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Show B?" I THE PRESIDENT'S I ANNUAL MESSAGE I 'CAUSES OF THE PRESENT FINAN I CIAL CONDITIONS IS MADE I THE CHIEF TOPIC. I SUGGESTS REMEDIES FOR ILLS I 'CONTROL OF CORPORATIONS AND I RAILROADS TO PREVENT Wi OVERCAPITALIZATION. H 'Believes This Would Solve the Prob- U lem Together with Provision for H More Clattlo Currency Recom- U mends Postal Banks and Asks for D Lsglslatlon Along Many Lines. H Washington, Dec S. Prosldent Jloosevolfs annual message to congress .Is a voluminous document of nearly H 30,000 words, by far the longest mes- age he has ever submitted tocongress. H Tho oponlng subject of the message Is the nnanclal condition of the country, M and for which the president lays, much W of the blamo upon unscrupulous stock H , speculators, and says: H "In any large body'ot men, however, VI there aro certain to be some who aro dishonest, and It the conditions ure HJ -such that these men prosper or com- mlt their misdeeds with Impunity, their HJ example Is a very evil thing for thp I -community. Where these men aro busl HI ness men of great sagacity and of tcm-Hl tcm-Hl .perament both unscrupulous and reck-HI reck-HI ,'lezs, and where the conditions are such J What they act without supervision or HI control and at first without effective I -check from public opinion, they delude Hi many Innocent people Into making In-HJ In-HJ vestments or embarking In kinds of business that are really unsound. HJ When the misdeeds of these successful-Hi successful-Hi ly dishonest men are discovered, suf- ferlng comes not only upon them, but HJ upon the Innocent men whom they .have misled. It Is a painful awakening, H whenever It occurs; and, naturally, HJ when' It does occur' those who suffer H are apt to forgot that the longor It 'was Hj -deferred the moro painful It would be. In the effort to punish the guilty It Is H both wlsa ahd proper to endeavor so tar as posnlblo to minimize tho dls-H dls-H tress of those. who have been misled by HJ the guilty. Tet It Is not possible to refrain because of such distress from HJ striving to put an end to the mlsdt-eds HJ that aro tho ultlmato causes of tho suf-HJ suf-HJ ferlng, and, as a means to this end, HJ whero possible to punish those re-Hi re-Hi sponsible for them. Thcro may be hon-H hon-H st dlfferencea of opinion as to many HH governmental policies) but surely there HE can bo no such differences as to the HH need of unflinching perseverance In tho HH war against successful dishonesty." He quotes at length from his mes- PPJ aage of last year In which he advo- HH cated federal control of corporations HH doing Interstato business, and believes HH that In such control would bo found the HH remedy for overcapitalization and HH stock speculation which ho bollavcs HH have brought about tho present flnan- HH Nclal conditions. 110 "ays: m "Our steady aim should bo by legls- HH latlon, cautiously and carefully under- HH taken, but resolutoly persevered In, to HH assert tho sovereignty of the national HH government by afllrmutlvo action. P "This Is only In form an Innovation. PJPJ In substanca It Is merely a restoration; PJH for from tho earliest time such rcgula- PJH tlon of Industrial activities has been PJH recognized In the action of the law- HH making bodies; and all that I propose HH Is to meet the chnngod conditions In HH such manner as will prevent tho com- HH monwcalth.abdlcatlng tho power It has HH always possessed, not only In this coun- HHf try, but also In England before and HH since this country became a separate HH nation. 'Hi fitVtArtnX Control of H Itallroada la Favored. I "No small part of the trouble that vo PJ have comes' from carrying to an ox- PJ treme tho national virtue of self-ro- PJ llance, of Independence In Inltlatlvo PJ and action. It Is wise to conaervo this PJ virtue and to provide for Its fullest ex- PJ erclse, compatible with seeing that lib- PJ crty does not become a liberty to PJ wrong others. Unfortunately, this Is PJ the kind of liberty that the lack of alt PJ effective regulation Inevitably breeds. PJ Tho founders of the constitution pro- PJ vldod that tho national government H should havo completo and. nolo control PJjl of Interstato commerce. ' There was PJ then practically no Interstato business H save such as was conducted by water, H and this tho national government at H fconce prooecded to rogulate In thorough- m M going and effective, fashion. Condi- HJ r tlons havo now so wholly changed that mm the Interstate commerce by' water is In- HP significant compared with tho amount M that goes by hind, and almost all big HJ business concerns aro now engaged in I Interstato conunerco. As a result, It HJ can bo but partially and Impurfectly PJPJ controlled or regulated by tho action of PJPJ any one of the several states; such nc- PJH tlon Inevitably tending to bo either too PJPJ drastic or else too lax, and In either PJH case Ineffective for purposes of Justice. PJPJ Only tho national government can In HI thoroughgoing fashion cxcrclso the HJ needed control. This does not mean HPJ that thero should be any extension of I fed oral authority, for such authority PJH already exists under the constitution In PJLI amplest and most far-reaching form; PJH but It docs mean that .there should be PJj an extension of foderat activity. This PJH Is not ndvocatlnc centralization, It Is PJH merely looking factH In the face, and PJI realizing that centralization In business mm has already come and can not be avoid- HJ ed or undone, and that the publlo at large can only protect Itself from cor- HjJjJ tain evil effects