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 ½ per cent, to 4, 2, and ½ 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. HERBERT HOOVER 
The White House, 
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 ½ per cent, to 4, 2, and ½ 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. HERBERT HOOVER The White House, 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 policy through the pact a great moral standard has been raised in the world by it 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 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 dispute between chile and peru in the disposal of the question of 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 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 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 it naturally rose with the great war but receded again to in 1924 when again it began to rise until during the current fiscal year the expenditures will reach to over 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 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 in 1924 there were about and in 1929 there were about our citizens army however including the national guard and other forms of reserves increase these totals up to about in 1914 about in 1924 and about 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 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 compared to the maximum in august 1919 of since june 30 it has been reduced by a further in the budget to be submitted the total appropriations recommended for the fiscal year 1931 are as compared to for the present fiscal year the present fiscal year however includes 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 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 and the fiscal year 1931 with a surplus of about 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 ½ per cent to 4 2 and ½ 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 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 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 for 1931 at about for 1932 at about the measure of american compromise in these settlements may be appreciated from the fact that our taxpayers are called upon to find annually about 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 all but 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 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 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 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 was for it was for it was and estimated on the basis of prices since the last harvest the value of the crop would be over 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 and 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 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 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 has been authorized for public buildings and the land upon which to construct them being for the district of columbia and for the country at large excluding which is for the acquisition of land in the triangle in this city this public building legislation provides for a program for the district of columbia and between an eight and nine year program for the country at large of this sum approximately was expended up to june 30 last of which has been expended in the district and 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 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 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 to per annum which together with about per annum released by completion of the ohio should make available after providing for other river and harbor works a sum of from to 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 of the present year to 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 lawrence waterway project highways there are over 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 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 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 program progress in improvement is about miles of all types per annum of which some 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 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 roads post office our post office deficit has now increased to over a year of which perhaps 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 airways now exceed miles more than miles of which will be lighted and equipped for operations by the close of the current year airport construction through all the states is extremely active there are now commercial and municipal airports in operation with an additional proposed for early development through this assistance the nation is building a sound aviation system operated by private enterprise over planes are in commercial use and pilots are licensed by the government our manufacturing capacity has risen to planes per annum the aviation companies have increased regular air transportation until it now totals miles per day 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 systems with more uniform and satisfactory rate structure a more stable financial structure more equitable distribution of traffic greater efficiency and instead of 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 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 construction loans have been made to the amount of approximately 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 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 period aggregating 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 involving approximately 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 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 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 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 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 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 white house conference on child health and protection this cooperative movement among interested agencies will impose no expense upon the government similar 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 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 and children 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 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 act through the children 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 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 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 veterans this in itself will mean an expenditure of nearly before 1945 in addition to the 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 per annum civil service approximately 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 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 responsibility second all executive and administrative functions should be separated from boards and commissions and placed under individual responsibility while and 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 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 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 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 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 herbert hoover the white house december 3 1929
senate house representatives constitution requires president shall time time give congress information state union recommend consideration measures shall judge necessary expedient complying requirement wish emphasize past year nation continued grow strength people advanced comfort gained knowledge education youth widely spread moral spiritual forces maintained peace become assured problems confronted problems growth progress solution determine facts develop relative importance assigned facts formulate common judgment upon realize solutions spirit conciliation foreign relations peace world foundations future peace substantially strengthened promote peace policy pact great moral standard raised world nations covenanted renounce war settle disputes pacific means new world outlook inaugurated profoundly affected foreign policies nations since inauguration initiated new efforts organization machinery peace also eliminate dangerous forces produce controversies amongst nations january 1926 senate gave consent adherence court international justice certain reservations september year statute establishing court action nations signatory amended meet senate reservations go even beyond reservations make clear court true international court justice believe clear everyone controversy question country claims interest passed court without consent time question arises doubt advisory opinions completely safeguarded adherence international court constituted slightest step toward entry league nations indicated shall direct signature affixed protocol adherence shall submit approval senate special message time convenient deal hope reducing friction world desire may reduce great economic burdens naval armament joined conference great britain france italy japan held london january consider limitation reduction naval arms hold high hopes success may attend effort beginning present administration neighboring state mexico best domestic insurrection maintained embargo upon shipment arms mexico permitted duly constituted government procure supplies surplus war stocks fortunately mexican government strength successfully withstood insurrection slight damage opportunity peaceful development given country request mexican government since lifted embargo shipment arms altogether two governments taken steps promote friendly relationships solve differences conventions prolonging period two years life general special claims commissions concluded south america proud part settlement dispute chile peru disposal question work commission inquiry conciliation bolivia paraguay representative government participated successfully terminated incident seemed threaten war proposed plan final settlement suggested neutral governments still consideration government continued efforts act mediator boundary difficulties guatemala honduras instance profound importance establishing good inauguration regular air mail service united states caribbean central american south american countries still marines foreign soil nicaragua haiti china large sense wish represented abroad manner marines remain nicaragua urgent request government leaders parties pending training domestic constabulary capable insuring tranquility already reduced forces materially anxious withdraw situation warrants haiti 700 marines much difficult problem solution still obscure congress approves shall dispatch commission haiti review study matter endeavor arrive definite policy present forces china constitute men hope also reduce normal legation guard desire establish firmly understanding relationships latin american countries strengthening diplomatic missions countries hope secure men long experienced diplomatic service speak languages peoples accredited chiefs diplomatic missions states shall send senate early date nominations several men congress numerous wise foresighted acts past years greatly strengthened character representation abroad made liberal provision establishment suitable quarters foreign staffs different countries order however may develop effective force one responsible functions government shall recommend congress liberal appropriations work state department know expenditure public money greater economic moral return come us assuring effective conduct foreign relations national defense preserve internal order freedom encroachment first purpose government army navy maintained efficient state officers high intelligence zeal extent expansion numbers equipment present authorized ample purpose well deeply concerned however growing expense total expenditure national defense purposes 1914 naturally rose great war receded 1924 began rise current fiscal year expenditures reach excluding civilian services