  This message is the first of several which I shall send to Congress during the interval between the opening of its regular session and its adjournment for the Christmas holidays. The amount of information to be communicated as to the operations of the Government, the number of important subjects calling for comment by the Executive, and the transmission to Congress of exhaustive reports of special commissions, make it impossible to include in one message of a reasonable length a discussion of the topics that ought to be brought to the attention of the National Legislature at its first regular session. In May last the Supreme Court handed down decisions in the suits in equity brought by the United States to enjoin the further maintenance of the Standard Oil Trust and of the American Tobacco Trust, and to secure their dissolution. The decisions are epoch-making and serve to advise the business world authoritatively of the scope and operation of the anti-trust act of 1890. The decisions do not depart in any substantial way from the previous decisions of the court in construing and applying this important statute, but they clarify those decisions by further defining the already admitted exceptions to the literal construction of the act. By the decrees, they furnish a useful precedent as to the proper method of dealing with the capital and property of illegal trusts. These decisions suggest the need and wisdom of additional or supplemental legislation to make it easier for the entire business community to square with the rule of action and legality thus finally established and to preserve the benefit, freedom, and spur of reasonable competition without loss of real efficiency or progress. The statute in its first section declares to be illegal "every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States or with foreign nations," and in the second, declares guilty of a misdemeanor "every person who shall monopolize or attempt to monopolize or combine or conspire with any other person to monopolize any part of the trade or commerce of the several States or with foreign nations." In two early cases, where the statute was invoked to enjoin a transportation rate agreement between interstate railroad companies, it was held that it was no defense to show that the agreement as to rates complained of was reasonable at common law, because it was said that the statute was directed against all contracts and combinations in restraint of trade whether reasonable at common law or not. It was plain from the record, however, that the contracts complained of in those cases would not have been deemed reasonable at common law. In subsequent cases the court said that the statute should be given a reasonable construction and refused to include within its inhibition, certain contractual restraints of trade which it denominated as incidental or as indirect. These cases of restraint of trade that the court excepted from the operation of the statute were instances which, at common law, would have been called reasonable. In the Standard Oil and Tobacco cases, therefore, the court merely adopted the tests of the common law, and in defining exceptions to the literal application of the statute, only substituted for the test of being incidental or indirect, that of being reasonable, and this, without varying in the slightest the actual scope and effect of the statute. In other words, all the cases under the statute which have now been decided would have been decided the same way if the court had originally accepted in its construction the rule at common law. It has been said that the court, by introducing into the construction of the statute common-law distinctions, has emasculated it. This is obviously untrue. By its judgment every contract and combination in restraint of interstate trade made with the purpose or necessary effect of controlling prices by stifling competition, or of establishing in whole or in part a monopoly of such trade, is condemned by the statute. The most extreme critics can not instance a case that ought to be condemned under the statute which is not brought within its terms as thus construed. The suggestion is also made that the Supreme Court by its decision in the last two cases has committed to the court the undefined and unlimited discretion to determine whether a case of restraint of trade is within the terms of the statute. This is wholly untrue. A reasonable restraint of trade at common law is well understood and is clearly defined. It does not rest in the discretion of the court. It must be limited to accomplish the purpose of a lawful main contract to which, in order that it shall be enforceable at all, it must be incidental. If it exceed the needs of that contract, it is void. The test of reasonableness was never applied by the court at common law to contracts or combinations or conspiracies in restraint of trade whose purpose was or whose necessary effect would be to stifle competition, to control prices, or establish monopolies. The courts never assumed power to say that such contracts or combinations or conspiracies might be lawful if the parties to them were only moderate in the use of the power thus secured and did not exact from the public too great and exorbitant prices. It is true that many theorists, and others engaged in business violating the statute, have hoped that some such line could be drawn by courts; but no court of authority has ever attempted it. Certainly there is nothing in the decisions of the latest two cases from which such a dangerous theory of judicial discretion in enforcing this statute can derive the slightest sanction. We have been twenty-one years making this statute effective for the purposes for which it was enacted. The Knight case was discouraging and seemed to remit to the States the whole available power to attack and suppress the evils of the trusts. Slowly, however, the error of that judgment was corrected, and only in the last three or four years has the heavy hand of the law been laid upon the great illegal combinations that have exercised such an absolute dominion over many of our industries. Criminal prosecutions have been brought and a number are pending, but juries have felt averse to convicting for jail sentences, and judges have been most reluctant to impose such sentences on men of respectable standing in society whose offense has been regarded as merely statutory. Still, as the offense becomes better understood and the committing of it partakes more of studied and deliberate defiance of the law, we can be confident that juries will convict individuals and that jail sentences will be imposed. In the Standard Oil case the Supreme and Circuit Courts found the combination to be a monopoly of the interstate business of refining, transporting, and marketing petroleum and its products, effected and maintained through thirty-seven different corporations, the stock of which was held by a New Jersey company. It in effect commanded the dissolution of this combination, directed the transfer and pro rata distribution by the New Jersey company of the stock held by it in the thirty-seven corporations to and among its stockholders; and the corporations and individual defendants were enjoined from conspiring or combining to restore such monopoly; and all agreements between the subsidiary corporations tending to produce or bring about further violations of the act were enjoined. In the Tobacco case, the court found that the individual defendants, twenty-nine in number, had been engaged in a successful effort to acquire complete dominion over the manufacture, sale, and distribution of tobacco in this country and abroad, and that this had been done by combinations made with a purpose and effect to stifle competition, control prices, and establish a monopoly, not only in the manufacture of tobacco, but also of tin-foil and licorice used in its manufacture and of its products of cigars, cigarettes, and snuffs. The ' tobacco suit presented a far more complicated and difficult case than the Standard Oil suit for a decree which would effectuate the will of the court and end the violation of the statute. There was here no single holding company as in the case of the Standard Oil Trust. The main company was the American Tobacco Company, a manufacturing, selling, and holding company. The plan adopted to destroy the combination and restore competition involved the redivision of the capital and plants of the whole trust between some of the companies constituting the trust and new companies organized for the purposes of the decree and made parties to it, and numbering, new and old, fourteen. The American Tobacco Company (old), readjusted capital, $92, 000,000; the Liggett & Meyers Tobacco Company (new), capital, $67,000,000; the P. Lorillard Company (new), capital, $47,000,000; and the R. J. Reynolds Tobacco Company (old), capital, $7,525,000, are chiefly engaged in the manufacture and sale of chewing and smoking tobacco and cigars. The former one tinfoil company is divided into two, one of $825,000 capital and the other of $400,000. The one snuff company is divided into three companies, one with a capital Of $15,000,000, another with a capital of $8,000,000, and a third with a capital of $8,000,000. The licorice companies are two one with a capital Of $5,758,300 and another with a capital of $200,000. There is, also, the British-American Tobacco Company, a British corporation, doing business abroad with a capital Of $26,000,000, the Porto Rican Tobacco Company, with a capital of $1,800,000, and the corporation of United Cigar Stores, with a capital of $9,000,000. Under this arrangement, each of the different kinds of business will be distributed between two or more companies with a division of the prominent brands in the same tobacco products, so as to make competition not only possible but necessary. Thus the smoking-tobacco business of the country is divided so that the present independent companies have 21-39 per cent, while the American Tobacco Company will have 33-08 per cent, the Liggett & Meyers 20.05 per cent, the Lorillard Company 22.82 per cent, and the Reynolds Company 2.66 per cent. The stock of the other thirteen companies, both preferred and common, has been taken from the defendant American Tobacco Company and has been distributed among its stockholders. All covenants restricting competition have been declared null and further performance of them has been enjoined. The preferred stock of the different companies has now been given voting power which was denied it under the old organization. The ratio of the preferred stock to the common was as 78 to 40. This constitutes a very decided change in the character of the ownership and control of each company. In the original suit there were twenty-nine defendants who were charged with being the conspirators through whom the illegal combination acquired and exercised its unlawful dominion. Under the decree these defendants. will hold amounts of stock in the various distributee companies ranging from 41 per cent as a maximum to 28.5 per cent as a minimum, except in the case of one small company, the Porto Rican Tobacco Company, in which they will hold 45 per cent. The twenty-nine individual defendants are enjoined for three years from buying any stock except from each other, and the group is thus prevented from extending its control during that period. All parties to the suit, and the new companies who are made parties are enjoined perpetually from in any way effecting any combination between any of the companies in violation of the statute by way of resumption of the old trust. Each of the fourteen companies is enjoined from acquiring stock in any of the others. All these companies are enjoined from having common directors or officers, or common buying or selling agents, or common offices, or lending money to each other. Objection was made by certain independent tobacco companies that this settlement was unjust because it left companies with very large capital in active business, and that the settlement that would be effective to put all on an equality would be a division of the capital and plant of the trust into small fractions in amount more nearly equal to that of each of the independent companies. This contention results from a misunderstanding of the anti-trust law and its purpose. It is not intended thereby to prevent the accumulation of large capital in business enterprises in which such a combination can secure reduced cost of production, sale, and distribution. It is directed against such an aggregation of capital only when its purpose is that of stifling competition, enhancing or controlling prices, and establishing a monopoly. If we shall have by the decree defeated these purposes and restored competition between the large units into which the capital and plant have been divided, we shall have accomplished the useful purpose of the statute. It is not the purpose of the statute to confiscate the property and capital of the offending trusts. Methods of punishment by fine or imprisonment of the individual offenders, by fine of the corporation or by forfeiture of its goods in transportation, are provided, but the proceeding in equity is a specific remedy to stop the operation of the trust by injunction and prevent the future use of the plant and capital in violation of the statute. I venture to say that not in the history of American law has a decree more effective for such a purpose been entered by a court than that against the Tobacco Trust. As Circuit judge Noyes said in his judgment approving the decree: "The extent to which it has been necessary to tear apart this combination and force it into new forms with the attendant burdens ought to demonstrate that the Federal anti-trust statute is a drastic statute which accomplishes effective results; which so long as it stands on the statute books must be obeyed, and which can not be disobeyed without incurring far-reaching penalties. And, on the other hand, the successful reconstruction of this organization should teach that the effect of enforcing this statute is not to destroy, but to reconstruct; not to demolish, but to re-create in accordance with the conditions which the Congress has declared shall exist among the people of the United States." It has been assumed that the present pro rata and common ownership in all these companies by former stockholders of the trust would insure a continuance of the same old single control of all the companies into which the trust has by decree been disintegrated. This is erroneous and is based upon the assumed inefficacy and innocuousness of judicial injunctions. The companies are enjoined from cooperation or combination; they have different managers, directors, purchasing and sales agents. If all or many of the numerous stockholders, reaching into the thousands, attempt to secure concerted action of the companies with a view to the control of the market, their number is so large that such an attempt could not well be concealed, and its prime movers and all its participants would be at once subject to contempt proceedings and imprisonment of a summary character. The immediate result of the present situation will necessarily be activity by all the companies under different managers, and then competition must follow, or there will be activity by one company and stagnation by another. Only a short time will inevitably lead to a change in ownership of the stock, as all opportunity for continued cooperation must disappear. Those critics who speak of this dis integration in the trust as a mere change of garments have not given consideration to the inevitable working of the decree and understand little the personal danger of attempting to evade or set at naught the solemn injunction of a court whose object is made plain by the decree and whose inhibitions are set forth with a detail and comprehensiveness The effect of these two decisions has led to decrees dissolving the combination of manufacturers of electric lamps, a southern wholesale grocers' association, an interlocutory decree against the Powder Trust with directions by the circuit court compelling dissolution, and other combinations of a similar history are now negotiating with the Department of justice looking to a disintegration by decree and reorganization in accordance with law. It seems possible to bring about these reorganizations without general business disturbance. But now that the anti-trust act is seen to be effective for the accomplishment of the purpose of its enactment, we are met by a cry from many different quarters for its repeal. It is said to be obstructive of business progress . to be an attempt to restore old-fashioned methods of destructive competition between small units, and to make impossible those useful combinations of capital and the reduction of the cost of production that are essential to continued prosperity and normal growth. In the recent decisions the Supreme Court makes clear that there is nothing in the statute which condemns combinations of capital or mere bigness of plant organized to secure economy in production and a reduction of its cost. It is only when the purpose or necessary effect of the organization and maintenance of the combination or the aggregation of immense size are the stifling of competition, actual and potential, and the enhancing of prices and establishing a monopoly, that the statute is violated. Mere size is no sin against the law. The merging of two or more business plants necessarily eliminates competition between the units thus combined, but this elimination is in contravention of the statute only when the combination is made for purpose of ending this particular competition in order to secure control of, and enhance, prices and create a monopoly. The complaint is made of the statute that it is not sufficiently definite in its description of that which is forbidden, to enable business men to avoid its violation. The suggestion is, that we may have a combination of two corporations, which may run on for years, and that subsequently the Attorney General may conclude that it wa's a violation of the statute, and that which was supposed by the combiners to be innocent then turns out to be a combination in violation of the statute. The answer to this hypothetical case is that when men attempt to amass such stupendous capital as will enable them to suppress competition, control prices and establish a monopoly, they know the purpose of their acts. Men do not do such a thing without having it clearly in mind. If what they do is merely for the purpose of reducing the cost of production, without the thought of suppressing competition by use of the bigness of the plant they are creating, then they can not be convicted at the time the union is made, nor can they be convicted later, unless it happen that later on they conclude to suppress competition and take the usual methods for doing so, and thus establish for themselves a monopoly. They can, in such a case, hardly complain if the motive which subsequently is disclosed is attributed by the court to the original combination. Much is said of the repeal of this statute and of constructive legislation intended to accomplish the purpose and blaze a clear path for honest merchants and business men to follow. It may be that such a plan will be evolved, but I submit that the discussions which have been brought out in recent days by the fear of the continued execution of the anti-trust law have produced nothing but glittering generalities and have offered no line of distinction or rule of action as definite and as clear as that which the Supreme Court itself lays down in enforcing the statute. I see no objection-and indeed I can see decided advantages-in the enactment of a law which shall describe and denounce methods of competition which are unfair and are badges of the unlawful purpose denounced in the anti-trust law. The attempt and purpose to suppress a competitor by underselling him at a price so unprofitable as to drive him out of business, or the making of exclusive contracts with customers under which they are required to give up association with other manufacturers, and numerous kindred methods for stifling competition and effecting monopoly, should be described with sufficient accuracy in a criminal statute on the one hand to enable the Government to shorten its task by prosecuting single misdemeanors instead of an entire conspiracy, and, on the other hand, to serve the purpose of pointing out more in detail to the business community what must be avoided. In a special message to Congress on January 7, 1910, I ventured to point out the disturbance to business that would probably attend the dissolution of these offending trusts. I said: "But such an investigation and possible prosecution of corporations whose prosperity or destruction affects the comfort not only of stockholders but of millions of wage earners, employees, and associated tradesmen must necessarily tend to disturb the confidence of the business community, to dry up the now flowing sources of capital from its places of hoarding, and produce a halt in our present prosperity that will cause suffering and strained circumstances among the innocent many for the faults of the guilty few. The question which I wish in this message to bring clearly to the consideration and discussion of Congress is whether, in order to avoid such a possible business danger, something can not be done by which these business combinations may be offered a means, without great financial disturbance, of changing the character, organization, and extent of their business into one within the lines of the law under Federal control and supervision, securing compliance with the anti-trust statute. "Generally, in the industrial combinations called 'trusts,' the principal business is the sale of goods in many States and in foreign markets; in other words, the interstate and foreign business far exceeds the business done in any one State. This fact will justify the Federal Government in granting a Federal charter to such a combination to make and sell in interstate and foreign commerce the products of useful manufacture under such limitations as will secure a compliance with the anti-trust law. It is possible so to frame a statute that while it offers protection to a Federal company against harmful, vexatious, and unnecessary invasion by the States, it shall subject it to reasonable taxation and control by the States with respect to its purely local business. * * * "Corporations organized under this act should be prohibited from acquiring and holding stock in other corporations (except for special reasons, upon approval by the proper Federal authority), thus avoiding the creation under national auspices of the holding company with subordinate corporations in different States, which has been such an effective agency in the creation of the great trusts and monopolies. "If the prohibition of the anti-trust act against combinations in restraint of trade is to be effectively enforced, it is essential that the National Government shall provide for the creation of national corporations to carry on a legitimate business throughout the United States. The conflicting laws of the different States of the Union with respect to foreign corporations make it difficult, if not impossible, for one corporation to comply with their requirements so as to carry on business in a number of different States." I renew the recommendation of the enactment of a general law providing for the voluntary formation of corporations to engage in trade and commerce among the States and with foreign nations. Every argument which was then advanced for such a law, and every explanation which was at that time offered to possible objections, have been confirmed by our experience since the enforcement of the antitrust, statute has resulted in the actual dissolution of active commercial organizations. It is even more manifest now than it was then that the denunciation of conspiracies in restraint of trade should not and does not mean the denial of organizations large enough to be intrusted with our interstate and foreign trade. It has been made more clear now than it was then that a purely negative statute like the anti-trust law may well be supplemented by specific provisions for the building up and regulation of legitimate national and foreign commerce. The drafting of the decrees in the dissolution of the present trusts, with a view to their reorganization into legitimate corporations, has made it especially apparent that the courts are not provided with the administrative machinery to make the necessary inquiries preparatory to reorganization, or to pursue such inquiries, and they should be empowered to invoke the aid of the Bureau of Corporations in determining the suitable reorganization of the disintegrated parts. The circuit court and the Attorney General were greatly aided in framing the decree in the Tobacco Trust dissolution by an expert from the Bureau of Corporations. I do not set forth in detail the terms and sections of a statute which might supply the constructive legislation permitting and aiding the formation of combinations of capital into Federal corporations. They should be subject to rigid rules as to their organization and procedure, including effective publicity, and to the closest supervision as to the issue of stock and bonds by an executive bureau or commission in the Department of Commerce and Labor, to which in times of doubt they might well submit their proposed plans for future business. It must be distinctly understood that incorporation under Federal law could not exempt the company thus formed and its incorporators and managers from prosecution under the anti-trust law for subsequent illegal conduct, but the publicity of its procedure and the opportunity for frequent consultation with the bureau or commission in charge of the incorporation as to the legitimate purpose of its transactions would offer it as great security against successful prosecutions for violations of the law as would be practical or wise. Stich a bureau or commission might well be invested also with the duty already referred to, of aiding courts in the dissolution and recreation of trusts within the law. it should be an executive tribunal of the dignity and power of the Comptroller of the Currency or the Interstate Commerce Commission, which now exercise supervisory power over important classes of corporations under Federal regulation. The drafting of such a Federal incorporation law would offer ample opportunity to prevent many manifest evils in corporate management to-day, including irresponsibility of control in the hands of the few who are not the real owners. I recommend that the Federal charters thus to be granted shall be voluntary, at least until experience justifies mandatory provisions. The benefit to be derived from the operation of great businesses under the protection of such a charter would attract all who are anxious to keep within the lines of the law. Other large combinations that fail to take advantage of the Federal incorporation will not have a right to complain if their failure is ascribed to unwillingness to submit their transactions to the careful official. scrutiny, competent supervision, and publicity attendant upon the enjoyment of such a charter. The opportunity thus suggested for Federal incorporation, it seems tome, is suitable constructive legislation needed to facilitate the squaring of great industrial enterprises to the rule of action laid down by the anti-trust law. This statute as construed by the Supreme Court must continue to be the line of distinction for legitimate business. It must be enforced, unless we are to banish individualism from all business and reduce it to one common system of regulation or control of prices like that which now prevails with respect to public utilities, and which when applied to all business would be a long step toward State socialism. The anti-trust act is the expression of the effort of a freedomloving people to preserve equality of opportunity. It is the result of the confident determination of such a people to maintain their future growth by preserving uncontrolled and unrestricted the enterprise of the individual, his industry, his ingenuity, his intelligence, and his independent courage. For twenty years or more this statute has been upon the statute book. All knew its general purpose and approved. Many of its violators were cynical over its assumed impotence. It seemed impossible of enforcement. Slowly the mills of the courts ground, and only gradually did the majesty of the law assert itself. Many of its statesmen-authors died before it became a living force, and they and others saw the evil grow which they had hoped to destroy. Now its efficacy is seen; now its power is heavy; now its object is near achievement. Now we hear the call for its repeal on the plea that it interferes with business prosperity, and we are advised in most general terms, how by some other statute and in some other way the evil we are just stamping out can be cured, if we only abandon this work of twenty years and try another experiment for another term of years. It is said that the act has not done good. Can this be said in the face of the effect of the Northern Securities decree? That decree was in no way so drastic or inhibitive in detail as either the Standard Oil decree or the Tobacco decree; but did it not stop for all time the then powerful movement toward the control of all the railroads of the country in a single hand? Such a one-man power could not have been a healthful influence in the Republic, even though exercised under the general supervision of an interstate commission. Do we desire to make such ruthless combinations and monopolies lawful? When all energies are directed, not toward the reduction of the cost of production for the public benefit by a healthful competition, but toward new ways and means for making permanent in a few hands the absolute control of the conditions and prices prevailing in the whole field of industry, then individual enterprise and effort will be paralyzed and the spirit of commercial freedom will be dead.   The relations of the United States with other countries have continued during the past twelve months upon a basis of the usual good will and friendly intercourse. . The year just passed marks an important general movement on the part of the Powers for broader arbitration. In the recognition of the manifold benefits to mankind in the extension of the policy of the settlement of international disputes by arbitration rather than by war, and in response to a widespread demand for an advance in that direction on the part of the people of the United States and of Great Britain and of France, new arbitration treaties were negotiated last spring with Great Britain and France, the terms of which were de signed, as expressed in the preamble of these treaties, to extend the scope and obligations of the policy of arbitration adopted in our present treaties with those Governments To pave the way for this treat with the United States, Great Britain negotiated an important modification in its alliance with Japan, and the French Government also expedited the negotiations with signal good will. The new treaties have been submitted to the Senate and are awaiting its advice and consent to their ratification. All the essentials of these important treaties have long been known, and it is my earnest hope that they will receive prompt and favorable action. I am glad to report that on July 5 last the American claim of Alsop & Co. against the Government of Chile was finally disposed of by the decision of His Britannic Majesty George V, to whom, as amiable compositeur, the matter had been referred for determination. His Majesty made an award of nearly $1,000,000 to the claimants, which was promptly paid by Chile. The settlement of this controversy has happily eliminated from the relations between the Republic of Chile and the United States the only question which for two decades had given the two foreign offices any serious concern and makes possible the unobstructed development of the relations of friendship which it has been the aim of this Government in every possible way to further and cultivate. In further illustration of the practical and beneficent application of the principle of arbitration and the underlying broad spirit of conciliation, I am happy to advert to the part of the United States in facilitating amicable settlement of disputes which menaced the peace between Panama and Costa Rica and between Haiti and the Dominican Republic. Since the date of their independence, Colombia and Costa Rica had been seeking a solution of a boundary dispute, which came as an heritage from Colombia to the new Republic of Panama, upon its beginning life as an independent nation. Although the disputants had submitted this question for decision to the President of France under the terms of an arbitration treaty, the exact interpretation of the provisions of the award rendered had been a matter of serious disagreement between the two countries, both contending for widely different lines even under the terms of the decision. Subsequently and since T903 this boundary question bad been the subject of fruitless diplomatic negotiations between the parties. In January, 1910, at the request of both Governments the agents representing them met in conference at the Department of State and subsequently concluded a protocol submitting this long-pending controversy to the arbitral judgment of the Chief justice of the United States, who consented to act in this capacity. A boundary commission, according to the international agreement, has now been appointed, and it is expected that the arguments will shortly proceed and that this long-standing dispute will be honorably and satisfactorily terminated. Again, a few months ago it appeared that the Dominican Republic and Haiti were about to enter upon hostilities because of complications growing out of an acrimonious boundary dispute which the efforts of many years had failed to solve. The Government of the United States, by a friendly interposition of good offices, succeeded in prevailing upon the parties to place their reliance upon some form of pacific settlement. Accordingly, on the friendly suggestion of this Government, the two Governments empowered commissioners to meet at Washington in conference at the State Department in order to arrange the terms of submission to arbitration of the boundary controversy. Our arbitration of the Chamizal boundary question with Mexico was unfortunately abortive, but with the earnest efforts on the part of both Governments which its importance commands, it is felt that an early practical adjustment should prove possible. During the past year the Republic of Venezuela celebrated the one hundredth anniversary of its independence. The United States sent, in honor of this event, a special embassy to Caracas, where the cordial reception and generous hospitality shown it were most gratifying as a further proof of the good relations and friendship existing between that country and the United States. . The recent political events in Mexico received attention from this Government because of the exceedingly delicate and difficult situation created along our southern border and the necessity for taking measures properly to safeguard American interests. The Government of the United States, in its desire to secure a proper observance and enforcement of the so-called neutrality statutes of the Federal Government, issued directions to the appropriate officers to exercise a diligent and vigilant regard for the requirements of such rules and laws. Although a condition of actual armed conflict existed, there was no official recognition of belligerency involving the technical neutrality obligations of international law. On the 6th of March last, in the absence of the Secretary of State, I had a personal interview with Mr. Wilson, the ambassador of the United States to Mexico, in which he reported to me that the conditions in Mexico were much more critical than the press dispatches disclosed; that President Diaz was on a volcano of popular uprising; that the small outbreaks which had occurred were only symptomatic of the whole condition; that a very large per cent of the people were in sympathy with the insurrection; that a general explosion was probable at any time, in which case he feared that the 40,000 or more American residents in Mexico might be assailed, and that the very large American investments might be injured or destroyed. After a conference with the Secretary of War and the Secretary of the Navy, I thought it wise to assemble an Army division of full strength at San Antonio, Tex., a brigade of three regiments at Galveston, a brigade of Infantry in the Los Angeles district of southern California, together with a squadron of battleships and cruisers and transports at Galveston, and a small squadron of ships at San Diego. At the same time, through our representative at the City of Mexico, I expressed to President Diaz the hope that no apprehensions might result from unfounded conjectures as to these military maneuvers, and assured him that they had no significance which should cause concern to his Government. The mobilization was effected with great promptness, and on the 15th of March, through the Secretary of War and the Secretary of the Navy, in a letter addressed to the Chief of Staff, I issued the following instructions: It seems my duty as Commander in Chief to place troops in sufficient number where, if Congress shall direct that they enter Mexico to save American lives and property, an effective movement may be promptly made. Meantime, the movement of the troops to Texas and elsewhere near the boundary, accompanied with sincere assurances of the utmost goodwill toward the present Mexican Government and with larger and more frequent patrols along the border to prevent insurrectionary expeditions from American soil, will hold up the hands of the existing Government and will have a healthy moral effect to prevent attacks upon Americans and their property in any subsequent general internecine strife. Again, the sudden mobilization of a division of troops has been a great test of our Army and full of useful instruction, while the maneuvers that are thus made possible can occupy the troops and their officers to great advantage.
 The assumption by the press that I contemplate intervention on Mexican soil to protect American lives or property is of course gratuitous, because I seriously doubt whether I have such authority under any circumstances, and if I had I would not exercise it without express congressional approval. Indeed, as you know, I have already declined, without Mexican consent, to order a troop of Cavalry to protect the breakwater we are constructing just across the border in Mexico at the mouth of the Colorado River to save the Imperial Valley, although the insurrectos had scattered the Mexican troops and were taking our horses and supplies and frightening our workmen away. My determined purpose, however, is to be in a position so that when danger to American lives and property in Mexico threatens and the existing Government is rendered helpless by the insurrection, I can promptly execute congressional orders to protect them, with effect. Meantime, I send you this letter, through the Secretary, to call your attention to some things in connection with the presence of the division in the Southwest which have doubtless occurred to you, but which I wish to emphasize. In the first place, I want to make the mobilization a first-class training for the Army, and I wish you would give your time and that of the War College to advising and carrying out maneuvers of a useful character, and plan to continue to do this during the next three months. By that time we may expect that either Ambassador Wilson's fears will have been realized and chaos and its consequences have ensued, or that the present Government of Mexico will have so readjusted matters as to secure tranquillity-a result devoutly to be wished. The troops can then be returned to their posts. I understood from you in Washington that Gen. Aleshire said that you could probably meet all the additional expense of this whole movement out of the present appropriations if the troops continue in Texas for three months. I sincerely hope this is so. I observe from the newspapers that you have no blank cartridges, but I presume that this is an error, or that it will be easy to procure those for use as soon as your maneuvers begin. Second. Texas is a State ordinarily peaceful, but you can not put 20,000 troops into it without running some risk of a collision between the people of that State, and especially the -Mexicans who live in Texas near the border and who sympathize with the insurrectos, and the Federal soldiers. For that reason I beg you to be as careful as you can to prevent friction of any kind. We were able in Cuba, with the army of pacification there of something more than 5,000 troops, to maintain them for a year without any trouble, and I hope you can do the same thing in Texas. Please give your attention to this, and advise all the officers in command of the necessity for very great circumspection in this regard. Third. One of the great troubles in the concentration of troops is the danger of disease, and I suppose that you have adopted the most modern methods for preventing and, if necessary, for stamping out epidemics. That is so much a part of a campaign that it hardly seems necessary for me to call attention to it. Finally, I wish you to examine the question of the patrol of the border and put as many troops on that work as is practicable, and more than are now engaged in it, in order to prevent the use of our borderland for the carrying out of the insurrection. I have given assurances to the Mexican ambassador on this point. I sincerely hope that this experience will always be remembered by the Army and Navy as a useful means of education, and I should be greatly disappointed if it resulted in any injury or disaster to our forces from any cause. I have taken a good deal of responsibility in ordering this mobilization, but I am ready to answer for it if only you and those under you use the utmost care to avoid the difficulties which I have pointed out. You may have a copy of this letter made and left with Gen. Carter and such other generals in command as you may think wise and necessary to guide them in their course, but to be regarded as confidential. I am more than happy to here record the fact that all apprehensions as to the effect of the presence of so large a military force in Texas proved groundless; no disturbances occurred; the conduct of the troops was exemplary and the public reception and treatment of them was all that could have been desired, and this notwithstanding the presence of a large number of Mexican refugees in the border territory. From time to time communications were received from Ambassador Wilson, who had returned to Mexico, confirming the view that the massing of American troops in the neighborhood had had good effect. By dispatch of April 3, 1911, the ambassador said: The continuing gravity of the situation here and the chaos that would ensue should the constitutional authorities be eventually overthrown, thus greatly increasing the danger to which American lives and property are already subject, confirm the wisdom of the President in taking those military precautions which, making every allowance for the dignity and the sovereignty of a friendly state, are due to our nationals abroad.
 Charged as I am with the responsibility of safeguarding these lives and property, I am bound to say to the department that our military dispositions on the frontier have produced an effective impression on the Mexican mind and may, at any moment, prove to be the only guaranties for the safety of our nationals and their property. If it should eventuate that conditions here require more active measures by the President and Congress, sporadic attacks might be made upon the lives and property of our nationals, but the ultimate result would be order and adequate protection. The insurrection continued and resulted In engagements between the regular Mexican troops and the insurgents, and this along the border, so that in several instances bullets from the contending forces struck American citizens engaged in their lawful occupations on American soil. Proper protests were made against these invasions of American rights to the Mexican authorities. On April 17, 1911, 1 received the following telegram from the governor of Arizona: As a result of to-day's fighting across the international line, but within gunshot range of the heart of Douglas, five Americans wounded on this side of the line. Everything points to repetition of these casualties on to-morrow, and while the Federals seem disposed to keep their agreement not to fire into Douglas, the position of the insurrectionists is such that when fighting occurs on the east and southeast of the intrenchments people living in Douglas are put in danger of their lives. In my judgment radical measures are needed to protect our innocent people, and if anything can be done to stop the fighting at Agua Prieta the ,ittiation calls for such action. It is impossible to safeguard the people of Douglas unless the town be vacated. Can anything be done to relieve situation, now acute? After a conference with the Secretary of State, the following telegram was sent to Governor Sloan, on April 18, 1911, and made public: Your dispatch received. Have made urgent demand upon Mexican Government to issue instructions to prevent firing across border by Mexican federal troops, and am waiting reply. Meantime I have sent direct warning to the Mexican and insurgent forces near Douglas. I infer from your dispatch that both parties attempt to heed the warning, but that in the strain and exigency of the contest wild bullets still find their way into Douglas. The situation might justify me in ordering our troops to cross the border and attempt to stop the fighting, or to fire upon both combatants from the American side. But if I take this step, I must face the possibility of resistance and greater bloodshed, and also the danger of having our motives misconstrued and misrepresented, and of thus inflaming Mexican popular indignation against many thousand Americans now in Mexico and jeopardizing their lives and property. The pressure for general intervention under such conditions it might not be practicable to resist. It is impossible to foresee or reckon the consequences of such a course, and we must use the greatest self-restraint to avoid it. Pending my urgent representation to the Mexican Government, I can not therefore order the troops at Douglas to cross the border, but I must ask you and the local authorities, in case the same danger recurs, to direct the people of Douglas to place themselves where bullets can not reach them and thus avoid casualty. I am loath to endanger Americans in 'Mexico, where they are necessarily exposed, by taking a radical step to prevent injury to Americans on our side of the border who can avoid it by a temporary inconvenience. I am glad to say that no further invasion of American rights of any substantial character occurred. The presence of a large military and naval force available for prompt action, near the Mexican border, proved to be most fortunate under the somewhat trying conditions presented by this invasion of American rights Had no movement theretofore taken place, and because of these events it had been necessary then to bring about the mobilization, it must have bad sinister significance. On the other hand, the presence of the troops before and at the time of the unfortunate killing and wounding of American citizens at Douglas, made clear that the restraint exercised by our Government in regard to this Occurrence was not due to lack of force or power to deal with it promptly and aggressively, but was due to a real desire to use every means possible to avoid direct intervention in the affairs of our neighbor whose friendship we valued and were most anxious to retain. The policy and action of this Government were based upon an earnest friendliness for the Mexican people as a whole, and it is a matter of gratification to note that this attitude of strict impartiality as to all factions in Mexico and of sincere friendship for the neighboring nation, without regard for party allegiance, has been generally recognized and has resulted in an even closer and more sympathetic understanding between the two Republics and a warmer regard one for the other. Action to suppress violence and restore tranquillity throughout the Mexican Republic was of peculiar interest to this Government, in that it concerned the safeguarding of American life and property in that country. The Government of the United States had occasion to accord permission for the passage of a body of Mexican rurales through Douglas, Arizona, to Tia Juana, Mexico, for the suppression of general lawlessness which bad for some time existed in the region of northern Lower California. On May 25, 1911, President Diaz resigned, Senor de la Barra was chosen provisional President. Elections for President and Vice President were thereafter held throughout the Republic, and Senor Francisco 1. Madero was formally declared elected on October 15 to the chief magistracy. On November 6 President Madero entered upon the duties of his office. Since the inauguration of President Madero a plot has been unearthed against the present Government, to begin a new insurrection. Pursuing the same consistent policy which this administration has adopted from the beginning, it directed an investigation into the conspiracy charged, and this investigation has resulted in the indictment of Gen. Bernardo Reyes and others and the seizure of a number of officers and men and horses and accoutrements assembled upon the soil of Texas for the purpose of invading Mexico. Similar proceedings had been taken during the insurrection against the Diaz Government resulting in the indictments and prosecution of persons found to be engaged in violating the neutrality laws of the United States in aid of that uprising. The record of this Government in respect of the recognition of constituted authority in Mexico therefore is clear. As to the situation in Central America, I have taken occasion in the past to emphasize most strongly the importance that should be attributed to the consummation of the conventions between the Republics of Nicaragua and of Honduras and this country, and I again earnestly recommend that the necessary advice and consent of the Senate be accorded to these treaties, which will make it possible for these Central American Republics to enter upon an era of genuine economic national development. The Government of Nicaragua which has already taken favorable action on the convention, has found it necessary, pending the exchange of final ratifications, to enter into negotiations with American bankers for the purpose of securing a temporary loan to relieve the present financial tension. III connection with this temporary loan and in the hope of consummating, through the ultimate operation of the convention, a complete and lasting economic regeneration, the Government of Nicaragua has also decided to engage an American citizen as collector general of customs. The claims commission on which the services of two American citizens have been sought, and the work of the American financial adviser should accomplish a lasting good of inestimable benefit to the prosperity, commerce, and peace of the Republic. In considering the ratification of the conventions with Nicaragua and Honduras, there rests with the United States the heavy responsibility of the fact that their rejection here might destroy the progress made and consign the Republics concerned to still deeper submergence in bankruptcy, revolution, and national jeopardy. . Our relations with the Republic of Panama, peculiarly important, due to mutual obligations and the vast interests created by the canal, have continued in the usual friendly manner, and we have been glad to make appropriate expression of our attitude of sympathetic interest in the endeavors of our neighbor in undertaking the development of the rich resources of the country. With reference to the internal political affairs of the Republic, our obvious concern is in the maintenance of public peace and constitutional order, and the fostering of the general interests created by the actual relations of the two countries, without the manifestation of any preference for the success of either of the political parties. The Pan American Union, formerly known as the Bureau of American Republics, maintained by the joint contributions of all the American nations, has during the past year enlarged its practical work as an international organization, and continues to prove its usefillness as an agency for the mutual development of commerce, better acquaintance, and closer intercourse between the United States and her sister American republics. The past year has been marked in our relations with China by the conclusion of two important international loans, one for the construction of the Hukuang railways, the other for carrying out of the currency reform to which China was pledged by treaties with the United States, Great Britain, and Japan, of which mention was made in my last annual message. It will be remembered that early in 1909 an agreement was consummated among British, French, and German financial groups whereby they proposed to lend the Chinese Government funds for the construction of railways in the Provinces of Hunan and Hupeh, reserving for their nationals the privilege of engineering the construction of the lines and of furnishing the materials required for the work. After negotiations with the Governments and groups concerned an agreement was reached whereby American, British, French, and German nationals should participate upon equal terms in this important and useful undertaking. Thereupon the financial groups, supported by their respective Governments, began negotiations with the Chinese Government which terminated in a loan to China Of $30,000,000, with the privilege of increasing the amount to $50,000,000. The cooperative construction of these trunk lines should be of immense advantage, materially and otherwise, to China and should greatly facilitate the development of the bountiful resources of the Empire. On the other hand, a large portion of these funds is to be expended for materials, American products having equal preference with those of the other three lending nations, and as the contract provides for branches and extensions subsequently to be built on the same terms the opportunities for American materials will reach considerable proportions. Knowing the interest of the United States in the reform of Chinese currency, the Chinese Government, in the autumn of 1910 sought the assistance of the American Government to procure funds with which to accomplish that all-important reform. In the course of the subsequent negotiations there was combined with the proposed currency loan one for certain industrial developments in Manchuria, the two loans aggregating the sum Of $50,000,000. While this was originally to be solely an American enterprise, the American Government, consistently with its desire to secure a sympathetic and practical cooperation of the great powers toward maintaining the principle of equality of opportunity and the administrative integrity of China, urged the Chinese Government to admit to participation in the currency loan the associates of the American group in the Hukuang loan. While of immense importance in itself, the reform contemplated in making this loan is but preliminary to other and more comprehensive fiscal reforms which will be of incalculable benefit to China and foreign interests alike, since they will strengthen the Chinese Empire and promote the rapid development of international trade. When these negotiations were begun, it was understood that a financial adviser was to be employed by China in connection with the reform, and in order that absolute equality in all respects among the lending nations might be scrupulously observed, the American Government proposed the nomination of a neutral adviser, which was agreed to by China and the other Governments concerned. On September 28, 1911, Dr. Vissering, president of the Dutch Java Bank and a financier of wide experience in the Orient, was recommended to the Chinese Government for the post of monetary adviser. Especially important at the present, when the ancient Chinese Empire is shaken by civil war incidental to its awakening to the many influences and activities of modernization, are the cooperative policy of good understanding which has been fostered by the international projects referred to above and the general sympathy of view among all the Powers interested in the Far East. While safeguarding the interests of our nationals, this Government is using its best efforts in continuance of its traditional policy of sympathy and friendship toward the Chinese Empire and its people, with the confident hope for their economic and administrative development, and with the constant disposition to contribute to their welfare in all proper ways consistent with an attitude of strict impartiality as between contending factions. For the first time in the history of the two countries, a Chinese cruiser, the Haichi, under the command of Admiral Ching, recently visited New York, where the officers and men were given a cordial welcome. The treaty of commerce and navigation between the United States and Japan, signed in 1894, would by a strict interpretation of its provisions have terminated on July 17, 1912. Japan's general treaties with the other powers, however, terminated in 1911, and the Japanese Government expressed an earnest desire to conduct the negotiations for a new treaty with the United States simultaneously with its negotiations with the other powers. There were a number of important questions involved in the treaty, including the immigration of laborers, revision of the customs tariff, and the right of Americans to hold real estate in Japan. The United States consented to waive all technicalities and to enter at once upon negotiations for a new treaty on the understanding that there should be a continuance throughout the, life of the treaty of the same effective measures for the restriction of immigration of laborers to American territory which had been in operation with entire satisfaction to both Governments since 1908. The Japanese Government accepted this basis of negotiation, and a new treaty was quickly concluded, resulting in a highly satisfactory settlement of the other questions referred to. A satisfactory adjustment has also been effected of the questions growing out of the annexation of Korea by Japan. The recent visit of Admiral Count Togo to the United States as the Nation's guest afforded a welcome opportunity to demonstrate the friendly feeling so happily existing between the two countries. . There has been a change of sovereigns in Siam and the American minister at Bangkok was accredited in a special capacity to represent the United States at the coronation ceremony of the new King. In Europe and the Near East, during the past twelve-month, there has been at times considerable political unrest. The Moroccan question, which for some months was the cause of great anxiety, happily appears to have reached a stage at which it need no longer be regarded with concern. The Ottoman Empire was occupied for a period by strife in Albania and is now at war with Italy. In Greece and the Balkan countries the disquieting potentialities of this situation have been more or less felt. Persia has been the scene of a long internal struggle. These conditions have been the cause of uneasiness in European diplomacy, but thus far without direct political concern to the United States. In the war which unhappily exists between Italy and Turkey this Government has no direct political interest, and I took occasion at the suitable time to issue a proclamation of neutrality in that conflict. At the same time all necessary steps have been taken to safeguard the personal interests of American citizens and organizations in so far as affected by the war. In spite of the attendant economic uncertainties and detriments to commerce, the United States has gained markedly in its commercial standing with certain of the nations of the Near East. Turkey, especially, is beginning to come into closer relations with the United States through the new interest of American manufacturers and exporters in the possibilities of those regions, and it is hoped that foundations are being laid for a large and mutually beneficial exchange of commodities between the two countries. This new interest of Turkey in American goods is indicated by the fact that a party of prominent merchants from a large city in Turkey recently visited the United States to study conditions of manufacture and export here, and to get into personal touch with American merchants, with a view to cooperating more intelligently in opening up the markets of Turkey and the adjacent countries to our manufactures. Another indication of this new interest of America in the commerce of the Near East is the recent visit of a large party of American merchants and manufacturers to central and eastern Europe, where they were entertained by prominent officials and organizations of the large cities, and new bonds of friendship and understanding were established which can not but lead to closer and greater commercial interchange. The 22d of June of the present year marked the coronation of His Britannic Majesty King George V. In honor of this auspicious occasion I sent a special embassy to London. The courteous and cordial welcome extended to this Government's representatives by His Majesty and the people of Great Britain has further emphasized the strong bonds of friendship happily existing between the two nations. As the result of a determined effort on the part of both Great Britain and the United States to settle all of their outstanding differences a number of treaties have been entered into between the two countries in recent years, by which nearly all of the unsettled questions between them of any importance have either been adjusted by agreement or arrangements made for their settlement by arbitration. A number of the unsettled questions referred to consist of pecuniary claims presented by each country against the other, and in order that as many of these claims as possible should be settled by arbitration a special agreement for that purpose was entered into between the two Governments on the 18th day of August, 1910, in accordance with Article 11 of the general arbitration treaty with Great Britain of April 4, 19o8. Pursuant to the provisions of this special agreement a schedule of claims has already been agreed upon, and the special agreement, together with this schedule, received the approval of the Senate when submitted to it for that purpose at the last session of Congress. Negotiations between the two Governments for the preparation of an additional schedule of claims are already well advanced, and it is my intention to submit such schedule as soon as it is agreed upon to the Senate for its approval, in order that the arbitration proceedings may be undertaken at an early date. In this connection the attention of Congress is particularly called to the necessity for an appropriation to cover the expense incurred in submitting these claims to arbitration. In pursuance of the act of Congress, approved June 23, 1910, the Secretary of State and the joint Committee on the Library entered into a contract with the sculptor, Albert Jaegers, for the execution of a bronze replica of the statue of Gen. von Steuben erected in Washington, for presentation to His Majesty the German Emperor and the German nation in recognition of the gift of the statue of Frederick the Great made by the Emperor to the people of the United States. The presentation was made on September 2 last by representatives whom I commissioned as the special mission of this Government for the purpose. The German Emperor has conveyed to me by telegraph, on his own behalf and that of the German people, an expression of appreciative thanks for this action of Congress.  . By direction of the State Department, our ambassador to Russia has recently been having a series of conferences with the minister of foreign affairs of Russia, with a view to securing a clearer understanding and construction of the treaty of 1832 between Russia and the United States and the modification of any existing Russian regulations which may be found to interfere in any way with the full recognition of the rights of American citizens under this treaty. I believe that the Government of Russia is addressing itself seriously to the need of changing the present practice under the treaty and that sufficient progress has been made to warrant the continuance of these conferences in the hope that there may soon be removed any justification of the complaints of treaty violation now prevalent in this country. I expect that immediately after the Christmas recess I shall be able to make a further communication to Congress on this subject.  . Negotiations for the amelioration of conditions found to exist in Liberia by the American commission, undertaken through the Department of State, have been concluded and it is only necessary for certain formalities to be arranged in securing the loan which it is hoped will place that republic on a practical financial and economic footing. The National Constituent Assembly, regularly elected by the vote of the Portuguese people, having on June 19 last unanimously proclaimed a republican form of government, the official recognition of the Government of the United States was given to the new Republic in the afternoon of the same day. Negotiations for the betterment of conditions existing in the Spitzbergen Islands and the adjustment of conflicting claims of American citizens and Norwegian subjects to lands in that archipelago are still in progress. The supplementary protocol to The he Hague convention for the establishment of an international prize court, mentioned in my last annual message, embodying stipulations providing for an alternative procedure which would remove the constitutional objection to that part of The Hague convention which provides that there may be an appeal to the proposed court from the decisions of national courts, has received the signature of the governments parties to the original convention and has been ratified by the Government of the United States, together with the prize court convention. The deposit of the ratifications with the Government of the Netherlands awaits action by the powers on the declaration, signed at London on February 26, 1909 of the rules of international law to be recognized within the meaning of article 7 of The Hague convention for the establishment of an International Prize Court. The fur-seal controversy, which for nearly twenty-five years has been the source of serious friction between the United States and the powers bordering upon the north Pacific Ocean, whose subjects have been permitted to engage in pelagic sealing against the fur-seal herds having their breeding grounds within the jurisdiction of the United States, has at last been satisfactorily adjusted by the conclusion of the north Pacific sealing convention entered into between the United States, Great Britain, Japan, and Russia on the 7th of July last. This convention is a conservation measure of very great importance, and if it is carried out in the spirit of reciprocal concession and advantage upon which it is based, there is every reason to believe that not only will it result in preserving the furseal herds of the north Pacific Ocean and restoring them to their former value for the purposes of commerce, but also that it will afford a permanently satisfactory settlement of a question the only other solution of which seemed to be the total destruction of the fur seals. In another aspect, also, this convention is of importance in that it furnishes an illustration of the feasibility of securing a general international game law for the protection of other mammals of the sea, the preservation of which is of importance to all the nations of the world. The attention of Congress is especially called to the necessity for legislation on the part of the United States for the purpose of fulfilling the obligations assumed under this convention, to which the Senate gave its advice and consent on the 24th day of July last. The conference of the International Union for the Protection of Industrial Property, which, under the authority of Congress, convened at Washington on May 16, 1911, closed its labors on June 2, 1911, by the signature of three acts, as follows: (I) A convention revising the Paris convention of March 20, 1883, for the protection of industrial property, as modified by the additional act signed at Brussels on December 14, 1900; (2) An arrangement to replace the arrangement signed at Madrid on April 14, 1891 for the international registration of trade-marks, and the additional act with regard thereto signed at Brussels on December 14, 1900; and (3) An arrangement to replace the arrangement signed at Madrid on April 14, 18gi, relating to the repression of false indication of production of merchandise. The United States is a signatory of the first convention only, and this will be promptly submitted to the Senate. In a special message transmitted to the Congress on the 11th of January, 19ii, in which I concurred in the recommendations made by the Secretary of State in regard to certain needful legislation for the control of our interstate and foreign traffic in opium and other menacing drugs, I quoted from my annual message of December 7, 1909, in which I announced that the results of the International Opium Commission held at Shanghai in February, 1909, at the invitation of the United States, had been laid before this Government; that the report of that commission showed that China was making remarkable progress and admirable efforts toward the eradication of the opium evil; that the interested governments had not permitted their commercial interests to prevent their cooperation in this reform; and, as a result of collateral investigations of the opium question in this country, I recommended that the manufacture, sale, and use of opium in the United States should be more rigorously controlled by legislation Prior to that time and in continuation of the policy of this Government to secure the cooperation of the interested nations, the United States proposed an international opium conference with full powers for the purpose of clothing with the force of international law the resolutions adopted by the above-mentioned commission, together with their essential corollaries. The other powers concerned cordially responded to the proposal of this Government, and, I am glad to be able to announce, representatives of all the powers assembled in conference at The Hague on the first of this month. Since the passage of the opium-exclusion act, more than twenty States have been animated to modify their pharmacy laws and bring them in accord with the spirit of that act, thus stamping out, to a measure, the intrastate traffic in opium and other habit-forming drugs. But, although I have urged on the Congress the passage of certain measures for Federal control of the interstate and foreign traffic in these drugs, no action has yet been taken. In view of the fact that there is now sitting at The Hague so important a conference, which has under review the municipal laws of the different nations for the mitigation of their opium and other allied evils, a conference which will certainly deal with the international aspects of these evils, it seems to me most essential that the Congress should take immediate action on the anti-narcotic legislation to which I have already called attention by a special message. The four important conventions signed at the Fourth Pan American Conference at Buenos Aires, providing for the regulation of trademarks, patents, and copyrights, and for the arbitration of pecuniary claims, have, with the advice and consent of the Senate, been ratified on the part of the United States and the ratifications have been deposited with the Government of the Argentine Republic in accordance with the requirements of the conventions. I am not advised that similiar action has been taken by any other of the signatory governments. One of the notable advances in international morality accomplished in recent years was an arrangement entered into on April 13th of the present year between the United States and other powers for the repression of the circulation of obscene publications. In my last annual message I referred to the tariff negotiations of the Department of State with foreign countries in connection with the application, by a series of proclamations, of the minimum tariff of the United States to importations from the several countries, and I stated that, in its general operation, section 2 of the new tariff law had proved a guaranty of continued commercial peace, although there were, unfortunately, instances where foreign governments dealt arbitrarily with American interests within their jurisdiction in a manner injurious and inequitable. During the past year some instances of discriminatory treatment have been removed, but I regret to say that there remain a few cases of differential treatment adverse to the commerce of the United States. While none of these instances now appears to amount to undue discrimination in the sense of section 2 Of the tariff law of August 5, 1909, they are all exceptions to that complete degree of equality of tariff treatment that the Department of State has consistently sought to obtain for American commerce abroad. While the double tariff feature of the tariff law of 1909 has been amply justified by the results achieved in removing former and preventing new, undue discriminations against American commerce it is believed that the time has come for the amendment of this feature of the law in such way as to provide a graduated means of meeting varying degrees of discriminatory treatment of American commerce in foreign countries as well as to protect the financial interests abroad of American citizens against arbitrary and injurious treatment on the part of foreign governments through either legislative or administrative measures. It would seem desirable that the maximum tariff of the United States should embrace within its purview the free list, which is not the case at the present time, in order that it might have reasonable significance to the governments of those countries from which the importations into the United States are confined virtually to articles on the free list. The fiscal year ended June 30, 1911, shows great progress in the development of American trade. It was noteworthy as marking the highest record of exports of American products to foreign countries, the valuation being in excess of $2,000,000,000. These exports showed a gain over the preceding year of more than $300,000,000. There is widespread appreciation expressed by the business interests of the country as regards the practical value of the facilities now offered by the Department of State and the Department of Commerce and Labor for the furtherance of American commerce. Conferences with their officers at Washington who have an expert knowledge of trade conditions in foreign countries and with consular officers and commercial agents of the Department of Commerce and Labor who, while on leave of absence, visit the principal industrial centers of the United States, have been found of great value. These trade conferences are regarded as a particularly promising method of governmental aid in foreign trade promotion. The Department of Commerce and Labor has arranged to give publicity to the expected arrival and the itinerary of consular officers and commercial agents while on leave in the United States, in order that trade organizations may arrange for conferences with them. As I have indicated, it is increasingly clear that to obtain and maintain that equity and substantial equality of treatment essential to the flourishing foreign trade, which becomes year by year more important to the industrial and commercial welfare of the United States, we should have a flexibility of tariff sufficient for the give and take of negotiation by the Department of State on behalf of our commerce and industry. I need hardly reiterate the conviction that there should speedily be built up an American merchant marine. This is necessary to assure favorable transportation facilities to our great ocean-borne commerce as well as to supplement the Navy with an adequate reserve of ships and men It would have the economic advantage of keeping at home part of the vast sums now paid foreign shipping for carrying American goods. All the great commercial nations pay heavy subsidies to their merchant marine so that it is obvious that without some wise aid from the Congress the United States must lag behind in the matter of merchant marine in its present anomalous position. Legislation to facilitate the extension of American banks to foreign countries is another matter in which our foreign trade needs assistance. The interests of our foreign commerce are nonpartisan, and as a factor in prosperity are as broad as the land. In the dissemination of useful information and in the coordination of effort certain unofficial associations have done good work toward the promotion of foreign commerce. It is cause for regret, however, that the great number of such associations and the comparative lack of cooperation between them fails to secure an efficiency commensurate with the public interest. Through the agency of the Department of Commerce and Labor, and in some cases directly, the Department of State transmits to reputable business interests information of commercial opportunities, supplementing the regular published consular reports. Some central organization in touch with associations and chambers of commerce throughout the country and able to keep purely American interests in closer touch with different phases of commercial affairs would, I believe, be of great value. Such organization might be managed by a committee composed of a small number of those now actively carrying on the work of some of the larger associations, and there might be added to the committee, as members ex officio, one or two officials of the Department of State and one or two officials from the Department of Commerce and Labor and representatives of the appropriate committees of Congress. The authority and success of such an organization would evidently be enhanced if the Congress should see fit to prescribe its scope and organization through legislation which would give to it some such official standing as that, for example, of the National Red Cross. With these factors and the continuance of the foreign-service establishment (departmental, diplomatic, and consular) upon the high plane where it has been placed by the recent reorganization this Government would be abreast of the times in fostering the interests of its foreign trade, and the rest must be left to the energy and enterprise of our business men. The entire foreign-service organization is being improved and developed with especial regard to the requirements of the commercial interests of the country. The rapid growth of our foreign trade makes it of the utmost importance that governmental agencies through which that trade is to be aided and protected should possess a high degree of efficiency. Not only should the foreign representatives be maintained upon a generous scale in so far as salaries and establishments are concerned, but the selection and advancement of officers should be definitely and permanently regulated by law so that the service shall not fail to attract men of high character and ability. The experience of the past few years with a partial application of civil-service rules to the Diplomatic and Consular Service leaves no doubt in my mind of the wisdom of a wider and more permanent extension of those principles to both branches of the foreign service. The men selected for appointment by means of the existing executive regulations have been of a far higher average of intelligence and ability than the men appointed before the regulations were promulgated. Moreover, the feeling that under the existing rules there is reasonable hope for permanence of tenure during good behavior and for promotion for meritorious service has served to bring about a zealous activity in the interests of the country, which never before existed or could exist. It is my earnest conviction that the enactment into law of the general principles of the existing regulations can not fail to effect further improvement in both branches of the foreign service by providing greater inducement for young men of character and ability to seek a career abroad in the service of the Government, and an incentive to those already in the service to put forth greater efforts to attain the high standards which the successful conduct of our international relations and commerce requires. I therefore again commend to the favorable action of the Congress the enactment of a law applying to the diplomatic and consular service the principles embodied in section 1753 of the Revised Statutes of the United States, in the civil-service act of January 16, 1883, and the Executive orders of June 27, 1906, and of November 26, 1909. In its consideration of this important subject I desire to recall to the attention of the Congress the very favorable report made on the Lowden bill for the improvement of the foreign service by the Foreign Affairs Committee of the House of Representatives. Available statistics show the strictness with which the merit system has been applied to the foreign service during recent years and the absolute nonpartisan selection of consuls and diplomatic-service secretaries who, indeed, far from being selected with any view to political consideration, have actually been chosen to a disproportionate extent from States which would have been unrepresented in the foreign service under the system which it is to be hoped is now permanently obsolete. Some legislation for the perpetuation of the present system of examinations and promotions upon merit and efficiency would be of greatest value to our commerical and international interests.   In my annual message to Congress, December, 1909, I stated that under section 2 of the act of August 5, 1909, I had appointed a Tariff Board of three members to cooperate with the State Department in the administration of the maximum and minimum clause of that act, to make a glossary or encyclopedia of the existing tariff so as to render its terms intelligible to the ordinary reader, and then to investigate industrial conditions and costs of production at home and abroad with a view to determining to what extent existing tariff rates actually exemplify the protective principle, viz., that duties should be made adequate, and only adequate, to equalize the difference in cost of production at home and abroad. I further stated that I believed these investigations would be of great value as a basis for accurate legislation, and that I should from time to time recommend to Congress the revision of certain schedules in accordance with the findings of the Board. In the last session of the Sixty-first Congress a bill creating a permanent Tariff Board of five members, of whom not more than three should be of the same political party, passed each House, but failed of enactment because of slight differences on which agreement was not reached before adjournment. An appropriation act provided that the permanent Tariff Board, if created by statute, should report to Congress on Schedule K in December, 1911. Therefore, to carry out so far as lay within my power the purposes of this bill for a permanent Tariff Board, I appointed in March, 19li, a board of five, adding two members of such party affiliation as would have fulfilled the statutory requirement, and directed them to make a report to me on Schedule K of the tariff act in December of this year. In my message of August 17, 1911, accompanying the veto of the wool bill, I said that, in my judgment, Schedule K should be revised and the rates reduced. My veto was based on the ground that, since the Tariff Board would make, in December, a detailed report on wool and wool manufactures, with special reference to the relation of the existing rates of duties to relative costs here and abroad, public policy and a fair regard to the interests of the producers and the manufacturers on the one hand and of the consumers on the other demanded that legislation should not be hastily enacted in the absence of such information; that I was not myself possessed at that time of adequate knowledge of the facts to determine whether or not the proposed act was in accord with my pledge to support a fair and reasonable protective policy; that such legislation might prove only temporary and inflict upon a great industry the evils of continued uncertainty. I now herewith submit a report of the Tariff Board on Schedule K. The board is unanimous in its findings. On the basis of these findings I now recommend that the Congress proceed to a consideration of this schedule with a view to its revision and a general reduction of its rates. The report shows that the present method of assessing the duty on raw wool-this is, by a specific rate on the grease pound (i. e., unscoured) -operates to exclude wools of high shrinkage in scouring but fine quality from the American market and thereby lessens the range of wools available to the domestic manufacturer; that the duty on scoured wool Of 33 cents per pound is prohibitory and operates to exclude the importation of clean, low-priced foreign wools of inferior grades, which are nevertheless valuable material for manufacturing, and which can not be imported in the grease because of their heavy shrinkage. Such wools, if imported, might be used to displace the cheap substitutes now in use. To make the preceding paragraph a little plainer, take the instance of a hundred pounds of first-class wool imported under the present duty, which is 11 11 cents a pound. That would make the duty on the hundred pounds $11. The merchantable part of the wool thus imported is the weight of the wool of this hundred pounds after scouring. If the wool shrinks 80 per cent, as some wools do, then the duty in such a case would amount to $11 $11 on 20 pounds of scoured wool. This, of course, would be prohibitory. If the wool shrinks only 50 per cent, it would be $11 on 50 pounds of wool, and this is near to the average of the great bulk of wools that are imported from Australia, which is the principal source of our imported wool. These discriminations could be overcome by assessing a duty in ad valorem terms, but this method is open to the objection, first, that it increases administrative difficulties and tends to decrease revenue through undervaluation; and, second, that as prices advance, the ad valorem rate increases the duty per pound at the time when the consumer most needs relief and the producer can best stand competition; while if prices decline the duty is decreased at the time when the consumer is least burdened by the price and the producer most needs protection. Another method of meeting the difficulty of taxing the grease pound is to assess a specific duty on grease wool in terms of its scoured content. This obviates the chief evil of the present system, namely, the discrimination due to different shrinkages, and thereby tends greatly to equalize the duty. The board reports that this method is feasible in practice and could be administered without great expense. The scoured content of the wool is the basis on which users of wool make their calculations, and a duty of this kind would fit the usages of the trade. One effect of this method of assessment would be that , regardless of the rate of duty, there would be an increase in the supply and variety of wool by making available to the American market wools of both low and fine quality now excluded. The report shows in detail the difficulties involved in attempting to state in categorical terms the cost of wool production and the great differences in cost as between different regions and different types of wool. It is found, however, that, taking all varieties in account, the average cost of production for the whole American clip is higher than the cost in the chief competing country by an amount somewhat less than the present duty. The report shows that the duties on noils, wool wastes, and shoddy, which are adjusted to the rate Of 33 cents on scoured wool are prohibitory in the same measure that the duty on scoured wool is prohibitory. In general, they are assessed at rates as high as, or higher than, the duties paid on the clean content of wools actually imported. They should be reduced and so adjusted to the rate on wool as to bear their proper proportion to the real rate levied on the actual wool imports. The duties on many classes of wool manufacture are prohibitory and greatly in excess of the difference in cost of production here and abroad. This is true of tops, of yarns (with the exception of worsted yarns of a very high grade), and of low and medium grade cloth of heavy weight. On tops up to 52 cents a pound in value, and on yarns of 65 cents in value, the rate is 100 per cent with correspondingly higher rates for lower values. On cheap and medium grade cloths, the existing rates frequently run to 150 per cent and on some cheap goods to over 200 per cent. This is largely due to that part of the duty which is levied ostensibly to compensate the manufacturer for the enhanced cost of his raw material due to the duty on wool. As a matter of fact, this compensatory duty, for numerous classes of goods, is much in excess of the amount needed for strict compensation. On the other hand, the findings show that the duties which run to such high ad valorem equivalents are prohibitory, since the goods are not imported, but that the prices of domestic fabrics are not raised by the full amount of duty. On a set of 1-yard samples of 16 English fabrics, which are completely excluded by the present tariff rates, it was found that the total foreign value was $41.84; the duties which would have been assessed had these fabrics been imported, $76.90; the foreign value plus the amount of the duty, $118.74; or a nominal duty of 183 per cent. In fact, however, practically identical fabrics of domestic make sold at the same time at $69.75, showing an enhanced price over the foreign market value of but 67 per cent. Although these duties do not increase prices of domestic goods by anything like their full amount, it is none the less true that such prohibitive duties eliminate the possibility of foreign competition, even in time of scarcity; that they form a temptation to monopoly and conspiracies to control domestic prices; that they are much in excess of the difference in cost of production here and abroad, and that they should be reduced to a point which accords with this principle. The findings of the board show that in this industry the actual manufacturing cost, aside from the question of the price of materials, is much higher in this country than it is abroad; that in the making of yarn and cloth the domestic woolen or worsted manufacturer has in general no advantage in the form of superior machinery or more efficient labor to offset the higher wages paid in this country The findings show that the cost of turning wool into yarn in this country is about double that in the leading competing country, and that the cost of turning yarn into cloth is somewhat more than double. Under the protective policy a great industry, involving the welfare of hundreds of thousands of people, has been established despite these handicaps. In recommending revision and reduction, I therefore urge that action be taken with these facts in mind, to the end that an important and established industry may not be jeopardized. The Tariff Board reports that no equitable method has been found to, levy purely specific duties on woolen and worsted fabrics and that, excepting for a compensatory duty, the rate must be ad valorem on such manufactures. It is important to realize, however, that no flat ad valorem rate on such fabrics can be made to work fairly and effectively. Any single rate which is high enough to equalize the difference in manufacturing cost at home and abroad on highly finished goods involving such labor would be prohibitory on cheaper goods, in which the labor cost is a smaller proportion of the total value. Conversely, a rate only adequate to equalize this difference on cheaper goods would remove protection from the fine-goods manufacture, the increase in which has been one of the striking features of the trade's development in recent years. I therefore recommend that in any revision the importance of a graduated scale of ad valorem duties on cloths be carefully considered and applied. I venture to say that no legislative -body has ever had presented to it a more complete and exhaustive report than this on so difficult and complicated a subject as the relative costs of wool and woolens the world over. It is a monument to the thoroughness, industry, impartiality, and accuracy of the men engaged in its making. They were chosen from both political parties but have allowed no partisan spirit to prompt or control their inquiries. They are unanimous in their findings. I feel sure that after the report has been printed and studied the value of such a compendium of exact knowledge in respect to this schedule of the tariff will convince all of the wisdom of making such a board permanent in order that it may treat each schedule of the tariff as it has treated this, and then keep its bureau of information up to date with current changes in the economic world. It is no part of the function of the Tariff Board to propose rates of duty. Their function is merely to present findings of fact on which rates of duty may be fairly determined in the light of adequate knowledge in accord with the economic policy to be followed. This is what the present report does. The findings of fact by the board show ample reason for the revision downward of Schedule K, in accord with the protective principle, and present the data as to relative costs and prices from which may be determined what rates will fairly equalize the difference in production costs. I recommend that such revision be proceeded with at once.   The financial condition of the Government, as shown at the close of the last fiscal year, June 30, 1911, was very satisfactory. The ordinary receipts into the general fund, excluding postal revenues, amounted to $701,372,374.99, and the disbursements from the general fund for current expenses and capital outlays, excluding postal and Panama Canal disbursements, including the interest on the public debt, amounted to $654,137,907-89, leaving a surplus Of $47,234,377.10. The postal revenue receipts amounted to $237,879,823,60, while the payments made for the postal service from the postal revenues amounted to $237,660,705.48, which left a surplus of postal receipts over disbursements Of $219,118.12, the first time in 27 years in which a surplus occurred. The interest-bearing debt of the United States June 30, 1911, amounted to $915,353,igo. The debt on which interest had ceased amounted to $1,879,830.26, and the debt bearing no interest, including greenbacks, national bank notes to be redeemed, and fractional currency, amounted to $386,751,917-43, or a total of interest and noninterest bearing debt amounting to $1,303,984,937.69. The actual disbursements, exclusive of those for the Panama Canal and for the postal service for the year ending June 30, 1911, were $654,137,997.89. The actual disbursements for the year ending June 30, 1910, exclusive of the Panama Canal and the postal service disbursements, were $659,705,391.08, making a decrease Of $5,567,393.19 in yearly expenditures in the year 1911 under that of 1910. For the year ending June 30, 1912, the estimated receipts, exclusive of the postal revenues, are $666,000,000, while the total estimates, exclusive of those for the Panama Canal and the postal expenditures payable from the postal revenues, amount to $645,842,799.34. This is a decrease in the 1912 estimates from that of the 1911 estimates of $1,534,367-22. For the year ending June 30, 1913, the estimated receipts, exclusive of the postal revenues, are $667,000,000, while the total estimated appropriations, exclusive of the Panama Canal and postal disbursements payable from postal revenues, will amount to $637,920,803.35. This is a decrease in the 1913 estimates from that of the 1912 estimates of $7,921,995.99. As to the postal revenues, the expansion of the business in that department, the normal increase in the Post Office and the extension of the service, will increase the outlay to the SUM Of $260,938,463 ; but as the department was self-sustaining this year the Postmaster General is assured that next year the receipts will at least equal the expenditures, and probably exceed them by more than the surplus of this year. It is fair and equitable, therefore, in determining the economy with which the Government has been run, to exclude the transactions of a department like the Post Office Department, which relies for its support upon its receipts. In calculations heretofore made for comparison of economy in each year, it has been the proper custom only to include in the statement the deficit in the Post Office Department which was paid out of the Treasury. A calculation of the actual increase in the expenses of Government arising from the increase in the population and the general expansion of governmental functions, except those of the Post Office, for a number of years shows a normal increase of about 4 per cent a year. By directing the exercise of great care to keep down the expenses and the estimates we have succeeded in reducing the total disbursements each year. The credit of this Government was shown to be better than that of any other Government by the sale of the Panama Canal 3 per cent bonds. These bonds did not give their owners the privilege of using them as a basis for bank-note circulation, nor was there any other privilege extended to them which would affect their general market value. Their sale, therefore, measured the credit of the Government. The premium which was realized upon the bonds made the actual interest rate of the transaction 2.909 per cent. I In the Treasury Department the efficiency and economy work has been kept steadily up. Provision is made for the elimination of 134 positions during the coming year. Two hundred and sixty-seven statutory positions were eliminated during the last year in the office of the Treasury in Washington, and 141 positions in the year 1910, making an elimination Of 542 statutory positions since March 4, 1909; and this has been done without the discharge of anybody, because the normal resignations and deaths have been equal to the elimination of the places, a system of transfers having taken care of the persons whose positions were dropped out. In the field service if the department, too, 1,259 positions have been eliminated down to the present time, making a total net reduction of all Treasury positions to the number of 1,801. Meantime the efficiency of the work of the departmeat has increased. A matter of first importance that will come before Congress for action at this session is monetary reform. The Congress has itself arranged an early introduction of this great question through the report of its Monetary Commission. This commission was appointed to recommend a solution of the banking and currency problems so long confronting the Nation and to furnish the facts and data necessary to enable the Congress to take action. The commission was appointed when an impressive and urgent popular demand for legislative relief suddenly arose out of the distressing situation of the people caused by the deplorable panic of 1907. The Congress decided that while it could not give immediately the relief required, it would provide a commission to furnish the means for prompt action at a later date. In order to do its work with thoroughness and precision this commission has taken some time to make its report. The country is undoubtedly hoping for as prompt action on the report as the convenience of the Congress can permit. The recognition of the gross imperfections and marked inadequacy of our banking and currency system even in our most quiet financial periods is of long standing; and later there has matured a recognition of the fact that our system is responsible for the extraordinary devastation, waste, and business paralysis of our recurring periods of panic. Though the members of the Monetary Commission have for a considerable time been working in the open, and while large numbers of the people have been openly working with them, and while the press has largely noted and discussed this work as it has proceeded, so that the report of the commission promises to represent a national movement, the details of the report are still being considered. I can not, therefore, do much more at this time than commend the immense importance of monetary reform, urge prompt consideration and action when the commission's report is received, and express my satisfaction that the plan to be proposed promises to embrace main features that, having met the approval of a great preponderance of the practical and professional opinion of the country, are likely to meet equal approval in Congress. It is exceedingly fortunate that the wise and undisputed policy of maintaining unchanged the main features of our banking system rendered it at once impossible to introduce a central bank; for a central bank would certainly have been resisted, and a plan into which it could have been introduced would probably have been defeated. But as a central bank could not be a part of the only plan discussed or considered, that troublesome question is eliminated. And ingenious and novel as the proposed National Reserve Association appears, it simply is a logical outgrowth of what is best in our present system, and is, in fact, the fulfillment of that system. Exactly how the management of that association should be organized is a question still open. It seems to be desirable that the banks which would own the association should in the main manage it, It will be an agency of the banks to act for them, and they can be trusted better than anybody else chiefly to conduct it. It is mainly bankers' work. But there must be some form of Government supervision and ultimate control, and I favor a reasonable representation of the Government in the management. I entertain no fear of the introduction of politics or of any undesirable influences from a properly measured Government representation. I trust that all banks of the country possessing the requisite standards will be placed upon a footing of perfect equality of opportunity. Both the National system and the State system should be fairly recognized, leaving them eventually to coalesce if that shall prove to be their tendency. But such evolution can not develop impartially if the banks of one system are given or permitted any advantages of opportunity over those of the other system. And I trust also that the new legislation will carefully and completely protect and assure the individuality and the independence of each bank, to the end that any tendency there may ever be toward a consolidation of the money or banking power of the Nation shall be defeated. It will always be possible, of course, to correct any features of the new law which may in practice prove to be unwise; so that while this law is sure to be enacted under conditions of unusual knowledge and authority, it also will include, it is well to remember, the possibility of future amendment. With the present prospects of this long-awaited reform encouraging us, it would be singularly unfortunate if this monetary question should by any chance become a party issue. And I sincerely hope it will not. The exceeding amount of consideration it has received from the people of the Nation has been wholly nonpartisan; and the Congress set its nonpartisan seal upon it when the Monetary Commission was appointed. In commending the question to the favorable consideration of Congress, I speak for, and in the spirit of, the great number of my fellow citizens who without any thought of party or partisanship feel with remarkable earnestness that this reform is necessary to the interests of all the people. There is now before Congress a Dill, the purpose of which is to increase the efficiency and decrease the expense of the Army. It contains four principal features: First, a consolidation of the General Staff with the Adjutant General's and the Inspector General's Departments; second, a consolidation of the Quartermaster's Department with the Subsistence and the Pay Departments; third, the creation of an Army Service Corps; and fourth, an extension of the enlistment period from three to five years. With the establishment of an Army Service Corps, as proposed in the bill, I am thoroughly in accord and am convinced that the establishment of such a corps will result in a material economy and a very great increase of efficiency in the Army. It has repeatedly been recommended by me and my predecessors. I also believe that a consolidation of the Staff Corps can be made with a resulting increase in efficiency and economy, but not along the lines provided in the bill under consideration. I am opposed to any plan the result of which would be to break up or interfere with the essential principles of the detail system in the Staff Corps established by the act of February 2, 1901, and I am opposed to any plan the result of which would be to give to the officer selected as Chief of Staff or to any other member of the General Staff Corps greater permanency of office than he now has. Under the existing law neither the Chief. of Staff nor any other member of the General Staff Corps can remain in office for a period of more than four years, and there must be an interval of two years between successive tours of duty. The bill referred to provides that certain persons shall become permanent members of the General Staff Corps, and that certain others are subject to redetail without an interval of two years. Such provision is fraught with danger to the welfare of the Army, and would practically nullify the main purpose of the law creating the In making the consolidations no reduction should be made in the total number of officers of the Army, of whom there are now too few to perform the duties imposed by law. I have in the past recommended an increase in the number of officers by 6oo in order to provide sufficient officers to perform all classes of staff duty and tc reduce the number of line officers detached from their commands. Congress at the last session increased the total number of officers by 2oo, but this is not enough. Promotion in the line of the Army is too slow. Officers do not attain command rank at an age early enough properly to exercise it. It would be a mistake further to retard this already slow promotion by throwing back into the line of the Arm a number of high-ranking officers to be absorbed as is rovided in the Another feature of the bill which I believe to be a mistake is the proposed increase in the term of enlistment from three to five ears I believe it would be better to enlist men for six years, release them at the end of three years from active service, and put them in reserve for the remaining three years. Reenlistments should be largely confined to the noncommissioned officers and other enlisted men in the skilled grades. This plan by the payment of a comparatively small compensation during the three years of reserve, would keep a large bodv of men at the call of the Government, trained and ready for The Army of the United States is in good condition. It showed itself able to meet an emergency in the successful mobilization of an army division of from i5,ooo to :2o,ooo men, which took place along the border of Mexico during the recent disturbances in that country. The marvelous freedom from the ordinary camp diseases of typhoid fever and measles is referred to in the report of the Secretary of War and shows such an effectiveness in the sanitary regulations and treatment of the Medical Corps, and in the discipline of the Army itself, as to invoke the highest commendation. I beg to renew my recommendation of last year that the Congress appropriate for a memorial amphitheater at Arlington, Va., the funds required to construct it upon the plans already approved. The very satisfactory progress made on the Panama Canal last year has continued, and there is every reason to believe that the canal will be completed as early as the 1st of July, 1913, unless something unforeseen occurs. This is about 18 months before the time promised by the engineers. We are now near enough the completion of the canal to make it imperatively necessary that legislation should be enacted to fix the method by which the canal shall be maintained and controlled and the zone governed. The fact is that to-day there is no statutory law by authority of which the President is maintaining the government of the zone. Such authority was given in an amendment to the Spooner Act, which expired by the terms of its own limitation some years ago. Since that time the government has continued, under the advice of the Attorney General that in the absence of action by Congress, there is necessarily an implied authority on the part of the Executive to maintain a government in a territory in which he has to see that the laws are executed. The fact that we have been able thus to get along during the important days of construction without legislation expressly formulating the government of the zone, or delegating the creation of it to the President, is not a reason for supposing that we may continue the same kind of a government after the construction is finished. The implied authority of the President to maintain a civil government in the zone may be derived from the mandatory direction given him in the original Spooner Act, by which he was commanded to build the canal; but certainly, now that the canal is about to be completed and to be put under a permanent management, there ought to be specific statutory authority for its regulation and control and for the government of the zone, which we hold for the chief and main purpose of operating the canal. I fully concur with the Secretary of War that the problem is simply the management of a great public work, and not the government of a local republic; that every provision must be directed toward the successful maintenance of the canal as an avenue of commerce, and that all provisions for the government of those who live within the zone should be subordinate to the main purpose. The zone is 40 miles long and 10 miles wide. Now, it has a population Of 50,000 or 60,000, but as soon as the work of construction is completed, the towns which make up this population will be deserted, and only comparatively few natives will continue their residence there. The control of them ought to approximate a military government. One judge and two justices of the peace will be sufficient to attend to all the judicial and litigated business there is. With a few fundamental laws of Congress, the zone should be governed by the orders of the President, issued through the War Department, as it is today. Provisions can be made for the guaranties of life, liberty, and property, but beyond those, the government should be that of a military reservation, managed in connection with this great highway of trade. In my last annual message I discussed at length the reasons for the Government's assuming the task of furnishing to all ships that use the canal, whether our own naval vessels or others, the supplies of coal and oil and other necessities with which they must be replenished either before or after passing through the canal, together with the dock facilities and repairs of every character. This it is thought wise to do through the Government, because the Government must establish for itself, for its own naval vessels, large depots and dry docks and warehouses, and these may easily be enlarged so as to secure to the world public using the canal reasonable prices and a certainty that there will be no discrimination between those who wish to avail themselves of such facilities.  . I renew my recommendation with respect to the tolls of the canal that within limits, which shall seem wise to Congress, the power of fixing tolls be given to the President. In order to arrive at a proper conclusion, there must be some experimenting, and this can not be done if Congress does not delegate the power to one who can act expeditiously. I am very confident that the United States has the power to relieve from the payment of tolls any part of our shipping that Congress deems wise. We own the canal. It was our money that built it. We have the right to charge tolls for its use. Those tolls must be the same to everyone; but when we are dealing with our own ships, the practice of many Governments of subsidizing their own merchant vessels is so well established in general that a subsidy equal to the tolls, an equivalent remission of tolls, can not be held to be a discrimination in the use of the canal. The practice in the Suez Canal makes this clear. The experiment in tolls to be made by the President would doubtless disclose how great a burden of tolls the coastwise trade between the Atlantic and the Pacific coast could bear without preventing its usefulness in competition with the transcontinental railroads. One of the chief reasons for building the canal was to set up this competition and to bring the two shores closer together as a practical trade problem. It may be that the tolls will have to be wholly remitted. I do not think this is the best principle, because I believe that the cost of such a Government work as the Panama Canal ought to be imposed gradually but certainly upon the trade which it creates and makes possible. So far as we can, consistent with the development of the world's trade through the canal, and the benefit which it was intended to secure to the east and west coastwise trade, we ought to labor to secure from the canal tolls a sufficient amount ultimately to meet the debt which we have assumed and to pay the interest. In respect to the Philippines, I urgently join in the recommendation of the Secretary of War that the act of February 6, 1905, limiting the indebtedness that may be incurred by the Philippine Government for the construction of public works, be increased from $5,000,000 to $15,ooo,ooo. The finances of that Government are in excellent condition. The maximum sum mentioned is quite low as compared with the amount of indebtedness of other governments with similar resources, and the success which has attended the expenditure of the $5,000,000 in the useful improvements of the harbors and other places in the Islands justifies and requires additional expenditures for like purposes.  . I also join in the recommendation that the legislature of the Philippine Islands be authorized to provide for the naturalization of Filipinos and others who by the present law are treated as aliens, so as to enable them to become citizens of the Philippine Islands. Pending an investigation by Congress at its last session, through one of its committees, into the disposition of the friars' lands, Secretary Dickinson directed that the friars' lands should not be sold in excess of the limits fixed for the public lands until Congress should pass upon the subject or should have concluded its investigation. This order has been an obstruction to the disposition of the lands, and I expect to direct the Secretary of War to return to the practice under the opinion of the Attorney General which will enable us to dispose of the lands much more promptly, and to prepare a sinking fund with which to meet the $7,000,000 of bonds issued for the purchase of the lands. I have no doubt whatever that the Attorney General's construction was a proper one, and that it is in the interest of everyone that the land shall be promptly disposed of. The danger of creating a monopoly of ownership in lands under the statutes as construed is nothing. There are only two tracts of 60,000 acres each unimproved and in remote Provinces that are likely to be disposed of in bulk, and the rest of the lands are subject to the limitation that they shall be first offered to the present tenants and lessors who hold them in small tracts. The estimates for the river and harbor improvements reach $32,000,000 for the coming year. I wish to urge that whenever a project has been adopted by Congress as one to be completed, the more money which can be economically expended in its construction in each year, the greater the ultimate economy. This has especial application to the improvement of the Mississippi River and its large branches. It seems to me that an increase in the amount- of money now being annually expended in the improvement of the Ohio River which has been formally adopted by Congress would be in the interest of the public. A similar change ought to be made during the present Congress, in the amount to be appropriated for the Missouri River. The engineers say that the cost of the improvement of the Missouri River from Kansas City to St. Louis, in order to secure 6 feet as a permanent channel, will reach $20,000,000. There have been at least three recommendations from the Chief of Engineers that if the improvement be adopted, $2,000,000 should be expended upon it annually. This particular improvement is especially entitled to the attention of Congress, because a company has been organized in Kansas City, with a capital of $1,000,000, which has built steamers and barges, and is actually using the river for transportation in order to show what can be done in the way of affecting rates between Kansas City and St. Louis, and in order to manifest their good faith and confidence in respect of the improvement. I urgently recommend that the appropriation for this improvement be increased from $600,000, as recommended now in the completion of a contract, to $2,000,000 annually, so that the work may be done in 10 years. The project for a navigable waterway from Lake Michigan to the mouth of the Illinois River, and thence via the Mississippi to the Gulf of Mexico, is one of national importance. In view of the work already accomplished by the Sanitary District of Chicago, an agency of the State of Illinois, which has constructed the most difficult and costly stretch of this waterway and made it an asset of the Nation, and in view of the fact that the people of Illinois have authorized the expenditure Of $20,000,000 to carry this waterway 62 miles farther to Utica, I feel that it is fitting that this work should be supplemented by the Government, and that the expenditures recommended by the special board of engineers on the waterway from Utica to the mouth of the Illinois River be made upon lines which while providing a waterway for the Nation should otherwise benefit that State to the fullest extent. I recommend that the term of service of said special board of engineers be continued, and that it be empowered to reopen the question of the treatment of the lower Illinois River, and to negotiate with a properly constituted commission representing the State of Illinois, and to agree upon a plan for the improvement of the lower Illinois River and upon the extent to which the United States may properly cooperate with the State of Illinois in securing the construction of a navigable waterway from Lockport to the mouth of the Illinois River in conjunction with the development of water power by that State between Lockport and Utica. The report of the Attorney General shows that he has subjected to close examination the accounts of the clerks of the Federal courts; that he has found a good many which disclose irregularities or dishonesty; but that he has had considerable difficulty in securing an effective prosecution or removal of the clerks thus derelict. I am certainly not unduly prejudiced against the Federal courts, but the fact is that the long and confidential relations which grow out of the tenure for life on the part of the judge and the practical tenure for life on the part of the clerk are not calculated to secure the strictness of dealing by the judge with the clerk in respect to his fees and accounts which assures in the clerk's conduct a freedom from overcharges and carelessness. The relationship between the judge and the clerk makes it ungracious for members of the bar to complain of the clerk or for department examiners to make charges against him to be heard by the court, and an order of removal of a clerk and a judgment for the recovery of fees are in some cases reluctantly entered by the judge. For this reason I recommend an amendment to the law whereby the President shall be given power to remove the clerks for cause. This provision need not interfere with the right of the judge to appoint his clerk or to remove him. In my last message, I recommended to Congress that it authorize the payment of the findings or judgments of the Court of Claims in the matter of the French spoliation cases. There has been no appropriation to pay these judgments since 1905. The findings and awards were obtained after a very bitter fight, the Government succeeding in about 75 per cent of the cases. The amount of the awards ought, as a matter of good faith on the part of the Government, to be paid. The limitation of the liability of the master to his servant for personal injuries to such as are occasioned by his fault has been abandoned in most civilized countries and provision made whereby the employee injured in the course of his employment is compensated for his loss of working ability irrespective of negligence. The principle upon which such provision proceeds is that accidental injuries to workmen in modern industry, with its vast complexity and inherent dangers arising from complicated machinery and the use of the great forces of steam and electricity, should be regarded as risks of the industry and the loss borne in some equitable proportion by those who for their own profit engage therein. In recognition of this the last Congress authorized the appointment of a commission to investigate the subject of employers' liability and workmen's compensation and to report the result of their investigations, through the President, to Congress. This commission was appointed and has been at work, holding hearings, gathering data, and considering the subject, and it is expected will be able to report by the first of the year, in accordance with the provisions of the law. It is hoped and expected that the commission will suggest legislation which will enable us to put in the place of the present wasteful and sometimes unjust system of employers' liability a plan of compensation which will afford some certain and definite relief to all employees who are injured in the course of their employment in those industries which are subject to the regulating power of Congress. In promotion of the movement for the prevention of delay and unnecessary cost, in litigation, I am glad to say that the Supreme Court has taken steps to reform the present equity rules of the Federal courts, and that we may in the near future expect a revision of them which will be a long step in the right direction. The American Bar Association has recommended to Congress several bills expediting procedure, one of which has already passed the House unanimously, February 6, 1911. This directs that no judgment should be set aside or reversed, or new trial granted, unless it appears to the court, after an examination of the entire cause, that the error complained of has injuriously affected the substantial rights of the parties, and also provides for the submission of issues of fact to a jury, reserving questions of law for subsequent argument and decision. I hope this bill will pass the Senate and become law, for it will simplify the procedure at law. Another bill to amend chapter II of the judicial Code, in order to avoid errors in pleading, was presented by the same association, and one. enlarging the jurisdiction of the Supreme Court so as to permit that court to examine, upon a writ of error, all cases in which any right or title is claimed under the Constitution, or any statute or treaty of the United States, whether the decision in the court below has been against the right or title or in its favor. Both these measures are in the interest of justice and should be passed. At the beginning of the present administration in 1909 the postal service was in arrears to the extent Of $17,479,770.47. It was very much the largest deficit on record. In the brief space of two years this has been turned into a surplus Of $220,000, which has been accomplished without curtailment of the postal facilities, as may be seen by the fact that there have been established 3,744 new post offices; delivery by carrier has been added to the service in 186 cities; 2,516 new rural routes have been established, covering 60,000 miles; the force of postal employees has been increased in these two years by more than 8,000, and their average annual salary has had a substantial increase. On January 3, 1911, postal-savings depositories were established experimentally in 48 States and Territories. After three months' successful operation the system was extended as rapidly as feasible to the 7,500 Post offices of the first, second, and third classes constituting the presidential grade. By the end of the year practically all of these will have been designated and then the system will be extended to all fourth-class post offices doing a money-order business. In selecting post offices for depositories consideration was given to