of this business cen- HH trullzatlon by providing hotter methods HH for the exercise of control through the HH authority already centralized In the HHJ national government by the constltu- HHJ tlon Itself. There must he no halt In HH the healthy constructive course of nc- HP tlon which this nation has elected to HP pursuo, and has steadily pursued, dur- HHI Ing tho last six years, as shown both In PJPJI tho legislation of the congress and the PJH administration of the law by tho de- HH partment of Justice, The most vital HH yS need Is In connection with the railroads. HH 7 As to these, In my Judgment there HI should now be either a national Incor- HH poratlon act or a law licensing railway HP companies to engage' In Interstate com- HJ merce upon certain conditions. The law HJ should be so framed n to give to the HP Intel tatf commerce commission power PJ to p. ' upon tho future Issue of securl- HJ ties, whllo amplo moans should be pro- HJ vldud to enable the commission, when- H ever In Its Judgment It Is necessary, to HJ make a physical valuation of any rail- HJ road. As I stated In my message' to the HJJ congress a year ago, railroads should HJ be given power to enter Into, agree- HJ ments, subject to theso agreements be- HJ Ing made publlo In minute detail and to '- ' ' ' , '.K'ySsT' the consent of the Interstate commerce commission being first obtained. Until tho national government assumes proper control of Interstate commerce. In the oxerclse of the authority it already al-ready possesses. It will be Impossible either to give to or to got from the railroads full Justice. The railroads and all other great corporations will do well to recognlzn that thlB control must come; tho onlv question Is as to what governmental body can most wisely exerclsA It. The courts will determine de-termine the limits within which the federal authority can exercise it. and there will still remain ample work within each state for the railway commission com-mission of that stato; and tho national Interstate commerce commission will work In harmony with the several state commissions, each wltt)n its own province, prov-ince, to achlevii the desired end, Control of lulurstate Hualnrxa Concerns Creed. "Moreover, in my Judgment there should bo additional legislation looking to the proper control of tho great business con-i uerns 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 genoral public. As I have repeatedly said In messages to congress and elsewhere, else-where, experience has definitely shown not merely the unwisdom but the futility of endeavoring to put a stop to all pusl-ness pusl-ness 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', corpora-tions', to all big combinations of capital, as to desire to put an end to combinations combina-tions 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 cither there Is evil, It should be promptly held to account; ac-count; but It should receive hearty en couragement 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,, moral-ity,, that really puts a premium upon publlo Immorality, by undertaking to forbid honest men froni doing what must be done under modern business conditions, condi-tions, 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 usu-ally means the accomplishment of too little, lit-tle, and often tho doing of positive damage. dam-age. "The antitrust law should not be repealed; re-pealed; but It should be made both more efficient and moro In harmony with actual act-ual conditions. It should be so amended as to forbid only tho 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 su-pervisory power to the government over these big corporations engaged In Interstato Inter-stato business. This should be accompanied accom-panied by provision for tho compulsory publication of accounts and tho subjection subjec-tion of books and papers to tho Inspection Inspec-tion of the government oMcIals. A beginning be-ginning has already been made for such supervision by tho establishment of the bdreau of corporations. "Tho antitrust law should not prohibit combinations that do no tnjustlco to the public, still less those .tho existence of which Is oil the wholo of benefit to tho public. But even It this feature of the law were abolished, thero would remain as an equally objectionable feature the difficulty and delay now Incldont to Its enforcement. Tho government must now submit to Irksome nnd repeated delays 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 tho department depart-ment of JUstlco nnd tho courts an Impossible Im-possible burden; It Is not feasible to carry on more than n 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 tho abuses Incident to the creation crea-tion of unhealthy and Improper combinations. combina-tions. Instead of watting until they are In exlstenco and then attempting to destroy, de-stroy, them by civil or criminal proceedings. proceed-ings. Investing l'ublle Should He Amply, Safeguarded. "Tho congress has the power to charter corporations to engage In Interstate and foreign commerce, and a general taw ca'n be enacted under the provisions of which existing corporations could take out federal fed-eral charters and new federnl corporations corpora-tions could be created. An essential provision pro-vision of such a law should be a method of predetermining by soma 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 bo made for complete publicity In all matters affecting the public and completo protection protec-tion to the investing publlo and the shareholders share-holders In the matter of Issuing corporate securities. If an incorporation