departments programs authorized carry still larger figures future years remuneration paid soldiers sailors justly higher rate country world cost subsistence higher yet total expenditures excess highly militarized nations world upon conference shortly held london depend moderation make naval expenditure shall compelled undertake naval construction implied washington arms treaty well construction would appear necessary international agreement completed shall committed next six years construction expenditure upward besides necessary increase costs annual upkeep 1914 various army contingents necessarily expanded end great war receded low point 1924 expansion began 1914 officers men regular forces army navy 1924 1929 citizens army however including national guard forms reserves increase totals 1914 1924 1929 kellogg pact undertaken never use war instrument national policy therefore undertaken covenant use equipments solely defensive purposes defense point view forces proportioned national need therefore extent modified prospects peace never brighter borne mind improvement national guard federal support begun 1920 definitely strengthened national security rendering far effective ever heretofore advance aviation also greatly increased effectiveness defense addition large program air forces maintaining army navy enormous growth commercial aviation provided unanticipated reserves manufacturing capacity industrial air personnel adds security recommend congress give earnest consideration possibilities prudent action give relief continuously mounting expenditures finances government finances government sound condition shall submit detailed evidences usual recommendations special budget message may however summarize position public debt june 30 year stood compared maximum august 1919 since june 30 reduced budget submitted total appropriations recommended fiscal year 1931 compared present fiscal year present fiscal year however includes federal farm board estimate yet determined 1931 owing many necessary burdens assumed congress previous years require large outlays extreme difficulty shall able keep expenditures next fiscal year within bounds present year economies many directions permitted accommodation pressing needs net result increase shown 1 per cent present fiscal year fail recognize obligations government support public welfare must coincidentally bear mind burden taxes strive find relief tax reduction every dollar returned fertilizes soil prosperity tax reduction estimate submitted secretary treasury budget director indicates government close fiscal year 1930 surplus fiscal year 1931 surplus owing unusual circumstances extremely difficult estimate future revenues accuracy believe however congress fully justified giving benefits prospective surpluses taxpayers particularly ample provision debt reduction made years form debt retirement ordinary revenues view uncertainty respect future revenues comparatively small size indicated surplus 1931 relief take form provisional revision tax rates recommend normal income tax rates applicable incomes individuals calendar year 1929 reduced 5 3 1 ½ per cent 4 2 ½ per cent tax income corporations calendar year 1929 reduced 12 11 per cent estimated result reduction income taxes collected calendar year 1930 loss revenue divided approximately equally fiscal years 1930 1931 program give measure tax relief maximum number taxpayers relatively larger benefits taxpayers small moderate incomes foreign debts past year brought us near completion settlements indebtedness foreign governments united states act congress approved february 4 1929 authorized settlement government austria along lines similar terms settlement offered government relief creditors agreement yet concluded government form agreement settled execution awaits government austria securing assent relief creditors terms offered act congress approved february 14 1929 authorized settlement government greece agreement concluded may 10 1929 government france ratified agreement us july 27 1929 agreement shortly congress recommend approval indebtedness foreign governments united states unsettled russia armenia past year committee distinguished experts american leadership submitted plan looking revision claims germany various governments united states denied participation war settlement general reparations claims comparatively small amount arise costs army occupation claims private citizens losses awards mixed claims commission established agreement german government finding basis settlement necessary committee experts request governments concerned make contribution adjustment felt share proportion concessions made state treasury departments position shortly submit consideration draft agreement executed united states germany providing payments revised amounts extensive statement submitted time total amount indebtedness various countries united states funded sum effect provided issue united states government bonds people payments various governments us account principal interest 1930 estimated total 1931 1932 measure american compromise settlements may appreciated fact taxpayers called upon find annually interest addition redeem principal sums borrowed united states government purposes alien enemy property wise determination property seized war returned owners proceeded considerable rapidity original seized cash property valued total returned remainder disposed next year general economic situation country enjoyed large degree prosperity sound progress past year steady improvement methods production distribution consequent advancement standards living progress course unequal among industries coal lumber leather textiles still lag behind long upward trend fundamental progress however gave rise profits translated wave uncontrolled speculation securities resulting diversion capital business stock market inevitable crash natural consequences reduction consumption luxuries met losses number persons thrown temporarily employment prices agricultural products dealt upon great markets affected sympathy stock crash fortunately federal reserve system taken measures strengthen position day speculation would break together strong position banks carried whole credit system crisis without impairment capital hitherto absorbed loans speculative purposes returning normal channels business inflation prices commodities undue accumulation goods foreign trade expanded magnitude exerts steadying influence upon activity industry employment sudden threat unemployment especially recollection economic consequences previous crashes much less secured financial system created unwarranted pessimism fear recalled past storms similar character resulted retrenchment construction reduction wages laying workers natural result tendency business agencies throughout country pause plans proposals continuation extension businesses hesitation unchecked could intensify depression widespread unemployment suffering therefore instituted systematic voluntary measures cooperation business institutions state municipal authorities make certain fundamental businesses country shall continue usual wages therefore consuming power shall reduced special effort shall made expand construction work order assist equalizing deficits employment due enlarged sense cooperation responsibility grown business world past years response remarkable satisfactory canvassed federal government instituted measures prudent expansion work helpful upon different departments make early recommendations congress convinced measures reestablished confidence wages remain stable large degree industrial unemployment suffering would otherwise occurred prevented agricultural prices reflected returning confidence measures taken must vigorously pursued normal conditions restored agriculture agricultural situation improving gross farm income estimated department agriculture crop season estimated basis prices since last harvest value crop would slight decline general commodity prices past years naturally assists farmers buying power number farmer bankruptcies materially decreased previous years decline land values seems arrested rate movement farm city reduced sections agriculture course fared equally areas suffered drought responsible farm leaders assured large measure confidence returning agriculture feeling optimism pervades industry extensive action strengthening agricultural industry ever taken government inaugurated farm marketing act june 15 last provisions federal farm board established comprised men long widely experienced agriculture sponsored farm organizations country short period existence board taken definite steps toward efficient organization agriculture toward elimination waste marketing toward upbuilding farmers marketing organizations sounder efficient lines substantial headway made organization four basic commodities grain cotton livestock wool support board cooperative marketing organizations board activities undoubtedly served steady farmers market recent crisis operated also great stimulus cooperative organization agriculture problems industry complex need sound organization imperative yet board moving rapidly along lines laid act facilitating creation farmers organizations federating central institutions view increasing bargaining power agriculture preventing controlling surpluses mobilizing economic power agriculture tariff special session congress called expedite fulfillment party pledges agricultural relief tariff pledge farm relief carried time stated principles upon believed action taken respect tariff effective tariff upon agricultural products compensate farmer higher costs higher standards living dual purpose tariff protects farmer domestic market also stimulates diversify crops grow products could otherwise produce thus lessens dependence upon exports foreign markets great expansion production abroad conditions mentioned renders foreign competition export markets increasingly serious seems natural therefore american farmer greatly handicapped foreign market competition younger expanding countries ask foreign access domestic market regulated taking account differences costs production considering tariff industries agriculture find economic shifts necessitating readjustment tariff schedules seven years experience tariff bill enacted 1922 demonstrated wisdom congress enactment measure whole worked well main wages maintained high levels exports imports steadily increased exceptions manufacturing industries prosperous nevertheless economic changes taken place time placed certain domestic products disadvantage new industries come create necessity limited changes schedules administrative clauses laws written 1922 would seem test necessity revision main whether substantial slackening activity industry past years consequent decrease employment due insurmountable competition products industry setting new basis protective duties seven years ago need remedy whatever substantial loss employment may resulted shifts since time determining changes tariff must fail take account broad interests country whole interests include trade relations countries condition arisen view change principles stated opening special session firmly opinion application pending revision give country kind tariff law needs wants would helpful action taken early moment especially time business agriculture cooperating minimize future uncertainties know rates even limited revision requires consideration readjustment many items exhaustive inquiries valuable debate men representative parts country needed determine detailed rates must necessarily accomplished congress however perfectly rate structure may framed given time shifting economic forces inevitably occurs render changes items desirable necessarily long intervals congressional revision injustices bound develop experienced dairymen flaxseed producers glass industry others 1922 rates reason anxious broad principle