the efficiency of the postmasters and only those offices where the ratings were satisfactory to the department have been designated. Withholding designation from postmasters with unsatisfactory ratings has had a salutary effect on the service. The deposits have kept pace with the extension of the system. Amounting to only $60,652 at the end of the first month's operation in the experimental offices, they increased to $679,310 by July, and now after 11 months of operation have reached a total of $ 11,000,000. This sum is distributed among 2,71o banks and protected tinder the law by bonds deposited with the Treasurer of the United States. Under the method adopted for the conduct of the system certificates are issued as evidence of deposits, and accounts with depositors are kept by the post offices instead of by the department. Compared with the practice in other countries of entering deposits in pass books and keeping at the central office a ledger account with each depositor, the use of the certificate has resulted in great economy of administration. The depositors thus far number approximately 150,000. They include 40 nationalities, native Americans largely predominating and English and Italians coming next. The first conversion of deposits into United States bonds bearing interest at the rate of 2.5 per cent occurred on July 1, 1911, the amount of deposits exchanged being $41,900, or a little more than 6 per cent of the total outstanding certificates of deposit on June 30. Of this issue, bonds to the value of $6,120 were in coupon form and $35,780 in registered form. Steps should be taken immediately for the establishment of a rural parcel post. In the estimates of appropriations needed for the maintenance of the postal service for the ensuing fiscal year an item of $150,000 has been inserted to cover the preliminary expense of establishing a parcel post on rural mail routes, as well as to cover an investigation having for its object the final establishment of a general parcel post on all railway and steamboat transportation routes. The department believes that after the initial expenses of establishing the system are defrayed and the parcel post is in full operation on the rural routes it will not only bring in sufficient revenue to meet its cost, but also a surplus that can be utilized in paying the expenses of a parcel post in the City Delivery Service. It is hoped that Congress will authorize the immediate establishment of a limited parcel post on such rural routes as may be selected, providing for the delivery along the routes of parcels not exceeding eleven pounds, which is the weight limit for the international parcel post, or at the post office from which such route emanates, or on another route emanating from the same office. Such preliminary service will prepare the way for the more thorough and comprehensive inquiry contemplated in asking for the appropriation mentioned, enable the department to gain definite information concerning the practical operation of a general system, and at the same time extend the benefit of the service to a class of people who, above all others, are specially in need of it. The suggestion that we have a general parcel post has awakened great opposition on the part of some who think that it will have the effect to destroy the business of the country storekeeper. Instead of doing this, I think the change will greatly increase business for the benefit of all. The reduction in the cost of living it will bring about ought to make its coming certain. On the 2d of November last, I reviewed the fighting fleet of battleships and other vessels assembled in New York Harbor, consisting of 24 battleships, 2 armored cruisers, 2 cruisers, 22 destroyers, 12 torpedo boats, 8 submarines, and other attendant vessels, making 98 vessels of all classes, of a tonnage Of 576,634 tons. Those who saw the fleet were struck with its preparedness and with its high military efficiency. All Americans should be proud of its personnel. The fleet was deficient in the number of torpedo destroyers, in cruisers, and in colliers, as well as in large battleship cruisers, which are now becoming a very important feature of foreign navies, notably the British, German, and Japanese. The building plan for this year contemplates two battleships and two colliers. This is because the other and smaller vessels can be built much more rapidly in case of emergency than the battleships, and we certainly ought to continue the policy of two battleships a year until after the Panama Canal is finished and until in our first line and in our reserve line we can number 40 available vessels of proper armament and size. The reorganization of the Navy and the appointment of four aids to the Secretary have continued to demonstrate their usefulness. It would be difficult now to administer the affairs of the Navy without the expert counsel and advice of these aids, and I renew the recommendation which I made last year, that the aids be recognized by statute. It is certain that the Navy, with its present size, should have admirals in active command higher than rear admirals. The recognized grades in order are: Admiral of the fleet, admiral, vice admiral, and rear admiral. Our great battleship fleet is commanded by a rear admiral, with four other rear admirals under his orders. This is not as it should be, and when questions of precedence arise between our naval officers and those of European navies, the American rear admiral, though in command of ten times the force of a foreign vice admiral, must yield precedence to the latter. Such an absurdity ought not to prevail, and it can be avoided by the creation of two or three positions of flag rank above that of rear admiral. I attended the opening of the new training school at North Chicago, Ill., and am glad to note the opportunity which this gives for drawing upon young men of the country from the interior, from farms, stores, shops, and offices, which insures a high average of intelligence and character among them, and which they showed in the very wonderful improvement in discipline and drill which only a few short weeks' presence at the naval station had made. I invite your attention to the consideration of the new system of detention and of punishment for Army and Navy enlisted men which has obtained in Great Britain, and which has made greatly for the better control of the. men. We should adopt a similar system here. Like the Treasury Department and the War Department, the Navy Department has given much attention to economy in administration, and has cut down a number of unnecessary expenses and reduced its estimates except for construction and the increase that that involves. I urge upon Congress the necessity for an immediate increase of 2,000 men in the enlisted strength of the Navy, provided for in the estimates. Four thousand more are now needed to man all the available vessels. There are in the service to-day about 47,750 enlisted men of all ratings. Careful computation shows that in April, 1912, 49,166 men will be required for vessels in commission, and 3,000 apprentice seamen should be kept under training at all times. The Secretary of the Navy has recommended the abolition of certain of the smaller and unnecessary navy yards, and in order to furnish a complete and comprehensive report has referred the question of all navy yards to the joint board of the Army and Navy. This board will shortly make its report and the Secretary of the Navy advises me that his recommendations on the subject will be presented early in the coming year. The measure of economy contained in a proper handling of this subject is so great and so important to the interests of the Nation that I shall present it to Congress as a separate subject apart from my annual message. Concentration of the necessary work for naval vessels in a few navy yards on each coast is a vital necessity if proper economy in Government expenditures is to be attained. The Secretary of the Navy is striving to unify the various corps of the Navy to the extent possible and thereby stimulate a Navy spirit as distinguished from a corps spirit. In this he has my warm support. All officers are to be naval officers first and specialists afterwards. This means that officers will take up at least one specialty, such as ordnance, construction, or engineering. This is practically what is done now, only some of the specialists, like the pay officers and naval constructors, are not of the line. It is proposed to make them all of the line. All combatant corps should obviously be of the line. This necessitates amalgamating the pay officers and also those engaged in the technical work of producing the finished ship. This is at present the case with the single exception of the naval constructors, whom it is now proposed to amalgamate with the line. I urge again upon Congress the desirability of establishing the council of national defense. The bill to establish this council was before Congress last winter, and it is hoped that this legislation will pass during the present session. The purpose of the council is to determine the general policy of national defense and to recommend to Congress and to the President such measures relating to it as it shall deem necessary and expedient. No such machinery is now provided by which the readiness of the Army and Navy may be improved and the programs of military and naval requirements shall be coordinated and properly scrutinized with a view of the necessities of the whole Nation rather than of separate departments. For the consideration of matters which are pending or have been disposed of in the Agricultural Department and in the Department of Commerce and Labor, I refer to the very excellent reports of the Secretaries of those departments. I shall not be able to submit to Congress until after the Christmas holidays the question of conservation of our resources arising in Alaska and the West and the question of the rate for second-class mail matter in the Post Office Department. The law does not require the submission of the reports of the Commission on Economy and Efficiency until the 31st of December. I shall therefore not be able to submit a report of the work of that commission until the assembling of Congress after the holidays. I have already advocated, in my last annual message, the adoption of a civil-service retirement system, with a contributory feature to it so as to reduce to a minimum the cost to the Government of the pensions to be paid. After considerable reflection, I am very much opposed to a pension system that involves no contribution from the employees. I think the experience of other governments justifies this view; but the crying necessity for some such contributory system, with possibly a preliminary governmental outlay, in order to cover the initial cost and to set the system going at once while the contributions are accumulating, is manifest on every side. Nothing will so much promote the economy and efficiency of the Government as such a system. I wish to renew again my recommendation that all the local offices throughout the country, including collectors of internal revenue, collectors of customs, postmasters of all four classes, immigration commissioners and marshals, should be by law covered into the classified service, the necessity for confirmation by the Senate be removed, and the President and the others, whose time is now taken up in distributing this patronage under the custom that has prevailed since the beginning of the Government in accordance with the recommendation of the Senators and Congressmen of the majority party, should be relieved from this burden. I am confident that such a change would greatly reduce the cost of administering the Government, and that it would add greatly to its efficiency. It would take away the power to use the patronage of the Government for political purposes. When officers are recommended by Senators and Congressmen from political motives and for political services rendered, it is impossible to expect that while in office the appointees will not regard their tenure as more or less dependent upon continued political service for their patrons, and no regulations, however stiff or rigid, will prevent this, because such regulations, in view of the method and motive for selection, are plainly inconsistent and deemed hardly worthy of respect.
This message is the first of several which I shall send to Congress during the interval between the opening of its regular session and its adjournment for the Christmas holidays. The amount of information to be communicated as to the operations of the Government, the number of important subjects calling for comment by the Executive, and the transmission to Congress of exhaustive reports of special commissions, make it impossible to include in one message of a reasonable length a discussion of the topics that ought to be brought to the attention of the National Legislature at its first regular session. In May last the Supreme Court handed down decisions in the suits in equity brought by the United States to enjoin the further maintenance of the Standard Oil Trust and of the American Tobacco Trust, and to secure their dissolution. The decisions are epoch-making and serve to advise the business world authoritatively of the scope and operation of the anti-trust act of 1890. The decisions do not depart in any substantial way from the previous decisions of the court in construing and applying this important statute, but they clarify those decisions by further defining the already admitted exceptions to the literal construction of the act. By the decrees, they furnish a useful precedent as to the proper method of dealing with the capital and property of illegal trusts. These decisions suggest the need and wisdom of additional or supplemental legislation to make it easier for the entire business community to square with the rule of action and legality thus finally established and to preserve the benefit, freedom, and spur of reasonable competition without loss of real efficiency or progress. The statute in its first section declares to be illegal "every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States or with foreign nations," and in the second, declares guilty of a misdemeanor "every person who shall monopolize or attempt to monopolize or combine or conspire with any other person to monopolize any part of the trade or commerce of the several States or with foreign nations." In two early cases, where the statute was invoked to enjoin a transportation rate agreement between interstate railroad companies, it was held that it was no defense to show that the agreement as to rates complained of was reasonable at common law, because it was said that the statute was directed against all contracts and combinations in restraint of trade whether reasonable at common law or not. It was plain from the record, however, that the contracts complained of in those cases would not have been deemed reasonable at common law. In subsequent cases the court said that the statute should be given a reasonable construction and refused to include within its inhibition, certain contractual restraints of trade which it denominated as incidental or as indirect. These cases of restraint of trade that the court excepted from the operation of the statute were instances which, at common law, would have been called reasonable. In the Standard Oil and Tobacco cases, therefore, the court merely adopted the tests of the common law, and in defining exceptions to the literal application of the statute, only substituted for the test of being incidental or indirect, that of being reasonable, and this, without varying in the slightest the actual scope and effect of the statute. In other words, all the cases under the statute which have now been decided would have been decided the same way if the court had originally accepted in its construction the rule at common law. It has been said that the court, by introducing into the construction of the statute common-law distinctions, has emasculated it. This is obviously untrue. By its judgment every contract and combination in restraint of interstate trade made with the purpose or necessary effect of controlling prices by stifling competition, or of establishing in whole or in part a monopoly of such trade, is condemned by the statute. The most extreme critics can not instance a case that ought to be condemned under the statute which is not brought within its terms as thus construed. The suggestion is also made that the Supreme Court by its decision in the last two cases has committed to the court the undefined and unlimited discretion to determine whether a case of restraint of trade is within the terms of the statute. This is wholly untrue. A reasonable restraint of trade at common law is well understood and is clearly defined. It does not rest in the discretion of the court. It must be limited to accomplish the purpose of a lawful main contract to which, in order that it shall be enforceable at all, it must be incidental. If it exceed the needs of that contract, it is void. The test of reasonableness was never applied by the court at common law to contracts or combinations or conspiracies in restraint of trade whose purpose was or whose necessary effect would be to stifle competition, to control prices, or establish monopolies. The courts never assumed power to say that such contracts or combinations or conspiracies might be lawful if the parties to them were only moderate in the use of the power thus secured and did not exact from the public too great and exorbitant prices. It is true that many theorists, and others engaged in business violating the statute, have hoped that some such line could be drawn by courts; but no court of authority has ever attempted it. Certainly there is nothing in the decisions of the latest two cases from which such a dangerous theory of judicial discretion in enforcing this statute can derive the slightest sanction. We have been twenty-one years making this statute effective for the purposes for which it was enacted. The Knight case was discouraging and seemed to remit to the States the whole available power to attack and suppress the evils of the trusts. Slowly, however, the error of that judgment was corrected, and only in the last three or four years has the heavy hand of the law been laid upon the great illegal combinations that have exercised such an absolute dominion over many of our industries. Criminal prosecutions have been brought and a number are pending, but juries have felt averse to convicting for jail sentences, and judges have been most reluctant to impose such sentences on men of respectable standing in society whose offense has been regarded as merely statutory. Still, as the offense becomes better understood and the committing of it partakes more of studied and deliberate defiance of the law, we can be confident that juries will convict individuals and that jail sentences will be imposed. In the Standard Oil case the Supreme and Circuit Courts found the combination to be a monopoly of the interstate business of refining, transporting, and marketing petroleum and its products, effected and maintained through thirty-seven different corporations, the stock of which was held by a New Jersey company. It in effect commanded the dissolution of this combination, directed the transfer and pro rata distribution by the New Jersey company of the stock held by it in the thirty-seven corporations to and among its stockholders; and the corporations and individual defendants were enjoined from conspiring or combining to restore such monopoly; and all agreements between the subsidiary corporations tending to produce or bring about further violations of the act were enjoined. In the Tobacco case, the court found that the individual defendants, twenty-nine in number, had been engaged in a successful effort to acquire complete dominion over the manufacture, sale, and distribution of tobacco in this country and abroad, and that this had been done by combinations made with a purpose and effect to stifle competition, control prices, and establish a monopoly, not only in the manufacture of tobacco, but also of tin-foil and licorice used in its manufacture and of its products of cigars, cigarettes, and snuffs. The ' tobacco suit presented a far more complicated and difficult case than the Standard Oil suit for a decree which would effectuate the will of the court and end the violation of the statute. There was here no single holding company as in the case of the Standard Oil Trust. The main company was the American Tobacco Company, a manufacturing, selling, and holding company. The plan adopted to destroy the combination and restore competition involved the redivision of the capital and plants of the whole trust between some of the companies constituting the trust and new companies organized for the purposes of the decree and made parties to it, and numbering, new and old, fourteen. The American Tobacco Company (old), readjusted capital, $92, 000,000; the Liggett & Meyers Tobacco Company (new), capital, $67,000,000; the P. Lorillard Company (new), capital, $47,000,000; and the R. J. Reynolds Tobacco Company (old), capital, $7,525,000, are chiefly engaged in the manufacture and sale of chewing and smoking tobacco and cigars. The former one tinfoil company is divided into two, one of $825,000 capital and the other of $400,000. The one snuff company is divided into three companies, one with a capital Of $15,000,000, another with a capital of $8,000,000, and a third with a capital of $8,000,000. The licorice companies are two one with a capital Of $5,758,300 and another with a capital of $200,000. There is, also, the British-American Tobacco Company, a British corporation, doing business abroad with a capital Of $26,000,000, the Porto Rican Tobacco Company, with a capital of $1,800,000, and the corporation of United Cigar Stores, with a capital of $9,000,000. Under this arrangement, each of the different kinds of business will be distributed between two or more companies with a division of the prominent brands in the same tobacco products, so as to make competition not only possible but necessary. Thus the smoking-tobacco business of the country is divided so that the present independent companies have 21-39 per cent, while the American Tobacco Company will have 33-08 per cent, the Liggett & Meyers 20.05 per cent, the Lorillard Company 22.82 per cent, and the Reynolds Company 2.66 per cent. The stock of the other thirteen companies, both preferred and common, has been taken from the defendant American Tobacco Company and has been distributed among its stockholders. All covenants restricting competition have been declared null and further performance of them has been enjoined. The preferred stock of the different companies has now been given voting power which was denied it under the old organization. The ratio of the preferred stock to the common was as 78 to 40. This constitutes a very decided change in the character of the ownership and control of each company. In the original suit there were twenty-nine defendants who were charged with being the conspirators through whom the illegal combination acquired and exercised its unlawful dominion. Under the decree these defendants. will hold amounts of stock in the various distributee companies ranging from 41 per cent as a maximum to 28.5 per cent as a minimum, except in the case of one small company, the Porto Rican Tobacco Company, in which they will hold 45 per cent. The twenty-nine individual defendants are enjoined for three years from buying any stock except from each other, and the group is thus prevented from extending its control during that period. All parties to the suit, and the new companies who are made parties are enjoined perpetually from in any way effecting any combination between any of the companies in violation of the statute by way of resumption of the old trust. Each of the fourteen companies is enjoined from acquiring stock in any of the others. All these companies are enjoined from having common directors or officers, or common buying or selling agents, or common offices, or lending money to each other. Objection was made by certain independent tobacco companies that this settlement was unjust because it left companies with very large capital in active business, and that the settlement that would be effective to put all on an equality would be a division of the capital and plant of the trust into small fractions in amount more nearly equal to that of each of the independent companies. This contention results from a misunderstanding of the anti-trust law and its purpose. It is not intended thereby to prevent the accumulation of large capital in business enterprises in which such a combination can secure reduced cost of production, sale, and distribution. It is directed against such an aggregation of capital only when its purpose is that of stifling competition, enhancing or controlling prices, and establishing a monopoly. If we shall have by the decree defeated these purposes and restored competition between the large units into which the capital and plant have been divided, we shall have accomplished the useful purpose of the statute. It is not the purpose of the statute to confiscate the property and capital of the offending trusts. Methods of punishment by fine or imprisonment of the individual offenders, by fine of the corporation or by forfeiture of its goods in transportation, are provided, but the proceeding in equity is a specific remedy to stop the operation of the trust by injunction and prevent the future use of the plant and capital in violation of the statute. I venture to say that not in the history of American law has a decree more effective for such a purpose been entered by a court than that against the Tobacco Trust. As Circuit judge Noyes said in his judgment approving the decree: "The extent to which it has been necessary to tear apart this combination and force it into new forms with the attendant burdens ought to demonstrate that the Federal anti-trust statute is a drastic statute which accomplishes effective results; which so long as it stands on the statute books must be obeyed, and which can not be disobeyed without incurring far-reaching penalties. And, on the other hand, the successful reconstruction of this organization should teach that the effect of enforcing this statute is not to destroy, but to reconstruct; not to demolish, but to re-create in accordance with the conditions which the Congress has declared shall exist among the people of the United States." It has been assumed that the present pro rata and common ownership in all these companies by former stockholders of the trust would insure a continuance of the same old single control of all the companies into which the trust has by decree been disintegrated. This is erroneous and is based upon the assumed inefficacy and innocuousness of judicial injunctions. The companies are enjoined from cooperation or combination; they have different managers, directors, purchasing and sales agents. If all or many of the numerous stockholders, reaching into the thousands, attempt to secure concerted action of the companies with a view to the control of the market, their number is so large that such an attempt could not well be concealed, and its prime movers and all its participants would be at once subject to contempt proceedings and imprisonment of a summary character. The immediate result of the present situation will necessarily be activity by all the companies under different managers, and then competition must follow, or there will be activity by one company and stagnation by another. Only a short time will inevitably lead to a change in ownership of the stock, as all opportunity for continued cooperation must disappear. Those critics who speak of this dis integration in the trust as a mere change of garments have not given consideration to the inevitable working of the decree and understand little the personal danger of attempting to evade or set at naught the solemn injunction of a court whose object is made plain by the decree and whose inhibitions are set forth with a detail and comprehensiveness The effect of these two decisions has led to decrees dissolving the combination of manufacturers of electric lamps, a southern wholesale grocers' association, an interlocutory decree against the Powder Trust with directions by the circuit court compelling dissolution, and other combinations of a similar history are now negotiating with the Department of justice looking to a disintegration by decree and reorganization in accordance with law. It seems possible to bring about these reorganizations without general business disturbance. But now that the anti-trust act is seen to be effective for the accomplishment of the purpose of its enactment, we are met by a cry from many different quarters for its repeal. It is said to be obstructive of business progress . to be an attempt to restore old-fashioned methods of destructive competition between small units, and to make impossible those useful combinations of capital and the reduction of the cost of production that are essential to continued prosperity and normal growth. In the recent decisions the Supreme Court makes clear that there is nothing in the statute which condemns combinations of capital or mere bigness of plant organized to secure economy in production and a reduction of its cost. It is only when the purpose or necessary effect of the organization and maintenance of the combination or the aggregation of immense size are the stifling of competition, actual and potential, and the enhancing of prices and establishing a monopoly, that the statute is violated. Mere size is no sin against the law. The merging of two or more business plants necessarily eliminates competition between the units thus combined, but this elimination is in contravention of the statute only when the combination is made for purpose of ending this particular competition in order to secure control of, and enhance, prices and create a monopoly. The complaint is made of the statute that it is not sufficiently definite in its description of that which is forbidden, to enable business men to avoid its violation. The suggestion is, that we may have a combination of two corporations, which may run on for years, and that subsequently the Attorney General may conclude that it wa's a violation of the statute, and that which was supposed by the combiners to be innocent then turns out to be a combination in violation of the statute. The answer to this hypothetical case is that when men attempt to amass such stupendous capital as will enable them to suppress competition, control prices and establish a monopoly, they know the purpose of their acts. Men do not do such a thing without having it clearly in mind. If what they do is merely for the purpose of reducing the cost of production, without the thought of suppressing competition by use of the bigness of the plant they are creating, then they can not be convicted at the time the union is made, nor can they be convicted later, unless it happen that later on they conclude to suppress competition and take the usual methods for doing so, and thus establish for themselves a monopoly. They can, in such a case, hardly complain if the motive which subsequently is disclosed is attributed by the court to the original combination. Much is said of the repeal of this statute and of constructive legislation intended to accomplish the purpose and blaze a clear path for honest merchants and business men to follow. It may be that such a plan will be evolved, but I submit that the discussions which have been brought out in recent days by the fear of the continued execution of the anti-trust law have produced nothing but glittering generalities and have offered no line of distinction or rule of action as definite and as clear as that which the Supreme Court itself lays down in enforcing the statute. I see no objection-and indeed I can see decided advantages-in the enactment of a law which shall describe and denounce methods of competition which are unfair and are badges of the unlawful purpose denounced in the anti-trust law. The attempt and purpose to suppress a competitor by underselling him at a price so unprofitable as to drive him out of business, or the making of exclusive contracts with customers under which they are required to give up association with other manufacturers, and numerous kindred methods for stifling competition and effecting monopoly, should be described with sufficient accuracy in a criminal statute on the one hand to enable the Government to shorten its task by prosecuting single misdemeanors instead of an entire conspiracy, and, on the other hand, to serve the purpose of pointing out more in detail to the business community what must be avoided. In a special message to Congress on January 7, 1910, I ventured to point out the disturbance to business that would probably attend the dissolution of these offending trusts. I said: "But such an investigation and possible prosecution of corporations whose prosperity or destruction affects the comfort not only of stockholders but of millions of wage earners, employees, and associated tradesmen must necessarily tend to disturb the confidence of the business community, to dry up the now flowing sources of capital from its places of hoarding, and produce a halt in our present prosperity that will because suffering and strained circumstances among the innocent many for the faults of the guilty few. The question which I wish in this message to bring clearly to the consideration and discussion of Congress is whether, in order to avoid such a possible business danger, something can not be done by which these business combinations may be offered a means, without great financial disturbance, of changing the character, organization, and extent of their business into one within the lines of the law under Federal control and supervision, securing compliance with the anti-trust statute. "Generally, in the industrial combinations called 'trusts,' the principal business is the sale of goods in many States and in foreign markets; in other words, the interstate and foreign business far exceeds the business done in any one State. This fact will justify the Federal Government in granting a Federal charter to such a combination to make and sell in interstate and foreign commerce the products of useful manufacture under such limitations as will secure a compliance with the anti-trust law. It is possible so to frame a statute that while it offers protection to a Federal company against harmful, vexatious, and unnecessary invasion by the States, it shall subject it to reasonable taxation and control by the States with respect to its purely local business. * * * "Corporations organized under this act should be prohibited from acquiring and holding stock in other corporations (except for special reasons, upon approval by the proper Federal authority), thus avoiding the creation under national auspices of the holding company with subordinate corporations in different States, which has been such an effective agency in the creation of the great trusts and monopolies. "If the prohibition of the anti-trust act against combinations in restraint of trade is to be effectively enforced, it is essential that the National Government shall provide for the creation of national corporations to carry on a legitimate business throughout the United States. The conflicting laws of the different States of the Union with respect to foreign corporations make it difficult, if not impossible, for one corporation to comply with their requirements so as to carry on business in a number of different States." I renew the recommendation of the enactment of a general law providing for the voluntary formation of corporations to engage in trade and commerce among the States and with foreign nations. Every argument which was then advanced for such a law, and every explanation which was at that time offered to possible objections, have been confirmed by our experience since the enforcement of the antitrust, statute has resulted in the actual dissolution of active commercial organizations. It is even more manifest now than it was then that the denunciation of conspiracies in restraint of trade should not and does not mean the denial of organizations large enough to be intrusted with our interstate and foreign trade. It has been made more clear now than it was then that a purely negative statute like the anti-trust law may well be supplemented by specific provisions for the building up and regulation of legitimate national and foreign commerce. The drafting of the decrees in the dissolution of the present trusts, with a view to their reorganization into legitimate corporations, has made it especially apparent that the courts are not provided with the administrative machinery to make the necessary inquiries preparatory to reorganization, or to pursue such inquiries, and they should be empowered to invoke the aid of the Bureau of Corporations in determining the suitable reorganization of the disintegrated parts. The circuit court and the Attorney General were greatly aided in framing the decree in the Tobacco Trust dissolution by an expert from the Bureau of Corporations. I do not set forth in detail the terms and sections of a statute which might supply the constructive legislation permitting and aiding the formation of combinations of capital into Federal corporations. They should be subject to rigid rules as to their organization and procedure, including effective publicity, and to the closest supervision as to the issue of stock and bonds by an executive bureau or commission in the Department of Commerce and Labor, to which in times of doubt they might well submit their proposed plans for future business. It must be distinctly understood that incorporation under Federal law could not exempt the company thus formed and its incorporators and managers from prosecution under the anti-trust law for subsequent illegal conduct, but the publicity of its procedure and the opportunity for frequent consultation with the bureau or commission in charge of the incorporation as to the legitimate purpose of its transactions would offer it as great security against successful prosecutions for violations of the law as would be practical or wise. Stich a bureau or commission might well be invested also with the duty already referred to, of aiding courts in the dissolution and recreation of trusts within the law. it should be an executive tribunal of the dignity and power of the Comptroller of the Currency or the Interstate Commerce Commission, which now exercise supervisory power over important classes of corporations under Federal regulation. The drafting of such a Federal incorporation law would offer ample opportunity to prevent many manifest evils in corporate management to-day, including irresponsibility of control in the hands of the few who are not the real owners. I recommend that the Federal charters thus to be granted shall be voluntary, at least until experience justifies mandatory provisions. The benefit to be derived from the operation of great businesses under the protection of such a charter would attract all who are anxious to keep within the lines of the law. Other large combinations that fail to take advantage of the Federal incorporation will not have a right to complain if their failure is ascribed to unwillingness to submit their transactions to the careful official. scrutiny, competent supervision, and publicity attendant upon the enjoyment of such a charter. The opportunity thus suggested for Federal incorporation, it seems tome, is suitable constructive legislation needed to facilitate the squaring of great industrial enterprises to the rule of action laid down by the anti-trust law. This statute as construed by the Supreme Court must continue to be the line of distinction for legitimate business. It must be enforced, unless we are to banish individualism from all business and reduce it to one common system of regulation or control of prices like that which now prevails with respect to public utilities, and which when applied to all business would be a long step toward State socialism. The anti-trust act is the expression of the effort of a freedomloving people to preserve equality of opportunity. It is the result of the confident determination of such a people to maintain their future growth by preserving uncontrolled and unrestricted the enterprise of the individual, his industry, his ingenuity, his intelligence, and his independent courage. For twenty years or more this statute has been upon the statute book. All knew its general purpose and approved. Many of its violators were cynical over its assumed impotence. It seemed impossible of enforcement. Slowly the mills of the courts ground, and only gradually did the majesty of the law assert itself. Many of its statesmen-authors died before it became a living force, and they and others saw the evil grow which they had hoped to destroy. Now its efficacy is seen; now its power is heavy; now its object is near achievement. Now we hear the call for its repeal on the plea that it interferes with business prosperity, and we are advised in most general terms, how by some other statute and in some other way the evil we are just stamping out can be cured, if we only abandon this work of twenty years and try another experiment for another term of years. It is said that the act has not done good. Can this be said in the face of the effect of the Northern Securities decree? That decree was in no way so drastic or inhibitive in detail as either the Standard Oil decree or the Tobacco decree; but did it not stop for all time the then powerful movement toward the control of all the railroads of the country in a single hand? Such a one-man power could not have been a healthful influence in the Republic, even though exercised under the general supervision of an interstate commission. Do we desire to make such ruthless combinations and monopolies lawful? When all energies are directed, not toward the reduction of the cost of production for the public benefit by a healthful competition, but toward new ways and means for making permanent in a few hands the absolute control of the conditions and prices prevailing in the whole field of industry, then individual enterprise and effort will be paralyzed and the spirit of commercial freedom will be dead. The relations of the United States with other countries have continued during the past twelve months upon a basis of the usual good will and friendly intercourse. . The year just passed marks an important general movement on the part of the Powers for broader arbitration. In the recognition of the manifold benefits to mankind in the extension of the policy of the settlement of international disputes by arbitration rather than by war, and in response to a widespread demand for an advance in that direction on the part of the people of the United States and of Great Britain and of France, new arbitration treaties were negotiated last spring with Great Britain and France, the terms of which were de signed, as expressed in the preamble of these treaties, to extend the scope and obligations of the policy of arbitration adopted in our present treaties with those Governments To pave the way for this treat with the United States, Great Britain negotiated an important modification in its alliance with Japan, and the French Government also expedited the negotiations with signal good will. The new treaties have been submitted to the Senate and are awaiting its advice and consent to their ratification. All the essentials of these important treaties have long been known, and it is my earnest hope that they will receive prompt and favorable action. I am glad to report that on July 5 last the American claim of Alsop & Co. against the Government of Chile was finally disposed of by the decision of His Britannic Majesty George V, to whom, as amiable compositeur, the matter had been referred for determination. His Majesty made an award of nearly $1,000,000 to the claimants, which was promptly paid by Chile. The settlement of this controversy has happily eliminated from the relations between the Republic of Chile and the United States the only question which for two decades had given the two foreign offices any serious concern and makes possible the unobstructed development of the relations of friendship which it has been the aim of this Government in every possible way to further and cultivate. In further illustration of the practical and beneficent application of the principle of arbitration and the underlying broad spirit of conciliation, I am happy to advert to the part of the United States in facilitating amicable settlement of disputes which menaced the peace between Panama and Costa Rica and between Haiti and the Dominican Republic. Since the date of their independence, Colombia and Costa Rica had been seeking a solution of a boundary dispute, which came as an heritage from Colombia to the new Republic of Panama, upon its beginning life as an independent nation. Although the disputants had submitted this question for decision to the President of France under the terms of an arbitration treaty, the exact interpretation of the provisions of the award rendered had been a matter of serious disagreement between the two countries, both contending for widely different lines even under the terms of the decision. Subsequently and since T903 this boundary question bad been the subject of fruitless diplomatic negotiations between the parties. In January, 1910, at the request of both Governments the agents representing them met in conference at the Department of State and subsequently concluded a protocol submitting this long-pending controversy to the arbitral judgment of the Chief justice of the United States, who consented to act in this capacity. A boundary commission, according to the international agreement, has now been appointed, and it is expected that the arguments will shortly proceed and that this long-standing dispute will be honorably and satisfactorily terminated. Again, a few months ago it appeared that the Dominican Republic and Haiti were about to enter upon hostilities because of complications growing out of an acrimonious boundary dispute which the efforts of many years had failed to solve. The Government of the United States, by a friendly interposition of good offices, succeeded in prevailing upon the parties to place their reliance upon some form of pacific settlement. Accordingly, on the friendly suggestion of this Government, the two Governments empowered commissioners to meet at Washington in conference at the State Department in order to arrange the terms of submission to arbitration of the boundary controversy. Our arbitration of the Chamizal boundary question with Mexico was unfortunately abortive, but with the earnest efforts on the part of both Governments which its importance commands, it is felt that an early practical adjustment should prove possible. During the past year the Republic of Venezuela celebrated the one hundredth anniversary of its independence. The United States sent, in honor of this event, a special embassy to Caracas, where the cordial reception and generous hospitality shown it were most gratifying as a further proof of the good relations and friendship existing between that country and the United States. . The recent political events in Mexico received attention from this Government because of the exceedingly delicate and difficult situation created along our southern border and the necessity for taking measures properly to safeguard American interests. The Government of the United States, in its desire to secure a proper observance and enforcement of the so-called neutrality statutes of the Federal Government, issued directions to the appropriate officers to exercise a diligent and vigilant regard for the requirements of such rules and laws. Although a condition of actual armed conflict existed, there was no official recognition of belligerency involving the technical neutrality obligations of international law. On the 6th of March last, in the absence of the Secretary of State, I had a personal interview with Mr. Wilson, the ambassador of the United States to Mexico, in which he reported to me that the conditions in Mexico were much more critical than the press dispatches disclosed; that President Diaz was on a volcano of popular uprising; that the small outbreaks which had occurred were only symptomatic of the whole condition; that a very large per cent of the people were in sympathy with the insurrection; that a general explosion was probable at any time, in which case he feared that the 40,000 or more American residents in Mexico might be assailed, and that the very large American investments might be injured or destroyed. After a conference with the Secretary of War and the Secretary of the Navy, I thought it wise to assemble an Army division of full strength at San Antonio, Tex., a brigade of three regiments at Galveston, a brigade of Infantry in the Los Angeles district of southern California, together with a squadron of battleships and cruisers and transports at Galveston, and a small squadron of ships at San Diego. At the same time, through our representative at the City of Mexico, I expressed to President Diaz the hope that no apprehensions might result from unfounded conjectures as to these military maneuvers, and assured him that they had no significance which should because concern to his Government. The mobilization was effected with great promptness, and on the 15th of March, through the Secretary of War and the Secretary of the Navy, in a letter addressed to the Chief of Staff, I issued the following instructions: It seems my duty as Commander in Chief to place troops in sufficient number where, if Congress shall direct that they enter Mexico to save American lives and property, an effective movement may be promptly made. Meantime, the movement of the troops to Texas and elsewhere near the boundary, accompanied with sincere assurances of the utmost goodwill toward the present Mexican Government and with larger and more frequent patrols along the border to prevent insurrectionary expeditions from American soil, will hold up the hands of the existing Government and will have a healthy moral effect to prevent attacks upon Americans and their property in any subsequent general internecine strife. Again, the sudden mobilization of a division of troops has been a great test of our Army and full of useful instruction, while the maneuvers that are thus made possible can occupy the troops and their officers to great advantage. The assumption by the press that I contemplate intervention on Mexican soil to protect American lives or property is of course gratuitous, because I seriously doubt whether I have such authority under any circumstances, and if I had I would not exercise it without express congressional approval. Indeed, as you know, I have already declined, without Mexican consent, to order a troop of Cavalry to protect the breakwater we are constructing just across the border in Mexico at the mouth of the Colorado River to save the Imperial Valley, although the insurrectos had scattered the Mexican troops and were taking our horses and supplies and frightening our workmen away. My determined purpose, however, is to be in a position so that when danger to American lives and property in Mexico threatens and the existing Government is rendered helpless by the insurrection, I can promptly execute congressional orders to protect them, with effect. Meantime, I send you this letter, through the Secretary, to call your attention to some things in connection with the presence of the division in the Southwest which have doubtless occurred to you, but which I wish to emphasize. In the first place, I want to make the mobilization a first-class training for the Army, and I wish you would give your time and that of the War College to advising and carrying out maneuvers of a useful character, and plan to continue to do this during the next three months. By that time we may expect that either Ambassador Wilson's fears will have been realized and chaos and its consequences have ensued, or that the present Government of Mexico will have so readjusted matters as to secure tranquillity-a result devoutly to be wished. The troops can then be returned to their posts. I understood from you in Washington that Gen. Aleshire said that you could probably meet all the additional expense of this whole movement out of the present appropriations if the troops continue in Texas for three months. I sincerely hope this is so. I observe from the newspapers that you have no blank cartridges, but I presume that this is an error, or that it will be easy to procure those for use as soon as your maneuvers begin. Second. Texas is a State ordinarily peaceful, but you can not put 20,000 troops into it without running some risk of a collision between the people of that State, and especially the -Mexicans who live in Texas near the border and who sympathize with the insurrectos, and the Federal soldiers. For that reason I beg you to be as careful as you can to prevent friction of any kind. We were able in Cuba, with the army of pacification there of something more than 5,000 troops, to maintain them for a year without any trouble, and I hope you can do the same thing in Texas. Please give your attention to this, and advise all the officers in command of the necessity for very great circumspection in this regard. Third. One of the great troubles in the concentration of troops is the danger of disease, and I suppose that you have adopted the most modern methods for preventing and, if necessary, for stamping out epidemics. That is so much a part of a campaign that it hardly seems necessary for me to call attention to it. Finally, I wish you to examine the question of the patrol of the border and put as many troops on that work as is practicable, and more than are now engaged in it, in order to prevent the use of our borderland for the carrying out of the insurrection. I have given assurances to the Mexican ambassador on this point. I sincerely hope that this experience will always be remembered by the Army and Navy as a useful means of education, and I should be greatly disappointed if it resulted in any injury or disaster to our forces from any because. I have taken a good deal of responsibility in ordering this mobilization, but I am ready to answer for it if only you and those under you use the utmost care to avoid the difficulties which I have pointed out. You may have a copy of this letter made and left with Gen. Carter and such other generals in command as you may think wise and necessary to guide them in their course, but to be regarded as confidential. I am more than happy to here record the fact that all apprehensions as to the effect of the presence of so large a military force in Texas proved groundless; no disturbances occurred; the conduct of the troops was exemplary and the public reception and treatment of them was all that could have been desired, and this notwithstanding the presence of a large number of Mexican refugees in the border territory. From time to time communications were received from Ambassador Wilson, who had returned to Mexico, confirming the view that the massing of American troops in the neighborhood had had good effect. By dispatch of April 3, 1911, the ambassador said: The continuing gravity of the situation here and the chaos that would ensue should the constitutional authorities be eventually overthrown, thus greatly increasing the danger to which American lives and property are already subject, confirm the wisdom of the President in taking those military precautions which, making every allowance for the dignity and the sovereignty of a friendly state, are due to our nationals abroad. Charged as I am with the responsibility of safeguarding these lives and property, I am bound to say to the department that our military dispositions on the frontier have produced an effective impression on the Mexican mind and may, at any moment, prove to be the only guaranties for the safety of our nationals and their property. If it should eventuate that conditions here require more active measures by the President and Congress, sporadic attacks might be made upon the lives and property of our nationals, but the ultimate result would be order and adequate protection. The insurrection continued and resulted In engagements between the regular Mexican troops and the insurgents, and this along the border, so that in several instances bullets from the contending forces struck American citizens engaged in their lawful occupations on American soil. Proper protests were made against these invasions of American rights to the Mexican authorities. On April 17, 1911, 1 received the following telegram from the governor of Arizona: As a result of to-day's fighting across the international line, but within gunshot range of the heart of Douglas, five Americans wounded on this side of the line. Everything points to repetition of these casualties on to-morrow, and while the Federals seem disposed to keep their agreement not to fire into Douglas, the position of the insurrectionists is such that when fighting occurs on the east and southeast of the intrenchments people living in Douglas are put in danger of their lives. In my judgment radical measures are needed to protect our innocent people, and if anything can be done to stop the fighting at Agua Prieta the ,ittiation calls for such action. It is impossible to safeguard the people of Douglas unless the town be vacated. Can anything be done to relieve situation, now acute? After a conference with the Secretary of State, the following telegram was sent to Governor Sloan, on April 18, 1911, and made public: Your dispatch received. Have made urgent demand upon Mexican Government to issue instructions to prevent firing across border by Mexican federal troops, and am waiting reply. Meantime I have sent direct warning to the Mexican and insurgent forces near Douglas. I infer from your dispatch that both parties attempt to heed the warning, but that in the strain and exigency of the contest wild bullets still find their way into Douglas. The situation might justify me in ordering our troops to cross the border and attempt to stop the fighting, or to fire upon both combatants from the American side. But if I take this step, I must face the possibility of resistance and greater bloodshed, and also the danger of having our motives misconstrued and misrepresented, and of thus inflaming Mexican popular indignation against many thousand Americans now in Mexico and jeopardizing their lives and property. The pressure for general intervention under such conditions it might not be practicable to resist. It is impossible to foresee or reckon the consequences of such a course, and we must use the greatest self-restraint to avoid it. Pending my urgent representation to the Mexican Government, I can not therefore order the troops at Douglas to cross the border, but I must ask you and the local authorities, in case the same danger recurs, to direct the people of Douglas to place themselves where bullets can not reach them and thus avoid casualty. I am loath to endanger Americans in 'Mexico, where they are necessarily exposed, by taking a radical step to prevent injury to Americans on our side of the border who can avoid it by a temporary inconvenience. I am glad to say that no further invasion of American rights of any substantial character occurred. The presence of a large military and naval force available for prompt action, near the Mexican border, proved to be most fortunate under the somewhat trying conditions presented by this invasion of American rights Had no movement theretofore taken place, and because of these events it had been necessary then to bring about the mobilization, it must have bad sinister significance. On the other hand, the presence of the troops before and at the time of the unfortunate killing and wounding of American citizens at Douglas, made clear that the restraint exercised by our Government in regard to this Occurrence was not due to lack of force or power to deal with it promptly and aggressively, but was due to a real desire to use every means possible to avoid direct intervention in the affairs of our neighbor whose friendship we valued and were most anxious to retain. The policy and action of this Government were based upon an earnest friendliness for the Mexican people as a whole, and it is a matter of gratification to note that this attitude of strict impartiality as to all factions in Mexico and of sincere friendship for the neighboring nation, without regard for party allegiance, has been generally recognized and has resulted in an even closer and more sympathetic understanding between the two Republics and a warmer regard one for the other. Action to suppress violence and restore tranquillity throughout the Mexican Republic was of peculiar interest to this Government, in that it concerned the safeguarding of American life and property in that country. The Government of the United States had occasion to accord permission for the passage of a body of Mexican rurales through Douglas, Arizona, to Tia Juana, Mexico, for the suppression of general lawlessness which bad for some time existed in the region of northern Lower California. On May 25, 1911, President Diaz resigned, Senor de la Barra was chosen provisional President. Elections for President and Vice President were thereafter held throughout the Republic, and Senor Francisco 1. Madero was formally declared elected on October 15 to the chief magistracy. On November 6 President Madero entered upon the duties of his office. Since the inauguration of President Madero a plot has been unearthed against the present Government, to begin a new insurrection. Pursuing the same consistent policy which this administration has adopted from the beginning, it directed an investigation into the conspiracy charged, and this investigation has resulted in the indictment of Gen. Bernardo Reyes and others and the seizure of a number of officers and men and horses and accoutrements assembled upon the soil of Texas for the purpose of invading Mexico. Similar proceedings had been taken during the insurrection against the Diaz Government resulting in the indictments and prosecution of persons found to be engaged in violating the neutrality laws of the United States in aid of that uprising. The record of this Government in respect of the recognition of constituted authority in Mexico therefore is clear. As to the situation in Central America, I have taken occasion in the past to emphasize most strongly the importance that should be attributed to the consummation of the conventions between the Republics of Nicaragua and of Honduras and this country, and I again earnestly recommend that the necessary advice and consent of the Senate be accorded to these treaties, which will make it possible for these Central American Republics to enter upon an era of genuine economic