law Is not deemed advisable, a license act for big Interstato corporations might be enacted; or a combination of the two might be tried. The supervision established might bo analogous to that now exercised over national banks. At least, tho antitrust act should bo supplemented by specific prohibitions of the methods which experience ex-perience has shown havu been of most ' service In enabling monopolistic combinations combina-tions to crush out competition. The real owners of a corporation should bo compelled com-pelled to do business In their own name. Tho right to hold stock In other corporations corpora-tions should heureattrr be denied to Interstate Inter-state corporations, unless on approval by tho proper government olllclnls, nnd a prerequisite to such approval should be the listing with the government of all owners nnd stockholders, both by the corporation owning such stock und by tho corporations In which sucli stock Is owned, "To confer upon the national government, govern-ment, In connection with the amendment I ndvocate In tho antitrust low, power of supervision over big business concerns engaged In interstate commerce, would benollt them as It Ihih benefited tho national na-tional banks. In the recent business crisis It Is noteworthy that tho institutions institu-tions which failed wece Institutions which wcro not under the supervision and control of the national government, Thoso which were under national" control con-trol stood the test. "National control of the kind above advocated ad-vocated would be to the benefit of every well-managed rullwuy. From the .stand- paint of tho publlo there Is need for additional ad-ditional tracks, udltlonal . tormlnals, and Improvements In the actual handling of the railroads, nnd all this as rapidly as possible. Ample, safe, and speedy transportation trans-portation facilities aro even moro necessary neces-sary than cheap transportation. Therefore, There-fore, there Is need for the Investment of money which will provide for all these things while at the samo time securing as fas as Is possible better wages and shorter hours for their employes. Therefore, There-fore, while there must be Just and reasonable rea-sonable regulation of rates, we should be tho first to .protest against any arbitrary und unthinking movemont to cut them down without the fullest und most careful care-ful consideration of all Interests concerned con-cerned and of the actual needs of the situation. Only u special body of men acting for the national government under un-der authority conferred upon It by the congress Is competent to pass Judgment on such a matter, Orcnter ISInstlrlly In Currency Is Urgrd.- The president quotes extensively from his last mcssago In dealing with tho dl- rect subject of currency legislation, and says: "I again urge on the congress the need of Immediate attention to this matter. We need a greater elasticity In our currency; cur-rency; provided, of course, that we recognize recog-nize the even greater need of a safe and secure currency. There must always bo tho most rigid examination by tho national na-tional authorities. Provision should bo made for ' on emergency currency. The emergency Issue should, of course, be made with an effective gunranty, and upon up-on conditions carefully prescribed by the government. Quch emergency Issuo must be based on adequate securities approved by the government, nnd must bo Issued under a heavy tax. This would permit currency being Issued when the demand for It was urgent, while securing Its retirement re-tirement as tho demand fell off. It Is worth Investigating to determine whether officers nnd directors of national banks should ever be allowed to loan to themselves. them-selves. Trust compnnles should bo sub ject to the same supervision ns banks; legislation to this effect should be enacted en-acted for the District of Columbia and the territories. "Vet 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 guar-antee the business co'mmunlty against tho results of speculative folly any more than It can guarantee an Individual against the results of his extravagance. When an individual in-dividual mortgages his house to buy an automobllo ho Invites disaster; and when wealthy men, or men who pose as such, or aro unscrupulously or foolishly eager to become such, Indulge In reckless speculation spec-ulation especially If It Is accompanied by dishonesty they Jeopardize not only their own future but the future of nil their innocent in-nocent fcllow-cltlzcns, for they expose the whole business community to panic and distress." He advises against -any general tariff legislation this session of congress, and says; "In a country of such phenomenal growth as ours It Is probably well that every dozen yenra or so the tariff laws should bo carefully scrutinized so as to see that ho excessive or Improper benefits bene-fits are conferred thereby, that proper revenue Is provided, and that our foreign trade Is "encouraged. Thero must always be as a minimum a tariff which will not only allow al-low for tho collection of an ample revenue rev-enue but which will at least make good the difference In cost of production here and abroad; that Is, tho difference In the labor cost here and abroad, for the well-being of the wage-worker must over be a cardinal point of American policy, Tho question should be approached purely pure-ly from a business standpoint: both the tlmo and the manner of tho change being such as to arouse tho minimum of agitation agi-tation and disturbance In the business world, and to glvo tho least play for selfish nnd factional