flexible tariff provided existing law preserved delays action avoided expeditious methods determining costs production home abroad executive authority promulgate changes upon recommendation tariff commission exhaustive investigation changes congress isolated items referred would unlikely concentrations oppositions country could see advantage industry state difficulty limiting consideration congress isolated cases fundamental conflict interests farmer worker lowering standards living either tends destroy prosperity one rests upon real conflict east west north south united states complete interlocking economic dependence common striving social spiritual progress common heritage americans infinite web national sentiment created solidarity great people unparalleled human history invisible bonds shattered differences opinion growing discussion tariff public buildings provisions various acts congress authorized public buildings land upon construct district columbia country large excluding acquisition land triangle city public building legislation provides program district columbia eight nine year program country large sum approximately expended june 30 last expended district outside even generous provision district columbia country insufficient pressing governmental needs expensive rents inadequate facilities extravagance economy district even completion projects shall fully clerks housed rented temporary war buildings last little longer therefore recommend consideration given extension authorizations country large district columbia distributed term years survey need categories made secretary treasury postmaster general would helpful present economic situation steps taken would enable early construction work expedition enlargement program district would bring direct economies construction enabling erection buildings regular sequence maintaining stable labor force city contracts made advantageous terms earlier completion program acknowledged need would add dignity celebration 1932 two hundredth anniversary birth president washington consideration projects contribute much dignify national capital like renew suggestion fine arts commission required pass upon private buildings proposed sites facing upon public buildings parks without control much effort congress beautification capital minimized waterways flood control development inland waterways received new impulse completion year canalization ohio uniform depth development segments mississippi system expedited view recommending increase appropriations rivers harbors per annum together per annum released completion ohio make available providing river harbor works sum per annum mississippi system thus bring early completion conflict opinion arisen proposed floodway arkansas river gulf mexico via atchafalaya river led withhold construction upon portion mississippi flood control plan could reviewed engineers recommendation congress portions project vigorously prosecuted recommended increase appropriations present year next fiscal year expansion intracoastal waterways effective barge depths well warranted awaiting action canada upon lawrence waterway project highways miles legally established highways united states 10 per cent included state highway systems remainder county local roads miles improved type surfacing comprising 63 per cent state highway systems 16 per cent local roads improved roads miles hard surfaced comprising 22 per cent state highway systems 8 per cent local roads proper planning materially reduce listed mileage public roads particularly agricultural districts turn roads back useful purposes evident road construction must program progress improvement miles types per annum miles durable types total expenditures federal state local governments last year construction maintenance assumed huge total federal aid construction highway systems conjunction states proved beneficial stimulating must ultimately give consideration increase contribution systems particularly view stimulating improvement roads post office post office deficit increased year perhaps due losses ocean mail air mail contracts department making exhaustive study sources deficit view later recommendation congress respect post office quarters provided part federal construction part various forms rent lease arrangements practice grown recent years contracting long term leases rent amortization principal cost buildings included advised fully 40 per cent could saved many rent lease agreements even allowing interest capital required normal government rate also many objectionable features practices provision adequate quarters post office put sound basis revision air mail rates upon systematic permanent footing necessary subject study legislation prove necessary subject presented congress meantime recommend congress consider desirability authorizing expansion south american services commercial aviation past year progress civil aeronautics remarkable considerable degree due wise assistance federal government establishment maintenance airways department commerce mail contracts post office department airways exceed miles miles lighted equipped operations close current year airport construction states extremely active commercial municipal airports operation additional proposed early development assistance nation building sound aviation system operated private enterprise planes commercial use pilots licensed government manufacturing capacity risen planes per annum aviation companies increased regular air transportation totals miles per day flown night mail express services connect principal cities extensive services passenger transportation inaugurated others importance imminent american air lines reach canada mexico cuba porto rico central america important countries south america railways whole railroads never good physical financial condition country never well served greatest volume freight traffic ever tendered carried speed never attained satisfaction shippers efficiencies new methods resulted reduction cost providing freight transportation freight rates show continuous descending line level enforced world war however yet assured future adequate system transportation consolidations objective congress transportation act chief purpose consolidation secure systems uniform satisfactory rate structure stable financial structure equitable distribution traffic greater efficiency instead hauls way country assurance better service ultimately lower even rates would otherwise attained legislation simplify expedite consolidation methods better protect public interest enacted consideration also given relief members commission necessity detailed attention comparatively inconsequential matters existing law must receive direct personal consideration public interest members commission pressed minor matters inadequate time investigation consideration larger questions committed solution many minor matters function commission might well made revisory primary responsibility delegated subordinate officials practice long vogue executive departments merchant marine impulse merchant marine act 1928 transfer private enterprise steamship lines going forward increasing success shipping board operates 18 lines less half number originally established estimate expenditures coming fiscal year based upon reduction losses government lines approximately construction loans made amount approximately revolving fund authorized congress furnished additional aid american shipping stimulated building vessels american yards desirous securing full values nation great effort develop merchant marine merchant marine act soon inauguration present administration appointed interdepartmental committee consisting secretary commerce chairman secretary navy postmaster general chairman shipping board make survey policies pursued act 1928 respect mail contracts inquire workings advise postmaster general administration act particular seemed necessary determine result contracts already let would assure purpose expressed act develop american merchant marine assure permanence transportation foreign trade united states purposes develop coordinated policy purposes may translated actualities review mail contracts already awarded found aggregated 25 separate awards imposing governmental obligation little per annum provision imposed five contracts construction new vessels replace expand services requirements come total 12 vessels period aggregating tons conditions contracts worked satisfactorily study substantially completed committee advised desirability necessity securing much larger undertakings service new construction future contracts committee time recommending advertising 14 additional routes making substantial requirements construction new vessels life contract recommended total 40 new vessels required contracts proposed half required built next three years capital cost new construction approximately involving approximately gross tons bidders found make undertakings necessary recommend congress increase authorized expenditure post office annually advantageous grant authority conflict administration act arisen contention persons purchased shipping board vessels entitled mail contracts irrespective whether lowest bidder post office hand required law let contracts manner urgent congress clarify situation banking system desirable congress consider revision portions banking law development group chain banking presents many new problems question naturally arises whether allowed expand without restraint methods would dangerously concentrate control credit whether would event seriously threaten one fundamentals american credit system credit based upon banking deposits controlled persons within areas furnish deposits thus subject restraints local interest public opinion areas degree however movement chain group banking groping stronger support banks secure basis institutions growth size stability metropolitan banks marked contrast trend country districts many failures losses failures imposed upon agricultural community relinquishment charters national banks great commercial centers favor state charters indicates conditions surround national banks render unable compete state banks withdrawal results weakening national banking system proposed permission granted national banks engage branch banking nature would preserve within limited regions local responsibility control credit institutions subjects however require careful investigation might found advantageous create joint commission embracing members congress appropriate federal officials subsequent report electrical power regulation federal power commission comprised three cabinet officers duties involved competent conduct growing responsibilities commission far exceed time attention officials properly afford important duties recommended authority given appointment commissioners replace also desirable authority commission extended certain phases power regulation nature electric utilities industry 90 per cent power generation distribution intrastate character states developed regulatory systems certificates convenience rates profits utilities encroach upon authorities responsibilities would encroachment upon rights states cases however interstate character beyond jurisdiction states meet cases would desirable method could worked initial action may taken commissions states whose joint action made effective federal power commission reserve act motion case disagreement nonaction states radio commission recommend reorganization radio commission permanent body present temporary status requirement present law commissioners shall appointed specified zones abolished general provision made equitable selection different parts country despite effort commissioners present method develops public insistence commissioners specially charged supervision radio affairs zone appointed result danger system degenerate national system five regional agencies varying