national development. The Government of Nicaragua which has already taken favorable action on the convention, has found it necessary, pending the exchange of final ratifications, to enter into negotiations with American bankers for the purpose of securing a temporary loan to relieve the present financial tension. III connection with this temporary loan and in the hope of consummating, through the ultimate operation of the convention, a complete and lasting economic regeneration, the Government of Nicaragua has also decided to engage an American citizen as collector general of customs. The claims commission on which the services of two American citizens have been sought, and the work of the American financial adviser should accomplish a lasting good of inestimable benefit to the prosperity, commerce, and peace of the Republic. In considering the ratification of the conventions with Nicaragua and Honduras, there rests with the United States the heavy responsibility of the fact that their rejection here might destroy the progress made and consign the Republics concerned to still deeper submergence in bankruptcy, revolution, and national jeopardy. . Our relations with the Republic of Panama, peculiarly important, due to mutual obligations and the vast interests created by the canal, have continued in the usual friendly manner, and we have been glad to make appropriate expression of our attitude of sympathetic interest in the endeavors of our neighbor in undertaking the development of the rich resources of the country. With reference to the internal political affairs of the Republic, our obvious concern is in the maintenance of public peace and constitutional order, and the fostering of the general interests created by the actual relations of the two countries, without the manifestation of any preference for the success of either of the political parties. The Pan American Union, formerly known as the Bureau of American Republics, maintained by the joint contributions of all the American nations, has during the past year enlarged its practical work as an international organization, and continues to prove its usefillness as an agency for the mutual development of commerce, better acquaintance, and closer intercourse between the United States and her sister American republics. The past year has been marked in our relations with China by the conclusion of two important international loans, one for the construction of the Hukuang railways, the other for carrying out of the currency reform to which China was pledged by treaties with the United States, Great Britain, and Japan, of which mention was made in my last annual message. It will be remembered that early in 1909 an agreement was consummated among British, French, and German financial groups whereby they proposed to lend the Chinese Government funds for the construction of railways in the Provinces of Hunan and Hupeh, reserving for their nationals the privilege of engineering the construction of the lines and of furnishing the materials required for the work. After negotiations with the Governments and groups concerned an agreement was reached whereby American, British, French, and German nationals should participate upon equal terms in this important and useful undertaking. Thereupon the financial groups, supported by their respective Governments, began negotiations with the Chinese Government which terminated in a loan to China Of $30,000,000, with the privilege of increasing the amount to $50,000,000. The cooperative construction of these trunk lines should be of immense advantage, materially and otherwise, to China and should greatly facilitate the development of the bountiful resources of the Empire. On the other hand, a large portion of these funds is to be expended for materials, American products having equal preference with those of the other three lending nations, and as the contract provides for branches and extensions subsequently to be built on the same terms the opportunities for American materials will reach considerable proportions. Knowing the interest of the United States in the reform of Chinese currency, the Chinese Government, in the autumn of 1910 sought the assistance of the American Government to procure funds with which to accomplish that all-important reform. In the course of the subsequent negotiations there was combined with the proposed currency loan one for certain industrial developments in Manchuria, the two loans aggregating the sum Of $50,000,000. While this was originally to be solely an American enterprise, the American Government, consistently with its desire to secure a sympathetic and practical cooperation of the great powers toward maintaining the principle of equality of opportunity and the administrative integrity of China, urged the Chinese Government to admit to participation in the currency loan the associates of the American group in the Hukuang loan. While of immense importance in itself, the reform contemplated in making this loan is but preliminary to other and more comprehensive fiscal reforms which will be of incalculable benefit to China and foreign interests alike, since they will strengthen the Chinese Empire and promote the rapid development of international trade. When these negotiations were begun, it was understood that a financial adviser was to be employed by China in connection with the reform, and in order that absolute equality in all respects among the lending nations might be scrupulously observed, the American Government proposed the nomination of a neutral adviser, which was agreed to by China and the other Governments concerned. On September 28, 1911, Dr. Vissering, president of the Dutch Java Bank and a financier of wide experience in the Orient, was recommended to the Chinese Government for the post of monetary adviser. Especially important at the present, when the ancient Chinese Empire is shaken by civil war incidental to its awakening to the many influences and activities of modernization, are the cooperative policy of good understanding which has been fostered by the international projects referred to above and the general sympathy of view among all the Powers interested in the Far East. While safeguarding the interests of our nationals, this Government is using its best efforts in continuance of its traditional policy of sympathy and friendship toward the Chinese Empire and its people, with the confident hope for their economic and administrative development, and with the constant disposition to contribute to their welfare in all proper ways consistent with an attitude of strict impartiality as between contending factions. For the first time in the history of the two countries, a Chinese cruiser, the Haichi, under the command of Admiral Ching, recently visited New York, where the officers and men were given a cordial welcome. The treaty of commerce and navigation between the United States and Japan, signed in 1894, would by a strict interpretation of its provisions have terminated on July 17, 1912. Japan's general treaties with the other powers, however, terminated in 1911, and the Japanese Government expressed an earnest desire to conduct the negotiations for a new treaty with the United States simultaneously with its negotiations with the other powers. There were a number of important questions involved in the treaty, including the immigration of laborers, revision of the customs tariff, and the right of Americans to hold real estate in Japan. The United States consented to waive all technicalities and to enter at once upon negotiations for a new treaty on the understanding that there should be a continuance throughout the, life of the treaty of the same effective measures for the restriction of immigration of laborers to American territory which had been in operation with entire satisfaction to both Governments since 1908. The Japanese Government accepted this basis of negotiation, and a new treaty was quickly concluded, resulting in a highly satisfactory settlement of the other questions referred to. A satisfactory adjustment has also been effected of the questions growing out of the annexation of Korea by Japan. The recent visit of Admiral Count Togo to the United States as the Nation's guest afforded a welcome opportunity to demonstrate the friendly feeling so happily existing between the two countries. . There has been a change of sovereigns in Siam and the American minister at Bangkok was accredited in a special capacity to represent the United States at the coronation ceremony of the new King. In Europe and the Near East, during the past twelve-month, there has been at times considerable political unrest. The Moroccan question, which for some months was the because of great anxiety, happily appears to have reached a stage at which it need no longer be regarded with concern. The Ottoman Empire was occupied for a period by strife in Albania and is now at war with Italy. In Greece and the Balkan countries the disquieting potentialities of this situation have been more or less felt. Persia has been the scene of a long internal struggle. These conditions have been the because of uneasiness in European diplomacy, but thus far without direct political concern to the United States. In the war which unhappily exists between Italy and Turkey this Government has no direct political interest, and I took occasion at the suitable time to issue a proclamation of neutrality in that conflict. At the same time all necessary steps have been taken to safeguard the personal interests of American citizens and organizations in so far as affected by the war. In spite of the attendant economic uncertainties and detriments to commerce, the United States has gained markedly in its commercial standing with certain of the nations of the Near East. Turkey, especially, is beginning to come into closer relations with the United States through the new interest of American manufacturers and exporters in the possibilities of those regions, and it is hoped that foundations are being laid for a large and mutually beneficial exchange of commodities between the two countries. This new interest of Turkey in American goods is indicated by the fact that a party of prominent merchants from a large city in Turkey recently visited the United States to study conditions of manufacture and export here, and to get into personal touch with American merchants, with a view to cooperating more intelligently in opening up the markets of Turkey and the adjacent countries to our manufactures. Another indication of this new interest of America in the commerce of the Near East is the recent visit of a large party of American merchants and manufacturers to central and eastern Europe, where they were entertained by prominent officials and organizations of the large cities, and new bonds of friendship and understanding were established which can not but lead to closer and greater commercial interchange. The 22d of June of the present year marked the coronation of His Britannic Majesty King George V. In honor of this auspicious occasion I sent a special embassy to London. The courteous and cordial welcome extended to this Government's representatives by His Majesty and the people of Great Britain has further emphasized the strong bonds of friendship happily existing between the two nations. As the result of a determined effort on the part of both Great Britain and the United States to settle all of their outstanding differences a number of treaties have been entered into between the two countries in recent years, by which nearly all of the unsettled questions between them of any importance have either been adjusted by agreement or arrangements made for their settlement by arbitration. A number of the unsettled questions referred to consist of pecuniary claims presented by each country against the other, and in order that as many of these claims as possible should be settled by arbitration a special agreement for that purpose was entered into between the two Governments on the 18th day of August, 1910, in accordance with Article 11 of the general arbitration treaty with Great Britain of April 4, 19o8. Pursuant to the provisions of this special agreement a schedule of claims has already been agreed upon, and the special agreement, together with this schedule, received the approval of the Senate when submitted to it for that purpose at the last session of Congress. Negotiations between the two Governments for the preparation of an additional schedule of claims are already well advanced, and it is my intention to submit such schedule as soon as it is agreed upon to the Senate for its approval, in order that the arbitration proceedings may be undertaken at an early date. In this connection the attention of Congress is particularly called to the necessity for an appropriation to cover the expense incurred in submitting these claims to arbitration. In pursuance of the act of Congress, approved June 23, 1910, the Secretary of State and the joint Committee on the Library entered into a contract with the sculptor, Albert Jaegers, for the execution of a bronze replica of the statue of Gen. von Steuben erected in Washington, for presentation to His Majesty the German Emperor and the German nation in recognition of the gift of the statue of Frederick the Great made by the Emperor to the people of the United States. The presentation was made on September 2 last by representatives whom I commissioned as the special mission of this Government for the purpose. The German Emperor has conveyed to me by telegraph, on his own behalf and that of the German people, an expression of appreciative thanks for this action of Congress. . By direction of the State Department, our ambassador to Russia has recently been having a series of conferences with the minister of foreign affairs of Russia, with a view to securing a clearer understanding and construction of the treaty of 1832 between Russia and the United States and the modification of any existing Russian regulations which may be found to interfere in any way with the full recognition of the rights of American citizens under this treaty. I believe that the Government of Russia is addressing itself seriously to the need of changing the present practice under the treaty and that sufficient progress has been made to warrant the continuance of these conferences in the hope that there may soon be removed any justification of the complaints of treaty violation now prevalent in this country. I expect that immediately after the Christmas recess I shall be able to make a further communication to Congress on this subject. . Negotiations for the amelioration of conditions found to exist in Liberia by the American commission, undertaken through the Department of State, have been concluded and it is only necessary for certain formalities to be arranged in securing the loan which it is hoped will place that republic on a practical financial and economic footing. The National Constituent Assembly, regularly elected by the vote of the Portuguese people, having on June 19 last unanimously proclaimed a republican form of government, the official recognition of the Government of the United States was given to the new Republic in the afternoon of the same day. Negotiations for the betterment of conditions existing in the Spitzbergen Islands and the adjustment of conflicting claims of American citizens and Norwegian subjects to lands in that archipelago are still in progress. The supplementary protocol to The he Hague convention for the establishment of an international prize court, mentioned in my last annual message, embodying stipulations providing for an alternative procedure which would remove the constitutional objection to that part of The Hague convention which provides that there may be an appeal to the proposed court from the decisions of national courts, has received the signature of the governments parties to the original convention and has been ratified by the Government of the United States, together with the prize court convention. The deposit of the ratifications with the Government of the Netherlands awaits action by the powers on the declaration, signed at London on February 26, 1909 of the rules of international law to be recognized within the meaning of article 7 of The Hague convention for the establishment of an International Prize Court. The fur-seal controversy, which for nearly twenty-five years has been the source of serious friction between the United States and the powers bordering upon the north Pacific Ocean, whose subjects have been permitted to engage in pelagic sealing against the fur-seal herds having their breeding grounds within the jurisdiction of the United States, has at last been satisfactorily adjusted by the conclusion of the north Pacific sealing convention entered into between the United States, Great Britain, Japan, and Russia on the 7th of July last. This convention is a conservation measure of very great importance, and if it is carried out in the spirit of reciprocal concession and advantage upon which it is based, there is every reason to believe that not only will it result in preserving the furseal herds of the north Pacific Ocean and restoring them to their former value for the purposes of commerce, but also that it will afford a permanently satisfactory settlement of a question the only other solution of which seemed to be the total destruction of the fur seals. In another aspect, also, this convention is of importance in that it furnishes an illustration of the feasibility of securing a general international game law for the protection of other mammals of the sea, the preservation of which is of importance to all the nations of the world. The attention of Congress is especially called to the necessity for legislation on the part of the United States for the purpose of fulfilling the obligations assumed under this convention, to which the Senate gave its advice and consent on the 24th day of July last. The conference of the International Union for the Protection of Industrial Property, which, under the authority of Congress, convened at Washington on May 16, 1911, closed its labors on June 2, 1911, by the signature of three acts, as follows: (I) A convention revising the Paris convention of March 20, 1883, for the protection of industrial property, as modified by the additional act signed at Brussels on December 14, 1900; (2) An arrangement to replace the arrangement signed at Madrid on April 14, 1891 for the international registration of trade-marks, and the additional act with regard thereto signed at Brussels on December 14, 1900; and (3) An arrangement to replace the arrangement signed at Madrid on April 14, 18gi, relating to the repression of false indication of production of merchandise. The United States is a signatory of the first convention only, and this will be promptly submitted to the Senate. In a special message transmitted to the Congress on the 11th of January, 19ii, in which I concurred in the recommendations made by the Secretary of State in regard to certain needful legislation for the control of our interstate and foreign traffic in opium and other menacing drugs, I quoted from my annual message of December 7, 1909, in which I announced that the results of the International Opium Commission held at Shanghai in February, 1909, at the invitation of the United States, had been laid before this Government; that the report of that commission showed that China was making remarkable progress and admirable efforts toward the eradication of the opium evil; that the interested governments had not permitted their commercial interests to prevent their cooperation in this reform; and, as a result of collateral investigations of the opium question in this country, I recommended that the manufacture, sale, and use of opium in the United States should be more rigorously controlled by legislation Prior to that time and in continuation of the policy of this Government to secure the cooperation of the interested nations, the United States proposed an international opium conference with full powers for the purpose of clothing with the force of international law the resolutions adopted by the above-mentioned commission, together with their essential corollaries. The other powers concerned cordially responded to the proposal of this Government, and, I am glad to be able to announce, representatives of all the powers assembled in conference at The Hague on the first of this month. Since the passage of the opium-exclusion act, more than twenty States have been animated to modify their pharmacy laws and bring them in accord with the spirit of that act, thus stamping out, to a measure, the intrastate traffic in opium and other habit-forming drugs. But, although I have urged on the Congress the passage of certain measures for Federal control of the interstate and foreign traffic in these drugs, no action has yet been taken. In view of the fact that there is now sitting at The Hague so important a conference, which has under review the municipal laws of the different nations for the mitigation of their opium and other allied evils, a conference which will certainly deal with the international aspects of these evils, it seems to me most essential that the Congress should take immediate action on the anti-narcotic legislation to which I have already called attention by a special message. The four important conventions signed at the Fourth Pan American Conference at Buenos Aires, providing for the regulation of trademarks, patents, and copyrights, and for the arbitration of pecuniary claims, have, with the advice and consent of the Senate, been ratified on the part of the United States and the ratifications have been deposited with the Government of the Argentine Republic in accordance with the requirements of the conventions. I am not advised that similiar action has been taken by any other of the signatory governments. One of the notable advances in international morality accomplished in recent years was an arrangement entered into on April 13th of the present year between the United States and other powers for the repression of the circulation of obscene publications. In my last annual message I referred to the tariff negotiations of the Department of State with foreign countries in connection with the application, by a series of proclamations, of the minimum tariff of the United States to importations from the several countries, and I stated that, in its general operation, section 2 of the new tariff law had proved a guaranty of continued commercial peace, although there were, unfortunately, instances where foreign governments dealt arbitrarily with American interests within their jurisdiction in a manner injurious and inequitable. During the past year some instances of discriminatory treatment have been removed, but I regret to say that there remain a few cases of differential treatment adverse to the commerce of the United States. While none of these instances now appears to amount to undue discrimination in the sense of section 2 Of the tariff law of August 5, 1909, they are all exceptions to that complete degree of equality of tariff treatment that the Department of State has consistently sought to obtain for American commerce abroad. While the double tariff feature of the tariff law of 1909 has been amply justified by the results achieved in removing former and preventing new, undue discriminations against American commerce it is believed that the time has come for the amendment of this feature of the law in such way as to provide a graduated means of meeting varying degrees of discriminatory treatment of American commerce in foreign countries as well as to protect the financial interests abroad of American citizens against arbitrary and injurious treatment on the part of foreign governments through either legislative or administrative measures. It would seem desirable that the maximum tariff of the United States should embrace within its purview the free list, which is not the case at the present time, in order that it might have reasonable significance to the governments of those countries from which the importations into the United States are confined virtually to articles on the free list. The fiscal year ended June 30, 1911, shows great progress in the development of American trade. It was noteworthy as marking the highest record of exports of American products to foreign countries, the valuation being in excess of $2,000,000,000. These exports showed a gain over the preceding year of more than $300,000,000. There is widespread appreciation expressed by the business interests of the country as regards the practical value of the facilities now offered by the Department of State and the Department of Commerce and Labor for the furtherance of American commerce. Conferences with their officers at Washington who have an expert knowledge of trade conditions in foreign countries and with consular officers and commercial agents of the Department of Commerce and Labor who, while on leave of absence, visit the principal industrial centers of the United States, have been found of great value. These trade conferences are regarded as a particularly promising method of governmental aid in foreign trade promotion. The Department of Commerce and Labor has arranged to give publicity to the expected arrival and the itinerary of consular officers and commercial agents while on leave in the United States, in order that trade organizations may arrange for conferences with them. As I have indicated, it is increasingly clear that to obtain and maintain that equity and substantial equality of treatment essential to the flourishing foreign trade, which becomes year by year more important to the industrial and commercial welfare of the United States, we should have a flexibility of tariff sufficient for the give and take of negotiation by the Department of State on behalf of our commerce and industry. I need hardly reiterate the conviction that there should speedily be built up an American merchant marine. This is necessary to assure favorable transportation facilities to our great ocean-borne commerce as well as to supplement the Navy with an adequate reserve of ships and men It would have the economic advantage of keeping at home part of the vast sums now paid foreign shipping for carrying American goods. All the great commercial nations pay heavy subsidies to their merchant marine so that it is obvious that without some wise aid from the Congress the United States must lag behind in the matter of merchant marine in its present anomalous position. Legislation to facilitate the extension of American banks to foreign countries is another matter in which our foreign trade needs assistance. The interests of our foreign commerce are nonpartisan, and as a factor in prosperity are as broad as the land. In the dissemination of useful information and in the coordination of effort certain unofficial associations have done good work toward the promotion of foreign commerce. It is because for regret, however, that the great number of such associations and the comparative lack of cooperation between them fails to secure an efficiency commensurate with the public interest. Through the agency of the Department of Commerce and Labor, and in some cases directly, the Department of State transmits to reputable business interests information of commercial opportunities, supplementing the regular published consular reports. Some central organization in touch with associations and chambers of commerce throughout the country and able to keep purely American interests in closer touch with different phases of commercial affairs would, I believe, be of great value. Such organization might be managed by a committee composed of a small number of those now actively carrying on the work of some of the larger associations, and there might be added to the committee, as members ex officio, one or two officials of the Department of State and one or two officials from the Department of Commerce and Labor and representatives of the appropriate committees of Congress. The authority and success of such an organization would evidently be enhanced if the Congress should see fit to prescribe its scope and organization through legislation which would give to it some such official standing as that, for example, of the National Red Cross. With these factors and the continuance of the foreign-service establishment (departmental, diplomatic, and consular) upon the high plane where it has been placed by the recent reorganization this Government would be abreast of the times in fostering the interests of its foreign trade, and the rest must be left to the energy and enterprise of our business men. The entire foreign-service organization is being improved and developed with especial regard to the requirements of the commercial interests of the country. The rapid growth of our foreign trade makes it of the utmost importance that governmental agencies through which that trade is to be aided and protected should possess a high degree of efficiency. Not only should the foreign representatives be maintained upon a generous scale in so far as salaries and establishments are concerned, but the selection and advancement of officers should be definitely and permanently regulated by law so that the service shall not fail to attract men of high character and ability. The experience of the past few years with a partial application of civil-service rules to the Diplomatic and Consular Service leaves no doubt in my mind of the wisdom of a wider and more permanent extension of those principles to both branches of the foreign service. The men selected for appointment by means of the existing executive regulations have been of a far higher average of intelligence and ability than the men appointed before the regulations were promulgated. Moreover, the feeling that under the existing rules there is reasonable hope for permanence of tenure during good behavior and for promotion for meritorious service has served to bring about a zealous activity in the interests of the country, which never before existed or could exist. It is my earnest conviction that the enactment into law of the general principles of the existing regulations can not fail to effect further improvement in both branches of the foreign service by providing greater inducement for young men of character and ability to seek a career abroad in the service of the Government, and an incentive to those already in the service to put forth greater efforts to attain the high standards which the successful conduct of our international relations and commerce requires. I therefore again commend to the favorable action of the Congress the enactment of a law applying to the diplomatic and consular service the principles embodied in section 1753 of the Revised Statutes of the United States, in the civil-service act of January 16, 1883, and the Executive orders of June 27, 1906, and of November 26, 1909. In its consideration of this important subject I desire to recall to the attention of the Congress the very favorable report made on the Lowden bill for the improvement of the foreign service by the Foreign Affairs Committee of the House of Representatives. Available statistics show the strictness with which the merit system has been applied to the foreign service during recent years and the absolute nonpartisan selection of consuls and diplomatic-service secretaries who, indeed, far from being selected with any view to political consideration, have actually been chosen to a disproportionate extent from States which would have been unrepresented in the foreign service under the system which it is to be hoped is now permanently obsolete. Some legislation for the perpetuation of the present system of examinations and promotions upon merit and efficiency would be of greatest value to our commerical and international interests. In my annual message to Congress, December, 1909, I stated that under section 2 of the act of August 5, 1909, I had appointed a Tariff Board of three members to cooperate with the State Department in the administration of the maximum and minimum clause of that act, to make a glossary or encyclopedia of the existing tariff so as to render its terms intelligible to the ordinary reader, and then to investigate industrial conditions and costs of production at home and abroad with a view to determining to what extent existing tariff rates actually exemplify the protective principle, viz., that duties should be made adequate, and only adequate, to equalize the difference in cost of production at home and abroad. I further stated that I believed these investigations would be of great value as a basis for accurate legislation, and that I should from time to time recommend to Congress the revision of certain schedules in accordance with the findings of the Board. In the last session of the Sixty-first Congress a bill creating a permanent Tariff Board of five members, of whom not more than three should be of the same political party, passed each House, but failed of enactment because of slight differences on which agreement was not reached before adjournment. An appropriation act provided that the permanent Tariff Board, if created by statute, should report to Congress on Schedule K in December, 1911. Therefore, to carry out so far as lay within my power the purposes of this bill for a permanent Tariff Board, I appointed in March, 19li, a board of five, adding two members of such party affiliation as would have fulfilled the statutory requirement, and directed them to make a report to me on Schedule K of the tariff act in December of this year. In my message of August 17, 1911, accompanying the veto of the wool bill, I said that, in my judgment, Schedule K should be revised and the rates reduced. My veto was based on the ground that, since the Tariff Board would make, in December, a detailed report on wool and wool manufactures, with special reference to the relation of the existing rates of duties to relative costs here and abroad, public policy and a fair regard to the interests of the producers and the manufacturers on the one hand and of the consumers on the other demanded that legislation should not be hastily enacted in the absence of such information; that I was not myself possessed at that time of adequate knowledge of the facts to determine whether or not the proposed act was in accord with my pledge to support a fair and reasonable protective policy; that such legislation might prove only temporary and inflict upon a great industry the evils of continued uncertainty. I now herewith submit a report of the Tariff Board on Schedule K. The board is unanimous in its findings. On the basis of these findings I now recommend that the Congress proceed to a consideration of this schedule with a view to its revision and a general reduction of its rates. The report shows that the present method of assessing the duty on raw wool-this is, by a specific rate on the grease pound (i. e., unscoured) -operates to exclude wools of high shrinkage in scouring but fine quality from the American market and thereby lessens the range of wools available to the domestic manufacturer; that the duty on scoured wool Of 33 cents per pound is prohibitory and operates to exclude the importation of clean, low-priced foreign wools of inferior grades, which are nevertheless valuable material for manufacturing, and which can not be imported in the grease because of their heavy shrinkage. Such wools, if imported, might be used to displace the cheap substitutes now in use. To make the preceding paragraph a little plainer, take the instance of a hundred pounds of first-class wool imported under the present duty, which is 11 11 cents a pound. That would make the duty on the hundred pounds $11. The merchantable part of the wool thus imported is the weight of the wool of this hundred pounds after scouring. If the wool shrinks 80 per cent, as some wools do, then the duty in such a case would amount to $11 $11 on 20 pounds of scoured wool. This, of course, would be prohibitory. If the wool shrinks only 50 per cent, it would be $11 on 50 pounds of wool, and this is near to the average of the great bulk of wools that are imported from Australia, which is the principal source of our imported wool. These discriminations could be overcome by assessing a duty in ad valorem terms, but this method is open to the objection, first, that it increases administrative difficulties and tends to decrease revenue through undervaluation; and, second, that as prices advance, the ad valorem rate increases the duty per pound at the time when the consumer most needs relief and the producer can best stand competition; while if prices decline the duty is decreased at the time when the consumer is least burdened by the price and the producer most needs protection. Another method of meeting the difficulty of taxing the grease pound is to assess a specific duty on grease wool in terms of its scoured content. This obviates the chief evil of the present system, namely, the discrimination due to different shrinkages, and thereby tends greatly to equalize the duty. The board reports that this method is feasible in practice and could be administered without great expense. The scoured content of the wool is the basis on which users of wool make their calculations, and a duty of this kind would fit the usages of the trade. One effect of this method of assessment would be that , regardless of the rate of duty, there would be an increase in the supply and variety of wool by making available to the American market wools of both low and fine quality now excluded. The report shows in detail the difficulties involved in attempting to state in categorical terms the cost of wool production and the great differences in cost as between different regions and different types of wool. It is found, however, that, taking all varieties in account, the average cost of production for the whole American clip is higher than the cost in the chief competing country by an amount somewhat less than the present duty. The report shows that the duties on noils, wool wastes, and shoddy, which are adjusted to the rate Of 33 cents on scoured wool are prohibitory in the same measure that the duty on scoured wool is prohibitory. In general, they are assessed at rates as high as, or higher than, the duties paid on the clean content of wools actually imported. They should be reduced and so adjusted to the rate on wool as to bear their proper proportion to the real rate levied on the actual wool imports. The duties on many classes of wool manufacture are prohibitory and greatly in excess of the difference in cost of production here and abroad. This is true of tops, of yarns (with the exception of worsted yarns of a very high grade), and of low and medium grade cloth of heavy weight. On tops up to 52 cents a pound in value, and on yarns of 65 cents in value, the rate is 100 per cent with correspondingly higher rates for lower values. On cheap and medium grade cloths, the existing rates frequently run to 150 per cent and on some cheap goods to over 200 per cent. This is largely due to that part of the duty which is levied ostensibly to compensate the manufacturer for the enhanced cost of his raw material due to the duty on wool. As a matter of fact, this compensatory duty, for numerous classes of goods, is much in excess of the amount needed for strict compensation. On the other hand, the findings show that the duties which run to such high ad valorem equivalents are prohibitory, since the goods are not imported, but that the prices of domestic fabrics are not raised by the full amount of duty. On a set of 1-yard samples of 16 English fabrics, which are completely excluded by the present tariff rates, it was found that the total foreign value was $41.84; the duties which would have been assessed had these fabrics been imported, $76.90; the foreign value plus the amount of the duty, $118.74; or a nominal duty of 183 per cent. In fact, however, practically identical fabrics of domestic make sold at the same time at $69.75, showing an enhanced price over the foreign market value of but 67 per cent. Although these duties do not increase prices of domestic goods by anything like their full amount, it is none the less true that such prohibitive duties eliminate the possibility of foreign competition, even in time of scarcity; that they form a temptation to monopoly and conspiracies to control domestic prices; that they are much in excess of the difference in cost of production here and abroad, and that they should be reduced to a point which accords with this principle. The findings of the board show that in this industry the actual manufacturing cost, aside from the question of the price of materials, is much higher in this country than it is abroad; that in the making of yarn and cloth the domestic woolen or worsted manufacturer has in general no advantage in the form of superior machinery or more efficient labor to offset the higher wages paid in this country The findings show that the cost of turning wool into yarn in this country is about double that in the leading competing country, and that the cost of turning yarn into cloth is somewhat more than double. Under the protective policy a great industry, involving the welfare of hundreds of thousands of people, has been established despite these handicaps. In recommending revision and reduction, I therefore urge that action be taken with these facts in mind, to the end that an important and established industry may not be jeopardized. The Tariff Board reports that no equitable method has been found to, levy purely specific duties on woolen and worsted fabrics and that, excepting for a compensatory duty, the rate must be ad valorem on such manufactures. It is important to realize, however, that no flat ad valorem rate on such fabrics can be made to work fairly and effectively. Any single rate which is high enough to equalize the difference in manufacturing cost at home and abroad on highly finished goods involving such labor would be prohibitory on cheaper goods, in which the labor cost is a smaller proportion of the total value. Conversely, a rate only adequate to equalize this difference on cheaper goods would remove protection from the fine-goods manufacture, the increase in which has been one of the striking features of the trade's development in recent years. I therefore recommend that in any revision the importance of a graduated scale of ad valorem duties on cloths be carefully considered and applied. I venture to say that no legislative -body has ever had presented to it a more complete and exhaustive report than this on so difficult and complicated a subject as the relative costs of wool and woolens the world over. It is a monument to the thoroughness, industry, impartiality, and accuracy of the men engaged in its making. They were chosen from both political parties but have allowed no partisan spirit to prompt or control their inquiries. They are unanimous in their findings. I feel sure that after the report has been printed and studied the value of such a compendium of exact knowledge in respect to this schedule of the tariff will convince all of the wisdom of making such a board permanent in order that it may treat each schedule of the tariff as it has treated this, and then keep its bureau of information up to date with current changes in the economic world. It is no part of the function of the Tariff Board to propose rates of duty. Their function is merely to present findings of fact on which rates of duty may be fairly determined in the light of adequate knowledge in accord with the economic policy to be followed. This is what the present report does. The findings of fact by the board show ample reason for the revision downward of Schedule K, in accord with the protective principle, and present the data as to relative costs and prices from which may be determined what rates will fairly equalize the difference in production costs. I recommend that such revision be proceeded with at once. The financial condition of the Government, as shown at the close of the last fiscal year, June 30, 1911, was very satisfactory. The ordinary receipts into the general fund, excluding postal revenues, amounted to $701,372,374.99, and the disbursements from the general fund for current expenses and capital outlays, excluding postal and Panama Canal disbursements, including the interest on the public debt, amounted to $654,137,907-89, leaving a surplus Of $47,234,377.10. The postal revenue receipts amounted to $237,879,823,60, while the payments made for the postal service from the postal revenues amounted to $237,660,705.48, which left a surplus of postal receipts over disbursements Of $219,118.12, the first time in 27 years in which a surplus occurred. The interest-bearing debt of the United States June 30, 1911, amounted to $915,353,igo. The debt on which interest had ceased amounted to $1,879,830.26, and the debt bearing no interest, including greenbacks, national bank notes to be redeemed, and fractional currency, amounted to $386,751,917-43, or a total of interest and noninterest bearing debt amounting to $1,303,984,937.69. The actual disbursements, exclusive of those for the Panama Canal and for the postal service for the year ending June 30, 1911, were $654,137,997.89. The actual disbursements for the year ending June 30, 1910, exclusive of the Panama Canal and the postal service disbursements, were $659,705,391.08, making a decrease Of $5,567,393.19 in yearly expenditures in the year 1911 under that of 1910. For the year ending June 30, 1912, the estimated receipts, exclusive of the postal revenues, are $666,000,000, while the total estimates, exclusive of those for the Panama Canal and the postal expenditures payable from the postal revenues, amount to $645,842,799.34. This is a decrease in the 1912 estimates from that of the 1911 estimates of $1,534,367-22. For the year ending June 30, 1913, the estimated receipts, exclusive of the postal revenues, are $667,000,000, while the total estimated appropriations, exclusive of the Panama Canal and postal disbursements payable from postal revenues, will amount to $637,920,803.35. This is a decrease in the 1913 estimates from that of the 1912 estimates of $7,921,995.99. As to the postal revenues, the expansion of the business in that department, the normal increase in the Post Office and the extension of the service, will increase the outlay to the SUM Of $260,938,463 ; but as the department was self-sustaining this year the Postmaster General is assured that next year the receipts will at least equal the expenditures, and probably exceed them by more than the surplus of this year. It is fair and equitable, therefore, in determining the economy with which the Government has been run, to exclude the transactions of a department like the Post Office Department, which relies for its support upon its receipts. In calculations heretofore made for comparison of economy in each year, it has been the proper custom only to include in the statement the deficit in the Post Office Department which was paid out of the Treasury. A calculation of the actual increase in the expenses of Government arising from the increase in the population and the general expansion of governmental functions, except those of the Post Office, for a number of years shows a normal increase of about 4 per cent a year. By directing the exercise of great care to keep down the expenses and the estimates we have succeeded in reducing the total disbursements each year. The credit of this Government was shown to be better than that of any other Government by the sale of the Panama Canal 3 per cent bonds. These bonds did not give their owners the privilege of using them as a basis for bank-note circulation, nor was there any other privilege extended to them which would affect their general market value. Their sale, therefore, measured the credit of the Government. The premium which was realized upon the bonds made the actual interest rate of the transaction 2.909 per cent. I In the Treasury Department the efficiency and economy work has been kept steadily up. Provision is made for the elimination of 134 positions during the coming year. Two hundred and sixty-seven statutory positions were eliminated during the last year in the office of the Treasury in Washington, and 141 positions in the year 1910, making an elimination Of 542 statutory positions since March 4, 1909; and this has been done without the discharge of anybody, because the normal resignations and deaths have been equal to the elimination of the places, a system of transfers having taken care of the persons whose positions were dropped out. In the field service if the department, too, 1,259 positions have been eliminated down to the present time, making a total net reduction of all Treasury positions to the number of 1,801. Meantime the efficiency of the work of the departmeat has increased. A matter of first importance that will come before Congress for action at this session is monetary reform. The Congress has itself arranged an early introduction of this great question through the report of its Monetary Commission. This commission was appointed to recommend a solution of the banking and currency problems so long confronting the Nation and to furnish the facts and data necessary to enable the Congress to take action. The commission was appointed when an impressive and urgent popular demand for legislative relief suddenly arose out of the distressing situation of the people caused by the deplorable panic of 1907. The Congress decided that while it could not give immediately the relief required, it would provide a commission to furnish the means for prompt action at a later date. In order to do its work with thoroughness and precision this commission has taken some time to make its report. The country is undoubtedly hoping for as prompt action on the report as the convenience of the Congress can permit. The recognition of the gross imperfections and marked inadequacy of our banking and currency system even in our most quiet financial periods is of long standing; and later there has matured a recognition of the fact that our system is responsible for the extraordinary devastation, waste, and business paralysis of our recurring periods of panic. Though the members of the Monetary Commission have for a considerable time been working in the open, and while large numbers of the people have been openly working with them, and while the press has largely noted and discussed this work as it has proceeded, so that the report of the commission promises to represent a national movement, the details of the report are still being considered. I can not, therefore, do much more at this time than commend the immense importance of monetary reform, urge prompt consideration and action when the commission's report is received, and express my satisfaction that the plan to be proposed promises to embrace main features that, having met the approval of a great preponderance of the practical and professional opinion of the country, are likely to meet equal approval in Congress. It is exceedingly fortunate that the wise and undisputed policy of maintaining unchanged the main features of our banking system rendered it at once impossible to introduce a central bank; for a central bank would certainly have been resisted, and a plan into which it could have been introduced would probably have been defeated. But as a central bank could not be a part of the only plan discussed or considered, that troublesome question is eliminated. And ingenious and novel as the proposed National Reserve Association appears, it simply is a logical outgrowth of what is best in our present system, and is, in fact, the fulfillment of that system. Exactly how the management of that association should be organized is a question still open. It seems to be desirable that the banks which would own the association should in the main manage it, It will be an agency of the banks to act for them, and they can be trusted better than anybody else chiefly to conduct it. It is mainly bankers' work. But there must be some form of Government supervision and ultimate control, and I favor a reasonable representation of the Government in the management. I entertain no fear of the introduction of politics or of any undesirable influences from a properly measured Government representation. I trust that all banks of the country possessing the requisite standards will be placed upon a footing of perfect equality of opportunity. Both the National system and the State system should be fairly recognized, leaving them eventually to coalesce if that shall prove to be their tendency. But such evolution can not develop impartially if the banks of one system are given or permitted any advantages of opportunity over those of the other system. And I trust also that the new legislation will carefully and completely protect and assure the individuality and the independence of each bank, to the end that any tendency there may ever be toward a consolidation of the money or banking power of the Nation shall be defeated. It will always be possible, of course, to correct any features of the new law which may in practice prove to be unwise; so that while this law is sure to be enacted under conditions of unusual knowledge and authority, it also will include, it is well to remember, the possibility of future amendment. With the present prospects of this long-awaited reform encouraging us, it would be singularly unfortunate if this monetary question should by any chance become a party issue. And I sincerely hope it will not. The exceeding amount of consideration it has received from the people of the Nation has been wholly nonpartisan; and the Congress set its nonpartisan seal upon it when the Monetary Commission was appointed. In commending the question to the favorable consideration of Congress, I speak for, and in the spirit of, the great number of my fellow citizens who without any thought of party or partisanship feel with remarkable earnestness that this reform is necessary to the interests of all the people. There is now before Congress a Dill, the purpose of which is to increase the efficiency and decrease the expense of the Army. It contains four principal features: First, a consolidation of the General Staff with the Adjutant General's and the Inspector General's Departments; second, a consolidation of the Quartermaster's Department with the Subsistence and the Pay Departments; third, the creation of an Army Service Corps; and fourth, an extension of the enlistment period from three to five years. With the establishment of an Army Service Corps, as proposed in the bill, I am thoroughly in accord and am convinced that the establishment of such a corps will result in a material economy and a very great increase of efficiency in the Army. It has repeatedly been recommended by me and my predecessors. I also believe that a consolidation of the Staff Corps can be made with a resulting increase in efficiency and economy, but not along the lines provided in the bill under consideration. I am opposed to any plan the result of which would be to break up or interfere with the essential principles of the detail system in the Staff Corps established by the act of February 2, 1901, and I am opposed to any plan the result of which would be to give to the officer selected as Chief of Staff or to any other member of the General Staff Corps greater permanency of office than he now has. Under the existing law neither the Chief. of Staff nor any other member of the General Staff Corps can remain in office for a period of more than four years, and there must be an interval of two years between successive tours of duty. The bill referred to provides that certain persons shall become permanent members of the General Staff Corps, and that certain others are subject to redetail without an interval of two years. Such provision is fraught with danger to the welfare of the Army, and would practically nullify the main purpose of the law creating the In making the consolidations no reduction should be made in the total number of officers of the Army, of whom there are now too few to perform the duties imposed by law. I have in the past recommended an increase in the number of officers by 6oo in order to provide sufficient officers to perform all classes of staff duty and tc reduce the number of line officers detached from their commands. Congress at the last session increased the total number of officers by 2oo, but this is not enough. Promotion in the line of the Army is too slow. Officers do not attain command rank at an age early enough properly to exercise it. It would be a mistake further to retard this already slow promotion by throwing back into the line of the Arm a number of high-ranking officers to be absorbed as is rovided in the Another feature of the bill which I believe to be a mistake is the proposed increase in the term of enlistment from three to five ears I believe it would be better to enlist men for six years, release them at the end of three years from active service, and put them in reserve for the remaining three years. Reenlistments should be largely confined to the noncommissioned officers and other enlisted men in the skilled grades. This plan by the payment of a comparatively small compensation during the three years of reserve, would keep a large bodv of men at the call of the Government, trained and ready for The Army of the United States is in good condition. It showed itself able to meet an emergency in the successful mobilization of an army division of from i5,ooo to :2o,ooo men, which took place along the border of Mexico during the recent disturbances in that country. The marvelous freedom from the ordinary camp diseases of typhoid fever and measles is referred to in the report of the Secretary of War and shows such an effectiveness in the sanitary regulations and treatment of the Medical Corps, and in the discipline of the Army itself, as to invoke the highest commendation. I beg to renew my recommendation of last year that the Congress appropriate for a memorial amphitheater at Arlington, Va., the funds required to construct it upon the plans already approved. The very satisfactory progress made on the Panama Canal last year has continued, and there is every reason to believe that the canal will be completed as early as the 1st of July, 1913, unless something unforeseen occurs. This is about 18 months before the time promised by the engineers. We are now near enough the completion of the canal to make it imperatively necessary that legislation should be enacted to fix the method by which the canal shall be maintained and controlled and the zone governed. The fact is that to-day there is no statutory law by authority of which the President is maintaining the government of the zone. Such authority was given in an amendment to the Spooner Act, which expired by the terms of its own limitation some years ago. Since that time the government has continued, under the advice of the Attorney General that in the absence of action by Congress, there is necessarily an implied authority on the part of the Executive to maintain a government in a territory in which he has to see that the laws are executed. The fact that we have been able thus to get along during the important days of construction without legislation expressly formulating the government of the zone, or delegating the creation of it to the President, is not a reason for supposing that we may continue the same kind of a government after the construction is finished. The implied authority of the President to maintain a civil government in the zone may be derived from the mandatory direction given him in the original Spooner Act, by which he was commanded to build the canal; but certainly, now that the canal is about to be completed and to be put under a permanent management, there ought to be specific statutory authority for its regulation and control and for the government of the zone, which we hold for the chief and main purpose of operating the canal. I fully concur with the Secretary of War that the problem is simply the management of a great public work, and not the government of a local republic; that every provision must be directed toward the successful maintenance of the canal as an avenue of commerce, and that all provisions for the government of those who live within the zone should be subordinate to the main purpose. The zone is 40 miles long and 10 miles wide. Now, it has a population Of 50,000 or 60,000, but as soon as the work of construction is completed, the towns which make up this population will be deserted, and only comparatively few natives will continue their residence there. The control of them ought to approximate a military government. One judge and two justices of the peace will be sufficient to attend to all the judicial and litigated business there is. With a few fundamental laws of Congress, the zone should be governed by the orders of the President, issued through the War Department, as it is today. Provisions can be made for the guaranties of life, liberty, and property, but beyond those, the government should be that of a military reservation, managed in connection with this great highway of trade. In my last annual message I discussed at length the reasons for the Government's assuming the task of furnishing to all ships that use the canal, whether our own naval vessels or others, the supplies of coal and oil and other necessities with which they must be replenished either before or after passing through the canal, together with the dock facilities and repairs of every character. This it is thought wise to do through the Government, because the Government must establish for itself, for its own naval vessels, large depots and dry docks and warehouses, and these may easily be enlarged so as to secure to the world public using the canal reasonable prices and a certainty that there will be no discrimination between those who wish to avail themselves of such facilities. . I renew my recommendation with respect to the tolls of the canal that within limits, which shall seem wise to Congress, the power of fixing tolls be given to the President. In order to arrive at a proper conclusion, there must be some experimenting, and this can not be done if Congress does not delegate the power to one who can act expeditiously. I am very confident that the United States has the power to relieve from the payment of tolls any part of our shipping that Congress deems wise. We own the canal. It was our money that built it. We have the right to charge tolls for its use. Those tolls must be the same to everyone; but when we are dealing with our own ships, the practice of many Governments of subsidizing their own merchant vessels is so well established in general that a subsidy equal to the tolls, an equivalent remission of tolls, can not be held to be a discrimination in the use of the canal. The practice in the Suez Canal makes this clear. The experiment in tolls to be made by the President would doubtless disclose how great a burden of tolls the coastwise trade between the