motives. Tho solo consideration should be to see that tho sum total of changes represent tho public pub-lic good. This means that the subject cannot with wisdom bo dealt with In tho year preceding a presidential election, because be-cause as a matter of fact experience has conclusively .shown thnt at such a time It Is Impossible to get men to treat It from tho standpoint of the publlo good. In my Judgment tho wise time to deal with the matter Is Immediately after such election." elec-tion." He asks for the repeal of the tariff on paper and wood pulp. He reviews nnd enlarges upon his previous pre-vious recommendations for the enactment enact-ment of federal Inheritance and Income tax laws. t . Attention Is called to the prosecution of wealthy offenders against the national laws, and In this connection he asks that tho laws under which theso prosecutions are brought bo strengthened and made moro definite. The Use nnd the Abuse of Injunctions, "Instances of abuse In the granting of Injunctions In labor disputes continue to occur, nnd the resentment In the minds of thoso who feel that their rights are being Invaded and their liberty of action and of speech unwarrantably restrained continues to grow. Much of the attack on the use of the process of Injunction Is wholly -without warrant; but' I am constrained con-strained to express tho belief thnt for some of It thero Is warrant. This question ques-tion Is becoming moro nnd more of prime Importance, and unless tho courts will themselves deal with It In effective manner, man-ner, It Is certain ultimately to demand some form of legislative action. It would be most unfortunate for our social welfare wel-fare If wo should permit many honest and law-abiding citizens to feel that they had Just cause for regarding our courts with hostility. I earnestly commend com-mend to the attention of tho congress this matter, so that some way may bo devised which will limit tho abuse of Injunctions In-junctions and protect thoso rights which from time to tlmo It unwarrantably Invades. In-vades. Moreover, discontent Is often expressed ex-pressed with tho ubo of the process of Injunction by tho courts, not only In la-. la-. bor disputes, but where state laws are concerned. I refrain from discussion of this question ns I am Informed thnt It will soon recclvo the consideration of tho supreme court." Of other legislation In the Interest of labor he favors federal Inspection of railroads; rail-roads; providing limited but deflnlto compensation com-pensation for accidents to all workmen employed In any way by the government, and says: "The constitutionality of the employcre' liability act passed by tho preceding congress con-gress has been carried before the courts. In two Jurisdictions the law has bcon declared de-clared unconstitutional, und In three jurisdictions juris-dictions Its constitutionality has been affirmed, af-firmed, The question has been carried to tuo supreme court, the case has been heard by thnt tribunal, and u decision Is expected nt an early date. In tho event that the court should affirm tho constitutionality consti-tutionality of the act, I urgn further legislation leg-islation ulnng the lines advocated In my mes8ngo to tho preceding congress. Tho ' prnctlco of putting tho cntlro burden of loss of life or limb Upon the victim or tno victim's family Is n form of social Injustice In-justice In which tho United Htntes stands In unenviable propilnenco, In both our federal nnd our state legislation we have, with few exceptions, senrcely gono farther than the repeal of the fallow-servant fallow-servant principle of the old law of liability, liabil-ity, und In some of our states even this slight modification of a complete outgrown out-grown principle has not yet been so-cured." so-cured." He favors the extension of tho eight-hour eight-hour law to all departments of tho government, gov-ernment, and to all work carried on by the government. He urges legislation for the compulsory Investigation of Industrial In-dustrial disputes, and says; "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 caus-ing great damage to business Interests and serious Inconvenience to tho general gen-eral public. Appeals wcro made to mo from many parts of the country, from city councils, from boards of trado, from chambers of commerce, and from labor organizations, urging that steps be taken to terminate the strike Everything that could with any propriety pro-priety be done by a representative of tho government was done without uvnll, 1 nnd for weeks the publlo stood by and suffered without recourse of any kind. Mad the machinery existed and had there been authority for compulsory investigation of the dispute, tho publlo would have been placed in possession of the merits of tho controversy, and publlo opinion would probably have brought about prompt ailjystment. "It Is idle to bold that without good laws evlln such as child labor, as the over-working of women, as the failure fail-ure to protect employes from loss of life or limb, can be effectively reached, any more than the evils of rebates nnd stock-watering can be reached without good laws. To fall to stop these practices prac-tices by legislation means to force honest men Into them, because otherwise other-wise the dishonest who surely will take advantage Ut them will have everything their own way. If tho states will correct these evils, well and good; but tho nation must stand ready to aid them. Inland Waterwny .Systems Should He Uervloped. "The conservation of our national resources re-sources nnd their proper use constitute the fundamental