practices varying policies competitive tendencies consequent failure attain utmost capacity service people whole muscle shoals desirable question disposed present conditions income plants less could otherwise secured use especially public securing full benefits could obtained belief parts plants would useful revenues remainder dedicated time farmers united states investigation experimentation commercial scale agricultural chemistry means advancing discoveries science systematically applied agricultural need development chemical industry tennessee valley assured favor operation government either power manufacturing business except unavoidable major public purpose form settlement question imply entering upon contract contracts lease plants either whole parts reservation facilities products income agricultural purposes extremely technical involved nature contracts dealing chemical electrical enterprises added unusual difficulties surrounding special plants rapid commercial changes progress power synthetic nitrogen manufacture lead suggest congress create special commission investigate report past authority negotiate complete sort contract contracts behalf government subject course general requirements congress may stipulate boulder dam secretary interior making satisfactory progress negotiation complex contracts required sale power generated project contracts must assure return government outlays upon project recommend necessary funds appropriated initiation work soon contracts hands congress conservation conservation national resources fixed policy government three important questions bearing upon conservation public lands become urgent conservation oil gas resources future need national necessity working oil permit system development oil gas resources public domain subject great abuse considered necessary suspend issuance permits direct review outstanding permits compliance holders law purpose end abuse place government position review entire subject also confronted major problem conservation due overgrazing public lands effect overgrazing become general destroy ranges impairing ground coverage seriously menace water supply many parts west quick spring floods autumn drought third problem major dimensions reconsideration reclamation policy inclusion available lands public domain existing planned reclamation projects largely completes original purpose reclamation service still remains necessity extensive storage water arid states renders desirable give wider vision purpose service provide careful consideration questions also better division responsibilities state federal governments including possible transfer states school purposes lands unreserved forests parks power minerals appointed commission conservation public domain membership representing major public land states time public large recommend congress authorize moderate sum defray expenses social service federal government provides extensive valuable program constructive social service education home building protection women children employment public health recreation many directions broad sense federal activity directions confined research dissemination information experience temporary subsidies states order secure uniform advancement practice methods attitude federal government undermine one precious possessions american people local individual responsibility adhere policy federal officials however make important contribution leadership stimulation community voluntary agencies extending federal assistance organization forces bringing cooperation among instance character recently cooperation secretaries interior labor laid foundations exhaustive inquiry facts precedent white house conference child health protection cooperative movement among interested agencies impose expense upon government similar conferences called connection better housing recreation later date view considerable difference opinion policies pursued federal government respect education appointed committee representative important educational associations others investigate present recommendations cooperation secretary interior also appointed voluntary committee distinguished membership assist movement abolition illiteracy recommended additional appropriations federal employment service order may fully cover cooperative work state local services also recommended additional appropriations women children bureaus much needed research facts feel prove helpful public health advance scientific discovery disease health imposes new considerations upon us nation whole vitally interested health people protection spread contagious disease relation physical mental disabilities criminality economic moral advancement fundamentally associated sound body mind organization preventive measures health education personal application province public health service organization universal public education support proper burden upon taxpayer organized success either sanitary educational phases except public authority based upon local state responsibility consider federal government obligation contribution establishment agencies practical working organization exhaustive experiment trial demonstrated base competent organization municipality county local unit municipalities 400 rural counties unit organization highly developed health unit comprises least physician sanitary engineer community nurse addition cases another nurse devoted problems maternity children organization gives fundamental control preventive measures assists community instruction federal government interest control contagion acting united states public health service state agencies past future concern development particularly many rural sections unfortunately far behind progress parts funds contributed act children bureau department labor also found way channels recommend congress purpose sheppard towner act continued children bureau limited period years congress consider desirability confining use federal funds states building county local units outlay positively coordinated funds expended united states public health service directed phases county local unit organization funds appropriated course applied states public health program county local unit efficiently coordinated whole state federal prisons closely related crime conditions administration federal prison system federal penal institutions overcrowded condition daily becoming worse parole probation systems inadequate conditions make impossible perform work personal reconstruction prisoners prepare return duties citizenship order relieve pressing evils directed temporary transfer army disciplinary barracks leavenworth department justice use federal prison temporary inadequate present needs need new federal prisons reorganization probation parole systems established department justice bureau prisons sufficient force deal adequately growing activities prison institutions authorization improvements given speedily initial appropriations allow construction new institutions undertaken immigration restriction immigration every aspect proved sound national policy pressing problem formulate method limited number immigrants welcome shall adapted national setting national needs opposed basis quotas force hoped could find practical method secure believe real national objective fitness immigrant physique character training need service perhaps system priorities within quotas could produce results time enable hardships present system cleared recommend congress give subject study executive departments gladly cooperate hope discovering method fully secure national necessities veterans policy government almost inception make provision men disabled defense country policy maintained originally took form land grants pensions system continued entry world war congress time inaugurated new plan compensation rehabilitation hospitalization medical care treatment insurance whereby benefits awarded veterans immediate dependents whose disabilities attributable war service basic principle legislation sound desire eliminate possibilities injustice due difficulties establishing service connection disabilities principles degree extended veterans whose diseases injuries become apparent within brief period war receiving compensation insurance benefits liberalized emergency officers receiving additional benefits doors government hospitals opened veterans even though diseases injuries result war service addition adjusted service certificates issued veterans mean expenditure nearly 1945 addition appropriating annually veterans relief administration laws concerning veterans dependents upon basis dealing generously humanely justly inequalities arisen substantial adequate care given justice administered improvement administration may require amendment time time law care taken see changes conform basic principles legislation convinced gain efficiency economy uniform administration better definition national policies pension bureau national home volunteer soldiers veterans bureau brought together single agency total appropriations agencies exceed per annum civil service approximately employees executive civil service occupy positions subject competitive examination civil service law however still commanding opportunities extending system opportunities lie within province congress president recommend step taken authorization appointments postmasters made civil service law departmental reorganization subject consideration 20 years promised political parties recent campaign repeatedly examined committees commissions congressional executive voluntary conclusions investigations unanimous reorganization necessity sound administration economy effective governmental policies relief citizen unnecessary harassment relations multitude scattered governmental agencies presentation specific plan enlivens opposition every official whose authority may curtailed fears position imperiled result bureaus departments wish maintain authority activities citizens organizations selfishly interested inspired fear favorite bureau may new setting less subject influence subject influence seems essential principles reorganization two number first administrative activities major purpose placed groups responsibility second executive administrative functions separated boards commissions placed individual responsibility broadly advisory functions removed individual authority assigned boards commissions indeed fundamental principles upon government founded principles adhered whole development business structure distillation common sense generations instance conservation national resources spread among eight agencies five departments suffer conflict overlap proper development adherence broad national policies central point searchlight public opinion may concentrate functions grouped direction official assistant secretary conservation particular department cabinet officer group placed secondary importance need concentration may said educational services merchant marine aids public works public health veterans services many others component parts widely scattered various departments independent agencies desirable first experience different groups action create new departments may necessary later background previous experience see hope development sound reorganization government unless congress willing delegate authority problem subject defined principles executive act upon approval joint committee congress reservation power revision congress within limited period adequate consideration prohibition first duty president oath office secure enforcement laws enforcement laws enacted give effect eighteenth amendment far satisfactory part due inadequate organization administrative agencies federal government hope expediting reorganization requested june 6 last congress appoint joint committee collaborate executive agencies preparation legislation would helpful could appointed subject earnestly