Atlantic and the Pacific coast could bear without preventing its usefulness in competition with the transcontinental railroads. One of the chief reasons for building the canal was to set up this competition and to bring the two shores closer together as a practical trade problem. It may be that the tolls will have to be wholly remitted. I do not think this is the best principle, because I believe that the cost of such a Government work as the Panama Canal ought to be imposed gradually but certainly upon the trade which it creates and makes possible. So far as we can, consistent with the development of the world's trade through the canal, and the benefit which it was intended to secure to the east and west coastwise trade, we ought to labor to secure from the canal tolls a sufficient amount ultimately to meet the debt which we have assumed and to pay the interest. In respect to the Philippines, I urgently join in the recommendation of the Secretary of War that the act of February 6, 1905, limiting the indebtedness that may be incurred by the Philippine Government for the construction of public works, be increased from $5,000,000 to $15,ooo,ooo. The finances of that Government are in excellent condition. The maximum sum mentioned is quite low as compared with the amount of indebtedness of other governments with similar resources, and the success which has attended the expenditure of the $5,000,000 in the useful improvements of the harbors and other places in the Islands justifies and requires additional expenditures for like purposes. . I also join in the recommendation that the legislature of the Philippine Islands be authorized to provide for the naturalization of Filipinos and others who by the present law are treated as aliens, so as to enable them to become citizens of the Philippine Islands. Pending an investigation by Congress at its last session, through one of its committees, into the disposition of the friars' lands, Secretary Dickinson directed that the friars' lands should not be sold in excess of the limits fixed for the public lands until Congress should pass upon the subject or should have concluded its investigation. This order has been an obstruction to the disposition of the lands, and I expect to direct the Secretary of War to return to the practice under the opinion of the Attorney General which will enable us to dispose of the lands much more promptly, and to prepare a sinking fund with which to meet the $7,000,000 of bonds issued for the purchase of the lands. I have no doubt whatever that the Attorney General's construction was a proper one, and that it is in the interest of everyone that the land shall be promptly disposed of. The danger of creating a monopoly of ownership in lands under the statutes as construed is nothing. There are only two tracts of 60,000 acres each unimproved and in remote Provinces that are likely to be disposed of in bulk, and the rest of the lands are subject to the limitation that they shall be first offered to the present tenants and lessors who hold them in small tracts. The estimates for the river and harbor improvements reach $32,000,000 for the coming year. I wish to urge that whenever a project has been adopted by Congress as one to be completed, the more money which can be economically expended in its construction in each year, the greater the ultimate economy. This has especial application to the improvement of the Mississippi River and its large branches. It seems to me that an increase in the amount- of money now being annually expended in the improvement of the Ohio River which has been formally adopted by Congress would be in the interest of the public. A similar change ought to be made during the present Congress, in the amount to be appropriated for the Missouri River. The engineers say that the cost of the improvement of the Missouri River from Kansas City to St. Louis, in order to secure 6 feet as a permanent channel, will reach $20,000,000. There have been at least three recommendations from the Chief of Engineers that if the improvement be adopted, $2,000,000 should be expended upon it annually. This particular improvement is especially entitled to the attention of Congress, because a company has been organized in Kansas City, with a capital of $1,000,000, which has built steamers and barges, and is actually using the river for transportation in order to show what can be done in the way of affecting rates between Kansas City and St. Louis, and in order to manifest their good faith and confidence in respect of the improvement. I urgently recommend that the appropriation for this improvement be increased from $600,000, as recommended now in the completion of a contract, to $2,000,000 annually, so that the work may be done in 10 years. The project for a navigable waterway from Lake Michigan to the mouth of the Illinois River, and thence via the Mississippi to the Gulf of Mexico, is one of national importance. In view of the work already accomplished by the Sanitary District of Chicago, an agency of the State of Illinois, which has constructed the most difficult and costly stretch of this waterway and made it an asset of the Nation, and in view of the fact that the people of Illinois have authorized the expenditure Of $20,000,000 to carry this waterway 62 miles farther to Utica, I feel that it is fitting that this work should be supplemented by the Government, and that the expenditures recommended by the special board of engineers on the waterway from Utica to the mouth of the Illinois River be made upon lines which while providing a waterway for the Nation should otherwise benefit that State to the fullest extent. I recommend that the term of service of said special board of engineers be continued, and that it be empowered to reopen the question of the treatment of the lower Illinois River, and to negotiate with a properly constituted commission representing the State of Illinois, and to agree upon a plan for the improvement of the lower Illinois River and upon the extent to which the United States may properly cooperate with the State of Illinois in securing the construction of a navigable waterway from Lockport to the mouth of the Illinois River in conjunction with the development of water power by that State between Lockport and Utica. The report of the Attorney General shows that he has subjected to close examination the accounts of the clerks of the Federal courts; that he has found a good many which disclose irregularities or dishonesty; but that he has had considerable difficulty in securing an effective prosecution or removal of the clerks thus derelict. I am certainly not unduly prejudiced against the Federal courts, but the fact is that the long and confidential relations which grow out of the tenure for life on the part of the judge and the practical tenure for life on the part of the clerk are not calculated to secure the strictness of dealing by the judge with the clerk in respect to his fees and accounts which assures in the clerk's conduct a freedom from overcharges and carelessness. The relationship between the judge and the clerk makes it ungracious for members of the bar to complain of the clerk or for department examiners to make charges against him to be heard by the court, and an order of removal of a clerk and a judgment for the recovery of fees are in some cases reluctantly entered by the judge. For this reason I recommend an amendment to the law whereby the President shall be given power to remove the clerks for because. This provision need not interfere with the right of the judge to appoint his clerk or to remove him. In my last message, I recommended to Congress that it authorize the payment of the findings or judgments of the Court of Claims in the matter of the French spoliation cases. There has been no appropriation to pay these judgments since 1905. The findings and awards were obtained after a very bitter fight, the Government succeeding in about 75 per cent of the cases. The amount of the awards ought, as a matter of good faith on the part of the Government, to be paid. The limitation of the liability of the master to his servant for personal injuries to such as are occasioned by his fault has been abandoned in most civilized countries and provision made whereby the employee injured in the course of his employment is compensated for his loss of working ability irrespective of negligence. The principle upon which such provision proceeds is that accidental injuries to workmen in modern industry, with its vast complexity and inherent dangers arising from complicated machinery and the use of the great forces of steam and electricity, should be regarded as risks of the industry and the loss borne in some equitable proportion by those who for their own profit engage therein. In recognition of this the last Congress authorized the appointment of a commission to investigate the subject of employers' liability and workmen's compensation and to report the result of their investigations, through the President, to Congress. This commission was appointed and has been at work, holding hearings, gathering data, and considering the subject, and it is expected will be able to report by the first of the year, in accordance with the provisions of the law. It is hoped and expected that the commission will suggest legislation which will enable us to put in the place of the present wasteful and sometimes unjust system of employers' liability a plan of compensation which will afford some certain and definite relief to all employees who are injured in the course of their employment in those industries which are subject to the regulating power of Congress. In promotion of the movement for the prevention of delay and unnecessary cost, in litigation, I am glad to say that the Supreme Court has taken steps to reform the present equity rules of the Federal courts, and that we may in the near future expect a revision of them which will be a long step in the right direction. The American Bar Association has recommended to Congress several bills expediting procedure, one of which has already passed the House unanimously, February 6, 1911. This directs that no judgment should be set aside or reversed, or new trial granted, unless it appears to the court, after an examination of the entire because, that the error complained of has injuriously affected the substantial rights of the parties, and also provides for the submission of issues of fact to a jury, reserving questions of law for subsequent argument and decision. I hope this bill will pass the Senate and become law, for it will simplify the procedure at law. Another bill to amend chapter II of the judicial Code, in order to avoid errors in pleading, was presented by the same association, and one. enlarging the jurisdiction of the Supreme Court so as to permit that court to examine, upon a writ of error, all cases in which any right or title is claimed under the Constitution, or any statute or treaty of the United States, whether the decision in the court below has been against the right or title or in its favor. Both these measures are in the interest of justice and should be passed. At the beginning of the present administration in 1909 the postal service was in arrears to the extent Of $17,479,770.47. It was very much the largest deficit on record. In the brief space of two years this has been turned into a surplus Of $220,000, which has been accomplished without curtailment of the postal facilities, as may be seen by the fact that there have been established 3,744 new post offices; delivery by carrier has been added to the service in 186 cities; 2,516 new rural routes have been established, covering 60,000 miles; the force of postal employees has been increased in these two years by more than 8,000, and their average annual salary has had a substantial increase. On January 3, 1911, postal-savings depositories were established experimentally in 48 States and Territories. After three months' successful operation the system was extended as rapidly as feasible to the 7,500 Post offices of the first, second, and third classes constituting the presidential grade. By the end of the year practically all of these will have been designated and then the system will be extended to all fourth-class post offices doing a money-order business. In selecting post offices for depositories consideration was given to the efficiency of the postmasters and only those offices where the ratings were satisfactory to the department have been designated. Withholding designation from postmasters with unsatisfactory ratings has had a salutary effect on the service. The deposits have kept pace with the extension of the system. Amounting to only $60,652 at the end of the first month's operation in the experimental offices, they increased to $679,310 by July, and now after 11 months of operation have reached a total of $ 11,000,000. This sum is distributed among 2,71o banks and protected tinder the law by bonds deposited with the Treasurer of the United States. Under the method adopted for the conduct of the system certificates are issued as evidence of deposits, and accounts with depositors are kept by the post offices instead of by the department. Compared with the practice in other countries of entering deposits in pass books and keeping at the central office a ledger account with each depositor, the use of the certificate has resulted in great economy of administration. The depositors thus far number approximately 150,000. They include 40 nationalities, native Americans largely predominating and English and Italians coming next. The first conversion of deposits into United States bonds bearing interest at the rate of 2.5 per cent occurred on July 1, 1911, the amount of deposits exchanged being $41,900, or a little more than 6 per cent of the total outstanding certificates of deposit on June 30. Of this issue, bonds to the value of $6,120 were in coupon form and $35,780 in registered form. Steps should be taken immediately for the establishment of a rural parcel post. In the estimates of appropriations needed for the maintenance of the postal service for the ensuing fiscal year an item of $150,000 has been inserted to cover the preliminary expense of establishing a parcel post on rural mail routes, as well as to cover an investigation having for its object the final establishment of a general parcel post on all railway and steamboat transportation routes. The department believes that after the initial expenses of establishing the system are defrayed and the parcel post is in full operation on the rural routes it will not only bring in sufficient revenue to meet its cost, but also a surplus that can be utilized in paying the expenses of a parcel post in the City Delivery Service. It is hoped that Congress will authorize the immediate establishment of a limited parcel post on such rural routes as may be selected, providing for the delivery along the routes of parcels not exceeding eleven pounds, which is the weight limit for the international parcel post, or at the post office from which such route emanates, or on another route emanating from the same office. Such preliminary service will prepare the way for the more thorough and comprehensive inquiry contemplated in asking for the appropriation mentioned, enable the department to gain definite information concerning the practical operation of a general system, and at the same time extend the benefit of the service to a class of people who, above all others, are specially in need of it. The suggestion that we have a general parcel post has awakened great opposition on the part of some who think that it will have the effect to destroy the business of the country storekeeper. Instead of doing this, I think the change will greatly increase business for the benefit of all. The reduction in the cost of living it will bring about ought to make its coming certain. On the 2d of November last, I reviewed the fighting fleet of battleships and other vessels assembled in New York Harbor, consisting of 24 battleships, 2 armored cruisers, 2 cruisers, 22 destroyers, 12 torpedo boats, 8 submarines, and other attendant vessels, making 98 vessels of all classes, of a tonnage Of 576,634 tons. Those who saw the fleet were struck with its preparedness and with its high military efficiency. All Americans should be proud of its personnel. The fleet was deficient in the number of torpedo destroyers, in cruisers, and in colliers, as well as in large battleship cruisers, which are now becoming a very important feature of foreign navies, notably the British, German, and Japanese. The building plan for this year contemplates two battleships and two colliers. This is because the other and smaller vessels can be built much more rapidly in case of emergency than the battleships, and we certainly ought to continue the policy of two battleships a year until after the Panama Canal is finished and until in our first line and in our reserve line we can number 40 available vessels of proper armament and size. The reorganization of the Navy and the appointment of four aids to the Secretary have continued to demonstrate their usefulness. It would be difficult now to administer the affairs of the Navy without the expert counsel and advice of these aids, and I renew the recommendation which I made last year, that the aids be recognized by statute. It is certain that the Navy, with its present size, should have admirals in active command higher than rear admirals. The recognized grades in order are: Admiral of the fleet, admiral, vice admiral, and rear admiral. Our great battleship fleet is commanded by a rear admiral, with four other rear admirals under his orders. This is not as it should be, and when questions of precedence arise between our naval officers and those of European navies, the American rear admiral, though in command of ten times the force of a foreign vice admiral, must yield precedence to the latter. Such an absurdity ought not to prevail, and it can be avoided by the creation of two or three positions of flag rank above that of rear admiral. I attended the opening of the new training school at North Chicago, Ill., and am glad to note the opportunity which this gives for drawing upon young men of the country from the interior, from farms, stores, shops, and offices, which insures a high average of intelligence and character among them, and which they showed in the very wonderful improvement in discipline and drill which only a few short weeks' presence at the naval station had made. I invite your attention to the consideration of the new system of detention and of punishment for Army and Navy enlisted men which has obtained in Great Britain, and which has made greatly for the better control of the. men. We should adopt a similar system here. Like the Treasury Department and the War Department, the Navy Department has given much attention to economy in administration, and has cut down a number of unnecessary expenses and reduced its estimates except for construction and the increase that that involves. I urge upon Congress the necessity for an immediate increase of 2,000 men in the enlisted strength of the Navy, provided for in the estimates. Four thousand more are now needed to man all the available vessels. There are in the service to-day about 47,750 enlisted men of all ratings. Careful computation shows that in April, 1912, 49,166 men will be required for vessels in commission, and 3,000 apprentice seamen should be kept under training at all times. The Secretary of the Navy has recommended the abolition of certain of the smaller and unnecessary navy yards, and in order to furnish a complete and comprehensive report has referred the question of all navy yards to the joint board of the Army and Navy. This board will shortly make its report and the Secretary of the Navy advises me that his recommendations on the subject will be presented early in the coming year. The measure of economy contained in a proper handling of this subject is so great and so important to the interests of the Nation that I shall present it to Congress as a separate subject apart from my annual message. Concentration of the necessary work for naval vessels in a few navy yards on each coast is a vital necessity if proper economy in Government expenditures is to be attained. The Secretary of the Navy is striving to unify the various corps of the Navy to the extent possible and thereby stimulate a Navy spirit as distinguished from a corps spirit. In this he has my warm support. All officers are to be naval officers first and specialists afterwards. This means that officers will take up at least one specialty, such as ordnance, construction, or engineering. This is practically what is done now, only some of the specialists, like the pay officers and naval constructors, are not of the line. It is proposed to make them all of the line. All combatant corps should obviously be of the line. This necessitates amalgamating the pay officers and also those engaged in the technical work of producing the finished ship. This is at present the case with the single exception of the naval constructors, whom it is now proposed to amalgamate with the line. I urge again upon Congress the desirability of establishing the council of national defense. The bill to establish this council was before Congress last winter, and it is hoped that this legislation will pass during the present session. The purpose of the council is to determine the general policy of national defense and to recommend to Congress and to the President such measures relating to it as it shall deem necessary and expedient. No such machinery is now provided by which the readiness of the Army and Navy may be improved and the programs of military and naval requirements shall be coordinated and properly scrutinized with a view of the necessities of the whole Nation rather than of separate departments. For the consideration of matters which are pending or have been disposed of in the Agricultural Department and in the Department of Commerce and Labor, I refer to the very excellent reports of the Secretaries of those departments. I shall not be able to submit to Congress until after the Christmas holidays the question of conservation of our resources arising in Alaska and the West and the question of the rate for second-class mail matter in the Post Office Department. The law does not require the submission of the reports of the Commission on Economy and Efficiency until the 31st of December. I shall therefore not be able to submit a report of the work of that commission until the assembling of Congress after the holidays. I have already advocated, in my last annual message, the adoption of a civil-service retirement system, with a contributory feature to it so as to reduce to a minimum the cost to the Government of the pensions to be paid. After considerable reflection, I am very much opposed to a pension system that involves no contribution from the employees. I think the experience of other governments justifies this view; but the crying necessity for some such contributory system, with possibly a preliminary governmental outlay, in order to cover the initial cost and to set the system going at once while the contributions are accumulating, is manifest on every side. Nothing will so much promote the economy and efficiency of the Government as such a system. I wish to renew again my recommendation that all the local offices throughout the country, including collectors of internal revenue, collectors of customs, postmasters of all four classes, immigration commissioners and marshals, should be by law covered into the classified service, the necessity for confirmation by the Senate be removed, and the President and the others, whose time is now taken up in distributing this patronage under the custom that has prevailed since the beginning of the Government in accordance with the recommendation of the Senators and Congressmen of the majority party, should be relieved from this burden. I am confident that such a change would greatly reduce the cost of administering the Government, and that it would add greatly to its efficiency. It would take away the power to use the patronage of the Government for political purposes. When officers are recommended by Senators and Congressmen from political motives and for political services rendered, it is impossible to expect that while in office the appointees will not regard their tenure as more or less dependent upon continued political service for their patrons, and no regulations, however stiff or rigid, will prevent this, because such regulations, in view of the method and motive for selection, are plainly inconsistent and deemed hardly worthy of respect.
this message is the first of several which i shall send to congress during the interval between the opening of its regular session and its adjournment for the christmas holidays the amount of information to be communicated as to the operations of the government the number of important subjects calling for comment by the executive and the transmission to congress of exhaustive reports of special commissions make it impossible to include in one message of a reasonable length a discussion of the topics that ought to be brought to the attention of the national legislature at its first regular session in may last the supreme court handed down decisions in the suits in equity brought by the united states to enjoin the further maintenance of the standard oil trust and of the american tobacco trust and to secure their dissolution the decisions are and serve to advise the business world authoritatively of the scope and operation of the act of 1890 the decisions do not depart in any substantial way from the previous decisions of the court in construing and applying this important statute but they clarify those decisions by further defining the already admitted exceptions to the literal construction of the act by the decrees they furnish a useful precedent as to the proper method of dealing with the capital and property of illegal trusts these decisions suggest the need and wisdom of additional or supplemental legislation to make it easier for the entire business community to square with the rule of action and legality thus finally established and to preserve the benefit freedom and spur of reasonable competition without loss of real efficiency or progress the statute in its first section declares to be illegal every contract combination in the form of trust or otherwise or conspiracy in restraint of trade or commerce among the several states or with foreign nations and in the second declares guilty of a misdemeanor every person who shall monopolize or attempt to monopolize or combine or conspire with any other person to monopolize any part of the trade or commerce of the several states or with foreign nations in two early cases where the statute was invoked to enjoin a transportation rate agreement between interstate railroad companies it was held that it was no defense to show that the agreement as to rates complained of was reasonable at common law because it was said that the statute was directed against all contracts and combinations in restraint of trade whether reasonable at common law or not it was plain from the record however that the contracts complained of in those cases would not have been deemed reasonable at common law in subsequent cases the court said that the statute should be given a reasonable construction and refused to include within its inhibition certain contractual restraints of trade which it denominated as incidental or as indirect these cases of restraint of trade that the court excepted from the operation of the statute were instances which at common law would have been called reasonable in the standard oil and tobacco cases therefore the court merely adopted the tests of the common law and in defining exceptions to the literal application of the statute only substituted for the test of being incidental or indirect that of being reasonable and this without varying in the slightest the actual scope and effect of the statute in other words all the cases under the statute which have now been decided would have been decided the same way if the court had originally accepted in its construction the rule at common law it has been said that the court by introducing into the construction of the statute distinctions has emasculated it this is obviously untrue by its judgment every contract and combination in restraint of interstate trade made with the purpose or necessary effect of controlling prices by stifling competition or of establishing in whole or in part a monopoly of such trade is condemned by the statute the most extreme critics can not instance a case that ought to be condemned under the statute which is not brought within its terms as thus construed the suggestion is also made that the supreme court by its decision in the last two cases has committed to the court the undefined and unlimited discretion to determine whether a case of restraint of trade is within the terms of the statute this is wholly untrue a reasonable restraint of trade at common law is well understood and is clearly defined it does not rest in the discretion of the court it must be limited to accomplish the purpose of a lawful main contract to which in order that it shall be enforceable at all it must be incidental if it exceed the needs of that contract it is void the test of reasonableness was never applied by the court at common law to contracts or combinations or conspiracies in restraint of trade whose purpose was or whose necessary effect would be to stifle competition to control prices or establish monopolies the courts never assumed power to say that such contracts or combinations or conspiracies might be lawful if the parties to them were only moderate in the use of the power thus secured and did not exact from the public too great and exorbitant prices it is true that many theorists and others engaged in business violating the statute have hoped that some such line could be drawn by courts but no court of authority has ever attempted it certainly there is nothing in the decisions of the latest two cases from which such a dangerous theory of judicial discretion in enforcing this statute can derive the slightest sanction we have been years making this statute effective for the purposes for which it was enacted the knight case was discouraging and seemed to remit to the states the whole available power to attack and suppress the evils of the trusts slowly however the error of that judgment was corrected and only in the last three or four years has the heavy hand of the law been laid upon the great illegal combinations that have exercised such an absolute dominion over many of our industries criminal prosecutions have been brought and a number are pending but juries have felt averse to convicting for jail sentences and judges have been most reluctant to impose such sentences on men of respectable standing in society whose offense has been regarded as merely statutory still as the offense becomes better understood and the committing of it partakes more of studied and deliberate defiance of the law we can be confident that juries will convict individuals and that jail sentences will be imposed in the standard oil case the supreme and circuit courts found the combination to be a monopoly of the interstate business of refining transporting and marketing petroleum and its products effected and maintained through different corporations the stock of which was held by a new jersey company it in effect commanded the dissolution of this combination directed the transfer and pro rata distribution by the new jersey company of the stock held by it in the corporations to and among its stockholders and the corporations and individual defendants were enjoined from conspiring or combining to restore such monopoly and all agreements between the subsidiary corporations tending to produce or bring about further violations of the act were enjoined in the tobacco case the court found that the individual defendants in number had been engaged in a successful effort to acquire complete dominion over the manufacture sale and distribution of tobacco in this country and abroad and that this had been done by combinations made with a purpose and effect to stifle competition control prices and establish a monopoly not only in the manufacture of tobacco but also of and licorice used in its manufacture and of its products of cigars cigarettes and snuffs the tobacco suit presented a far more complicated and difficult case than the standard oil suit for a decree which would effectuate the will of the court and end the violation of the statute there was here no single holding company as in the case of the standard oil trust the main company was the american tobacco company a manufacturing selling and holding company the plan adopted to destroy the combination and restore competition involved the redivision of the capital and plants of the whole trust between some of the companies constituting the trust and new companies organized for the purposes of the decree and made parties to it and numbering new and old fourteen the american tobacco company old readjusted capital 92 the liggett meyers tobacco company new capital the lorillard company new capital and the reynolds tobacco company old capital are chiefly engaged in the manufacture and sale of chewing and smoking tobacco and cigars the former one tinfoil company is divided into two one of capital and the other of the one snuff company is divided into three companies one with a capital of another with a capital of and a third with a capital of the licorice companies are two one with a capital of and another with a capital of there is also the tobacco company a british corporation doing business abroad with a capital of the porto rican tobacco company with a capital of and the corporation of united cigar stores with a capital of under this arrangement each of the different kinds of business will be distributed between two or more companies with a division of the prominent brands in the same tobacco products so as to make competition not only possible but necessary thus the business of the country is divided so that the present independent companies have per cent while the american tobacco company will have per cent the liggett meyers per cent the lorillard company per cent and the reynolds company per cent the stock of the other thirteen companies both preferred and common has been taken from the defendant american tobacco company and has been distributed among its stockholders all covenants restricting competition have been declared null and further performance of them has been enjoined the preferred stock of the different companies has now been given voting power which was denied it under the old organization the ratio of the preferred stock to the common was as 78 to 40 this constitutes a very decided change in the character of the ownership and control of each company in the original suit there were defendants who were charged with being the conspirators through whom the illegal combination acquired and exercised its unlawful dominion under the decree these defendants will hold amounts of stock in the various distributee companies ranging from 41 per cent as a maximum to per cent as a minimum except in the case of one small company the porto rican tobacco company in which they will hold 45 per cent the individual defendants are enjoined for three years from buying any stock except from each other and the group is thus prevented from extending its control during that period all parties to the suit and the new companies who are made parties are enjoined perpetually from in any way effecting any combination between any of the companies in violation of the statute by way of resumption of the old trust each of the fourteen companies is enjoined from acquiring stock in any of the others all these companies are enjoined from having common directors or officers or common buying or selling agents or common offices or lending money to each other objection was made by certain independent tobacco companies that this settlement was unjust because it left companies with very large capital in active business and that the settlement that would be effective to put all on an equality would be a division of the capital and plant of the trust into small fractions in amount more nearly equal to that of each of the independent companies this contention results from a misunderstanding of the law and its purpose it is not intended thereby to prevent the accumulation of large capital in business enterprises in which such a combination can secure reduced cost of production sale and distribution it is directed against such an aggregation of capital only when its purpose is that of stifling competition enhancing or controlling prices and establishing a monopoly if we shall have by the decree defeated these purposes and restored competition between the large units into which the capital and plant have been divided we shall have accomplished the useful purpose of the statute it is not the purpose of the statute to confiscate the property and capital of the offending trusts methods of punishment by fine or imprisonment of the individual offenders by fine of the corporation or by forfeiture of its goods in transportation are provided but the proceeding in equity is a specific remedy to stop the operation of the trust by injunction and prevent the future use of the plant and capital in violation of the statute i venture to say that not in the history of american law has a decree more effective for such a purpose been entered by a court than that against the tobacco trust as circuit judge noyes said in his judgment approving the decree the extent to which it has been necessary to tear apart this combination and force it into new forms with the attendant burdens ought to demonstrate that the federal statute is a drastic statute which accomplishes effective results which so long as it stands on the statute books must be obeyed and which can not be disobeyed without incurring penalties and on the other hand the successful reconstruction of this organization should teach that the effect of enforcing this statute is not to destroy but to reconstruct not to demolish but to in accordance with the conditions which the congress has declared shall exist among the people of the united states it has been assumed that the present pro rata and common ownership in all these companies by former stockholders of the trust would insure a continuance of the same old single control of all the companies into which the trust has by decree been disintegrated this is erroneous and is based upon the assumed inefficacy and innocuousness of judicial injunctions the companies are enjoined from cooperation or combination they have different managers directors purchasing and sales agents if all or many of the numerous stockholders reaching into the thousands attempt to secure concerted action of the companies with a view to the control of the market their number is so large that such an attempt could not well be concealed and its prime movers and all its participants would be at once subject to contempt proceedings and imprisonment of a summary character the immediate result of the present situation will necessarily be activity by all the companies under different managers and then competition must follow or there will be activity by one company and stagnation by another only a short time will inevitably lead to a change in ownership of the stock as all opportunity for continued cooperation must disappear those critics who speak of this dis integration in the trust as a mere change of garments have not given consideration to the inevitable working of the decree and understand little the personal danger of attempting to evade or set at naught the solemn injunction of a court whose object is made plain by the decree and whose inhibitions are set forth with a detail and comprehensiveness the effect of these two decisions has led to decrees dissolving the combination of manufacturers of electric lamps a southern wholesale grocers association an interlocutory decree against the powder trust with directions by the circuit court compelling dissolution and other combinations of a similar history are now negotiating with the department of justice looking to a disintegration by decree and reorganization in accordance with law it seems possible to bring about these reorganizations without general business disturbance but now that the act is seen to be effective for the accomplishment of the purpose of its enactment we are met by a cry from many different quarters for its repeal it is said to be obstructive of business progress to be an attempt to restore methods of destructive competition between small units and to make impossible those useful combinations of capital and the reduction of the cost of production that are essential to continued prosperity and normal growth in the recent decisions the supreme court makes clear that there is nothing in the statute which condemns combinations of capital or mere bigness of plant organized to secure economy in production and a reduction of its cost it is only when the purpose or necessary effect of the organization and maintenance of the combination or the aggregation of immense size are the stifling of competition actual and potential and the enhancing of prices and establishing a monopoly that the statute is violated mere size is no sin against the law the merging of two or more business plants necessarily eliminates competition between the units thus combined but this elimination is in contravention of the statute only when the combination is made for purpose of ending this particular competition in order to secure control of and enhance prices and create a monopoly the complaint is made of the statute that it is not sufficiently definite in its description of that which is forbidden to enable business men to avoid its violation the suggestion is that we may have a combination of two corporations which may run on for years and that subsequently the attorney general may conclude that it wa a violation of the statute and that which was supposed by the combiners to be innocent then turns out to be a combination in violation of the statute the answer to this hypothetical case is that when men attempt to amass such stupendous capital as will enable them to suppress competition control prices and establish a monopoly they know the purpose of their acts men do not do such a thing without having it clearly in mind if what they do is merely for the purpose of reducing the cost of production without the thought of suppressing competition by use of the bigness of the plant they are creating then they can not be convicted at the time the union is made nor can they be convicted later unless it happen that later on they conclude to suppress competition and take the usual methods for doing so and thus establish for themselves a monopoly they can in such a case hardly complain if the motive which subsequently is disclosed is attributed by the court to the original combination much is said of the repeal of this statute and of constructive legislation intended to accomplish the purpose and blaze a clear path for honest merchants and business men to follow it may be that such a plan will be evolved but i submit that the discussions which have been brought out in recent days by the fear of the continued execution of the law have produced nothing but glittering generalities and have offered no line of distinction or rule of action as definite and as clear as that which the supreme court itself lays down in enforcing the statute i see no indeed i can see decided the enactment of a law which shall describe and denounce methods of competition which are unfair and are badges of the unlawful purpose denounced in the law the attempt and purpose to suppress a competitor by underselling him at a price so unprofitable as to drive him out of business or the making of exclusive contracts with customers under which they are required to give up association with other manufacturers and numerous kindred methods for stifling competition and effecting monopoly should be described with sufficient accuracy in a criminal statute on the one hand to enable the government to shorten its task by prosecuting single misdemeanors instead of an entire conspiracy and on the other hand to serve the purpose of pointing out more in detail to the business community what must be avoided in a special message to congress on january 7 1910 i ventured to point out the disturbance to business that would probably attend the dissolution of these offending trusts i said but such an investigation and possible prosecution of corporations whose prosperity or destruction affects the comfort not only of stockholders but of millions of wage earners employees and associated tradesmen must necessarily tend to disturb the confidence of the business community to dry up the now flowing sources of capital from its places of hoarding and produce a halt in our present prosperity that will because suffering and strained circumstances among the innocent many for the faults of the guilty few the question which i wish in this message to bring clearly to the consideration and discussion of congress is whether in order to avoid such a possible business danger something can not be done by which these business combinations may be offered a means without great financial disturbance of changing the character organization and extent of their business into one within the lines of the law under federal control and supervision securing compliance with the statute generally in the industrial combinations called the principal business is the sale of goods in many states and in foreign markets in other words the interstate and foreign business far exceeds the business done in any one state this fact will justify the federal government in granting a federal charter to such a combination to make and sell in interstate and foreign commerce the products of useful manufacture under such limitations as will secure a compliance with the law it is possible so to frame a statute that while it offers protection to a federal company against harmful vexatious and unnecessary invasion by the states it shall subject it to reasonable taxation and control by the states with respect to its purely local business corporations organized under this act should be prohibited from acquiring and holding stock in other corporations except for special reasons upon approval by the proper federal authority thus avoiding the creation under national auspices of the holding company with subordinate corporations in different states which has been such an effective agency in the creation of the great trusts and monopolies if the prohibition of the act against combinations in restraint of trade is to be effectively enforced it is essential that the national government shall provide for the creation of national corporations to carry on a legitimate business throughout the united states the conflicting laws of the different states of the union with respect to foreign corporations make it difficult if not impossible for one corporation to comply with their requirements so as to carry on business in a number of different states i renew the recommendation of the enactment of a general law providing for the voluntary formation of corporations to engage in trade and commerce among the states and with foreign nations every argument which was then advanced for such a law and every explanation which was at that time offered to possible objections have been confirmed by our experience since the enforcement of the antitrust statute has resulted in the actual dissolution of active commercial organizations it is even more manifest now than it was then that the denunciation of conspiracies in restraint of trade should not and does not mean the denial of organizations large enough to be intrusted with our interstate and foreign trade it has been made more clear now than it was then that a purely negative statute like the law may well be supplemented by specific provisions for the building up and regulation of legitimate national and foreign commerce the drafting of the decrees in the dissolution of the present trusts with a view to their reorganization into legitimate corporations has made it especially apparent that the courts are not provided with the administrative machinery to make the necessary inquiries preparatory to reorganization or to pursue such inquiries and they should be empowered to invoke the aid of the bureau of corporations in determining the suitable reorganization of the disintegrated parts the circuit court and the attorney general were greatly aided in framing the decree in the tobacco trust dissolution by an expert from the bureau of corporations i do not set forth in detail the terms and sections of a statute which might supply the constructive legislation permitting and aiding the formation of combinations of capital into federal corporations they should be subject to rigid rules as to their organization and procedure including effective publicity and to the closest supervision as to the issue of stock and bonds by an executive bureau or commission in the department of commerce and labor to which in times of doubt they might well submit their proposed plans for future business it must be distinctly understood that incorporation under federal law could not exempt the company thus formed and its incorporators and managers from prosecution under the law for subsequent illegal conduct but the publicity of its procedure and the opportunity for frequent consultation with the bureau or commission in charge of the incorporation as to the legitimate purpose of its transactions would offer it as great security against successful prosecutions for violations of the law as would be practical or wise stich a bureau or commission might well be invested also with the duty already referred to of aiding courts in the dissolution and recreation of trusts within the law it should be an executive tribunal of the dignity and power of the comptroller of the currency or the interstate commerce commission which now exercise supervisory power over important classes of corporations under federal regulation the drafting of such a federal incorporation law would offer ample opportunity to prevent many manifest evils in corporate management including irresponsibility of control in the hands of the few who are not the real owners i recommend that the federal charters thus to be granted shall be voluntary at least until experience justifies mandatory provisions the benefit to be derived from the operation of great businesses under the protection of such a charter would attract all who are anxious to keep within the lines of the law other large combinations that fail to take advantage of the federal incorporation will not have a right to complain if their failure is ascribed to unwillingness to submit their transactions to the careful official scrutiny competent supervision and publicity attendant upon the enjoyment of such a charter the opportunity thus suggested for federal incorporation it seems tome is suitable constructive legislation needed to facilitate the squaring of great industrial enterprises to the rule of action laid down by the law this statute as construed by the supreme court must continue to be the line of distinction for legitimate business it must be enforced unless we are to banish individualism from all business and reduce it to one common system of regulation or control of prices like that which now prevails with respect to public utilities and which when applied to all business would be a long step toward state socialism the act is the expression of the effort of a freedomloving people to preserve equality of opportunity it is the result of the confident determination of such a people to maintain their future growth by preserving uncontrolled and unrestricted the enterprise of the individual his industry his ingenuity his intelligence and his independent courage for twenty years or more this statute has been upon the statute book all knew its general purpose and approved many of its violators were cynical over its assumed impotence it seemed impossible of enforcement slowly the mills of the courts ground and only gradually did the majesty of the law assert itself many of its died before it became a living force and they and others saw the evil grow which they had hoped to destroy now its efficacy is seen now its power is heavy now its object is near achievement now we hear the call for its repeal on the plea that it interferes with business prosperity and we are advised in most general terms how by some other statute and in some other way the evil we are just stamping out can be cured if we only abandon this work of twenty years and try another experiment for another term of years it is said that the act has not done good can this be said in the face of the effect of the northern securities decree that decree was in no way so drastic or inhibitive in detail as either the standard oil decree or the tobacco decree but did it not stop for all time the then powerful movement toward the control of all the railroads of the country in a single hand such a power could not have been a healthful influence in the republic even though exercised under the general supervision of an interstate commission do we desire to make such ruthless combinations and monopolies lawful when all energies are directed not toward the reduction of the cost of production for the public benefit by a healthful competition but toward new ways and means for making permanent in a few hands the absolute control of the conditions and prices prevailing in the whole field of industry then individual enterprise and effort will be paralyzed and the spirit of commercial freedom will be dead the relations of the united states with other countries have continued during the past twelve months upon a basis of the usual good will and friendly intercourse the year just passed marks an important general movement on the part of the powers for broader arbitration in the recognition of the manifold benefits to mankind in the extension of the policy of the settlement of international disputes by arbitration rather than by war and in response to a widespread demand for an advance in that direction on the part of the people of the united states and of great britain and of france new arbitration treaties were negotiated last spring with great britain and france the terms of which were de signed as expressed in the preamble of these treaties to extend the scope and obligations of the policy of arbitration adopted in our present treaties with those governments to pave the way for this treat with the united states great britain negotiated an important modification in its alliance with japan and the french government also expedited the negotiations with signal good will the new treaties have been submitted to the senate and are awaiting its advice and consent to their ratification all the essentials of these important treaties have long been known and it is my earnest hope that they will receive prompt and favorable action i am glad to report that on july 5 last the american claim of alsop against the government of chile was finally disposed of by the decision of his britannic majesty george v to whom as amiable compositeur the matter had been referred for determination his majesty made an award of nearly to the claimants which was promptly paid by chile the settlement of this controversy has happily eliminated from the relations between the republic of chile and the united states the only question which for two decades had given the two foreign offices any serious concern and makes possible the unobstructed development of the relations of friendship which it has been the aim of this government in every possible way to further and cultivate in further illustration of the practical and beneficent application of the principle of arbitration and the underlying broad spirit of conciliation i am happy to advert to the part of the united states in facilitating amicable settlement of disputes which menaced the peace between panama and costa rica and between haiti and the dominican republic since the date of their independence colombia and costa rica had been seeking a solution of a boundary dispute which came as an heritage from colombia to the new republic of panama upon its beginning life as an independent nation although the disputants had submitted this question for decision to the president of france under the terms of an arbitration treaty the exact interpretation of the provisions of the award rendered had been a matter of serious disagreement between the two countries both contending for widely different lines even under the terms of the decision subsequently and since t903 this boundary question bad been the subject of fruitless diplomatic negotiations between the parties in january 1910 at the request of both governments the agents representing them met in conference at the department of state and subsequently concluded a protocol submitting this controversy to the arbitral judgment of the chief justice of the united states who consented to act in this capacity a boundary commission according to the international agreement has now been appointed and it is expected that the arguments will shortly proceed and that this dispute will be honorably and satisfactorily terminated again a few months ago it appeared that the dominican republic and haiti were about to enter upon hostilities because of complications growing out of an acrimonious boundary dispute which the efforts of many years had failed to solve the government of the united states by a friendly interposition of good offices succeeded in prevailing upon the parties to place their reliance upon some form of pacific settlement accordingly on the friendly suggestion of this government the two governments empowered commissioners to meet at washington in conference at the state department in order to arrange the terms of submission to arbitration of the boundary controversy our arbitration of the chamizal boundary question with mexico was unfortunately abortive but with the earnest efforts on the part of both governments which its importance commands it is felt that an early practical adjustment should prove possible during the past year the republic of venezuela celebrated the one hundredth anniversary of its independence the united states sent in honor of this event a special embassy to caracas where the cordial reception and generous hospitality shown it were most gratifying as a further proof of the good relations and friendship existing between that country and the united states the recent political events in mexico received attention from this government because of the exceedingly delicate and difficult situation created along our southern border and the necessity for taking measures properly to safeguard american interests the government of the united states in its desire to secure a proper observance and enforcement of the neutrality statutes of the federal government issued directions to the appropriate officers to exercise a diligent and vigilant regard for the requirements of such rules and laws although a condition of actual armed conflict existed there was no official recognition of belligerency involving the technical neutrality obligations of international law on the 6th of march last in the absence of the secretary of state i had a personal interview with wilson the ambassador of the united states to mexico in which he reported to me that the conditions in mexico were much more critical than the press dispatches disclosed that president diaz was on a volcano of popular uprising that the small outbreaks which had occurred were only symptomatic of the whole condition that a very large per cent of the people were in sympathy with the insurrection that a general explosion was probable at any time in which case he feared that the or more american residents in mexico might be assailed and that the very large american investments might be injured or destroyed after a conference with the secretary of war and the secretary of the navy i thought it wise to assemble an army division of full strength at san antonio a brigade of three regiments at galveston a brigade of infantry in the los angeles district of southern california together with a squadron of battleships and cruisers and transports at galveston and a small squadron of ships at san diego at the same time through our representative at the city of mexico i expressed to president diaz the hope that no apprehensions might result from unfounded conjectures as to these military maneuvers and assured him that they had no significance which should because concern to his government the mobilization was effected with great promptness and on the 15th of march through the secretary of war and the secretary of the navy in a letter addressed to the chief of staff i issued the following instructions it seems my duty as commander in chief to place troops in sufficient number where if congress shall direct that they enter mexico to save american lives and property an effective movement may be promptly made meantime the movement of the troops to texas and elsewhere near the boundary accompanied with sincere assurances of the utmost goodwill toward the present mexican government and with larger and more frequent patrols along the border to prevent insurrectionary expeditions from american soil will hold up the hands of the existing government and will have a healthy moral effect to prevent attacks upon americans and their property in any subsequent general internecine strife again the sudden mobilization of a division of troops has been a great test of our army and full of useful instruction while the maneuvers that are thus made possible can occupy the troops and their officers to great advantage the assumption by the press that i contemplate intervention on mexican soil to protect american lives or property is of course gratuitous because i seriously doubt whether i have such authority under any circumstances and if i had i would not exercise it without express congressional approval indeed as you know i have already declined without mexican consent to order a troop of cavalry to protect the breakwater we are constructing just across the border in mexico at the mouth of the colorado river to save the imperial valley although the insurrectos had scattered the mexican troops and were taking our horses and supplies and frightening our workmen away my determined purpose however is to be in a position so that when danger to american lives and property in mexico threatens and the existing government is rendered helpless by the insurrection i can promptly execute congressional orders to protect them with effect meantime i send you this letter through the secretary to call your attention to some things in connection with the presence of the division in the southwest which have doubtless occurred to you but which i wish to emphasize in the first place i want to