problem which underlies under-lies almost overy other problem of our national life. Wo must maintain for our civilization the adequate material basis without which that civilization cannot exist. Wo must show foresight, we must look ahead. As a nation we not only enjoy a wonderful measure of present prosperity but If this prosperity prosper-ity Is used aright It Is an earnest of future success such ns no other nation will have. The reward of foresight fot this nation Is great and easily foretold. Hut thcro must be tho look nhead, there must be a realization of tho fact that to waste, to destroy, our natural resources, to skin nnd 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 nnd developed. devel-oped. For the last few years, through several agencies, ttie government has been endeavoring to get our people to look abend nnd to substitute a planned and orderly development of our resources re-sources In place of a haphazard striving striv-ing for Immediate protlt, Our great river systems should bo developed ns national water highways; the Mississippi, Missis-sippi, with Its tributaries, standing first In Importance, nnd the Columbia second, sec-ond, although there are many others of Importance on the Pacific and Atlantlo and the gulf slopes. The national government gov-ernment should undertake this work, and I hope a beginning will be made In the present congress; and tho greatest great-est of all our rivers, the Mississippi, should receive especial attention. From the Oreat Lakes tiPtho mouth of the Mississippi there should be a deep waterway, wa-terway, with deep waterways leading from It to tho cast ahd tho 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 bo carried through In time appreciably to relievo the congestion con-gestion of our great freight-carrying lines of railroads. The work should bo systematically and continuously carried forward In accordance with some well-conceived well-conceived plan. The main streams should be Improved to tho highest point of efficiency beforo the Improvement Improve-ment of tho branches Is nttempted; and the work should bo kept free from every taint of recklessness or Jobbery." Attention Is called to the work of Irrigation Ir-rigation and reclamation of government govern-ment lands. In tho same connection he asks for a revision of the publlo lnnd laws along tho lines proposed by the publlo lands commission. Delleves the government should Increase Its efforts to conserve our forests and should Increase In-crease by purchaso tho existing forest preserves. On the subject of tho natural resources of the nation ho says: "In tho eastern United States the mineral fuclJ have already passed Into the hands of large private owners, and thoso of tho west are rapidly following. It Is obvious that these fuels should be conserved and not wasted, nnd It would bo well to protect tho pooplo against unjust and extortionate prices, so far as thnt can still bo 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. Jn my Judgment the government should have tho right to keep tho 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 tho congress con-gress will not adopt this method, the coal doposlts should be sold under limitations, lim-itations, to conserve them ns publlo utilities, tho right to mine coal being separated from the title to tho soli. The regulations should permit coal lands to bo worked In sufficient quantity quan-tity by tho several corporations. Tho present limitations have been absurd, excessive, and serve no useful purpose, and often render It necessary thnt there should be either fraud or else abandonment of tho work of getting out the coal." I'rogrrss of the Work On the Panama Cannl. "Work on tho Panama canal is proceeding pro-ceeding In a highly satisfactory manner. man-ner. In March the total excnvatlon In the Culohra Cut. whero effort was chiefly concentrated, was 815,270 cubic yards. In April this was Incroased to 879,527 cublo yards. Thcro was a considerable con-siderable decrease In tho output for May and June owing partly to the advent ad-vent of tho rnlny season nnd 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 tho total excavation ex-cavation advanced materially nnd In August the grand total from nit points In the canal prism by steam shovels and dredges exceeded nil previous United States records, reaching 1,274,-404 1,274,-404 cublo yards. In September this record rec-ord was eclipsed and u total of 1,517,-412 1,517,-412 cublo ynrds was removed. Of this amount 1,481,307 cublo ynrds woro from thu canal prism nnd 36.I0S cublo yards wero from accessory works. These results re-sults wro achieved In tho rnlny sea-eon sea-eon with a rainfall In August of 11180 inches und In September of 11,05 Inches. Finally, In October, tho record was again eclipsed, the total excavation being be-ing 1.8C8.729 cublo yards; a truly extraordinary ex-traordinary record, especially In vlow of the heavy rainfall, which wns 17,1 Inches. In fact, experlencn during the last two rainy vcasons demonstrates thnt tho rains are a loss serious oh-stnelo oh-stnelo to progress than has hitherto been supposed, "Work on tho looks nnd dams nt aatun, which began actively In March last, has advanced bo fnr thnt It Is thought that masonry work on the locks can bo begun within 13 months. "Last winter bids were requested nnd received for doing the work of canal construction by contract, None of them was found to be satisfactory nnd all were rejected. It Is ' tho unanimous opinion of the present commission that the work can be done better, more cheaply, und more quickly by tho government gov-ernment