considered law enforcement commission administrative officials government joint conclusions certain steps taken first immediate concentration responsibility strengthening enforcement agencies federal government transfer department justice federal functions detection considerable degree prosecution lodged prohibition bureau treasury time control distribution industrial alcohol legalized beverages remain treasury second provision made relief congestion federal courts modifying simplifying procedure dealing large volume petty prosecutions various federal acts third codification laws relating prohibition avoid necessity exists resorting 25 statutes enacted various times 40 years technical defects statutes disclosed cured would add recommendations desirability reorganizing various services engaged prevention smuggling one border patrol coast guard recommendations upon subject whole developed examination law enforcement commission expected criminal law ever fully enforced long criminals exist district columbia model city law enforcement nation conditions much better many cities far perfect due part congestion criminal cases supreme court district resulting long delays furthermore need legislation district supplementing national prohibition act sharply defining enlarging duties powers district commissioners police district opening way better cooperation enforcement prohibition district officials prohibition officers federal government urgent conditions remedied law enforcement observance one look satisfaction upon volume crime kinds growth organized crime country pressing need organize system administering criminal justice establish full vigor effectiveness need reestablish faith highest interests country served insistence upon swift administration justice offenders whether rich poor shall effect improvement vital preservation institutions serious issue people authority congress appointed national commission law observance enforcement exhaustive study entire problem enforcement laws improvement judicial system including special problems abuses growing prohibition laws commission invited make widest inquiry shortcomings administration justice causes remedies organized work subcommittees dealing many contributory causes situation enlisted aid investigators fields requiring special consideration confident result studies carried forward make notable contribution solution pressing problems pending legislation department justice striving weed inefficiency wherever exists stimulate activity part prosecuting officers use increasing care examining qualifications appointed serve prosecutors department seeking systematically strengthen law enforcement agencies week week month month dramatic displays steady pressure removal negligent officials encouragement assistance vigilant course efforts revealed districts causes contributing congestion criminal dockets delays inefficiency prosecutions lack sufficient forces offices united states attorneys clerks courts marshals conditions tend clog machinery justice last conference senior circuit judges taken note indorsed department proposals improvement increases appropriations necessary asked order reenforce offices orderly administration law involves mere machinery law enforcement efficient use machinery spirit people support law alike essential need improvement however much may perfect mechanism still citizen dependent upon laws protection holds dear shall insist selecting particular laws obey undermines safety country attitude may obscure conceal ugly truth lawbreaker whoever may enemy society longer gloss unpleasant reality made vital consciousness every citizen condones traffics crime indifferent punishment criminal lax performance official duty effective agency breakdown society law rise source good citizenship men earnestly believe desire law upheld government officials law end laws made people right work repeal repeal equal duty observe demand enforcement gratified awakening sense responsibility citizens past months gratified many instances occurred refuted cynicism asserted system could convict defied law possessed means resist execution things reveal moral awakening people officials lies foundation rule law conclusion test rightfulness decisions must whether sustained advanced ideals american people foundations local government justice whether individual group ordered liberty freedom domination open opportunity equality opportunity initiative individuality people prosperity lessening poverty freedom public opinion education advancement knowledge growth religious spirit tolerance faiths foundations home advancement peace herbert hoover white house december 3 1929
senate house representative constitution require president shall time time give congress information state union recommend consideration measure shall judge necessary expedient comply requirement wish emphasize past year nation continue grow strength people advance comfort gain knowledge education youth widely spread moral spiritual force maintain peace become assure problem confront problem growth progress solution determine fact develop relative importance assign fact formulate common judgment upon realize solution spirit conciliation foreign relation peace world foundation future peace substantially strengthen promote peace policy pact great moral standard raise world nation covenant renounce war settle dispute pacific mean new world outlook inaugurate profoundly affected foreign policy nation since inauguration initiate new effort organization machinery peace also eliminate dangerous force produce controversy amongst nation january 1926 senate give consent adherence court international justice certain reservation september year statute establish court action nation signatory amend meet senate reservation go even beyond reservation make clear court true international court justice believe clear everyone controversy question country claim interest pass court without consent time question arise doubt advisory opinion completely safeguard adherence international court constitute slight step toward entry league nation indicate shall direct signature affix protocol adherence shall submit approval senate special message time convenient deal hope reduce friction world desire may reduce great economic burden naval armament join conference great britain france italy japan hold london january consider limitation reduction naval arm hold high hope success may attend effort begin present administration neighbor state mexico best domestic insurrection maintain embargo upon shipment arm mexico permit duly constituted government procure supply surplus war stock fortunately mexican government strength successfully withstood insurrection slight damage opportunity peaceful development give country request mexican government since lift embargo shipment arm altogether two government take step promote friendly relationship solve difference convention prolong period two year life general special claim commission conclude south america proud part settlement dispute chile peru disposal question work commission inquiry conciliation bolivia paraguay representative government participate successfully terminate incident seem threaten war propose plan final settlement suggest neutral government still consideration government continue effort act mediator boundary difficulty guatemala honduras instance profound importance establish good inauguration regular air mail service united state caribbean central american south american country still marines foreign soil nicaragua haiti china large sense wish represent abroad manner marine remain nicaragua urgent request government leader party pending training domestic constabulary capable insure tranquility already reduce force materially anxious withdraw situation warrant haiti 700 marine much difficult problem solution still obscure congress approve shall dispatch commission haiti review study matter endeavor arrive definite policy present force china constitute men hope also reduce normal legation guard desire establish firmly understanding relationship latin american country strengthen diplomatic mission country hope secure men long experience diplomatic service speak languages people accredit chiefs diplomatic mission state shall send senate early date nomination several men congress numerous wise foresighted act past year greatly strengthen character representation abroad make liberal provision establishment suitable quarter foreign staff different country order however may develop effective force one responsible function government shall recommend congress liberal appropriation work state department know expenditure public money great economic moral return come u assure effective conduct foreign relation national defense preserve internal order freedom encroachment first purpose government army navy maintain efficient state officer high intelligence zeal extent expansion number equipment present authorize ample purpose well deeply concern however grow expense total expenditure national defense purpose 1914 naturally rise great war recede 1924 begin rise current fiscal year expenditures reach exclude civilian service department program authorize carry still large figure future year remuneration pay soldier sailor justly high rate country world cost subsistence high yet total expenditure excess highly militarize nation world upon conference shortly hold london depend moderation make naval expenditure shall compel undertake naval construction imply washington arm treaty well construction would appear necessary international agreement complete shall commit next six year construction expenditure upward besides necessary increase cost annual upkeep 1914 various army contingent necessarily expand end great war recede low point 1924 expansion begin 1914 officer men regular force army navy 1924 1929 citizen army however include national guard form reserve increase total 1914 1924 1929 kellogg pact undertaken never use war instrument national policy therefore undertaken covenant use equipment solely defensive purpose defense point view force proportion national need therefore extent modified prospect peace never bright borne mind improvement national guard federal support begin 1920 definitely strengthen national security render far effective ever heretofore advance aviation also greatly increased effectiveness defense addition large program air force maintain army navy enormous growth commercial aviation provide unanticipated reserve manufacture capacity industrial air personnel add security recommend congress give earnest consideration possibility prudent action give relief continuously mount expenditure finance government finance government sound condition shall submit detailed evidence usual recommendation special budget message may however summarize position public debt june 30 year stand compare maximum august 1919 since june 30 reduce budget submit total appropriation recommend fiscal year 1931 compare present fiscal year present fiscal year however include federal farm board estimate yet determine 1931 owe many necessary burden assume congress previous year require large outlay extreme difficulty shall able keep expenditure next fiscal year within bound present year economy many direction permit accommodation press need net result increase show 1 per cent present fiscal year fail recognize obligation government support public welfare must coincidentally bear mind burden tax strive find relief tax reduction every dollar return fertilizes soil prosperity tax reduction estimate submit secretary treasury budget director indicate government close fiscal year 1930 surplus fiscal year 1931 surplus owe unusual circumstance extremely difficult estimate future revenue accuracy believe however congress fully justify give benefit prospective surplus taxpayer particularly ample provision debt reduction make year form debt retirement ordinary