make the mobilization a training for the army and i wish you would give your time and that of the war college to advising and carrying out maneuvers of a useful character and plan to continue to do this during the next three months by that time we may expect that either ambassador wilson fears will have been realized and chaos and its consequences have ensued or that the present government of mexico will have so readjusted matters as to secure result devoutly to be wished the troops can then be returned to their posts i understood from you in washington that aleshire said that you could probably meet all the additional expense of this whole movement out of the present appropriations if the troops continue in texas for three months i sincerely hope this is so i observe from the newspapers that you have no blank cartridges but i presume that this is an error or that it will be easy to procure those for use as soon as your maneuvers begin second texas is a state ordinarily peaceful but you can not put troops into it without running some risk of a collision between the people of that state and especially the who live in texas near the border and who sympathize with the insurrectos and the federal soldiers for that reason i beg you to be as careful as you can to prevent friction of any kind we were able in cuba with the army of pacification there of something more than troops to maintain them for a year without any trouble and i hope you can do the same thing in texas please give your attention to this and advise all the officers in command of the necessity for very great circumspection in this regard third one of the great troubles in the concentration of troops is the danger of disease and i suppose that you have adopted the most modern methods for preventing and if necessary for stamping out epidemics that is so much a part of a campaign that it hardly seems necessary for me to call attention to it finally i wish you to examine the question of the patrol of the border and put as many troops on that work as is practicable and more than are now engaged in it in order to prevent the use of our borderland for the carrying out of the insurrection i have given assurances to the mexican ambassador on this point i sincerely hope that this experience will always be remembered by the army and navy as a useful means of education and i should be greatly disappointed if it resulted in any injury or disaster to our forces from any because i have taken a good deal of responsibility in ordering this mobilization but i am ready to answer for it if only you and those under you use the utmost care to avoid the difficulties which i have pointed out you may have a copy of this letter made and left with carter and such other generals in command as you may think wise and necessary to guide them in their course but to be regarded as confidential i am more than happy to here record the fact that all apprehensions as to the effect of the presence of so large a military force in texas proved groundless no disturbances occurred the conduct of the troops was exemplary and the public reception and treatment of them was all that could have been desired and this notwithstanding the presence of a large number of mexican refugees in the border territory from time to time communications were received from ambassador wilson who had returned to mexico confirming the view that the massing of american troops in the neighborhood had had good effect by dispatch of april 3 1911 the ambassador said the continuing gravity of the situation here and the chaos that would ensue should the constitutional authorities be eventually overthrown thus greatly increasing the danger to which american lives and property are already subject confirm the wisdom of the president in taking those military precautions which making every allowance for the dignity and the sovereignty of a friendly state are due to our nationals abroad charged as i am with the responsibility of safeguarding these lives and property i am bound to say to the department that our military dispositions on the frontier have produced an effective impression on the mexican mind and may at any moment prove to be the only guaranties for the safety of our nationals and their property if it should eventuate that conditions here require more active measures by the president and congress sporadic attacks might be made upon the lives and property of our nationals but the ultimate result would be order and adequate protection the insurrection continued and resulted in engagements between the regular mexican troops and the insurgents and this along the border so that in several instances bullets from the contending forces struck american citizens engaged in their lawful occupations on american soil proper protests were made against these invasions of american rights to the mexican authorities on april 17 1911 1 received the following telegram from the governor of arizona as a result of fighting across the international line but within gunshot range of the heart of douglas five americans wounded on this side of the line everything points to repetition of these casualties on and while the federals seem disposed to keep their agreement not to fire into douglas the position of the insurrectionists is such that when fighting occurs on the east and southeast of the intrenchments people living in douglas are put in danger of their lives in my judgment radical measures are needed to protect our innocent people and if anything can be done to stop the fighting at agua prieta the ittiation calls for such action it is impossible to safeguard the people of douglas unless the town be vacated can anything be done to relieve situation now acute after a conference with the secretary of state the following telegram was sent to governor sloan on april 18 1911 and made public your dispatch received have made urgent demand upon mexican government to issue instructions to prevent firing across border by mexican federal troops and am waiting reply meantime i have sent direct warning to the mexican and insurgent forces near douglas i infer from your dispatch that both parties attempt to heed the warning but that in the strain and exigency of the contest wild bullets still find their way into douglas the situation might justify me in ordering our troops to cross the border and attempt to stop the fighting or to fire upon both combatants from the american side but if i take this step i must face the possibility of resistance and greater bloodshed and also the danger of having our motives misconstrued and misrepresented and of thus inflaming mexican popular indignation against many thousand americans now in mexico and jeopardizing their lives and property the pressure for general intervention under such conditions it might not be practicable to resist it is impossible to foresee or reckon the consequences of such a course and we must use the greatest to avoid it pending my urgent representation to the mexican government i can not therefore order the troops at douglas to cross the border but i must ask you and the local authorities in case the same danger recurs to direct the people of douglas to place themselves where bullets can not reach them and thus avoid casualty i am loath to endanger americans in where they are necessarily exposed by taking a radical step to prevent injury to americans on our side of the border who can avoid it by a temporary inconvenience i am glad to say that no further invasion of american rights of any substantial character occurred the presence of a large military and naval force available for prompt action near the mexican border proved to be most fortunate under the somewhat trying conditions presented by this invasion of american rights had no movement theretofore taken place and because of these events it had been necessary then to bring about the mobilization it must have bad sinister significance on the other hand the presence of the troops before and at the time of the unfortunate killing and wounding of american citizens at douglas made clear that the restraint exercised by our government in regard to this occurrence was not due to lack of force or power to deal with it promptly and aggressively but was due to a real desire to use every means possible to avoid direct intervention in the affairs of our neighbor whose friendship we valued and were most anxious to retain the policy and action of this government were based upon an earnest friendliness for the mexican people as a whole and it is a matter of gratification to note that this attitude of strict impartiality as to all factions in mexico and of sincere friendship for the neighboring nation without regard for party allegiance has been generally recognized and has resulted in an even closer and more sympathetic understanding between the two republics and a warmer regard one for the other action to suppress violence and restore tranquillity throughout the mexican republic was of peculiar interest to this government in that it concerned the safeguarding of american life and property in that country the government of the united states had occasion to accord permission for the passage of a body of mexican rurales through douglas arizona to tia juana mexico for the suppression of general lawlessness which bad for some time existed in the region of northern lower california on may 25 1911 president diaz resigned senor de la barra was chosen provisional president elections for president and vice president were thereafter held throughout the republic and senor francisco 1 madero was formally declared elected on october 15 to the chief magistracy on november 6 president madero entered upon the duties of his office since the inauguration of president madero a plot has been unearthed against the present government to begin a new insurrection pursuing the same consistent policy which this administration has adopted from the beginning it directed an investigation into the conspiracy charged and this investigation has resulted in the indictment of bernardo reyes and others and the seizure of a number of officers and men and horses and accoutrements assembled upon the soil of texas for the purpose of invading mexico similar proceedings had been taken during the insurrection against the diaz government resulting in the indictments and prosecution of persons found to be engaged in violating the neutrality laws of the united states in aid of that uprising the record of this government in respect of the recognition of constituted authority in mexico therefore is clear as to the situation in central america i have taken occasion in the past to emphasize most strongly the importance that should be attributed to the consummation of the conventions between the republics of nicaragua and of honduras and this country and i again earnestly recommend that the necessary advice and consent of the senate be accorded to these treaties which will make it possible for these central american republics to enter upon an era of genuine economic national development the government of nicaragua which has already taken favorable action on the convention has found it necessary pending the exchange of final ratifications to enter into negotiations with american bankers for the purpose of securing a temporary loan to relieve the present financial tension iii connection with this temporary loan and in the hope of consummating through the ultimate operation of the convention a complete and lasting economic regeneration the government of nicaragua has also decided to engage an american citizen as collector general of customs the claims commission on which the services of two american citizens have been sought and the work of the american financial adviser should accomplish a lasting good of inestimable benefit to the prosperity commerce and peace of the republic in considering the ratification of the conventions with nicaragua and honduras there rests with the united states the heavy responsibility of the fact that their rejection here might destroy the progress made and consign the republics concerned to still deeper submergence in bankruptcy revolution and national jeopardy our relations with the republic of panama peculiarly important due to mutual obligations and the vast interests created by the canal have continued in the usual friendly manner and we have been glad to make appropriate expression of our attitude of sympathetic interest in the endeavors of our neighbor in undertaking the development of the rich resources of the country with reference to the internal political affairs of the republic our obvious concern is in the maintenance of public peace and constitutional order and the fostering of the general interests created by the actual relations of the two countries without the manifestation of any preference for the success of either of the political parties the pan american union formerly known as the bureau of american republics maintained by the joint contributions of all the american nations has during the past year enlarged its practical work as an international organization and continues to prove its usefillness as an agency for the mutual development of commerce better acquaintance and closer intercourse between the united states and her sister american republics the past year has been marked in our relations with china by the conclusion of two important international loans one for the construction of the hukuang railways the other for carrying out of the currency reform to which china was pledged by treaties with the united states great britain and japan of which mention was made in my last annual message it will be remembered that early in 1909 an agreement was consummated among british french and german financial groups whereby they proposed to lend the chinese government funds for the construction of railways in the provinces of hunan and hupeh reserving for their nationals the privilege of engineering the construction of the lines and of furnishing the materials required for the work after negotiations with the governments and groups concerned an agreement was reached whereby american british french and german nationals should participate upon equal terms in this important and useful undertaking thereupon the financial groups supported by their respective governments began negotiations with the chinese government which terminated in a loan to china of with the privilege of increasing the amount to the cooperative construction of these trunk lines should be of immense advantage materially and otherwise to china and should greatly facilitate the development of the bountiful resources of the empire on the other hand a large portion of these funds is to be expended for materials american products having equal preference with those of the other three lending nations and as the contract provides for branches and extensions subsequently to be built on the same terms the opportunities for american materials will reach considerable proportions knowing the interest of the united states in the reform of chinese currency the chinese government in the autumn of 1910 sought the assistance of the american government to procure funds with which to accomplish that reform in the course of the subsequent negotiations there was combined with the proposed currency loan one for certain industrial developments in manchuria the two loans aggregating the sum of while this was originally to be solely an american enterprise the american government consistently with its desire to secure a sympathetic and practical cooperation of the great powers toward maintaining the principle of equality of opportunity and the administrative integrity of china urged the chinese government to admit to participation in the currency loan the associates of the american group in the hukuang loan while of immense importance in itself the reform contemplated in making this loan is but preliminary to other and more comprehensive fiscal reforms which will be of incalculable benefit to china and foreign interests alike since they will strengthen the chinese empire and promote the rapid development of international trade when these negotiations were begun it was understood that a financial adviser was to be employed by china in connection with the reform and in order that absolute equality in all respects among the lending nations might be scrupulously observed the american government proposed the nomination of a neutral adviser which was agreed to by china and the other governments concerned on september 28 1911 vissering president of the dutch java bank and a financier of wide experience in the orient was recommended to the chinese government for the post of monetary adviser especially important at the present when the ancient chinese empire is shaken by civil war incidental to its awakening to the many influences and activities of modernization are the cooperative policy of good understanding which has been fostered by the international projects referred to above and the general sympathy of view among all the powers interested in the far east while safeguarding the interests of our nationals this government is using its best efforts in continuance of its traditional policy of sympathy and friendship toward the chinese empire and its people with the confident hope for their economic and administrative development and with the constant disposition to contribute to their welfare in all proper ways consistent with an attitude of strict impartiality as between contending factions for the first time in the history of the two countries a chinese cruiser the haichi under the command of admiral ching recently visited new york where the officers and men were given a cordial welcome the treaty of commerce and navigation between the united states and japan signed in 1894 would by a strict interpretation of its provisions have terminated on july 17 1912 japan general treaties with the other powers however terminated in 1911 and the japanese government expressed an earnest desire to conduct the negotiations for a new treaty with the united states simultaneously with its negotiations with the other powers there were a number of important questions involved in the treaty including the immigration of laborers revision of the customs tariff and the right of americans to hold real estate in japan the united states consented to waive all technicalities and to enter at once upon negotiations for a new treaty on the understanding that there should be a continuance throughout the life of the treaty of the same effective measures for the restriction of immigration of laborers to american territory which had been in operation with entire satisfaction to both governments since 1908 the japanese government accepted this basis of negotiation and a new treaty was quickly concluded resulting in a highly satisfactory settlement of the other questions referred to a satisfactory adjustment has also been effected of the questions growing out of the annexation of korea by japan the recent visit of admiral count togo to the united states as the nation guest afforded a welcome opportunity to demonstrate the friendly feeling so happily existing between the two countries there has been a change of sovereigns in siam and the american minister at bangkok was accredited in a special capacity to represent the united states at the coronation ceremony of the new king in europe and the near east during the past there has been at times considerable political unrest the moroccan question which for some months was the because of great anxiety happily appears to have reached a stage at which it need no longer be regarded with concern the ottoman empire was occupied for a period by strife in albania and is now at war with italy in greece and the balkan countries the disquieting potentialities of this situation have been more or less felt persia has been the scene of a long internal struggle these conditions have been the because of uneasiness in european diplomacy but thus far without direct political concern to the united states in the war which unhappily exists between italy and turkey this government has no direct political interest and i took occasion at the suitable time to issue a proclamation of neutrality in that conflict at the same time all necessary steps have been taken to safeguard the personal interests of american citizens and organizations in so far as affected by the war in spite of the attendant economic uncertainties and detriments to commerce the united states has gained markedly in its commercial standing with certain of the nations of the near east turkey especially is beginning to come into closer relations with the united states through the new interest of american manufacturers and exporters in the possibilities of those regions and it is hoped that foundations are being laid for a large and mutually beneficial exchange of commodities between the two countries this new interest of turkey in american goods is indicated by the fact that a party of prominent merchants from a large city in turkey recently visited the united states to study conditions of manufacture and export here and to get into personal touch with american merchants with a view to cooperating more intelligently in opening up the markets of turkey and the adjacent countries to our manufactures another indication of this new interest of america in the commerce of the near east is the recent visit of a large party of american merchants and manufacturers to central and eastern europe where they were entertained by prominent officials and organizations of the large cities and new bonds of friendship and understanding were established which can not but lead to closer and greater commercial interchange the 22d of june of the present year marked the coronation of his britannic majesty king george in honor of this auspicious occasion i sent a special embassy to london the courteous and cordial welcome extended to this government representatives by his majesty and the people of great britain has further emphasized the strong bonds of friendship happily existing between the two nations as the result of a determined effort on the part of both great britain and the united states to settle all of their outstanding differences a number of treaties have been entered into between the two countries in recent years by which nearly all of the unsettled questions between them of any importance have either been adjusted by agreement or arrangements made for their settlement by arbitration a number of the unsettled questions referred to consist of pecuniary claims presented by each country against the other and in order that as many of these claims as possible should be settled by arbitration a special agreement for that purpose was entered into between the two governments on the 18th day of august 1910 in accordance with article 11 of the general arbitration treaty with great britain of april 4 19o8 pursuant to the provisions of this special agreement a schedule of claims has already been agreed upon and the special agreement together with this schedule received the approval of the senate when submitted to it for that purpose at the last session of congress negotiations between the two governments for the preparation of an additional schedule of claims are already well advanced and it is my intention to submit such schedule as soon as it is agreed upon to the senate for its approval in order that the arbitration proceedings may be undertaken at an early date in this connection the attention of congress is particularly called to the necessity for an appropriation to cover the expense incurred in submitting these claims to arbitration in pursuance of the act of congress approved june 23 1910 the secretary of state and the joint committee on the library entered into a contract with the sculptor albert jaegers for the execution of a bronze replica of the statue of von steuben erected in washington for presentation to his majesty the german emperor and the german nation in recognition of the gift of the statue of frederick the great made by the emperor to the people of the united states the presentation was made on september 2 last by representatives whom i commissioned as the special mission of this government for the purpose the german emperor has conveyed to me by telegraph on his own behalf and that of the german people an expression of appreciative thanks for this action of congress by direction of the state department our ambassador to russia has recently been having a series of conferences with the minister of foreign affairs of russia with a view to securing a clearer understanding and construction of the treaty of 1832 between russia and the united states and the modification of any existing russian regulations which may be found to interfere in any way with the full recognition of the rights of american citizens under this treaty i believe that the government of russia is addressing itself seriously to the need of changing the present practice under the treaty and that sufficient progress has been made to warrant the continuance of these conferences in the hope that there may soon be removed any justification of the complaints of treaty violation now prevalent in this country i expect that immediately after the christmas recess i shall be able to make a further communication to congress on this subject negotiations for the amelioration of conditions found to exist in liberia by the american commission undertaken through the department of state have been concluded and it is only necessary for certain formalities to be arranged in securing the loan which it is hoped will place that republic on a practical financial and economic footing the national constituent assembly regularly elected by the vote of the portuguese people having on june 19 last unanimously proclaimed a republican form of government the official recognition of the government of the united states was given to the new republic in the afternoon of the same day negotiations for the betterment of conditions existing in the spitzbergen islands and the adjustment of conflicting claims of american citizens and norwegian subjects to lands in that archipelago are still in progress the supplementary protocol to the he hague convention for the establishment of an international prize court mentioned in my last annual message embodying stipulations providing for an alternative procedure which would remove the constitutional objection to that part of the hague convention which provides that there may be an appeal to the proposed court from the decisions of national courts has received the signature of the governments parties to the original convention and has been ratified by the government of the united states together with the prize court convention the deposit of the ratifications with the government of the netherlands awaits action by the powers on the declaration signed at london on february 26 1909 of the rules of international law to be recognized within the meaning of article 7 of the hague convention for the establishment of an international prize court the controversy which for nearly years has been the source of serious friction between the united states and the powers bordering upon the north pacific ocean whose subjects have been permitted to engage in pelagic sealing against the herds having their breeding grounds within the jurisdiction of the united states has at last been satisfactorily adjusted by the conclusion of the north pacific sealing convention entered into between the united states great britain japan and russia on the 7th of july last this convention is a conservation measure of very great importance and if it is carried out in the spirit of reciprocal concession and advantage upon which it is based there is every reason to believe that not only will it result in preserving the furseal herds of the north pacific ocean and restoring them to their former value for the purposes of commerce but also that it will afford a permanently satisfactory settlement of a question the only other solution of which seemed to be the total destruction of the fur seals in another aspect also this convention is of importance in that it furnishes an illustration of the feasibility of securing a general international game law for the protection of other mammals of the sea the preservation of which is of importance to all the nations of the world the attention of congress is especially called to the necessity for legislation on the part of the united states for the purpose of fulfilling the obligations assumed under this convention to which the senate gave its advice and consent on the 24th day of july last the conference of the international union for the protection of industrial property which under the authority of congress convened at washington on may 16 1911 closed its labors on june 2 1911 by the signature of three acts as follows i a convention revising the paris convention of march 20 1883 for the protection of industrial property as modified by the additional act signed at brussels on december 14 1900 2 an arrangement to replace the arrangement signed at madrid on april 14 1891 for the international registration of and the additional act with regard thereto signed at brussels on december 14 1900 and 3 an arrangement to replace the arrangement signed at madrid on april 14 18gi relating to the repression of false indication of production of merchandise the united states is a signatory of the first convention only and this will be promptly submitted to the senate in a special message transmitted to the congress on the 11th of january 19ii in which i concurred in the recommendations made by the secretary of state in regard to certain needful legislation for the control of our interstate and foreign traffic in opium and other menacing drugs i quoted from my annual message of december 7 1909 in which i announced that the results of the international opium commission held at shanghai in february 1909 at the invitation of the united states had been laid before this government that the report of that commission showed that china was making remarkable progress and admirable efforts toward the eradication of the opium evil that the interested governments had not permitted their commercial interests to prevent their cooperation in this reform and as a result of collateral investigations of the opium question in this country i recommended that the manufacture sale and use of opium in the united states should be more rigorously controlled by legislation prior to that time and in continuation of the policy of this government to secure the cooperation of the interested nations the united states proposed an international opium conference with full powers for the purpose of clothing with the force of international law the resolutions adopted by the commission together with their essential corollaries the other powers concerned cordially responded to the proposal of this government and i am glad to be able to announce representatives of all the powers assembled in conference at the hague on the first of this month since the passage of the act more than twenty states have been animated to modify their pharmacy laws and bring them in accord with the spirit of that act thus stamping out to a measure the intrastate traffic in opium and other drugs but although i have urged on the congress the passage of certain measures for federal control of the interstate and foreign traffic in these drugs no action has yet been taken in view of the fact that there is now sitting at the hague so important a conference which has under review the municipal laws of the different nations for the mitigation of their opium and other allied evils a conference which will certainly deal with the international aspects of these evils it seems to me most essential that the congress should take immediate action on the legislation to which i have already called attention by a special message the four important conventions signed at the fourth pan american conference at buenos aires providing for the regulation of trademarks patents and copyrights and for the arbitration of pecuniary claims have with the advice and consent of the senate been ratified on the part of the united states and the ratifications have been deposited with the government of the argentine republic in accordance with the requirements of the conventions i am not advised that similiar action has been taken by any other of the signatory governments one of the notable advances in international morality accomplished in recent years was an arrangement entered into on april 13th of the present year between the united states and other powers for the repression of the circulation of obscene publications in my last annual message i referred to the tariff negotiations of the department of state with foreign countries in connection with the application by a series of proclamations of the minimum tariff of the united states to importations from the several countries and i stated that in its general operation section 2 of the new tariff law had proved a guaranty of continued commercial peace although there were unfortunately instances where foreign governments dealt arbitrarily with american interests within their jurisdiction in a manner injurious and inequitable during the past year some instances of discriminatory treatment have been removed but i regret to say that there remain a few cases of differential treatment adverse to the commerce of the united states while none of these instances now appears to amount to undue discrimination in the sense of section 2 of the tariff law of august 5 1909 they are all exceptions to that complete degree of equality of tariff treatment that the department of state has consistently sought to obtain for american commerce abroad while the double tariff feature of the tariff law of 1909 has been amply justified by the results achieved in removing former and preventing new undue discriminations against american commerce it is believed that the time has come for the amendment of this feature of the law in such way as to provide a graduated means of meeting varying degrees of discriminatory treatment of american commerce in foreign countries as well as to protect the financial interests abroad of american citizens against arbitrary and injurious treatment on the part of foreign governments through either legislative or administrative measures it would seem desirable that the maximum tariff of the united states should embrace within its purview the free list which is not the case at the present time in order that it might have reasonable significance to the governments of those countries from which the importations into the united states are confined virtually to articles on the free list the fiscal year ended june 30 1911 shows great progress in the development of american trade it was noteworthy as marking the highest record of exports of american products to foreign countries the valuation being in excess of these exports showed a gain over the preceding year of more than there is widespread appreciation expressed by the business interests of the country as regards the practical value of the facilities now offered by the department of state and the department of commerce and labor for the furtherance of american commerce conferences with their officers at washington who have an expert knowledge of trade conditions in foreign countries and with consular officers and commercial agents of the department of commerce and labor who while on leave of absence visit the principal industrial centers of the united states have been found of great value these trade conferences are regarded as a particularly promising method of governmental aid in foreign trade promotion the department of commerce and labor has arranged to give publicity to the expected arrival and the itinerary of consular officers and commercial agents while on leave in the united states in order that trade organizations may arrange for conferences with them as i have indicated it is increasingly clear that to obtain and maintain that equity and substantial equality of treatment essential to the flourishing foreign trade which becomes year by year more important to the industrial and commercial welfare of the united states we should have a flexibility of tariff sufficient for the give and take of negotiation by the department of state on behalf of our commerce and industry i need hardly reiterate the conviction that there should speedily be built up an american merchant marine this is necessary to assure favorable transportation facilities to our great commerce as well as to supplement the navy with an adequate reserve of ships and men it would have the economic advantage of keeping at home part of the vast sums now paid foreign shipping for carrying american goods all the great commercial nations pay heavy subsidies to their merchant marine so that it is obvious that without some wise aid from the congress the united states must lag behind in the matter of merchant marine in its present anomalous position legislation to facilitate the extension of american banks to foreign countries is another matter in which our foreign trade needs assistance the interests of our foreign commerce are nonpartisan and as a factor in prosperity are as broad as the land in the dissemination of useful information and in the coordination of effort certain unofficial associations have done good work toward the promotion of foreign commerce it is because for regret however that the great number of such associations and the comparative lack of cooperation between them fails to secure an efficiency commensurate with the public interest through the agency of the department of commerce and labor and in some cases directly the department of state transmits to reputable business interests information of commercial opportunities supplementing the regular published consular reports some central organization in touch with associations and chambers of commerce throughout the country and able to keep purely american interests in closer touch with different phases of commercial affairs would i believe be of great value such organization might be managed by a committee composed of a small number of those now actively carrying on the work of some of the larger associations and there might be added to the committee as members ex officio one or two officials of the department of state and one or two officials from the department of commerce and labor and representatives of the appropriate committees of congress the authority and success of such an organization would evidently be enhanced if the congress should see fit to prescribe its scope and organization through legislation which would give to it some such official standing as that for example of the national red cross with these factors and the continuance of the establishment departmental diplomatic and consular upon the high plane where it has been placed by the recent reorganization this government would be abreast of the times in fostering the interests of its foreign trade and the rest must be left to the energy and enterprise of our business men the entire organization is being improved and developed with especial regard to the requirements of the commercial interests of the country the rapid growth of our foreign trade makes it of the utmost importance that governmental agencies through which that trade is to be aided and protected should possess a high degree of efficiency not only should the foreign representatives be maintained upon a generous scale in so far as salaries and establishments are concerned but the selection and advancement of officers should be definitely and permanently regulated by law so that the service shall not fail to attract men of high character and ability the experience of the past few years with a partial application of rules to the diplomatic and consular service leaves no doubt in my mind of the wisdom of a wider and more permanent extension of those principles to both branches of the foreign service the men selected for appointment by means of the existing executive regulations have been of a far higher average of intelligence and ability than the men appointed before the regulations were promulgated moreover the feeling that under the existing rules there is reasonable hope for permanence of tenure during good behavior and for promotion for meritorious service has served to bring about a zealous activity in the interests of the country which never before existed or could exist it is my earnest conviction that the enactment into law of the general principles of the existing regulations can not fail to effect further improvement in both branches of the foreign service by providing greater inducement for young men of character and ability to seek a career abroad in the service of the government and an incentive to those already in the service to put forth greater efforts to attain the high standards which the successful conduct of our international relations and commerce requires i therefore again commend to the favorable action of the congress the enactment of a law applying to the diplomatic and consular service the principles embodied in section 1753 of the revised statutes of the united states in the act of january 16 1883 and the executive orders of june 27 1906 and of november 26 1909 in its consideration of this important subject i desire to recall to the attention of the congress the very favorable report made on the lowden bill for the improvement of the foreign service by the foreign affairs committee of the house of representatives available statistics show the strictness with which the merit system has been applied to the foreign service during recent years and the absolute nonpartisan selection of consuls and secretaries who indeed far from being selected with any view to political consideration have actually been chosen to a disproportionate extent from states which would have been unrepresented in the foreign service under the system which it is to be hoped is now permanently obsolete some legislation for the perpetuation of the present system of examinations and promotions upon merit and efficiency would be of greatest value to our commerical and international interests in my annual message to congress december 1909 i stated that under section 2 of the act of august 5 1909 i had appointed a tariff board of three members to cooperate with the state department in the administration of the maximum and minimum clause of that act to make a glossary or encyclopedia of the existing tariff so as to render its terms intelligible to the ordinary reader and then to investigate industrial conditions and costs of production at home and abroad with a view to determining to what extent existing tariff rates actually exemplify the protective principle that duties should be made adequate and only adequate to equalize the difference in cost of production at home and abroad i further stated that i believed these investigations would be of great value as a basis for accurate legislation and that i should from time to time recommend to congress the revision of certain schedules in accordance with the findings of the board in the last session of the congress a bill creating a permanent tariff board of five members of whom not more than three should be of the same political party passed each house but failed of enactment because of slight differences on which agreement was not reached before adjournment an appropriation act provided that the permanent tariff board if created by statute should report to congress on schedule k in december 1911 therefore to carry out so far as lay within my power the purposes of this bill for a permanent tariff board i appointed in march 19li a board of five adding two members of such party affiliation as would have fulfilled the statutory requirement and directed them to make a report to me on schedule k of the tariff act in december of this year in my message of august 17 1911 accompanying the veto of the wool bill i said that in my judgment schedule k should be revised and the rates reduced my veto was based on the ground that since the tariff board would make in december a detailed report on wool and wool manufactures with special reference to the relation of the existing rates of duties to relative costs here and abroad public policy and a fair regard to the interests of the producers and the manufacturers on the one hand and of the consumers on the other demanded that legislation should not be hastily enacted in the absence of such information that i was not myself possessed at that time of adequate knowledge of the facts to determine whether or not the proposed act was in accord with my pledge to support a fair and reasonable protective policy that such legislation might prove only temporary and inflict upon a great industry the evils of continued uncertainty i now herewith submit a report of the tariff board on schedule the board is unanimous in its findings on the basis of these findings i now recommend that the congress proceed to a consideration of this schedule with a view to its revision and a general reduction of its rates the report shows that the present method of assessing the duty on raw is by a specific rate on the grease pound unscoured to exclude wools of high shrinkage in scouring but fine quality from the american market and thereby lessens the range of wools available to the domestic manufacturer that the duty on scoured wool of 33 cents per pound is prohibitory and operates to exclude the importation of clean foreign wools of inferior grades which are nevertheless valuable material for manufacturing and which can not be imported in the grease because of their heavy shrinkage such wools if imported might be used to displace the cheap substitutes now in use to make the preceding paragraph a little plainer take the instance of a hundred pounds of wool imported under the present duty which is 11 11 cents a pound that would make the duty on the hundred pounds 11 the merchantable part of the wool thus imported is the weight of the wool of this hundred pounds after scouring if the wool shrinks 80 per cent as some wools do then the duty in such a case would amount to 11 11 on 20 pounds of scoured wool this of course would be prohibitory if the wool shrinks only 50 per cent it would be 11 on 50 pounds of wool and this is near to the average of the great bulk of wools that are imported from australia which is the principal source of our imported wool these discriminations could be overcome by assessing a duty in ad valorem terms but this method is open to the objection first that it increases administrative difficulties and tends to decrease revenue through undervaluation and second that as prices advance the ad valorem rate increases the duty per pound at the time when the consumer most needs relief and the producer can best stand competition while if prices decline the duty is decreased at the time when the consumer is least burdened by the price and the producer most needs protection another method of meeting the difficulty of taxing the grease pound is to assess a specific duty on grease wool in terms of its scoured content this obviates the chief evil of the present system namely the discrimination due to different shrinkages and thereby tends greatly to equalize the duty the board reports that this method is feasible in practice and could be administered without great expense the scoured content of the wool is the basis on which users of wool make their calculations and a duty of this kind would fit the usages of the trade one effect of this method of assessment would be that regardless of the rate of duty there would be an increase in the supply and variety of wool by making available to the american market wools of both low and fine quality now excluded the report shows in detail the difficulties involved in attempting to state in categorical terms the cost of wool production and the great differences in cost as between different regions and different types of wool it is found however that taking all varieties in account the average cost of production for the whole american clip is higher than the cost in the chief competing country by an amount somewhat less than the present duty the report shows that the duties on noils wool wastes and shoddy which are adjusted to the rate of 33 cents on scoured wool are prohibitory in the same measure that the duty on scoured wool is prohibitory in general they are assessed at rates as high as or higher than the duties paid on the clean content of wools actually imported they should be reduced and so adjusted to the rate on wool as to bear their proper proportion to the real rate levied on the actual wool imports the duties on many classes of wool manufacture are prohibitory and greatly in excess of the difference in cost of production here and abroad this is true of tops of yarns with the exception of worsted yarns of a very high grade and of low and medium grade cloth of heavy weight on tops up to 52 cents a pound in value and on yarns of 65 cents in value the rate is 100 per cent with correspondingly higher rates for lower values on cheap and medium grade cloths the existing rates frequently run to 150 per cent and on some cheap goods to over 200 per cent this is largely due to that part of the duty which is levied ostensibly to compensate the manufacturer for the enhanced cost of his raw material due to the duty on wool as a matter of fact this compensatory duty for numerous classes of goods is much in excess of the amount needed for strict compensation on the other hand the findings show that the duties which run to such high ad valorem equivalents are prohibitory since the goods are not imported but that the prices of domestic fabrics are not raised by the full amount of duty on a set of samples of 16 english fabrics which are completely excluded by the present tariff rates it was found that the total foreign value was the duties which would have been assessed had these fabrics been imported the foreign value plus the amount of the duty or a nominal duty of 183 per cent in fact however practically identical fabrics of domestic make sold at the same time at showing an enhanced price over the foreign market value of but 67 per cent although these duties do not increase prices of domestic goods by anything like their full amount it is none the less true that such prohibitive duties eliminate the possibility of foreign competition even in time of scarcity that they form a temptation to monopoly and conspiracies to control domestic prices that they are much in excess of the difference in cost of production here and abroad and that they should be reduced to a point which accords with this principle the findings of the board show that in this industry the actual manufacturing cost aside from the question of the price of materials is much higher in this country than it is abroad that in the making of yarn and cloth the domestic woolen or worsted manufacturer has in general no advantage in the form of superior machinery or more efficient labor to offset the higher wages paid in this country the findings show that the cost of turning wool into yarn in this country is about double that in the leading competing country and that the cost of turning yarn into cloth is somewhat more than double under the protective policy a great industry involving the welfare of hundreds of thousands of people has been established despite these handicaps in recommending revision and reduction i therefore urge that action be taken with these facts in mind to the end that an important and established industry may not be jeopardized the tariff board reports that no equitable method has been found to levy purely specific duties on woolen and worsted fabrics and that excepting for a compensatory duty the rate must be ad valorem on such manufactures it is important to realize however that no flat ad valorem rate on such fabrics can be made to work fairly and effectively any single rate which is high enough to equalize the difference in manufacturing cost at home and abroad on highly finished goods involving such labor would be prohibitory on cheaper goods in which the labor cost is a smaller proportion of the total value conversely a rate only adequate to equalize this difference on cheaper goods would remove protection from the manufacture the increase in which has been one of the striking features of the trade development in recent years i therefore recommend that in any revision the importance of a graduated scale of ad valorem duties on cloths be carefully considered and applied i venture to say that no legislative has ever had presented to it a more complete and exhaustive report than this on so difficult and complicated a subject as the relative costs of wool and woolens the world over it is a monument to the thoroughness industry impartiality and accuracy of the men engaged in its making they were chosen from both political parties but have allowed no partisan spirit to prompt or control their inquiries they are unanimous in their findings i feel sure that after the report has been printed and studied the value of such a compendium of exact knowledge in respect to this schedule of the tariff will convince all of the wisdom of making such a board permanent in order that it may treat each schedule of the tariff as it has treated this and then keep its bureau of information up to date with current changes in the economic world it is no part of the function of the tariff board to propose rates of duty their function is merely to present findings of fact on which rates of duty may be fairly determined in the light of adequate knowledge in accord with the economic policy to be followed this is what the present report does the findings of fact by the board show ample reason for the revision downward of schedule k in accord with the protective principle and present the data as to relative costs and prices from which may be determined what rates will fairly equalize the difference in production costs i recommend that such revision be proceeded with at once the financial condition of the government as shown at the close of the last fiscal year june 30 1911 was very satisfactory the ordinary receipts into the general fund excluding postal revenues amounted to and the disbursements from the general fund for current expenses and capital outlays excluding postal and panama canal disbursements including the interest on the public debt amounted to leaving a surplus of the postal revenue receipts amounted to while the payments made for the postal service from the postal revenues amounted to which left a surplus of postal receipts over disbursements of the first time in 27 years in which a surplus occurred the debt of the united states june 30 1911 amounted to igo the debt on which interest had ceased amounted to and the debt bearing no interest including greenbacks national bank notes to be redeemed and fractional currency amounted to or a total of interest and noninterest bearing debt amounting to the actual disbursements exclusive of those for the panama canal and for the postal service for the year ending june 30 1911 were the actual disbursements for the year ending june 30 1910 exclusive of the panama canal and the postal service disbursements were making a decrease of in yearly expenditures in the year 1911 under that of 1910 for the year ending june 30 1912 the estimated receipts exclusive of the postal revenues are while the total estimates exclusive of those for the panama canal and the postal expenditures payable from the postal revenues amount to this is a decrease in the 1912 estimates from that of the 1911 estimates of for the year ending june 30 1913 the estimated receipts exclusive of the postal revenues are while the total estimated appropriations exclusive of the panama canal and postal disbursements payable from postal revenues will amount to this is a decrease in the 1913 estimates from that of the 1912 estimates of as to the postal revenues the expansion of the business in that department the normal increase in the post office and the extension of the service will increase the outlay to the sum of but as the department was this year the postmaster general is assured that next year the receipts will at least equal the expenditures and probably exceed them by more than the surplus of this year it is fair and equitable therefore in determining the economy with which the government has been run to exclude the transactions of a department like the post office department which relies for its support upon its receipts in calculations heretofore made for comparison of economy in each year it has been the proper custom only to include in the statement the deficit in the post office department which was paid out of the treasury a calculation of the actual increase in the expenses of government arising from the increase in the population and the general expansion of governmental functions except those of the post office for a number of years shows a normal increase of about 4 per cent a year by directing the exercise of great care to keep down the expenses and the estimates we have succeeded in reducing the total disbursements each year the credit of this government was shown to be better than that of any other government by the sale of the panama canal 3 per cent bonds these bonds did not give their owners the privilege of using them as a basis for circulation nor was there any other privilege extended to them which would affect their general market value their sale therefore measured the credit of the government the premium which was realized upon the bonds made the actual interest rate of the transaction per cent i in the treasury department the efficiency and economy work has been kept steadily up provision is made for the elimination of 134 positions during the coming year two hundred and statutory positions were eliminated during the last year in the office of the treasury in washington and 141 positions in the year 1910 making an elimination of 542 statutory positions since march 4 1909 and this has been done without the discharge of anybody because the normal resignations and deaths have been equal to the elimination of the places a system of transfers having taken care of the persons whose positions were dropped out in the field service if the department too positions have been eliminated down to the present time making a total net reduction of all treasury positions to the number of meantime the efficiency of the work of the departmeat has increased a matter of first importance that will come before congress for action at this session is monetary reform the congress has itself arranged an early introduction of this great question through the report of its monetary commission this commission was appointed to recommend a solution of the banking and currency problems so long confronting the nation and to furnish the facts and data necessary to enable the congress to take action the commission was appointed when an impressive and urgent popular demand for legislative relief suddenly arose out of the distressing situation of the people caused by the deplorable panic of 1907 the congress decided that while it could not give immediately the relief required it would provide a commission to furnish the means for prompt action at a later date in order to do its work with thoroughness and precision this commission has taken some time to make its report the country is undoubtedly hoping for as prompt action on the report as the convenience of the congress can permit the recognition of the gross imperfections and marked inadequacy of our banking and currency system even in our most quiet financial periods is of long standing and later there has matured a recognition of the fact that our system is responsible for the extraordinary devastation waste and business paralysis of our recurring periods of panic though the members of the monetary commission have for a considerable time been working in the open and while large numbers of the people have been openly working with them and while the press has largely noted and discussed this work as it has proceeded so that the report of the commission promises to represent a national movement the details of the report are still being considered i can not therefore do much more at this time than commend the immense importance of monetary reform urge prompt consideration and action when the commission report is received and express my satisfaction that the plan to be proposed promises to embrace main features that having met the approval of a great preponderance of the practical and professional opinion of the country are likely to meet equal approval in congress it is exceedingly fortunate that the wise and undisputed policy of maintaining unchanged the main features of our banking system rendered it at once impossible to introduce a central bank for a central bank would certainly have been resisted and a plan into which it could have been introduced would probably have been defeated but as a central bank could not be a part of the only plan discussed or considered that troublesome question is eliminated and ingenious and novel as the proposed national reserve association appears it simply is a logical outgrowth of what is best in our present system and is in fact the fulfillment of that system exactly how the management of that association should be organized is a question still open it seems to be desirable that the banks which would own the association should in the main manage it it will be an agency of the banks to act for them and they can be trusted better than anybody else chiefly to conduct it it is mainly bankers work but there must be some form of government supervision and ultimate control and i favor a reasonable representation of the government in the management i entertain no fear of the introduction of politics or of any undesirable influences from a properly measured government representation i trust that all banks of the country possessing the requisite standards will be placed upon a footing of perfect equality of opportunity both the national system and the state system should be fairly recognized leaving them eventually to coalesce if that shall prove to be their tendency but such evolution can not develop impartially if the banks of one system are given or permitted any advantages of opportunity over those of the other system and i trust also that the new legislation will carefully and completely protect and assure the individuality and the independence of each bank to the end that any tendency there may ever be toward a consolidation of the money or banking power of the nation shall be defeated it will always be possible of course to correct any features of the new law which may in practice prove to be unwise so that while this law is sure to be enacted under conditions of unusual knowledge and authority it also will include it is well to remember the possibility of future amendment with the present prospects of this reform encouraging us it would be singularly unfortunate if this monetary question should by any chance become a party issue and i sincerely hope it will not the exceeding amount of consideration it has received from