than by private contractors. Fully 80 per cent, of tho entire plant needed for construction has been purchased pur-chased or contracted for; machine shops havo been erected and equipped for making all needed repairs to the plant; many thousands of employes have been secured; an effective organization organi-zation has been perfected; n recruiting system is In operation which Is capable of furnishing more labor than can be used advantageously; employes 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 tho work would bo unwise and unjust)-I unjust)-I liable, (or It would Inevitably dlsorgan- hpjVhphVhpbhYsPhphVhI t Ize existing conditions, check, progress, and Increase the cost and lengthen the time of completing the canal. President Iteeomnirnds Postal Nnvlnsa Dank. ''I commend to tho favorable consideration consid-eration of the congress u postal savings sav-ings hank system, as recommended by tho postmaster general. The primary object Is to encourage nmong our pooplo poo-plo economy and thrift and by the usu of postal savings bnnkH to glvo them an opportunity to husband their resources, re-sources, partlcmirly those who have not the facilities at hand for depositing their money In savings bankB. Vlowed, however, from the experience of tho past few weoks. it Is evident that the advantages of such an Institution are still more far-reaching. Timid depositors depos-itors have withdrawn their savings for tho tlmo being from national banks; Individuals In-dividuals havo hoarded their cash and the worklngmen their earnings; all of which money has been withdrawn and kept In hiding br In tho safe deposit de-posit box to tho detriment of prosperity. pros-perity. Through tho ngenoy of the postal pos-tal savings bankB 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 genoral's recommendation for an extension ex-tension of tho parcel post, especially on tho rural routes. Thero are now 38,-21E 38,-21E rural routes, serving nearly 16,000,-000 16,000,-000 poople who. do not have the advantages ad-vantages of tho Inhabitants of cities In obtaining their supplies. These recommendations recom-mendations have been drawn up to benefit tho farmer and the country storekeeper; otherwise, I should no,t favor them, for I believe that It Is good policy for our government to do everything every-thing posslblo to aid tho small town and tho country district. It is desirable that the country merchant should hot bo crushed out. "Tho fourth-class pqstmasters' convention con-vention has passed a Very strong resolution reso-lution In favor of placing ip fourth-class fourth-class postmasters under thfe x;i-serv-Ice law. The administration has already al-ready put Into effect tho policy of ro-fusing ro-fusing to remove any fourth-class postmasters post-masters save for reasons connected with the good of the service; and it Is endeavoring so far' ns posslblo to ro-movo ro-movo them from the domain of partisan politics. It would be a most deslrabjo thing to put the fourth-class postmasters postmas-ters In the classified service." Ho renews his recommendations of last year in regard to Alaska; calls attention at-tention to the admission of Oklahoma an a state; urges the Importance of providing pro-viding Bhipplng relief for Hawaii; asks for cttlzonshlp for Porto Rlcans, and promises submission of Secretary Taft's. report on Philippines when that oftlclal returns. Ho asks for' the creation of a bureau of mlnoa; recommends the providing of funds for preserving The Hermitage, tho' homo of Andrew Jnckonrnd' the erection of a naval monument at Vlcksburg., Corporntlon Contributions to Campaign Hiprnsra. "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 tho publication of both contributions con-tributions and expenditures. Thero Is, however, always danger In laws of this kind, which from their very nature nro difficult of enforcement; tlie danger being lest thoy bo 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 ham-per an unscrupulous man of unlimited means from buying his own way Into office. of-fice. There Is a very radical measure which would, I believe, work a substantial substan-tial Improvement In our system of conducting con-ducting a campaign, although I am well aware that It will tako some time for peoplo to so familiarize themselves with' such a proposal as to bo willing to consider con-sider Its adoption. Tho need for collecting collect-ing large campaign funds would vanish It congress provided an appropriation for the proper and legitimate expenses of each of the great national parties, an appropriation ap-propriation nmplo enough to meet the necessity for thorough organization and machinery, which requires a largo expenditure ex-penditure of money. Then the stipulation stipula-tion should be made that no party receiving re-ceiving campaign funds from tho treasury should accept more than a fixed amount from any Individual subscriber or donor; nnd tho necessary publicity for receipts nnd expenditures could without difficulty be provided." Wants Improvement In the , Oeran Hall Service. "I call your especial attention to the unsatisfactory un-satisfactory condition of our foreign mall service, which, becauso 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 man-ner which constitutes a serious barrier to the extensions of our commerce "The time has come, In my Judgmont, to set to work seriously to mako our ocean mall service correspond' more losely with our recent commercial nnd political development. A beginning was made by tho ocean mnll act of March , 1S31, hut even at that time tho act was known to be Inndequnto In