revenue view uncertainty respect future revenue comparatively small size indicate surplus 1931 relief take form provisional revision tax rate recommend normal income tax rate applicable incomes individual calendar year 1929 reduce 5 3 1 ½ per cent 4 2 ½ per cent tax income corporation calendar year 1929 reduce 12 11 per cent estimate result reduction income tax collect calendar year 1930 loss revenue divide approximately equally fiscal year 1930 1931 program give measure tax relief maximum number taxpayer relatively large benefit taxpayer small moderate income foreign debt past year bring u near completion settlement indebtedness foreign government united state act congress approve february 4 1929 authorize settlement government austria along line similar term settlement offer government relief creditor agreement yet concluded government form agreement settle execution awaits government austria secure assent relief creditor term offer act congress approve february 14 1929 authorize settlement government greece agreement conclude may 10 1929 government france ratify agreement u july 27 1929 agreement shortly congress recommend approval indebtedness foreign government united state unsettle russia armenia past year committee distinguish expert american leadership submit plan look revision claim germany various government united state deny participation war settlement general reparation claim comparatively small amount arise cost army occupation claim private citizen loss award mixed claim commission establish agreement german government find basis settlement necessary committee expert request government concerned make contribution adjustment felt share proportion concession make state treasury department position shortly submit consideration draft agreement execute united state germany provide payment revise amount extensive statement submit time total amount indebtedness various country unite state fund sum effect provide issue united states government bond people payment various government u account principal interest 1930 estimate total 1931 1932 measure american compromise settlement may appreciate fact taxpayer call upon find annually interest addition redeem principal sum borrow united state government purpose alien enemy property wise determination property seize war return owner proceed considerable rapidity original seized cash property value total returned remainder dispose next year general economic situation country enjoy large degree prosperity sound progress past year steady improvement method production distribution consequent advancement standard live progress course unequal among industry coal lumber leather textile still lag behind long upward trend fundamental progress however give rise profit translate wave uncontrolled speculation security result diversion capital business stock market inevitable crash natural consequence reduction consumption luxury meet loss number person throw temporarily employment price agricultural product deal upon great market affect sympathy stock crash fortunately federal reserve system take measure strengthen position day speculation would break together strong position bank carry whole credit system crisis without impairment capital hitherto absorb loan speculative purpose return normal channel business inflation price commodity undue accumulation good foreign trade expand magnitude exerts steady influence upon activity industry employment sudden threat unemployment especially recollection economic consequence previous crash much less secure financial system create unwarranted pessimism fear recall past storm similar character result retrenchment construction reduction wage lay worker natural result tendency business agency throughout country pause plan proposal continuation extension business hesitation unchecked could intensify depression widespread unemployment suffer therefore institute systematic voluntary measure cooperation business institution state municipal authority make certain fundamental business country shall continue usual wage therefore consume power shall reduce special effort shall make expand construction work order assist equalize deficit employment due enlarge sense cooperation responsibility grown business world past year response remarkable satisfactory canvass federal government institute measure prudent expansion work helpful upon different department make early recommendation congress convince measure reestablish confidence wage remain stable large degree industrial unemployment suffer would otherwise occur prevented agricultural price reflect return confidence measure take must vigorously pursue normal condition restore agriculture agricultural situation improve gross farm income estimate department agriculture crop season estimate basis price since last harvest value crop would slight decline general commodity price past year naturally assist farmer buy power number farmer bankruptcy materially decrease previous year decline land value seem arrest rate movement farm city reduce section agriculture course fare equally area suffer drought responsible farm leader assure large measure confidence return agriculture feel optimism pervades industry extensive action strengthen agricultural industry ever take government inaugurate farm marketing act june 15 last provision federal farm board establish comprise men long widely experienced agriculture sponsor farm organization country short period existence board take definite step toward efficient organization agriculture toward elimination waste marketing toward upbuilding farmer market organization sounder efficient line substantial headway make organization four basic commodity grain cotton livestock wool support board cooperative marketing organization board activity undoubtedly serve steady farmer market recent crisis operate also great stimulus cooperative organization agriculture problem industry complex need sound organization imperative yet board move rapidly along line lay act facilitate creation farmer organization federate central institution view increase bargaining power agriculture prevent control surplus mobilize economic power agriculture tariff special session congress call expedite fulfillment party pledge agricultural relief tariff pledge farm relief carry time state principle upon believe action take respect tariff effective tariff upon agricultural product compensate farmer high cost higher standard live dual purpose tariff protect farmer domestic market also stimulate diversify crop grow product could otherwise produce thus lessen dependence upon export foreign market great expansion production abroad condition mention render foreign competition export market increasingly serious seem natural therefore american farmer greatly handicap foreign market competition young expand country ask foreign access domestic market regulate take account difference cost production consider tariff industry agriculture find economic shift necessitate readjustment tariff schedule seven year experience tariff bill enact 1922 demonstrated wisdom congress enactment measure whole work well main wage maintain high level export import steadily increase exception manufacture industry prosperous nevertheless economic change take place time place certain domestic product disadvantage new industry come create necessity limit change schedule administrative clause law write 1922 would seem test necessity revision main whether substantial slacken activity industry past year consequent decrease employment due insurmountable competition product industry set new basis protective duty seven year ago need remedy whatever substantial loss employment may result shift since time determine change tariff must fail take account broad interest country whole interest include trade relation country condition arisen view change principle state open special session firmly opinion application pending revision give country kind tariff law need want would helpful action take early moment especially time business agriculture cooperate minimize future uncertainty know rate even limit revision require consideration readjustment many item exhaustive inquiry valuable debate men representative part country need determine detail rate must necessarily accomplish congress however perfectly rate structure may frame give time shift economic force inevitably occur render change item desirable necessarily long interval congressional revision injustice bound develop experienced dairyman flaxseed producer glass industry others 1922 rate reason anxious broad principle flexible tariff provide exist law preserve delay action avoid expeditious method determine cost production home abroad executive authority promulgate change upon recommendation tariff commission exhaustive investigation change congress isolate item refer would unlikely concentration opposition country could see advantage industry state difficulty limit consideration congress isolate case fundamental conflict interest farmer worker lowering standard live either tends destroy prosperity one rest upon real conflict east west north south united state complete interlock economic dependence common strive social spiritual progress common heritage american infinite web national sentiment create solidarity great people unparalleled human history invisible bond shatter difference opinion grow discussion tariff public building provision various act congress authorize public building land upon construct district columbia country large exclude acquisition land triangle city public building legislation provide program district columbia eight nine year program country large sum approximately expend june 30 last expend district outside even generous provision district columbia country insufficient press governmental need expensive rent inadequate facility extravagance economy district even completion project shall fully clerk house rented temporary war building last little long therefore recommend consideration give extension authorization country large district columbia distribute term year survey need category make secretary treasury postmaster general would helpful present economic situation step take would enable early construction work expedition enlargement program district would bring direct economy construction enable erection building regular sequence maintain stable labor force city contract make advantageous term earlier completion program acknowledge need would add dignity celebration 1932 two hundredth anniversary birth president washington consideration project contribute much dignify national capital like renew suggestion fine art commission require pas upon private building propose site face upon public building park without control much effort congress beautification capital minimize waterway flood control development inland waterway receive new impulse completion year canalization ohio uniform depth development segment mississippi system expedite view recommend increase appropriation river harbor per annum together per annum release completion ohio make available provide river harbor work sum per annum mississippi system thus bring early completion conflict opinion arisen propose floodway arkansas river gulf mexico via atchafalaya river lead withhold construction upon portion mississippi flood control plan could review engineer recommendation congress portion project vigorously prosecute recommended increase appropriation present year next fiscal year expansion intracoastal waterway effective barge depth well warrant await action canada upon lawrence waterway project highways mile legally establish highway unite state 10 per cent include state highway system remainder county local road mile improve type surface comprise 63 per cent state highway system 16 per cent local road improve road mile hard surface comprise 22 per cent state highway system 8 per cent local road proper plan materially reduce list