the people of the nation has been wholly nonpartisan and the congress set its nonpartisan seal upon it when the monetary commission was appointed in commending the question to the favorable consideration of congress i speak for and in the spirit of the great number of my fellow citizens who without any thought of party or partisanship feel with remarkable earnestness that this reform is necessary to the interests of all the people there is now before congress a dill the purpose of which is to increase the efficiency and decrease the expense of the army it contains four principal features first a consolidation of the general staff with the adjutant general and the inspector general departments second a consolidation of the quartermaster department with the subsistence and the pay departments third the creation of an army service corps and fourth an extension of the enlistment period from three to five years with the establishment of an army service corps as proposed in the bill i am thoroughly in accord and am convinced that the establishment of such a corps will result in a material economy and a very great increase of efficiency in the army it has repeatedly been recommended by me and my predecessors i also believe that a consolidation of the staff corps can be made with a resulting increase in efficiency and economy but not along the lines provided in the bill under consideration i am opposed to any plan the result of which would be to break up or interfere with the essential principles of the detail system in the staff corps established by the act of february 2 1901 and i am opposed to any plan the result of which would be to give to the officer selected as chief of staff or to any other member of the general staff corps greater permanency of office than he now has under the existing law neither the chief of staff nor any other member of the general staff corps can remain in office for a period of more than four years and there must be an interval of two years between successive tours of duty the bill referred to provides that certain persons shall become permanent members of the general staff corps and that certain others are subject to redetail without an interval of two years such provision is fraught with danger to the welfare of the army and would practically nullify the main purpose of the law creating the in making the consolidations no reduction should be made in the total number of officers of the army of whom there are now too few to perform the duties imposed by law i have in the past recommended an increase in the number of officers by 6oo in order to provide sufficient officers to perform all classes of staff duty and tc reduce the number of line officers detached from their commands congress at the last session increased the total number of officers by 2oo but this is not enough promotion in the line of the army is too slow officers do not attain command rank at an age early enough properly to exercise it it would be a mistake further to retard this already slow promotion by throwing back into the line of the arm a number of officers to be absorbed as is rovided in the another feature of the bill which i believe to be a mistake is the proposed increase in the term of enlistment from three to five ears i believe it would be better to enlist men for six years release them at the end of three years from active service and put them in reserve for the remaining three years reenlistments should be largely confined to the noncommissioned officers and other enlisted men in the skilled grades this plan by the payment of a comparatively small compensation during the three years of reserve would keep a large bodv of men at the call of the government trained and ready for the army of the united states is in good condition it showed itself able to meet an emergency in the successful mobilization of an army division of from i5 ooo to ooo men which took place along the border of mexico during the recent disturbances in that country the marvelous freedom from the ordinary camp diseases of typhoid fever and measles is referred to in the report of the secretary of war and shows such an effectiveness in the sanitary regulations and treatment of the medical corps and in the discipline of the army itself as to invoke the highest commendation i beg to renew my recommendation of last year that the congress appropriate for a memorial amphitheater at arlington the funds required to construct it upon the plans already approved the very satisfactory progress made on the panama canal last year has continued and there is every reason to believe that the canal will be completed as early as the 1st of july 1913 unless something unforeseen occurs this is about 18 months before the time promised by the engineers we are now near enough the completion of the canal to make it imperatively necessary that legislation should be enacted to fix the method by which the canal shall be maintained and controlled and the zone governed the fact is that there is no statutory law by authority of which the president is maintaining the government of the zone such authority was given in an amendment to the spooner act which expired by the terms of its own limitation some years ago since that time the government has continued under the advice of the attorney general that in the absence of action by congress there is necessarily an implied authority on the part of the executive to maintain a government in a territory in which he has to see that the laws are executed the fact that we have been able thus to get along during the important days of construction without legislation expressly formulating the government of the zone or delegating the creation of it to the president is not a reason for supposing that we may continue the same kind of a government after the construction is finished the implied authority of the president to maintain a civil government in the zone may be derived from the mandatory direction given him in the original spooner act by which he was commanded to build the canal but certainly now that the canal is about to be completed and to be put under a permanent management there ought to be specific statutory authority for its regulation and control and for the government of the zone which we hold for the chief and main purpose of operating the canal i fully concur with the secretary of war that the problem is simply the management of a great public work and not the government of a local republic that every provision must be directed toward the successful maintenance of the canal as an avenue of commerce and that all provisions for the government of those who live within the zone should be subordinate to the main purpose the zone is 40 miles long and 10 miles wide now it has a population of or but as soon as the work of construction is completed the towns which make up this population will be deserted and only comparatively few natives will continue their residence there the control of them ought to approximate a military government one judge and two justices of the peace will be sufficient to attend to all the judicial and litigated business there is with a few fundamental laws of congress the zone should be governed by the orders of the president issued through the war department as it is today provisions can be made for the guaranties of life liberty and property but beyond those the government should be that of a military reservation managed in connection with this great highway of trade in my last annual message i discussed at length the reasons for the government assuming the task of furnishing to all ships that use the canal whether our own naval vessels or others the supplies of coal and oil and other necessities with which they must be replenished either before or after passing through the canal together with the dock facilities and repairs of every character this it is thought wise to do through the government because the government must establish for itself for its own naval vessels large depots and dry docks and warehouses and these may easily be enlarged so as to secure to the world public using the canal reasonable prices and a certainty that there will be no discrimination between those who wish to avail themselves of such facilities i renew my recommendation with respect to the tolls of the canal that within limits which shall seem wise to congress the power of fixing tolls be given to the president in order to arrive at a proper conclusion there must be some experimenting and this can not be done if congress does not delegate the power to one who can act expeditiously i am very confident that the united states has the power to relieve from the payment of tolls any part of our shipping that congress deems wise we own the canal it was our money that built it we have the right to charge tolls for its use those tolls must be the same to everyone but when we are dealing with our own ships the practice of many governments of subsidizing their own merchant vessels is so well established in general that a subsidy equal to the tolls an equivalent remission of tolls can not be held to be a discrimination in the use of the canal the practice in the suez canal makes this clear the experiment in tolls to be made by the president would doubtless disclose how great a burden of tolls the coastwise trade between the atlantic and the pacific coast could bear without preventing its usefulness in competition with the transcontinental railroads one of the chief reasons for building the canal was to set up this competition and to bring the two shores closer together as a practical trade problem it may be that the tolls will have to be wholly remitted i do not think this is the best principle because i believe that the cost of such a government work as the panama canal ought to be imposed gradually but certainly upon the trade which it creates and makes possible so far as we can consistent with the development of the world trade through the canal and the benefit which it was intended to secure to the east and west coastwise trade we ought to labor to secure from the canal tolls a sufficient amount ultimately to meet the debt which we have assumed and to pay the interest in respect to the philippines i urgently join in the recommendation of the secretary of war that the act of february 6 1905 limiting the indebtedness that may be incurred by the philippine government for the construction of public works be increased from to 15 ooo ooo the finances of that government are in excellent condition the maximum sum mentioned is quite low as compared with the amount of indebtedness of other governments with similar resources and the success which has attended the expenditure of the in the useful improvements of the harbors and other places in the islands justifies and requires additional expenditures for like purposes i also join in the recommendation that the legislature of the philippine islands be authorized to provide for the naturalization of filipinos and others who by the present law are treated as aliens so as to enable them to become citizens of the philippine islands pending an investigation by congress at its last session through one of its committees into the disposition of the friars lands secretary dickinson directed that the friars lands should not be sold in excess of the limits fixed for the public lands until congress should pass upon the subject or should have concluded its investigation this order has been an obstruction to the disposition of the lands and i expect to direct the secretary of war to return to the practice under the opinion of the attorney general which will enable us to dispose of the lands much more promptly and to prepare a sinking fund with which to meet the of bonds issued for the purchase of the lands i have no doubt whatever that the attorney general construction was a proper one and that it is in the interest of everyone that the land shall be promptly disposed of the danger of creating a monopoly of ownership in lands under the statutes as construed is nothing there are only two tracts of acres each unimproved and in remote provinces that are likely to be disposed of in bulk and the rest of the lands are subject to the limitation that they shall be first offered to the present tenants and lessors who hold them in small tracts the estimates for the river and harbor improvements reach for the coming year i wish to urge that whenever a project has been adopted by congress as one to be completed the more money which can be economically expended in its construction in each year the greater the ultimate economy this has especial application to the improvement of the mississippi river and its large branches it seems to me that an increase in the of money now being annually expended in the improvement of the ohio river which has been formally adopted by congress would be in the interest of the public a similar change ought to be made during the present congress in the amount to be appropriated for the missouri river the engineers say that the cost of the improvement of the missouri river from kansas city to louis in order to secure 6 feet as a permanent channel will reach there have been at least three recommendations from the chief of engineers that if the improvement be adopted should be expended upon it annually this particular improvement is especially entitled to the attention of congress because a company has been organized in kansas city with a capital of which has built steamers and barges and is actually using the river for transportation in order to show what can be done in the way of affecting rates between kansas city and louis and in order to manifest their good faith and confidence in respect of the improvement i urgently recommend that the appropriation for this improvement be increased from as recommended now in the completion of a contract to annually so that the work may be done in 10 years the project for a navigable waterway from lake michigan to the mouth of the illinois river and thence via the mississippi to the gulf of mexico is one of national importance in view of the work already accomplished by the sanitary district of chicago an agency of the state of illinois which has constructed the most difficult and costly stretch of this waterway and made it an asset of the nation and in view of the fact that the people of illinois have authorized the expenditure of to carry this waterway 62 miles farther to utica i feel that it is fitting that this work should be supplemented by the government and that the expenditures recommended by the special board of engineers on the waterway from utica to the mouth of the illinois river be made upon lines which while providing a waterway for the nation should otherwise benefit that state to the fullest extent i recommend that the term of service of said special board of engineers be continued and that it be empowered to reopen the question of the treatment of the lower illinois river and to negotiate with a properly constituted commission representing the state of illinois and to agree upon a plan for the improvement of the lower illinois river and upon the extent to which the united states may properly cooperate with the state of illinois in securing the construction of a navigable waterway from lockport to the mouth of the illinois river in conjunction with the development of water power by that state between lockport and utica the report of the attorney general shows that he has subjected to close examination the accounts of the clerks of the federal courts that he has found a good many which disclose irregularities or dishonesty but that he has had considerable difficulty in securing an effective prosecution or removal of the clerks thus derelict i am certainly not unduly prejudiced against the federal courts but the fact is that the long and confidential relations which grow out of the tenure for life on the part of the judge and the practical tenure for life on the part of the clerk are not calculated to secure the strictness of dealing by the judge with the clerk in respect to his fees and accounts which assures in the clerk conduct a freedom from overcharges and carelessness the relationship between the judge and the clerk makes it ungracious for members of the bar to complain of the clerk or for department examiners to make charges against him to be heard by the court and an order of removal of a clerk and a judgment for the recovery of fees are in some cases reluctantly entered by the judge for this reason i recommend an amendment to the law whereby the president shall be given power to remove the clerks for because this provision need not interfere with the right of the judge to appoint his clerk or to remove him in my last message i recommended to congress that it authorize the payment of the findings or judgments of the court of claims in the matter of the french spoliation cases there has been no appropriation to pay these judgments since 1905 the findings and awards were obtained after a very bitter fight the government succeeding in about 75 per cent of the cases the amount of the awards ought as a matter of good faith on the part of the government to be paid the limitation of the liability of the master to his servant for personal injuries to such as are occasioned by his fault has been abandoned in most civilized countries and provision made whereby the employee injured in the course of his employment is compensated for his loss of working ability irrespective of negligence the principle upon which such provision proceeds is that accidental injuries to workmen in modern industry with its vast complexity and inherent dangers arising from complicated machinery and the use of the great forces of steam and electricity should be regarded as risks of the industry and the loss borne in some equitable proportion by those who for their own profit engage therein in recognition of this the last congress authorized the appointment of a commission to investigate the subject of employers liability and workmen compensation and to report the result of their investigations through the president to congress this commission was appointed and has been at work holding hearings gathering data and considering the subject and it is expected will be able to report by the first of the year in accordance with the provisions of the law it is hoped and expected that the commission will suggest legislation which will enable us to put in the place of the present wasteful and sometimes unjust system of employers liability a plan of compensation which will afford some certain and definite relief to all employees who are injured in the course of their employment in those industries which are subject to the regulating power of congress in promotion of the movement for the prevention of delay and unnecessary cost in litigation i am glad to say that the supreme court has taken steps to reform the present equity rules of the federal courts and that we may in the near future expect a revision of them which will be a long step in the right direction the american bar association has recommended to congress several bills expediting procedure one of which has already passed the house unanimously february 6 1911 this directs that no judgment should be set aside or reversed or new trial granted unless it appears to the court after an examination of the entire because that the error complained of has injuriously affected the substantial rights of the parties and also provides for the submission of issues of fact to a jury reserving questions of law for subsequent argument and decision i hope this bill will pass the senate and become law for it will simplify the procedure at law another bill to amend chapter ii of the judicial code in order to avoid errors in pleading was presented by the same association and one enlarging the jurisdiction of the supreme court so as to permit that court to examine upon a writ of error all cases in which any right or title is claimed under the constitution or any statute or treaty of the united states whether the decision in the court below has been against the right or title or in its favor both these measures are in the interest of justice and should be passed at the beginning of the present administration in 1909 the postal service was in arrears to the extent of it was very much the largest deficit on record in the brief space of two years this has been turned into a surplus of which has been accomplished without curtailment of the postal facilities as may be seen by the fact that there have been established new post offices delivery by carrier has been added to the service in 186 cities new rural routes have been established covering miles the force of postal employees has been increased in these two years by more than and their average annual salary has had a substantial increase on january 3 1911 depositories were established experimentally in 48 states and territories after three months successful operation the system was extended as rapidly as feasible to the post offices of the first second and third classes constituting the presidential grade by the end of the year practically all of these will have been designated and then the system will be extended to all post offices doing a business in selecting post offices for depositories consideration was given to the efficiency of the postmasters and only those offices where the ratings were satisfactory to the department have been designated withholding designation from postmasters with unsatisfactory ratings has had a salutary effect on the service the deposits have kept pace with the extension of the system amounting to only at the end of the first month operation in the experimental offices they increased to by july and now after 11 months of operation have reached a total of this sum is distributed among banks and protected tinder the law by bonds deposited with the treasurer of the united states under the method adopted for the conduct of the system certificates are issued as evidence of deposits and accounts with depositors are kept by the post offices instead of by the department compared with the practice in other countries of entering deposits in pass books and keeping at the central office a ledger account with each depositor the use of the certificate has resulted in great economy of administration the depositors thus far number approximately they include 40 nationalities native americans largely predominating and english and italians coming next the first conversion of deposits into united states bonds bearing interest at the rate of per cent occurred on july 1 1911 the amount of deposits exchanged being or a little more than 6 per cent of the total outstanding certificates of deposit on june 30 of this issue bonds to the value of were in coupon form and in registered form steps should be taken immediately for the establishment of a rural parcel post in the estimates of appropriations needed for the maintenance of the postal service for the ensuing fiscal year an item of has been inserted to cover the preliminary expense of establishing a parcel post on rural mail routes as well as to cover an investigation having for its object the final establishment of a general parcel post on all railway and steamboat transportation routes the department believes that after the initial expenses of establishing the system are defrayed and the parcel post is in full operation on the rural routes it will not only bring in sufficient revenue to meet its cost but also a surplus that can be utilized in paying the expenses of a parcel post in the city delivery service it is hoped that congress will authorize the immediate establishment of a limited parcel post on such rural routes as may be selected providing for the delivery along the routes of parcels not exceeding eleven pounds which is the weight limit for the international parcel post or at the post office from which such route emanates or on another route emanating from the same office such preliminary service will prepare the way for the more thorough and comprehensive inquiry contemplated in asking for the appropriation mentioned enable the department to gain definite information concerning the practical operation of a general system and at the same time extend the benefit of the service to a class of people who above all others are specially in need of it the suggestion that we have a general parcel post has awakened great opposition on the part of some who think that it will have the effect to destroy the business of the country storekeeper instead of doing this i think the change will greatly increase business for the benefit of all the reduction in the cost of living it will bring about ought to make its coming certain on the 2d of november last i reviewed the fighting fleet of battleships and other vessels assembled in new york harbor consisting of 24 battleships 2 armored cruisers 2 cruisers 22 destroyers 12 torpedo boats 8 submarines and other attendant vessels making 98 vessels of all classes of a tonnage of tons those who saw the fleet were struck with its preparedness and with its high military efficiency all americans should be proud of its personnel the fleet was deficient in the number of torpedo destroyers in cruisers and in colliers as well as in large battleship cruisers which are now becoming a very important feature of foreign navies notably the british german and japanese the building plan for this year contemplates two battleships and two colliers this is because the other and smaller vessels can be built much more rapidly in case of emergency than the battleships and we certainly ought to continue the policy of two battleships a year until after the panama canal is finished and until in our first line and in our reserve line we can number 40 available vessels of proper armament and size the reorganization of the navy and the appointment of four aids to the secretary have continued to demonstrate their usefulness it would be difficult now to administer the affairs of the navy without the expert counsel and advice of these aids and i renew the recommendation which i made last year that the aids be recognized by statute it is certain that the navy with its present size should have admirals in active command higher than rear admirals the recognized grades in order are admiral of the fleet admiral vice admiral and rear admiral our great battleship fleet is commanded by a rear admiral with four other rear admirals under his orders this is not as it should be and when questions of precedence arise between our naval officers and those of european navies the american rear admiral though in command of ten times the force of a foreign vice admiral must yield precedence to the latter such an absurdity ought not to prevail and it can be avoided by the creation of two or three positions of flag rank above that of rear admiral i attended the opening of the new training school at north chicago and am glad to note the opportunity which this gives for drawing upon young men of the country from the interior from farms stores shops and offices which insures a high average of intelligence and character among them and which they showed in the very wonderful improvement in discipline and drill which only a few short weeks presence at the naval station had made i invite your attention to the consideration of the new system of detention and of punishment for army and navy enlisted men which has obtained in great britain and which has made greatly for the better control of the men we should adopt a similar system here like the treasury department and the war department the navy department has given much attention to economy in administration and has cut down a number of unnecessary expenses and reduced its estimates except for construction and the increase that that involves i urge upon congress the necessity for an immediate increase of men in the enlisted strength of the navy provided for in the estimates four thousand more are now needed to man all the available vessels there are in the service about enlisted men of all ratings careful computation shows that in april 1912 men will be required for vessels in commission and apprentice seamen should be kept under training at all times the secretary of the navy has recommended the abolition of certain of the smaller and unnecessary navy yards and in order to furnish a complete and comprehensive report has referred the question of all navy yards to the joint board of the army and navy this board will shortly make its report and the secretary of the navy advises me that his recommendations on the subject will be presented early in the coming year the measure of economy contained in a proper handling of this subject is so great and so important to the interests of the nation that i shall present it to congress as a separate subject apart from my annual message concentration of the necessary work for naval vessels in a few navy yards on each coast is a vital necessity if proper economy in government expenditures is to be attained the secretary of the navy is striving to unify the various corps of the navy to the extent possible and thereby stimulate a navy spirit as distinguished from a corps spirit in this he has my warm support all officers are to be naval officers first and specialists afterwards this means that officers will take up at least one specialty such as ordnance construction or engineering this is practically what is done now only some of the specialists like the pay officers and naval constructors are not of the line it is proposed to make them all of the line all combatant corps should obviously be of the line this necessitates amalgamating the pay officers and also those engaged in the technical work of producing the finished ship this is at present the case with the single exception of the naval constructors whom it is now proposed to amalgamate with the line i urge again upon congress the desirability of establishing the council of national defense the bill to establish this council was before congress last winter and it is hoped that this legislation will pass during the present session the purpose of the council is to determine the general policy of national defense and to recommend to congress and to the president such measures relating to it as it shall deem necessary and expedient no such machinery is now provided by which the readiness of the army and navy may be improved and the programs of military and naval requirements shall be coordinated and properly scrutinized with a view of the necessities of the whole nation rather than of separate departments for the consideration of matters which are pending or have been disposed of in the agricultural department and in the department of commerce and labor i refer to the very excellent reports of the secretaries of those departments i shall not be able to submit to congress until after the christmas holidays the question of conservation of our resources arising in alaska and the west and the question of the rate for mail matter in the post office department the law does not require the submission of the reports of the commission on economy and efficiency until the 31st of december i shall therefore not be able to submit a report of the work of that commission until the assembling of congress after the holidays i have already advocated in my last annual message the adoption of a retirement system with a contributory feature to it so as to reduce to a minimum the cost to the government of the pensions to be paid after considerable reflection i am very much opposed to a pension system that involves no contribution from the employees i think the experience of other governments justifies this view but the crying necessity for some such contributory system with possibly a preliminary governmental outlay in order to cover the initial cost and to set the system going at once while the contributions are accumulating is manifest on every side nothing will so much promote the economy and efficiency of the government as such a system i wish to renew again my recommendation that all the local offices throughout the country including collectors of internal revenue collectors of customs postmasters of all four classes immigration commissioners and marshals should be by law covered into the classified service the necessity for confirmation by the senate be removed and the president and the others whose time is now taken up in distributing this patronage under the custom that has prevailed since the beginning of the government in accordance with the recommendation of the senators and congressmen of the majority party should be relieved from this burden i am confident that such a change would greatly reduce the cost of administering the government and that it would add greatly to its efficiency it would take away the power to use the patronage of the government for political purposes when officers are recommended by senators and congressmen from political motives and for political services rendered it is impossible to expect that while in office the appointees will not regard their tenure as more or less dependent upon continued political service for their patrons and no regulations however stiff or rigid will prevent this because such regulations in view of the method and motive for selection are plainly inconsistent and deemed hardly worthy of respect
message first several shall send congress interval opening regular session adjournment christmas holidays amount information communicated operations government number important subjects calling comment executive transmission congress exhaustive reports special commissions make impossible include one message reasonable length discussion topics ought brought attention national legislature first regular session may last supreme court handed decisions suits equity brought united states enjoin maintenance standard oil trust american tobacco trust secure dissolution decisions serve advise business world authoritatively scope operation act 1890 decisions depart substantial way previous decisions court construing applying important statute clarify decisions defining already admitted exceptions literal construction act decrees furnish useful precedent proper method dealing capital property illegal trusts decisions suggest need wisdom additional supplemental legislation make easier entire business community square rule action legality thus finally established preserve benefit freedom spur reasonable competition without loss real efficiency progress statute first section declares illegal every contract combination form trust otherwise conspiracy restraint trade commerce among several states foreign nations second declares guilty misdemeanor every person shall monopolize attempt monopolize combine conspire person monopolize part trade commerce several states foreign nations two early cases statute invoked enjoin transportation rate agreement interstate railroad companies held defense show agreement rates complained reasonable common law said statute directed contracts combinations restraint trade whether reasonable common law plain record however contracts complained cases would deemed reasonable common law subsequent cases court said statute given reasonable construction refused include within inhibition certain contractual restraints trade denominated incidental indirect cases restraint trade court excepted operation statute instances common law would called reasonable standard oil tobacco cases therefore court merely adopted tests common law defining exceptions literal application statute substituted test incidental indirect reasonable without varying slightest actual scope effect statute words cases statute decided would decided way court originally accepted construction rule common law said court introducing construction statute distinctions emasculated obviously untrue judgment every contract combination restraint interstate trade made purpose necessary effect controlling prices stifling competition establishing whole part monopoly trade condemned statute extreme critics instance case ought condemned statute brought within terms thus construed suggestion also made supreme court decision last two cases committed court undefined unlimited discretion determine whether case restraint trade within terms statute wholly untrue reasonable restraint trade common law well understood clearly defined rest discretion court must limited accomplish purpose lawful main contract order shall enforceable must incidental exceed needs contract void test reasonableness never applied court common law contracts combinations conspiracies restraint trade whose purpose whose necessary effect would stifle competition control prices establish monopolies courts never assumed power say contracts combinations conspiracies might lawful parties moderate use power thus secured exact public great exorbitant prices true many theorists others engaged business violating statute hoped line could drawn courts court authority ever attempted certainly nothing decisions latest two cases dangerous theory judicial discretion enforcing statute derive slightest sanction years making statute effective purposes enacted knight case discouraging seemed remit states whole available power attack suppress evils trusts slowly however error judgment corrected last three four years heavy hand law laid upon great illegal combinations exercised absolute dominion many industries criminal prosecutions brought number pending juries felt averse convicting jail sentences judges reluctant impose sentences men respectable standing society whose offense regarded merely statutory still offense becomes better understood committing partakes studied deliberate defiance law confident juries convict individuals jail sentences imposed standard oil case supreme circuit courts found combination monopoly interstate business refining transporting marketing petroleum products effected maintained different corporations stock held new jersey company effect commanded dissolution combination directed transfer pro rata distribution new jersey company stock held corporations among stockholders corporations individual defendants enjoined conspiring combining restore monopoly agreements subsidiary corporations tending produce bring violations act enjoined tobacco case court found individual defendants number engaged successful effort acquire complete dominion manufacture sale distribution tobacco country abroad done combinations made purpose effect stifle competition control prices establish monopoly manufacture tobacco also licorice used manufacture products cigars cigarettes snuffs tobacco suit presented far complicated difficult case standard oil suit decree would effectuate court end violation statute single holding company case standard oil trust main company american tobacco company manufacturing selling holding company plan adopted destroy combination restore competition involved redivision capital plants whole trust companies constituting trust new companies organized purposes decree made parties numbering new old fourteen american tobacco company old readjusted capital 92 liggett meyers tobacco company new capital lorillard company new capital reynolds tobacco company old capital chiefly engaged manufacture sale chewing smoking tobacco cigars former one tinfoil company divided two one capital one snuff company divided three companies one capital another capital third capital licorice companies two one capital another capital also tobacco company british corporation business abroad capital porto rican tobacco company capital corporation united cigar stores capital arrangement different kinds business distributed two companies division prominent brands tobacco products make competition possible necessary thus business country divided present independent companies per cent american tobacco company per cent liggett meyers per cent lorillard company per cent reynolds company per cent stock thirteen companies preferred common taken defendant american tobacco company distributed among stockholders covenants restricting competition declared null performance enjoined preferred stock different companies given voting power denied old organization ratio preferred stock common 78 40 constitutes decided change character ownership control company original suit defendants charged conspirators illegal combination acquired exercised unlawful dominion decree defendants hold amounts stock various distributee companies ranging 41 per cent maximum per cent minimum except case one small company porto rican tobacco company hold 45 per cent individual defendants enjoined three years buying stock except group thus prevented extending control period parties suit new companies made parties enjoined perpetually way effecting combination companies violation statute way resumption old trust fourteen companies enjoined acquiring stock others companies enjoined common directors officers common buying selling agents common offices lending money objection made certain independent tobacco companies settlement unjust left companies large capital active business settlement would effective put equality would division capital plant trust small fractions amount nearly equal independent companies contention results misunderstanding law purpose intended thereby prevent accumulation large capital business enterprises combination secure reduced cost production sale distribution directed aggregation capital purpose stifling competition enhancing controlling prices establishing monopoly shall decree defeated purposes restored competition large units capital plant divided shall accomplished useful purpose statute purpose statute confiscate property capital offending trusts methods punishment fine imprisonment individual offenders fine corporation forfeiture goods transportation provided proceeding equity specific remedy stop operation trust injunction prevent future use plant capital violation statute venture say history american law decree effective purpose entered court tobacco trust circuit judge noyes said judgment approving decree extent necessary tear apart combination force new forms attendant burdens ought demonstrate federal statute drastic statute accomplishes effective results long stands statute books must obeyed disobeyed without incurring penalties hand successful reconstruction organization teach effect enforcing statute destroy reconstruct demolish accordance conditions congress declared shall exist among people united states assumed present pro rata common ownership companies former stockholders trust would insure continuance old single control companies trust decree disintegrated erroneous based upon assumed inefficacy innocuousness judicial injunctions companies enjoined cooperation combination different managers directors purchasing sales agents many numerous stockholders reaching thousands attempt secure concerted action companies view control market number large attempt could well concealed prime movers participants would subject contempt proceedings imprisonment summary character immediate result present situation necessarily activity companies different managers competition must follow activity one company stagnation another short time inevitably lead change ownership stock opportunity continued cooperation must disappear critics speak dis integration trust mere change garments given consideration inevitable working decree understand little personal danger attempting evade set naught solemn injunction court whose object made plain decree whose inhibitions set forth detail comprehensiveness effect two decisions led decrees dissolving combination manufacturers electric lamps southern wholesale grocers association interlocutory decree powder trust directions circuit court compelling dissolution combinations similar history negotiating department justice looking disintegration decree reorganization accordance law seems possible bring reorganizations without general business disturbance act seen effective accomplishment purpose enactment met cry many different quarters repeal said obstructive business progress attempt restore methods destructive competition small units make impossible useful combinations capital reduction cost production essential continued prosperity normal growth recent decisions supreme court makes clear nothing statute condemns combinations capital mere bigness plant organized secure economy production reduction cost purpose necessary effect organization maintenance combination aggregation immense size stifling competition actual potential enhancing prices establishing monopoly statute violated mere size sin law merging two business plants necessarily eliminates competition units thus combined elimination contravention statute combination made purpose ending particular competition order secure control enhance prices create monopoly complaint made statute sufficiently definite description forbidden enable business men avoid violation suggestion may combination two corporations may run years subsequently attorney general may conclude wa violation statute supposed combiners innocent turns combination violation statute answer hypothetical case men attempt amass stupendous capital enable suppress competition control prices establish monopoly know purpose acts men thing without clearly mind merely purpose reducing cost production without thought suppressing competition use bigness plant creating convicted time union made convicted later unless happen later conclude suppress competition take usual methods thus establish monopoly case hardly complain motive subsequently disclosed attributed court original combination much said repeal statute constructive legislation intended accomplish purpose blaze clear path honest merchants business men follow may plan evolved submit discussions brought recent days fear continued execution law produced nothing glittering generalities offered line distinction rule action definite clear supreme court lays enforcing statute see indeed see decided enactment law shall describe denounce methods competition unfair badges unlawful purpose denounced law attempt purpose suppress competitor underselling price unprofitable drive business making exclusive contracts customers required give association manufacturers numerous kindred methods stifling competition effecting monopoly described sufficient accuracy criminal statute one hand enable government shorten task prosecuting single misdemeanors instead entire conspiracy hand serve purpose pointing detail business community must avoided special message congress january 7 1910 ventured point disturbance business would probably attend dissolution offending trusts said investigation possible prosecution corporations whose prosperity destruction affects comfort stockholders millions wage earners employees associated tradesmen must necessarily tend disturb confidence business community dry flowing sources capital places hoarding produce halt present prosperity suffering strained circumstances among innocent many faults guilty question wish message bring clearly consideration discussion congress whether order avoid possible business danger something done business combinations may offered means without great financial disturbance changing character organization extent business one within lines law federal control supervision securing compliance statute generally industrial combinations called principal business sale goods many states foreign markets words interstate foreign business far exceeds business done one state fact justify federal government granting federal charter combination make sell interstate foreign commerce products useful manufacture limitations secure compliance law possible frame statute offers protection federal company harmful vexatious unnecessary invasion states shall subject reasonable taxation control states respect purely local business corporations organized act prohibited acquiring holding stock corporations except special reasons upon approval proper federal authority thus avoiding creation national auspices holding company subordinate corporations different states effective agency creation great trusts monopolies prohibition act combinations restraint trade effectively enforced essential national government shall provide creation national corporations carry legitimate business throughout united states conflicting laws different states union respect foreign corporations make difficult impossible one corporation comply requirements carry business number different states renew recommendation enactment general law providing voluntary formation corporations engage trade commerce among states foreign nations every argument advanced law every explanation time offered possible objections confirmed experience since enforcement antitrust statute resulted actual dissolution active commercial organizations even manifest denunciation conspiracies restraint trade mean denial organizations large enough intrusted interstate foreign trade made clear purely negative statute like law may well supplemented specific provisions building regulation legitimate national foreign commerce drafting decrees dissolution present trusts view reorganization legitimate corporations made especially apparent courts provided administrative machinery make necessary inquiries preparatory reorganization pursue inquiries empowered invoke aid bureau corporations determining suitable reorganization disintegrated parts circuit court attorney general greatly aided framing decree tobacco trust dissolution expert bureau corporations set forth detail terms sections statute might supply constructive legislation permitting aiding formation combinations capital federal corporations subject rigid rules organization procedure including effective publicity closest supervision issue stock bonds executive bureau commission department commerce labor times doubt might well submit proposed plans future business must distinctly understood incorporation federal law could exempt company thus formed incorporators managers prosecution law subsequent illegal conduct publicity procedure opportunity frequent consultation bureau commission charge incorporation legitimate purpose transactions would offer great security successful prosecutions violations law would practical wise stich bureau commission might well invested also duty already referred aiding courts dissolution recreation trusts within law executive tribunal dignity power comptroller currency interstate commerce commission exercise supervisory power important classes corporations federal regulation drafting federal incorporation law would offer ample opportunity prevent many manifest evils corporate management including irresponsibility control hands real owners recommend federal charters thus granted shall voluntary least experience justifies mandatory provisions benefit derived operation great businesses protection charter would attract anxious keep within lines law large combinations fail take advantage federal incorporation right complain failure ascribed unwillingness submit transactions careful official scrutiny competent supervision publicity attendant upon enjoyment charter opportunity thus suggested federal incorporation seems tome suitable constructive legislation needed facilitate squaring great industrial enterprises rule action laid law statute construed supreme court must continue line distinction legitimate business must enforced unless banish individualism business reduce one common system regulation control prices like prevails respect public utilities applied business would long step toward state socialism act expression effort freedomloving people preserve equality opportunity result confident determination people maintain future growth preserving uncontrolled unrestricted enterprise individual industry ingenuity intelligence independent courage twenty years statute upon statute book knew general purpose approved many violators cynical assumed impotence seemed impossible enforcement slowly mills courts ground gradually majesty law assert many died became living force others saw evil grow hoped destroy efficacy seen power heavy object near achievement hear call repeal plea interferes business prosperity advised general terms statute way evil stamping cured abandon work twenty years try another experiment another term years said act done good said face effect northern securities decree decree way drastic inhibitive detail either standard oil decree tobacco decree stop time powerful movement toward control railroads country single hand power could healthful influence republic even though exercised general supervision interstate commission desire make ruthless combinations monopolies lawful energies directed toward reduction cost production public benefit healthful competition toward new ways means making permanent hands absolute control conditions prices prevailing whole field industry individual enterprise effort paralyzed spirit commercial freedom dead relations united states countries continued past twelve months upon basis usual good friendly intercourse year passed marks important general movement part powers broader arbitration recognition manifold benefits mankind extension policy settlement international disputes arbitration rather war response widespread demand advance direction part people united states great britain france new arbitration treaties negotiated last spring great britain france terms de signed expressed preamble treaties extend scope obligations policy arbitration adopted present treaties governments pave way treat united states great britain negotiated important modification alliance japan french government also expedited negotiations signal good new treaties submitted senate awaiting advice consent ratification essentials important treaties long known earnest hope receive prompt favorable action glad report july 5 last american claim alsop government chile finally disposed decision britannic majesty george v amiable compositeur matter referred determination majesty made award nearly claimants promptly paid chile settlement controversy happily eliminated relations republic chile united states question two decades given two foreign offices serious concern makes possible unobstructed development relations friendship aim government every possible way cultivate illustration practical beneficent application principle arbitration underlying broad spirit conciliation happy advert part united states facilitating amicable settlement disputes menaced peace panama costa rica haiti dominican republic since date independence colombia costa rica seeking solution boundary dispute came heritage colombia new republic panama upon beginning life independent nation although disputants submitted question decision president france terms arbitration treaty exact interpretation provisions award rendered matter serious disagreement two countries contending widely different lines even terms decision subsequently since t903 boundary question bad subject fruitless diplomatic negotiations parties january 1910 request governments agents representing met conference department state subsequently concluded protocol submitting controversy arbitral judgment chief justice united states consented act capacity boundary commission according international agreement appointed expected arguments shortly proceed dispute honorably satisfactorily terminated months ago appeared dominican republic haiti enter upon hostilities complications growing acrimonious boundary dispute efforts many years failed solve government united states friendly interposition good offices succeeded prevailing upon parties place reliance upon form pacific settlement accordingly friendly suggestion government two governments empowered commissioners meet washington conference state department order arrange terms submission arbitration boundary controversy arbitration chamizal boundary question mexico unfortunately abortive earnest efforts part governments importance commands felt early practical adjustment prove possible past year republic venezuela celebrated one hundredth anniversary independence united states sent honor event special embassy caracas cordial reception generous hospitality shown gratifying proof good relations friendship existing country united states recent political events mexico received attention government exceedingly delicate difficult situation created along southern border necessity taking measures properly safeguard american interests government united states desire secure proper observance enforcement neutrality statutes federal government issued directions appropriate officers exercise diligent vigilant regard requirements rules laws although condition actual armed conflict existed official recognition belligerency involving technical neutrality obligations international law 6th march last absence secretary state personal interview wilson ambassador united states mexico reported conditions mexico much critical press dispatches disclosed president diaz volcano popular uprising small outbreaks occurred symptomatic whole condition large per cent people sympathy insurrection general explosion probable time case feared american residents mexico might assailed large american investments might injured destroyed conference secretary war secretary navy thought wise assemble army division full strength san antonio brigade three regiments galveston brigade infantry los angeles district southern california together squadron battleships cruisers transports galveston small squadron ships san diego time representative city mexico expressed president diaz hope apprehensions might result unfounded conjectures military maneuvers assured significance concern government mobilization effected great promptness 15th march secretary war secretary navy letter addressed chief staff issued following instructions seems duty commander chief place troops sufficient number congress shall direct enter mexico save american lives property effective movement may promptly made meantime movement troops texas elsewhere near boundary accompanied sincere assurances utmost goodwill toward present mexican government larger frequent patrols along border prevent insurrectionary expeditions american soil hold hands existing government healthy moral effect prevent attacks upon americans property subsequent general internecine strife sudden mobilization division troops great test army full useful instruction maneuvers thus made possible occupy troops officers great advantage assumption press contemplate intervention mexican soil protect american lives property course gratuitous seriously doubt whether authority circumstances would exercise without express congressional approval indeed know already declined without mexican consent order troop cavalry protect breakwater constructing across border mexico mouth colorado river save imperial valley although insurrectos scattered mexican troops taking horses supplies frightening workmen away determined purpose however position danger american lives property mexico threatens existing government rendered helpless insurrection promptly execute congressional orders protect effect meantime send letter secretary call attention things connection presence division southwest doubtless occurred wish emphasize first place want make mobilization training army wish would give time war college advising carrying maneuvers useful character plan continue next three months time may expect either ambassador wilson fears realized chaos consequences ensued present government mexico readjusted matters secure result devoutly wished troops returned posts understood washington aleshire said could probably meet additional expense whole movement present appropriations troops continue texas three months sincerely hope observe newspapers blank cartridges presume error easy procure use soon maneuvers begin second texas state ordinarily peaceful put troops without running risk collision people state especially live texas near border sympathize insurrectos federal soldiers reason beg careful prevent friction kind able cuba army pacification something troops maintain year without trouble hope thing texas please give attention advise officers command necessity great circumspection regard third one great troubles concentration troops danger disease suppose adopted modern methods preventing necessary stamping epidemics much part campaign hardly seems necessary call attention finally wish examine question patrol border put many troops work practicable engaged order prevent use borderland carrying insurrection given assurances mexican ambassador point sincerely hope experience always remembered army navy useful means education greatly disappointed resulted injury disaster forces taken good deal responsibility ordering mobilization ready answer use utmost care avoid difficulties pointed may copy letter made left carter generals command may think wise necessary guide course regarded confidential happy record fact apprehensions effect presence large military force texas proved groundless disturbances occurred conduct troops exemplary public reception treatment could desired notwithstanding presence large number mexican refugees border territory time time communications received ambassador wilson returned mexico confirming view massing american troops neighborhood good effect dispatch april 3 1911 ambassador said continuing gravity situation chaos would ensue constitutional authorities eventually overthrown thus greatly increasing danger american lives property already subject confirm wisdom president taking military precautions making every allowance dignity sovereignty friendly state due nationals abroad charged responsibility safeguarding lives property bound say department military dispositions frontier produced effective impression mexican mind may moment prove guaranties safety nationals property eventuate conditions require active measures president congress sporadic attacks might made upon lives property nationals ultimate result would order adequate protection insurrection continued resulted engagements regular mexican troops insurgents along border several instances bullets contending forces struck american citizens engaged lawful occupations american soil proper protests made invasions american rights mexican authorities april 17 1911 1 received following telegram governor arizona result fighting across international line within gunshot range heart douglas five americans wounded side line everything points repetition casualties federals seem disposed keep agreement fire douglas position insurrectionists fighting occurs east southeast intrenchments people living douglas put danger lives judgment radical measures needed protect innocent people anything done stop fighting agua prieta ittiation calls action impossible safeguard people douglas unless town vacated anything done relieve situation acute conference secretary state following telegram sent governor sloan april 18 1911 made public dispatch received made urgent demand upon mexican government issue instructions prevent firing across border mexican federal troops waiting reply meantime sent direct warning mexican insurgent forces near douglas infer dispatch parties attempt heed warning strain exigency contest wild bullets still find way douglas