various particulars. par-ticulars. Klnco that time events havo moved rapidly In our history. Wo havo acquired Hawaii, tho Philippines, and lesser Islands In tho Pacific. Wo aro iteadlly prosecuting tho great work of uniting at tho Isthmus tho waters of tho Atlantic and tha Pacific. To n greater extent than seemed probnbly oven a dozen years ago we may look to an merlcan future on tho sea worthy of tho tradition of our past. As tho first step In that direction, and tho step most feasible at tho present time, I recommend ho oxtenslon of tho ocean mall act of 1891, That net has stood for Homo years free from successful criticism of Its prln-"Iple prln-"Iple and purpose. It wns based on theories theo-ries of tho obligations of a great maritime mari-time nation, undisputed In our own laud md followed by other nntlona since the boglnntng of steam navigation. Ilrlolly those theories nre, that It Is the duty of a first-class power so far as practicable to carry Its ocean malls under Its own flag; that the fast ocean steamships and their crews, required for such mall serv-'ce, serv-'ce, are valuable auxiliaries to the sea power of a nation. Furthermore, tho construction of such steamships Insures tho maintenance in nn einclont condition of the shipyards In which our battleships must be built. "The expenditure of publlo money for tho performance of such necessary functions func-tions of government Is certainly warranted, war-ranted, nor Is It necessary to dwell upon tho Incidental benefits to our foreign commerce, to the shipbuilding Industry, and to ship owning und navigation which will accompany the dlschargo of these urgent publlo duties, though they, too, should have weight." Asks Increase In l'ny for Army Ofltrers nnd Men. The president devotes much space to the affairs of the army, and strongly urges that our regular military organization organi-zation be kept up to the highest posslblo Btandard of efficiency, and s'ays; "Tho medical corps should ho much greater than the needs of our regular army In war. Yet at present It Is smaller small-er than the needs of the service demand even In peace. Tho Spanish war occurred oc-curred less than ten years ugo. The chief loss wo suffered In It was by disease dis-ease among tho regiments which never left tho country. At tha moment the nation seemed deeply Impressed by this ' ' w)siS!gr7T5''fT!HHHHHP HPHH " hhJhh PJHJHJHJHJ f BJBJBJBJBJBJBJBJ fact! yet seemingly it has already beeW forgotten, for not the slightest effort - HHH has been made to prepare a medical - HHHJ corps of sufficient size to prevent tho AJHHl repetition of the same disaster on a - HHJH much larger scale If we should ever be - PHHH engaged In n serious conflict. HHH "Hut the medical department Is not the 1 HPHH only department for which Increased pro- - 1 HHHJ vision should be made. The rate of, pay ' HHHJ for tho officers should ho greatly In H creased) there Is no higher type of citizen PSHH than the Amerlcnn'regular officer, nnd he 9 't'PJHHl should have a fair reward for his ad- HHHJ mlrnbto work. Thero should be a rela. ' .PJPJPJH lively even greater Increase In the pay for ilHPHH thu enlisted men. An especial provision -HHH should be mado for establishing grades .'HHH equivalent to thoso of warrant officers In ' tHHH the navy, which should be open to the ' HHHJ enlisted men who servo sufficiently long , HPjHJH and who do their work well. Inducements 'HHHH should be offered sufficient to encourage, " HJJHJH really good men to mako the army a lire ijHPHHJ occupation. The prlmo needs of our pres- HJHJPJ ent army Is to securo and retain compe- . HHJH tent noncommissioned officers. This dim- PJPJPJH culty rests fundamentally on the ques-1' ' PJPJPJPJ tlon of pay. Tho noncommissioned officer i PJPJPJPJ does not correspond with an unskilled la- , 'PJPJPJPJ borer: he corresponds to the best type of HJHJPJ skilled workman or to tho subordinate HHHJ ofTlclal In civil Institutions. Wages have ( HJHJPJ greatly Increased In outside occupations 1 HJHJH In the last 40 years and the' pay of the HJHJH soldier, Ilka tho pay of the officers, should HJHJH be proportionately Increased. The first PJPJPJPJ sergeant of n company, If a good man, PJPJPJP must be ono of such executive and ad- PJPJPJP mlnlstratlve ability, and such knowledge PJPJPJP of his trade, as to be worth far more than HJHJPJ we at present pay him. The same is true - PJPJPJP of tho regimental sergennt major. These PJHJHJ men should be men who had fully re HJHJ solved to make tho army a life occupa- PJPJPJP. tlon and they should be able to look for- PJPJPJI word to ample reward; while only men PJPJPJH properly qualified should be given a 'PJPJPJI chance to secure these final rowards. The PJPJPJ Increase over the present pay need not PJPJPJ be great In the lower grades for the first , PJPJPJP ono or two enlistments, but the Increase ' PJPJPJI should bo marked for the noncommls- i,PJPJPJ slotted officers of the' upper grades who ' PJHJPJ sorvo long enough to mnke It evident that HHJ they Intend to stay permanently In tha ," HHHJ army, while additional pay should be ( HHHJ given for high qualifications In target -; HJH ' HHJ "Among the officer's there should bo 'HHH severe examinations, to weed' out the HHHJ unfit up to the grade of major. From HJHJH that position on appointments should ,HHH be solely by selection and It should be , HHHJ understood that a man nt merely av- .HHHJ erage capacity could never set beyond . HHHJ the position of 'major, while every man "'HHJH who serves In any grade a certain 'HH length of time prior to, promotion to ' PJHH tho next