mileage public roads particularly agricultural district turn road back useful purpose evident road construction must program progress improvement mile type per annum mile durable type total expenditures federal state local government last year construction maintenance assume huge total federal aid construction highway system conjunction state proved beneficial stimulating must ultimately give consideration increase contribution system particularly view stimulate improvement road post office post office deficit increase year perhaps due loss ocean mail air mail contract department make exhaustive study source deficit view later recommendation congress respect post office quarter provide part federal construction part various form rent lease arrangement practice grow recent year contract long term lease rent amortization principal cost building include advise fully 40 per cent could save many rent lease agreement even allow interest capital require normal government rate also many objectionable feature practice provision adequate quarter post office put sound basis revision air mail rate upon systematic permanent footing necessary subject study legislation prove necessary subject present congress meantime recommend congress consider desirability authorize expansion south american service commercial aviation past year progress civil aeronautics remarkable considerable degree due wise assistance federal government establishment maintenance airways department commerce mail contract post office department airway exceed mile mile light equipped operation close current year airport construction state extremely active commercial municipal airport operation additional propose early development assistance nation build sound aviation system operate private enterprise plane commercial use pilot license government manufacturing capacity rise plane per annum aviation company increase regular air transportation total mile per day fly night mail express service connect principal city extensive service passenger transportation inaugurate others importance imminent american air line reach canada mexico cuba porto rico central america important country south america railway whole railroad never good physical financial condition country never well served great volume freight traffic ever tender carry speed never attain satisfaction shipper efficiencies new method result reduction cost provide freight transportation freight rate show continuous descend line level enforce world war however yet assure future adequate system transportation consolidation objective congress transportation act chief purpose consolidation secure system uniform satisfactory rate structure stable financial structure equitable distribution traffic great efficiency instead hauls way country assurance well service ultimately low even rate would otherwise attained legislation simplify expedite consolidation method well protect public interest enact consideration also give relief member commission necessity detailed attention comparatively inconsequential matter exist law must receive direct personal consideration public interest member commission press minor matter inadequate time investigation consideration large question commit solution many minor matter function commission might well make revisory primary responsibility delegate subordinate official practice long vogue executive department merchant marine impulse merchant marine act 1928 transfer private enterprise steamship line go forward increase success ship board operate 18 line less half number originally establish estimate expenditure come fiscal year base upon reduction loss government line approximately construction loan make amount approximately revolve fund authorize congress furnish additional aid american shipping stimulate building vessel american yard desirous secure full value nation great effort develop merchant marine merchant marine act soon inauguration present administration appoint interdepartmental committee consist secretary commerce chairman secretary navy postmaster general chairman ship board make survey policy pursue act 1928 respect mail contract inquire working advise postmaster general administration act particular seem necessary determine result contract already let would assure purpose express act develop american merchant marine assure permanence transportation foreign trade unite state purpose develop coordinated policy purpose may translate actuality review mail contract already award find aggregate 25 separate award impose governmental obligation little per annum provision impose five contract construction new vessel replace expand service requirement come total 12 vessel period aggregate ton condition contract work satisfactorily study substantially complete committee advise desirability necessity secure much large undertaking service new construction future contract committee time recommend advertise 14 additional route make substantial requirement construction new vessel life contract recommend total 40 new vessel require contract propose half require build next three year capital cost new construction approximately involve approximately gross ton bidder find make undertaking necessary recommend congress increase authorize expenditure post office annually advantageous grant authority conflict administration act arisen contention person purchase ship board vessel entitle mail contract irrespective whether low bidder post office hand require law let contract manner urgent congress clarify situation banking system desirable congress consider revision portion bank law development group chain bank present many new problem question naturally arise whether allow expand without restraint method would dangerously concentrate control credit whether would event seriously threaten one fundamental american credit system credit base upon bank deposit control person within area furnish deposit thus subject restraint local interest public opinion area degree however movement chain group bank grope strong support bank secure basis institution growth size stability metropolitan bank mark contrast trend country district many failure loss failure impose upon agricultural community relinquishment charter national bank great commercial center favor state charter indicate condition surround national bank render unable compete state bank withdrawal result weaken national banking system propose permission grant national bank engage branch banking nature would preserve within limited region local responsibility control credit institution subject however require careful investigation might find advantageous create joint commission embrace member congress appropriate federal official subsequent report electrical power regulation federal power commission comprise three cabinet officer duty involve competent conduct grow responsibility commission far exceed time attention official properly afford important duty recommend authority give appointment commissioner replace also desirable authority commission extend certain phase power regulation nature electric utility industry 90 per cent power generation distribution intrastate character state develop regulatory system certificate convenience rate profit utility encroach upon authority responsibility would encroachment upon right state case however interstate character beyond jurisdiction state meet case would desirable method could work initial action may take commission state whose joint action make effective federal power commission reserve act motion case disagreement nonaction state radio commission recommend reorganization radio commission permanent body present temporary status requirement present law commissioner shall appoint specified zone abolish general provision make equitable selection different part country despite effort commissioner present method develop public insistence commissioner specially charge supervision radio affair zone appoint result danger system degenerate national system five regional agency vary practice vary policy competitive tendency consequent failure attain utmost capacity service people whole muscle shoal desirable question dispose present condition income plant less could otherwise secure use especially public secure full benefit could obtain belief part plant would useful revenue remainder dedicated time farmer united state investigation experimentation commercial scale agricultural chemistry mean advance discovery science systematically apply agricultural need development chemical industry tennessee valley assure favor operation government either power manufacturing business except unavoidable major public purpose form settlement question imply enter upon contract contract lease plant either whole part reservation facility product income agricultural purpose extremely technical involved nature contract deal chemical electrical enterprise add unusual difficulty surround special plant rapid commercial change progress power synthetic nitrogen manufacture lead suggest congress create special commission investigate report past authority negotiate complete sort contract contract behalf government subject course general requirement congress may stipulate boulder dam secretary interior make satisfactory progress negotiation complex contract require sale power generate project contract must assure return government outlay upon project recommend necessary fund appropriate initiation work soon contract hand congress conservation conservation national resource fix policy government three important question bear upon conservation public land become urgent conservation oil gas resource future need national necessity work oil permit system development oil gas resource public domain subject great abuse consider necessary suspend issuance permit direct review outstanding permit compliance holder law purpose end abuse place government position review entire subject also confront major problem conservation due overgrazing public land effect overgrazing become general destroy range impair ground coverage seriously menace water supply many part west quick spring flood autumn drought third problem major dimension reconsideration reclamation policy inclusion available land public domain exist plan reclamation project largely complete original purpose reclamation service still remain necessity extensive storage water arid state render desirable give wider vision purpose service provide careful consideration question also better division responsibility state federal government include possible transfer state school purpose land unreserved forest park power mineral appoint commission conservation public domain membership represent major public land state time public large recommend congress authorize moderate sum defray expense social service federal government provide extensive valuable program constructive social service education home building protection woman child employment public health recreation many direction broad sense federal activity direction confine research dissemination information experience temporary subsidy state order secure uniform advancement practice method attitude federal government undermine one precious possession american people local individual responsibility adhere policy federal official however make important contribution leadership stimulation community voluntary agency extend federal assistance organization force bring cooperation among instance character recently cooperation secretary interior labor lay foundation exhaustive inquiry fact precedent white house conference child health protection cooperative movement among interested agency impose expense upon government similar conference call connection well housing recreation later date view considerable difference opinion policy pursue federal government respect education appoint committee representative important educational association others investigate present recommendation