grade Without getting the PJPJPJ promotion to the next' grade should be PJHJPJ forthwith retired." President Sees Need of "t HHHJ I.nrgrly Incrensed Navy. PJHJP The president asks for a continuous PJPJPJ Increase In the navy, and asks present iHHHJ congress for appropriations for' four .PJHJPJ new. battleships, and says: 'PJPJPJI "Wo need always to romember that . . : PJPJPJ In tlmo of war the navy Is ,not to be " PJPJPJ used to defend harbors and sea-coast PJPJPJ cities; we should perfect, our systom of PJPJPJ const fortifications. The only efficient ,-JPJPJH uoe for the navy Is for offense. The IssHHHl only way In which It cunfefnalontly pro- VHJHJH tcct our own coast against the posslblo HHJ action of n foreign navy Is by destroy- . HHHJ Ing that foreign navy,' For defense' - HHHJ against a hostile fleet which actually ' ,' HHHJ attacks them, the coast cities must, de- ' HJPJ pend upon their forts, mines,., torpedoes, HHHJ submarines nnd torpedo boats and de- - ,.HHJ stroyers. All of theso .together are ef- HHHJ flclent for defensive purposes, but they ( PJPJPJI In no way supply the. place of a.' thor- ') PJPJPJ oughly efficient navy capable of acting n PJHJPJ on the offensive; for parrying never yet PJPJH won a fight. It can only be won 'by HJPJH hard hltlng, nnd an aggressive sea-go- , HHHJ Ing navy alone can do this hard hitting; - HJHJPJ of tho offensive type. But the forts HHHJ and the like are necessary so that tho HHHJ navy may be footloose,. In time of war PJPJH there Is sure to bo demand, under pros- PJPJH sure of fright, for the ships to be scat- PJPJH tcred so ns to defond all kind of porta. HHHJ Under penalty of terrible disaster, this HHHJ demand must bo refused. The ships , HHHJ must be kept together, and their ob- CHHPjl Jectlve made the enemies' fleet. If iHHH fortifications are sufficiently strong, no 'VHHJ modern navy "will venture to attack HHHJ them, so long ns the foe hss In exist- ,HJ ence a hostile navy of anything llWo HJHJj tho same size or efficiency. But unless HP thero exists such n navy then, tho fortl- HJHJ flcntlona aro powerless by themselves iHJH to secure tho victory. For of course PJPJPJ the mere deficiency means thnt any PJPJPJ resolute enemy can at his leisure com- PJPJPJ bine all his forces upon one point with PJPJPJ the certainty that he can take It. HHH dives Iteasons for Despatch ;HJHJ OC Fleet to the PnrlHc. )HH "Until our battle fleet Is muoh larger ' HHH than at present It should never be split PJPJPJ Into detachments so fnr apart that thoy 'PJPJH could not In event of emergency be PJPJPJ speedily united. Our coast lino Is on PJPJH the Pacific Just an much as on the At- HHHJ lantlc. The Interests of California, HHJP Oregon nnd Washington are as cm- PJPJH phattcally the Interests of tho whole PJHJPJ union ns those of Maine and New York, H of Louisiana nnd Texas. The battla PJPJPJ fleet should now and then bo moved to PJPJPJ the Pacific, Just ns at other times It should bo kept In the Atlantic. .When the Isthmian canal la built the tranBlt of tho battlo Hoot from ono ocean to the other will be comparatively easy. 4PJH Until It Is built I earnestly hopo that PJPJPJ the battle fleet will bo thus shifted be- HJHJ tween the two oceans every year or HJHJ two. Tho marksmanship on all- our , HH ships has Improved phenomenally dur- . HJHJ Ing the Inst live yearn. Until, .within tho last- two or three years It was not HHP posslhlu to train a battlo fleet In squad- PJPJPJ ron maneuvers tinder service conditions, PJPJPJ and It Is only during these last two or HJHJ three years that the training under HJHJ theso conditions has become really of- HJHJ fectlve. Another nnd most necessary HJHJ strldo In advance Is now being taken. HH 'iho battle fleet Is about starting by HHH tho Straits of Magellan to visit tha HHH Pacific coast. Sixteen battleships aro HHH going under tho command of near Ad- H mlrnl Kvnns, while eight armored jHHJ cruisers and two other battleships will HH meet him nt San Francisco, whither sfwj certain torpedo destroyers nro also go- K-Buf Ing, No fleet pf such size linn ' ever 'aVlU mado such n voyage, nnd It will be of JiKJfl vory great educational use to all en- SliTB gaped In It. Tho only way b,y which to 'VYl fm teach officers and men how to handle JylWr the fleet so as to meet overy possible Hmva strain and emergency In time of war Is SMrVu to have them practlco under similar KMMr conditions In time of peace. Moroover, HL? the only way to find out our actual r-Jv5i noeds Is to perform In time of penco fil'W whatever muneuvors might be neces- S'I'v'tJ sary In time of war fitter war Is de- ''f tljK1 dared It Is tqo late, to Und out tho frt" needs; thnt menns. to Invite disaster. Jilvis'i Tho trip to tho Pacific will, show what 'Tf'tl' some of our needs nro nnd -will enable - A-iJi'- us to provide for thm. The proper -itf place for nn "officer to learn lils duty wit?' Is nt sea. and tile, only wjy In which a ItOV navy can' ever' bo inndo. etlcloit la by 'rwfet& proctlce at sea, under all thn condl- AOTH" tlons which would, have, to bo mot If WZ3ft war existed W9" He reviews the work accomplished Sffll by the second peace conference ut The ' ' PSEfc Ungues notes the Improvement of at- hlSI fairs In Cuba, nnd tho preparations be- fiPfll Ing made to reestablish the govern- PJH ment of the Island republic; nsUsper- HHJ mission' to cancel the remainder ,of jHJ China's Indemnity obligation' to us, and HHJ .reviews the effect of Secretary Hoofs' rHJ visit to Mexico. '''.,.,'.'" - HH THEODOItR ItQOSIiVCLT. " 'mUM The While Houe. ' 1 '.i . ' BjH December 3, 1007. f HJ jh |