cooperation secretary interior also appoint voluntary committee distinguish membership assist movement abolition illiteracy recommend additional appropriation federal employment service order may fully cover cooperative work state local service also recommend additional appropriation woman child bureaus much need research fact feel prove helpful public health advance scientific discovery disease health impose new consideration upon u nation whole vitally interested health people protection spread contagious disease relation physical mental disability criminality economic moral advancement fundamentally associate sound body mind organization preventive measure health education personal application province public health service organization universal public education support proper burden upon taxpayer organize success either sanitary educational phase except public authority base upon local state responsibility consider federal government obligation contribution establishment agency practical work organization exhaustive experiment trial demonstrate base competent organization municipality county local unit municipality 400 rural county unit organization highly develop health unit comprise least physician sanitary engineer community nurse addition case another nurse devote problem maternity child organization give fundamental control preventive measure assist community instruction federal government interest control contagion act united state public health service state agency past future concern development particularly many rural section unfortunately far behind progress part fund contribute act child bureau department labor also find way channel recommend congress purpose sheppard towner act continue child bureau limited period year congress consider desirability confining use federal fund state build county local unit outlay positively coordinate fund expend united state public health service direct phase county local unit organization fund appropriated course apply state public health program county local unit efficiently coordinate whole state federal prison closely related crime condition administration federal prison system federal penal institution overcrowd condition daily become bad parole probation system inadequate condition make impossible perform work personal reconstruction prisoner prepare return duty citizenship order relieve press evil direct temporary transfer army disciplinary barrack leavenworth department justice use federal prison temporary inadequate present need need new federal prison reorganization probation parole system establish department justice bureau prison sufficient force deal adequately grow activity prison institution authorization improvement give speedily initial appropriation allow construction new institution undertaken immigration restriction immigration every aspect prove sound national policy press problem formulate method limit number immigrant welcome shall adapt national set national need oppose basis quota force hop could find practical method secure believe real national objective fitness immigrant physique character train need service perhaps system priority within quota could produce result time enable hardship present system clear recommend congress give subject study executive department gladly cooperate hope discover method fully secure national necessity veteran policy government almost inception make provision men disable defense country policy maintain originally take form land grant pension system continue entry world war congress time inaugurate new plan compensation rehabilitation hospitalization medical care treatment insurance whereby benefit award veteran immediate dependent whose disability attributable war service basic principle legislation sound desire eliminate possibility injustice due difficulty establish service connection disability principle degree extend veteran whose disease injuries become apparent within brief period war receive compensation insurance benefit liberalize emergency officer receive additional benefit door government hospital open veteran even though disease injury result war service addition adjust service certificate issue veteran mean expenditure nearly 1945 addition appropriate annually veteran relief administration law concern veteran dependent upon basis deal generously humanely justly inequality arise substantial adequate care give justice administer improvement administration may require amendment time time law care take see change conform basic principle legislation convince gain efficiency economy uniform administration well definition national policy pension bureau national home volunteer soldier veteran bureau bring together single agency total appropriation agency exceed per annum civil service approximately employee executive civil service occupy position subject competitive examination civil service law however still command opportunity extend system opportunity lie within province congress president recommend step take authorization appointment postmaster make civil service law departmental reorganization subject consideration 20 year promise political party recent campaign repeatedly examine committee commission congressional executive voluntary conclusion investigation unanimous reorganization necessity sound administration economy effective governmental policy relief citizen unnecessary harassment relation multitude scattered governmental agency presentation specific plan enliven opposition every official whose authority may curtail fear position imperil result bureau department wish maintain authority activity citizens organization selfishly interested inspire fear favorite bureau may new set less subject influence subject influence seem essential principle reorganization two number first administrative activity major purpose place group responsibility second executive administrative function separate board commission place individual responsibility broadly advisory function remove individual authority assign board commission indeed fundamental principle upon government found principle adhere whole development business structure distillation common sense generation instance conservation national resource spread among eight agency five department suffer conflict overlap proper development adherence broad national policy central point searchlight public opinion may concentrate function group direction official assistant secretary conservation particular department cabinet officer group place secondary importance need concentration may say educational service merchant marine aid public work public health veteran service many others component part widely scatter various department independent agency desirable first experience different group action create new department may necessary later background previous experience see hope development sound reorganization government unless congress willing delegate authority problem subject define principle executive act upon approval joint committee congress reservation power revision congress within limited period adequate consideration prohibition first duty president oath office secure enforcement law enforcement law enact give effect eighteenth amendment far satisfactory part due inadequate organization administrative agency federal government hope expedite reorganization request june 6 last congress appoint joint committee collaborate executive agency preparation legislation would helpful could appoint subject earnestly consider law enforcement commission administrative official government joint conclusion certain step take first immediate concentration responsibility strengthen enforcement agency federal government transfer department justice federal function detection considerable degree prosecution lodge prohibition bureau treasury time control distribution industrial alcohol legalize beverage remain treasury second provision make relief congestion federal court modify simplifying procedure deal large volume petty prosecution various federal act third codification law relate prohibition avoid necessity exist resort 25 statute enact various time 40 year technical defect statute disclose cure would add recommendation desirability reorganize various service engage prevention smuggle one border patrol coast guard recommendation upon subject whole develop examination law enforcement commission expect criminal law ever fully enforce long criminal exist district columbia model city law enforcement nation condition much well many city far perfect due part congestion criminal case supreme court district result long delay furthermore need legislation district supplement national prohibition act sharply define enlarge duty power district commissioner police district opening way well cooperation enforcement prohibition district official prohibition officer federal government urgent condition remedied law enforcement observance one look satisfaction upon volume crime kinds growth organize crime country press need organize system administer criminal justice establish full vigor effectiveness need reestablish faith high interest country serve insistence upon swift administration justice offender whether rich poor shall effect improvement vital preservation institution serious issue people authority congress appoint national commission law observance enforcement exhaustive study entire problem enforcement law improvement judicial system include special problem abuse grow prohibition law commission invite make wide inquiry shortcoming administration justice cause remedy organize work subcommittee deal many contributory cause situation enlist aid investigator field require special consideration confident result study carry forward make notable contribution solution press problem pending legislation department justice strive weed inefficiency wherever exist stimulate activity part prosecute officer use increase care examine qualification appoint serve prosecutor department seek systematically strengthen law enforcement agency week week month month dramatic display steady pressure removal negligent official encouragement assistance vigilant course effort reveal district cause contribute congestion criminal docket delay inefficiency prosecution lack sufficient force office united state attorney clerk court marshal condition tend clog machinery justice last conference senior circuit judge take note indorsed department proposal improvement increase appropriation necessary ask order reenforce office orderly administration law involve mere machinery law enforcement efficient use machinery spirit people support law alike essential need improvement however much may perfect mechanism still citizen dependent upon law protection hold dear shall insist select particular law obey undermines safety country attitude may obscure conceal ugly truth lawbreaker whoever may enemy society long gloss unpleasant reality make vital consciousness every citizen condones traffic crime indifferent punishment criminal lax performance official duty effective agency breakdown society law rise source good citizenship men earnestly believe desire law upheld government official law end law make people right work repeal repeal equal duty observe demand enforcement gratify awaken sense responsibility citizen past month gratify many instance occur refuted cynicism assert system could convict defied law possess mean resist execution thing reveal moral awaken people official lie foundation rule law conclusion test rightfulness decision must whether sustain advanced ideal american people foundation local government justice whether individual group order liberty freedom domination open opportunity equality opportunity initiative individuality people prosperity lessen poverty freedom public opinion education advancement knowledge growth religious spirit tolerance faiths foundation home advancement peace herbert hoover white house december 3 1929