situation might justify ordering troops cross border attempt stop fighting fire upon combatants american side take step must face possibility resistance greater bloodshed also danger motives misconstrued misrepresented thus inflaming mexican popular indignation many thousand americans mexico jeopardizing lives property pressure general intervention conditions might practicable resist impossible foresee reckon consequences course must use greatest avoid pending urgent representation mexican government therefore order troops douglas cross border must ask local authorities case danger recurs direct people douglas place bullets reach thus avoid casualty loath endanger americans necessarily exposed taking radical step prevent injury americans side border avoid temporary inconvenience glad say invasion american rights substantial character occurred presence large military naval force available prompt action near mexican border proved fortunate somewhat trying conditions presented invasion american rights movement theretofore taken place events necessary bring mobilization must bad sinister significance hand presence troops time unfortunate killing wounding american citizens douglas made clear restraint exercised government regard occurrence due lack force power deal promptly aggressively due real desire use every means possible avoid direct intervention affairs neighbor whose friendship valued anxious retain policy action government based upon earnest friendliness mexican people whole matter gratification note attitude strict impartiality factions mexico sincere friendship neighboring nation without regard party allegiance generally recognized resulted even closer sympathetic understanding two republics warmer regard one action suppress violence restore tranquillity throughout mexican republic peculiar interest government concerned safeguarding american life property country government united states occasion accord permission passage body mexican rurales douglas arizona tia juana mexico suppression general lawlessness bad time existed region northern lower california may 25 1911 president diaz resigned senor de la barra chosen provisional president elections president vice president thereafter held throughout republic senor francisco 1 madero formally declared elected october 15 chief magistracy november 6 president madero entered upon duties office since inauguration president madero plot unearthed present government begin new insurrection pursuing consistent policy administration adopted beginning directed investigation conspiracy charged investigation resulted indictment bernardo reyes others seizure number officers men horses accoutrements assembled upon soil texas purpose invading mexico similar proceedings taken insurrection diaz government resulting indictments prosecution persons found engaged violating neutrality laws united states aid uprising record government respect recognition constituted authority mexico therefore clear situation central america taken occasion past emphasize strongly importance attributed consummation conventions republics nicaragua honduras country earnestly recommend necessary advice consent senate accorded treaties make possible central american republics enter upon era genuine economic national development government nicaragua already taken favorable action convention found necessary pending exchange final ratifications enter negotiations american bankers purpose securing temporary loan relieve present financial tension iii connection temporary loan hope consummating ultimate operation convention complete lasting economic regeneration government nicaragua also decided engage american citizen collector general customs claims commission services two american citizens sought work american financial adviser accomplish lasting good inestimable benefit prosperity commerce peace republic considering ratification conventions nicaragua honduras rests united states heavy responsibility fact rejection might destroy progress made consign republics concerned still deeper submergence bankruptcy revolution national jeopardy relations republic panama peculiarly important due mutual obligations vast interests created canal continued usual friendly manner glad make appropriate expression attitude sympathetic interest endeavors neighbor undertaking development rich resources country reference internal political affairs republic obvious concern maintenance public peace constitutional order fostering general interests created actual relations two countries without manifestation preference success either political parties pan american union formerly known bureau american republics maintained joint contributions american nations past year enlarged practical work international organization continues prove usefillness agency mutual development commerce better acquaintance closer intercourse united states sister american republics past year marked relations china conclusion two important international loans one construction hukuang railways carrying currency reform china pledged treaties united states great britain japan mention made last annual message remembered early 1909 agreement consummated among british french german financial groups whereby proposed lend chinese government funds construction railways provinces hunan hupeh reserving nationals privilege engineering construction lines furnishing materials required work negotiations governments groups concerned agreement reached whereby american british french german nationals participate upon equal terms important useful undertaking thereupon financial groups supported respective governments began negotiations chinese government terminated loan china privilege increasing amount cooperative construction trunk lines immense advantage materially otherwise china greatly facilitate development bountiful resources empire hand large portion funds expended materials american products equal preference three lending nations contract provides branches extensions subsequently built terms opportunities american materials reach considerable proportions knowing interest united states reform chinese currency chinese government autumn 1910 sought assistance american government procure funds accomplish reform course subsequent negotiations combined proposed currency loan one certain industrial developments manchuria two loans aggregating sum originally solely american enterprise american government consistently desire secure sympathetic practical cooperation great powers toward maintaining principle equality opportunity administrative integrity china urged chinese government admit participation currency loan associates american group hukuang loan immense importance reform contemplated making loan preliminary comprehensive fiscal reforms incalculable benefit china foreign interests alike since strengthen chinese empire promote rapid development international trade negotiations begun understood financial adviser employed china connection reform order absolute equality respects among lending nations might scrupulously observed american government proposed nomination neutral adviser agreed china governments concerned september 28 1911 vissering president dutch java bank financier wide experience orient recommended chinese government post monetary adviser especially important present ancient chinese empire shaken civil war incidental awakening many influences activities modernization cooperative policy good understanding fostered international projects referred general sympathy view among powers interested far east safeguarding interests nationals government using best efforts continuance traditional policy sympathy friendship toward chinese empire people confident hope economic administrative development constant disposition contribute welfare proper ways consistent attitude strict impartiality contending factions first time history two countries chinese cruiser haichi command admiral ching recently visited new york officers men given cordial welcome treaty commerce navigation united states japan signed 1894 would strict interpretation provisions terminated july 17 1912 japan general treaties powers however terminated 1911 japanese government expressed earnest desire conduct negotiations new treaty united states simultaneously negotiations powers number important questions involved treaty including immigration laborers revision customs tariff right americans hold real estate japan united states consented waive technicalities enter upon negotiations new treaty understanding continuance throughout life treaty effective measures restriction immigration laborers american territory operation entire satisfaction governments since 1908 japanese government accepted basis negotiation new treaty quickly concluded resulting highly satisfactory settlement questions referred satisfactory adjustment also effected questions growing annexation korea japan recent visit admiral count togo united states nation guest afforded welcome opportunity demonstrate friendly feeling happily existing two countries change sovereigns siam american minister bangkok accredited special capacity represent united states coronation ceremony new king europe near east past times considerable political unrest moroccan question months great anxiety happily appears reached stage need longer regarded concern ottoman empire occupied period strife albania war italy greece balkan countries disquieting potentialities situation less felt persia scene long internal struggle conditions uneasiness european diplomacy thus far without direct political concern united states war unhappily exists italy turkey government direct political interest took occasion suitable time issue proclamation neutrality conflict time necessary steps taken safeguard personal interests american citizens organizations far affected war spite attendant economic uncertainties detriments commerce united states gained markedly commercial standing certain nations near east turkey especially beginning come closer relations united states new interest american manufacturers exporters possibilities regions hoped foundations laid large mutually beneficial exchange commodities two countries new interest turkey american goods indicated fact party prominent merchants large city turkey recently visited united states study conditions manufacture export get personal touch american merchants view cooperating intelligently opening markets turkey adjacent countries manufactures another indication new interest america commerce near east recent visit large party american merchants manufacturers central eastern europe entertained prominent officials organizations large cities new bonds friendship understanding established lead closer greater commercial interchange 22d june present year marked coronation britannic majesty king george honor auspicious occasion sent special embassy london courteous cordial welcome extended government representatives majesty people great britain emphasized strong bonds friendship happily existing two nations result determined effort part great britain united states settle outstanding differences number treaties entered two countries recent years nearly unsettled questions importance either adjusted agreement arrangements made settlement arbitration number unsettled questions referred consist pecuniary claims presented country order many claims possible settled arbitration special agreement purpose entered two governments 18th day august 1910 accordance article 11 general arbitration treaty great britain april 4 19o8 pursuant provisions special agreement schedule claims already agreed upon special agreement together schedule received approval senate submitted purpose last session congress negotiations two governments preparation additional schedule claims already well advanced intention submit schedule soon agreed upon senate approval order arbitration proceedings may undertaken early date connection attention congress particularly called necessity appropriation cover expense incurred submitting claims arbitration pursuance act congress approved june 23 1910 secretary state joint committee library entered contract sculptor albert jaegers execution bronze replica statue von steuben erected washington presentation majesty german emperor german nation recognition gift statue frederick great made emperor people united states presentation made september 2 last representatives commissioned special mission government purpose german emperor conveyed telegraph behalf german people expression appreciative thanks action congress direction state department ambassador russia recently series conferences minister foreign affairs russia view securing clearer understanding construction treaty 1832 russia united states modification existing russian regulations may found interfere way full recognition rights american citizens treaty believe government russia addressing seriously need changing present practice treaty sufficient progress made warrant continuance conferences hope may soon removed justification complaints treaty violation prevalent country expect immediately christmas recess shall able make communication congress subject negotiations amelioration conditions found exist liberia american commission undertaken department state concluded necessary certain formalities arranged securing loan hoped place republic practical financial economic footing national constituent assembly regularly elected vote portuguese people june 19 last unanimously proclaimed republican form government official recognition government united states given new republic afternoon day negotiations betterment conditions existing spitzbergen islands adjustment conflicting claims american citizens norwegian subjects lands archipelago still progress supplementary protocol hague convention establishment international prize court mentioned last annual message embodying stipulations providing alternative procedure would remove constitutional objection part hague convention provides may appeal proposed court decisions national courts received signature governments parties original convention ratified government united states together prize court convention deposit ratifications government netherlands awaits action powers declaration signed london february 26 1909 rules international law recognized within meaning article 7 hague convention establishment international prize court controversy nearly years source serious friction united states powers bordering upon north pacific ocean whose subjects permitted engage pelagic sealing herds breeding grounds within jurisdiction united states last satisfactorily adjusted conclusion north pacific sealing convention entered united states great britain japan russia 7th july last convention conservation measure great importance carried spirit reciprocal concession advantage upon based every reason believe result preserving furseal herds north pacific ocean restoring former value purposes commerce also afford permanently satisfactory settlement question solution seemed total destruction fur seals another aspect also convention importance furnishes illustration feasibility securing general international game law protection mammals sea preservation importance nations world attention congress especially called necessity legislation part united states purpose fulfilling obligations assumed convention senate gave advice consent 24th day july last conference international union protection industrial property authority congress convened washington may 16 1911 closed labors june 2 1911 signature three acts follows convention revising paris convention march 20 1883 protection industrial property modified additional act signed brussels december 14 1900 2 arrangement replace arrangement signed madrid april 14 1891 international registration additional act regard thereto signed brussels december 14 1900 3 arrangement replace arrangement signed madrid april 14 18gi relating repression false indication production merchandise united states signatory first convention promptly submitted senate special message transmitted congress 11th january 19ii concurred recommendations made secretary state regard certain needful legislation control interstate foreign traffic opium menacing drugs quoted annual message december 7 1909 announced results international opium commission held shanghai february 1909 invitation united states laid government report commission showed china making remarkable progress admirable efforts toward eradication opium evil interested governments permitted commercial interests prevent cooperation reform result collateral investigations opium question country recommended manufacture sale use opium united states rigorously controlled legislation prior time continuation policy government secure cooperation interested nations united states proposed international opium conference full powers purpose clothing force international law resolutions adopted commission together essential corollaries powers concerned cordially responded proposal government glad able announce representatives powers assembled conference hague first month since passage act twenty states animated modify pharmacy laws bring accord spirit act thus stamping measure intrastate traffic opium drugs although urged congress passage certain measures federal control interstate foreign traffic drugs action yet taken view fact sitting hague important conference review municipal laws different nations mitigation opium allied evils conference certainly deal international aspects evils seems essential congress take immediate action legislation already called attention special message four important conventions signed fourth pan american conference buenos aires providing regulation trademarks patents copyrights arbitration pecuniary claims advice consent senate ratified part united states ratifications deposited government argentine republic accordance requirements conventions advised similiar action taken signatory governments one notable advances international morality accomplished recent years arrangement entered april 13th present year united states powers repression circulation obscene publications last annual message referred tariff negotiations department state foreign countries connection application series proclamations minimum tariff united states importations several countries stated general operation section 2 new tariff law proved guaranty continued commercial peace although unfortunately instances foreign governments dealt arbitrarily american interests within jurisdiction manner injurious inequitable past year instances discriminatory treatment removed regret say remain cases differential treatment adverse commerce united states none instances appears amount undue discrimination sense section 2 tariff law august 5 1909 exceptions complete degree equality tariff treatment department state consistently sought obtain american commerce abroad double tariff feature tariff law 1909 amply justified results achieved removing former preventing new undue discriminations american commerce believed time come amendment feature law way provide graduated means meeting varying degrees discriminatory treatment american commerce foreign countries well protect financial interests abroad american citizens arbitrary injurious treatment part foreign governments either legislative administrative measures would seem desirable maximum tariff united states embrace within purview free list case present time order might reasonable significance governments countries importations united states confined virtually articles free list fiscal year ended june 30 1911 shows great progress development american trade noteworthy marking highest record exports american products foreign countries valuation excess exports showed gain preceding year widespread appreciation expressed business interests country regards practical value facilities offered department state department commerce labor furtherance american commerce conferences officers washington expert knowledge trade conditions foreign countries consular officers commercial agents department commerce labor leave absence visit principal industrial centers united states found great value trade conferences regarded particularly promising method governmental aid foreign trade promotion department commerce labor arranged give publicity expected arrival itinerary consular officers commercial agents leave united states order trade organizations may arrange conferences indicated increasingly clear obtain maintain equity substantial equality treatment essential flourishing foreign trade becomes year year important industrial commercial welfare united states flexibility tariff sufficient give take negotiation department state behalf commerce industry need hardly reiterate conviction speedily built american merchant marine necessary assure favorable transportation facilities great commerce well supplement navy adequate reserve ships men would economic advantage keeping home part vast sums paid foreign shipping carrying american goods great commercial nations pay heavy subsidies merchant marine obvious without wise aid congress united states must lag behind matter merchant marine present anomalous position legislation facilitate extension american banks foreign countries another matter foreign trade needs assistance interests foreign commerce nonpartisan factor prosperity broad land dissemination useful information coordination effort certain unofficial associations done good work toward promotion foreign commerce regret however great number associations comparative lack cooperation fails secure efficiency commensurate public interest agency department commerce labor cases directly department state transmits reputable business interests information commercial opportunities supplementing regular published consular reports central organization touch associations chambers commerce throughout country able keep purely american interests closer touch different phases commercial affairs would believe great value organization might managed committee composed small number actively carrying work larger associations might added committee members ex officio one two officials department state one two officials department commerce labor representatives appropriate committees congress authority success organization would evidently enhanced congress see fit prescribe scope organization legislation would give official standing example national red cross factors continuance establishment departmental diplomatic consular upon high plane placed recent reorganization government would abreast times fostering interests foreign trade rest must left energy enterprise business men entire organization improved developed especial regard requirements commercial interests country rapid growth foreign trade makes utmost importance governmental agencies trade aided protected possess high degree efficiency foreign representatives maintained upon generous scale far salaries establishments concerned selection advancement officers definitely permanently regulated law service shall fail attract men high character ability experience past years partial application rules diplomatic consular service leaves doubt mind wisdom wider permanent extension principles branches foreign service men selected appointment means existing executive regulations far higher average intelligence ability men appointed regulations promulgated moreover feeling existing rules reasonable hope permanence tenure good behavior promotion meritorious service served bring zealous activity interests country never existed could exist earnest conviction enactment law general principles existing regulations fail effect improvement branches foreign service providing greater inducement young men character ability seek career abroad service government incentive already service put forth greater efforts attain high standards successful conduct international relations commerce requires therefore commend favorable action congress enactment law applying diplomatic consular service principles embodied section 1753 revised statutes united states act january 16 1883 executive orders june 27 1906 november 26 1909 consideration important subject desire recall attention congress favorable report made lowden bill improvement foreign service foreign affairs committee house representatives available statistics show strictness merit system applied foreign service recent years absolute nonpartisan selection consuls secretaries indeed far selected view political consideration actually chosen disproportionate extent states would unrepresented foreign service system hoped permanently obsolete legislation perpetuation present system examinations promotions upon merit efficiency would greatest value commerical international interests annual message congress december 1909 stated section 2 act august 5 1909 appointed tariff board three members cooperate state department administration maximum minimum clause act make glossary encyclopedia existing tariff render terms intelligible ordinary reader investigate industrial conditions costs production home abroad view determining extent existing tariff rates actually exemplify protective principle duties made adequate adequate equalize difference cost production home abroad stated believed investigations would great value basis accurate legislation time time recommend congress revision certain schedules accordance findings board last session congress bill creating permanent tariff board five members three political party passed house failed enactment slight differences agreement reached adjournment appropriation act provided permanent tariff board created statute report congress schedule k december 1911 therefore carry far lay within power purposes bill permanent tariff board appointed march 19li board five adding two members party affiliation would fulfilled statutory requirement directed make report schedule k tariff act december year message august 17 1911 accompanying veto wool bill said judgment schedule k revised rates reduced veto based ground since tariff board would make december detailed report wool wool manufactures special reference relation existing rates duties relative costs abroad public policy fair regard interests producers manufacturers one hand consumers demanded legislation hastily enacted absence information possessed time adequate knowledge facts determine whether proposed act accord pledge support fair reasonable protective policy legislation might prove temporary inflict upon great industry evils continued uncertainty herewith submit report tariff board schedule board unanimous findings basis findings recommend congress proceed consideration schedule view revision general reduction rates report shows present method assessing duty raw specific rate grease pound unscoured exclude wools high shrinkage scouring fine quality american market thereby lessens range wools available domestic manufacturer duty scoured wool 33 cents per pound prohibitory operates exclude importation clean foreign wools inferior grades nevertheless valuable material manufacturing imported grease heavy shrinkage wools imported might used displace cheap substitutes use make preceding paragraph little plainer take instance hundred pounds wool imported present duty 11 11 cents pound would make duty hundred pounds 11 merchantable part wool thus imported weight wool hundred pounds scouring wool shrinks 80 per cent wools duty case would amount 11 11 20 pounds scoured wool course would prohibitory wool shrinks 50 per cent would 11 50 pounds wool near average great bulk wools imported australia principal source imported wool discriminations could overcome assessing duty ad valorem terms method open objection first increases administrative difficulties tends decrease revenue undervaluation second prices advance ad valorem rate increases duty per pound time consumer needs relief producer best stand competition prices decline duty decreased time consumer least burdened price producer needs protection another method meeting difficulty taxing grease pound assess specific duty grease wool terms scoured content obviates chief evil present system namely discrimination due different shrinkages thereby tends greatly equalize duty board reports method feasible practice could administered without great expense scoured content wool basis users wool make calculations duty kind would fit usages trade one effect method assessment would regardless rate duty would increase supply variety wool making available american market wools low fine quality excluded report shows detail difficulties involved attempting state categorical terms cost wool production great differences cost different regions different types wool found however taking varieties account average cost production whole american clip higher cost chief competing country amount somewhat less present duty report shows duties noils wool wastes shoddy adjusted rate 33 cents scoured wool prohibitory measure duty scoured wool prohibitory general assessed rates high higher duties paid clean content wools actually imported reduced adjusted rate wool bear proper proportion real rate levied actual wool imports duties many classes wool manufacture prohibitory greatly excess difference cost production abroad true tops yarns exception worsted yarns high grade low medium grade cloth heavy weight tops 52 cents pound value yarns 65 cents value rate 100 per cent correspondingly higher rates lower values cheap medium grade cloths existing rates frequently run 150 per cent cheap goods 200 per cent largely due part duty levied ostensibly compensate manufacturer enhanced cost raw material due duty wool matter fact compensatory duty numerous classes goods much excess amount needed strict compensation hand findings show duties run high ad valorem equivalents prohibitory since goods imported prices domestic fabrics raised full amount duty set samples 16 english fabrics completely excluded present tariff rates found total foreign value duties would assessed fabrics imported foreign value plus amount duty nominal duty 183 per cent fact however practically identical fabrics domestic make sold time showing enhanced price foreign market value 67 per cent although duties increase prices domestic goods anything like full amount none less true prohibitive duties eliminate possibility foreign competition even time scarcity form temptation monopoly conspiracies control domestic prices much excess difference cost production abroad reduced point accords principle findings board show industry actual manufacturing cost aside question price materials much higher country abroad making yarn cloth domestic woolen worsted manufacturer general advantage form superior machinery efficient labor offset higher wages paid country findings show cost turning wool yarn country double leading competing country cost turning yarn cloth somewhat double protective policy great industry involving welfare hundreds thousands people established despite handicaps recommending revision reduction therefore urge action taken facts mind end important established industry may jeopardized tariff board reports equitable method found levy purely specific duties woolen worsted fabrics excepting compensatory duty rate must ad valorem manufactures important realize however flat ad valorem rate fabrics made work fairly effectively single rate high enough equalize difference manufacturing cost home abroad highly finished goods involving labor would prohibitory cheaper goods labor cost smaller proportion total value conversely rate adequate equalize difference cheaper goods would remove protection manufacture increase one striking features trade development recent years therefore recommend revision importance graduated scale ad valorem duties cloths carefully considered applied venture say legislative ever presented complete exhaustive report difficult complicated subject relative costs wool woolens world monument thoroughness industry impartiality accuracy men engaged making chosen political parties allowed partisan spirit prompt control inquiries unanimous findings feel sure report printed studied value compendium exact knowledge respect schedule tariff convince wisdom making board permanent order may treat schedule tariff treated keep bureau information date current changes economic world part function tariff board propose rates duty function merely present findings fact rates duty may fairly determined light adequate knowledge accord economic policy followed present report findings fact board show ample reason revision downward schedule k accord protective principle present data relative costs prices may determined rates fairly equalize difference production costs recommend revision proceeded financial condition government shown close last fiscal year june 30 1911 satisfactory ordinary receipts general fund excluding postal revenues amounted disbursements general fund current expenses capital outlays excluding postal panama canal disbursements including interest public debt amounted leaving surplus postal revenue receipts amounted payments made postal service postal revenues amounted left surplus postal receipts disbursements first time 27 years surplus occurred debt united states june 30 1911 amounted igo debt interest ceased amounted debt bearing interest including greenbacks national bank notes redeemed fractional currency amounted total interest noninterest bearing debt amounting actual disbursements exclusive panama canal postal service year ending june 30 1911 actual disbursements year ending june 30 1910 exclusive panama canal postal service disbursements making decrease yearly expenditures year 1911 1910 year ending june 30 1912 estimated receipts exclusive postal revenues total estimates exclusive panama canal postal expenditures payable postal revenues amount decrease 1912 estimates 1911 estimates year ending june 30 1913 estimated receipts exclusive postal revenues total estimated appropriations exclusive panama canal postal disbursements payable postal revenues amount decrease 1913 estimates 1912 estimates postal revenues expansion business department normal increase post office extension service increase outlay sum department year postmaster general assured next year receipts least equal expenditures probably exceed surplus year fair equitable therefore determining economy government run exclude transactions department like post office department relies support upon receipts calculations heretofore made comparison economy year proper custom include statement deficit post office department paid treasury calculation actual increase expenses government arising increase population general expansion governmental functions except post office number years shows normal increase 4 per cent year directing exercise great care keep expenses estimates succeeded reducing total disbursements year credit government shown better government sale panama canal 3 per cent bonds bonds give owners privilege using basis circulation privilege extended would affect general market value sale therefore measured credit government premium realized upon bonds made actual interest rate transaction per cent treasury department efficiency economy work kept steadily provision made elimination 134 positions coming year two hundred statutory positions eliminated last year office treasury washington 141 positions year 1910 making elimination 542 statutory positions since march 4 1909 done without discharge anybody normal resignations deaths equal elimination places system transfers taken care persons whose positions dropped field service department positions eliminated present time making total net reduction treasury positions number meantime efficiency work departmeat increased matter first importance come congress action session monetary reform congress arranged early introduction great question report monetary commission commission appointed recommend solution banking currency problems long confronting nation furnish facts data necessary enable congress take action commission appointed impressive urgent popular demand legislative relief suddenly arose distressing situation people caused deplorable panic 1907 congress decided could give immediately relief required would provide commission furnish means prompt action later date order work thoroughness precision commission taken time make report country undoubtedly hoping prompt action report convenience congress permit recognition gross imperfections marked inadequacy banking currency system even quiet financial periods long standing later matured recognition fact system responsible extraordinary devastation waste business paralysis recurring periods panic though members monetary commission considerable time working open large numbers people openly working press largely noted discussed work proceeded report commission promises represent national movement details report still considered therefore much time commend immense importance monetary reform urge prompt consideration action commission report received express satisfaction plan proposed promises embrace main features met approval great preponderance practical professional opinion country likely meet equal approval congress exceedingly fortunate wise undisputed policy maintaining unchanged main features banking system rendered impossible introduce central bank central bank would certainly resisted plan could introduced would probably defeated central bank could part plan discussed considered troublesome question eliminated ingenious novel proposed national reserve association appears simply logical outgrowth best present system fact fulfillment system exactly management association organized question still open seems desirable banks would association main manage agency banks act trusted better anybody else chiefly conduct mainly bankers work must form government supervision ultimate control favor reasonable representation government management entertain fear introduction politics undesirable influences properly measured government representation trust banks country possessing requisite standards placed upon footing perfect equality opportunity national system state system fairly recognized leaving eventually coalesce shall prove tendency evolution develop impartially banks one system given permitted advantages opportunity system trust also new legislation carefully completely protect assure individuality independence bank end tendency may ever toward consolidation money banking power nation shall defeated always possible course correct features new law may practice prove unwise law sure enacted conditions unusual knowledge authority also include well remember possibility future amendment present prospects reform encouraging us would singularly unfortunate monetary question chance become party issue sincerely hope exceeding amount consideration received people nation wholly nonpartisan congress set nonpartisan seal upon monetary commission appointed commending question favorable consideration congress speak spirit great number fellow citizens without thought party partisanship feel remarkable earnestness reform necessary interests people congress dill purpose increase efficiency decrease expense army contains four principal features first consolidation general staff adjutant general inspector general departments second consolidation quartermaster department subsistence pay departments third creation army service corps fourth extension enlistment period three five years establishment army service corps proposed bill thoroughly accord convinced establishment corps result material economy great increase efficiency army repeatedly recommended predecessors also believe consolidation staff corps made resulting increase efficiency economy along lines provided bill consideration opposed plan result would break interfere essential principles detail system staff corps established act february 2 1901 opposed plan result would give officer selected chief staff member general staff corps greater permanency office existing law neither chief staff member general staff corps remain office period four years must interval two years successive tours duty bill referred provides certain persons shall become permanent members general staff corps certain others subject redetail without interval two years provision fraught danger welfare army would practically nullify main purpose law creating making consolidations reduction made total number officers army perform duties imposed law past recommended increase number officers 6oo order provide sufficient officers perform classes staff duty tc reduce number line officers detached commands congress last session increased total number officers 2oo enough promotion line army slow officers attain command rank age early enough properly exercise would mistake retard already slow promotion throwing back line arm number officers absorbed rovided another feature bill believe mistake proposed increase term enlistment three five ears believe would better enlist men six years release end three years active service put reserve remaining three years reenlistments largely confined noncommissioned officers enlisted men skilled grades plan payment comparatively small compensation three years reserve would keep large bodv men call government trained ready army united states good condition showed able meet emergency successful mobilization army division i5 ooo ooo men took place along border mexico recent disturbances country marvelous freedom ordinary camp diseases typhoid fever measles referred report secretary war shows effectiveness sanitary regulations treatment medical corps discipline army invoke highest commendation beg renew recommendation last year congress appropriate memorial amphitheater arlington funds required construct upon plans already approved satisfactory progress made panama canal last year continued every reason believe canal completed early 1st july 1913 unless something unforeseen occurs 18 months time promised engineers near enough completion canal make imperatively necessary legislation enacted fix method canal shall maintained controlled zone governed fact statutory law authority president maintaining government zone authority given amendment spooner act expired terms limitation years ago since time government continued advice attorney general absence action congress necessarily implied authority part executive maintain government territory see laws executed fact able thus get along important days construction without legislation expressly formulating government zone delegating creation president reason supposing may continue kind government construction finished implied authority president maintain civil government zone may derived mandatory direction given original spooner act commanded build canal certainly canal completed put permanent management ought specific statutory authority regulation control government zone hold chief main purpose operating canal fully concur secretary war problem simply management great public work government local republic every provision must directed toward successful maintenance canal avenue commerce provisions government live within zone subordinate main purpose zone 40 miles long 10 miles wide population soon work construction completed towns make population deserted comparatively natives continue residence control ought approximate military government one judge two justices peace sufficient attend judicial litigated business fundamental laws congress zone governed orders president issued war department today provisions made guaranties life liberty property beyond government military reservation managed connection great highway trade last annual message discussed length reasons government assuming task furnishing ships use canal whether naval vessels others supplies coal oil necessities must replenished either passing canal together dock facilities repairs every character thought wise government government must establish naval vessels large depots dry docks warehouses may easily enlarged secure world public using canal reasonable prices certainty discrimination wish avail facilities renew recommendation respect tolls canal within limits shall seem wise congress power fixing tolls given president order arrive proper conclusion must experimenting done congress delegate power one act expeditiously confident united states power relieve payment tolls part shipping congress deems wise canal money built right charge tolls use tolls must everyone dealing ships practice many governments subsidizing merchant vessels well established general subsidy equal tolls equivalent remission tolls held discrimination use canal practice suez canal makes clear experiment tolls made president would doubtless disclose great burden tolls coastwise trade atlantic pacific coast could bear without preventing usefulness competition transcontinental railroads one chief reasons building canal set competition bring two shores closer together practical trade problem may tolls wholly remitted think best principle believe cost government work panama canal ought imposed gradually certainly upon trade creates makes possible far consistent development world trade canal benefit intended secure east west coastwise trade ought labor secure canal tolls sufficient amount ultimately meet debt assumed pay interest respect philippines urgently join recommendation secretary war act february 6 1905 limiting indebtedness may incurred philippine government construction public works increased 15 ooo ooo finances government excellent condition maximum sum mentioned quite low compared amount indebtedness governments similar resources success attended expenditure useful improvements harbors places islands justifies requires additional expenditures like purposes also join recommendation legislature philippine islands authorized provide naturalization filipinos others present law treated aliens enable become citizens philippine islands pending investigation congress last session one committees disposition friars lands secretary dickinson directed friars lands sold excess limits fixed public lands congress pass upon subject concluded investigation order obstruction disposition lands expect direct secretary war return practice opinion attorney general enable us dispose lands much promptly prepare sinking fund meet bonds issued purchase lands doubt whatever attorney general construction proper one interest everyone land shall promptly disposed danger creating monopoly ownership lands statutes construed nothing two tracts acres unimproved remote provinces likely disposed bulk rest lands subject limitation shall first offered present tenants lessors hold small tracts estimates river harbor improvements reach coming year wish urge whenever project adopted congress one completed money economically expended construction year greater ultimate economy especial application improvement mississippi river large branches seems increase money annually expended improvement ohio river formally adopted congress would interest public similar change ought made present congress amount appropriated missouri river engineers say cost improvement missouri river kansas city louis order secure 6 feet permanent channel reach least three recommendations chief engineers improvement adopted expended upon annually particular improvement especially entitled attention congress company organized kansas city capital built steamers barges actually using river transportation order show done way affecting rates kansas city louis order manifest good faith confidence respect improvement urgently recommend appropriation improvement increased recommended completion contract annually work may done 10 years project navigable waterway lake michigan mouth illinois river thence via mississippi gulf mexico one national importance view work already accomplished sanitary district chicago agency state illinois constructed difficult costly stretch waterway made asset nation view fact people illinois authorized expenditure carry waterway 62 miles farther utica feel fitting work supplemented government expenditures recommended special board engineers waterway utica mouth illinois river made upon lines providing waterway nation otherwise benefit state fullest extent recommend term service said special board engineers continued empowered reopen question treatment lower illinois river negotiate properly constituted commission representing state illinois agree upon plan improvement lower illinois river upon extent united states may properly cooperate state illinois securing construction navigable waterway lockport mouth illinois river conjunction development water power state lockport utica report attorney general shows subjected close examination accounts clerks federal courts found good many disclose irregularities dishonesty considerable difficulty securing effective prosecution removal clerks thus derelict certainly unduly prejudiced federal courts fact long confidential relations grow tenure life part judge practical tenure life part clerk calculated secure strictness dealing judge clerk respect fees accounts assures clerk conduct freedom overcharges carelessness relationship judge clerk makes ungracious members bar complain clerk department examiners make charges heard court order removal clerk judgment recovery fees cases reluctantly entered judge reason recommend amendment law whereby president shall given power remove clerks provision need interfere right judge appoint clerk remove last message recommended congress authorize payment findings judgments court claims matter french spoliation cases appropriation pay judgments since 1905 findings awards obtained bitter fight government succeeding 75 per cent cases amount awards ought matter good faith part government paid limitation liability master servant personal injuries occasioned fault abandoned civilized countries provision made whereby employee injured course employment compensated loss working ability irrespective negligence principle upon provision proceeds accidental injuries workmen modern industry vast complexity inherent dangers arising complicated machinery use great forces steam electricity regarded risks industry loss borne equitable proportion profit engage therein recognition last congress authorized appointment commission investigate subject employers liability workmen compensation report result investigations president congress commission appointed work holding hearings gathering data considering subject expected able report first year accordance provisions law hoped expected commission suggest legislation enable us put place present wasteful sometimes unjust system employers liability plan compensation afford certain definite relief employees injured course employment industries subject regulating power congress promotion movement prevention delay unnecessary cost litigation glad say supreme court taken steps reform present equity rules federal courts may near future expect revision long step right direction american bar association recommended congress several bills expediting procedure one already passed house unanimously february 6 1911 directs judgment set aside reversed new trial granted unless appears court examination entire error complained injuriously affected substantial rights parties also provides submission issues fact jury reserving questions law subsequent argument decision hope bill pass senate become law simplify procedure law another bill amend chapter ii judicial code order avoid errors pleading presented association one enlarging jurisdiction supreme court permit court examine upon writ error cases right title claimed constitution statute treaty united states whether decision court right title favor measures interest justice passed beginning present administration 1909 postal service arrears extent much largest deficit record brief space two years turned surplus accomplished without curtailment postal facilities may seen fact established new post offices delivery carrier added service 186 cities new rural routes established covering miles force postal employees increased two years average annual salary substantial increase january 3 1911 depositories established experimentally 48 states territories three months successful operation system extended rapidly feasible post offices first second third classes constituting presidential grade end year practically designated system extended post offices business selecting post offices depositories consideration given efficiency postmasters offices ratings satisfactory department designated withholding designation postmasters unsatisfactory ratings salutary effect service deposits kept pace extension system amounting end first month operation experimental offices increased july 11 months operation reached total sum distributed among banks protected tinder law bonds deposited treasurer united states method adopted conduct system certificates issued evidence deposits accounts depositors kept post offices instead department compared practice countries entering deposits pass books keeping central office ledger account depositor use certificate resulted great economy administration depositors thus far number approximately include 40 nationalities native americans largely predominating english italians coming next first conversion deposits united states bonds bearing interest rate per cent occurred july 1 1911 amount deposits exchanged little 6 per cent total outstanding certificates deposit june 30 issue bonds value coupon form registered form steps taken immediately establishment rural parcel post estimates appropriations needed maintenance postal service ensuing fiscal year item inserted cover preliminary expense establishing parcel post rural mail routes well cover investigation object final establishment general parcel post railway steamboat transportation routes department believes initial expenses establishing system defrayed parcel post full operation rural routes bring sufficient revenue meet cost also surplus utilized paying expenses parcel post city delivery service hoped congress authorize immediate establishment limited parcel post rural routes may selected providing delivery along routes parcels exceeding eleven pounds weight limit international parcel post post office route emanates another route emanating office preliminary service prepare way thorough comprehensive inquiry contemplated asking appropriation mentioned enable department gain definite information concerning practical operation general system time extend benefit service class people others specially need suggestion general parcel post awakened great opposition part think effect destroy business country storekeeper instead think change greatly increase business benefit reduction cost living bring ought make coming certain 2d november last reviewed fighting fleet battleships vessels assembled new york harbor consisting 24 battleships 2 armored cruisers 2 cruisers 22 destroyers 12 torpedo boats 8 submarines attendant vessels making 98 vessels classes tonnage tons saw fleet struck preparedness high military efficiency americans proud personnel fleet deficient number torpedo destroyers cruisers colliers well large battleship cruisers becoming important feature foreign navies notably british german japanese building plan year contemplates two battleships two colliers smaller vessels built much rapidly case emergency battleships certainly ought continue policy two battleships year panama canal finished first line reserve line number 40 available vessels proper armament size reorganization navy appointment four aids secretary continued demonstrate usefulness would difficult administer affairs navy without expert counsel advice aids renew recommendation made last year aids recognized statute certain navy present size admirals active command higher rear admirals recognized grades order admiral fleet admiral vice admiral rear admiral great battleship fleet commanded rear admiral four rear admirals orders questions precedence arise naval officers european navies american rear admiral though command ten times force foreign vice admiral must yield precedence latter absurdity ought prevail avoided creation two three positions flag rank rear admiral attended opening new training school north chicago glad note opportunity gives drawing upon young men country interior farms stores shops offices insures high average intelligence character among showed wonderful improvement discipline drill short weeks presence naval station made invite attention consideration new system detention punishment army navy enlisted men obtained great britain made greatly better control men adopt similar system like treasury department war department navy department given much attention economy administration cut number unnecessary expenses reduced estimates except construction increase involves urge upon congress necessity immediate increase men enlisted strength navy provided estimates four thousand needed man available vessels service enlisted men ratings careful computation shows april 1912 men required vessels commission apprentice seamen kept training times secretary navy recommended abolition certain smaller unnecessary navy yards order furnish complete comprehensive report referred question navy yards joint board army navy board shortly make report secretary navy advises recommendations subject presented early coming year measure economy contained proper handling subject great important interests nation shall present congress separate subject apart annual message concentration necessary work naval vessels navy yards coast vital necessity proper economy government expenditures attained secretary navy striving unify various corps navy extent possible thereby stimulate navy spirit distinguished corps spirit warm support officers naval officers first specialists afterwards means officers take least one specialty ordnance construction engineering practically done specialists like pay officers naval constructors line proposed make line combatant corps obviously line necessitates amalgamating pay officers also engaged technical work producing finished ship present case single exception naval constructors proposed amalgamate line urge upon congress desirability establishing council national defense bill establish council congress last winter hoped legislation pass present session purpose council determine general policy national defense recommend congress president measures relating shall deem necessary expedient machinery provided readiness army navy may improved programs military naval requirements shall coordinated properly scrutinized view necessities whole nation rather separate departments consideration matters pending disposed agricultural department department commerce labor refer excellent reports secretaries departments shall able submit congress christmas holidays question conservation resources arising alaska west question rate mail matter post office department law require submission reports commission economy efficiency 31st december shall therefore able submit report work commission assembling congress holidays already advocated last annual message adoption retirement system contributory feature reduce minimum cost government pensions paid considerable reflection much opposed pension system involves contribution employees think experience governments justifies view crying necessity contributory system possibly preliminary governmental outlay order cover initial cost set system going contributions accumulating manifest every side nothing much promote economy efficiency government system wish renew recommendation local offices throughout country including collectors internal revenue collectors customs postmasters four classes immigration commissioners marshals law covered classified service necessity confirmation senate removed president others whose time taken distributing patronage custom prevailed since beginning government accordance recommendation senators congressmen majority party relieved burden confident change would greatly reduce cost administering government would add greatly efficiency would take away power use patronage government political purposes officers recommended senators congressmen political motives political services rendered impossible expect office appointees regard tenure less dependent upon continued political service patrons regulations however stiff rigid prevent regulations view method motive selection plainly inconsistent deemed hardly worthy respect
message first several shall send congress interval open regular session adjournment christmas holiday amount information communicate operation government number important subject call comment executive transmission congress exhaustive report special commission make impossible include one message reasonable length discussion topic ought bring attention national legislature first regular session may last supreme court hand decision suit equity bring united state enjoin maintenance standard oil trust american tobacco trust secure dissolution decision serve advise business world authoritatively scope operation act 1890 decision depart substantial way previous decision court construe apply important statute clarify decision define already admit exception literal construction act decree furnish useful precedent proper method deal capital property illegal trust decision suggest need wisdom additional supplemental legislation make easy entire business community square rule action legality thus finally establish preserve benefit freedom spur reasonable competition without loss real efficiency progress statute first section declare illegal every contract combination form trust otherwise conspiracy restraint trade commerce among several state foreign nation second declares guilty misdemeanor every person shall monopolize attempt monopolize combine conspire person monopolize part trade commerce several state foreign nation two early case statute invoked enjoin transportation rate agreement interstate railroad company hold defense show agreement rate complain reasonable common law say statute direct contract combination restraint trade whether reasonable common law plain record however contract complain case would deem reasonable common law subsequent case court say statute give reasonable construction refuse include within inhibition certain contractual restraint trade denominate incidental indirect case restraint trade court except operation statute instance common law would call reasonable standard oil tobacco case therefore court merely adopt test common law define exception literal application statute substitute test incidental indirect reasonable without vary slight actual scope effect statute word case statute decide would decide way court originally accept construction rule common law say court introduce construction statute distinction emasculate obviously untrue judgment every contract combination restraint interstate trade make purpose necessary effect control price stifle competition establish whole part monopoly trade condemn statute extreme critic instance case ought condemn statute brought within term thus construe suggestion also make supreme court decision last two case committed court undefined unlimited discretion determine whether case restraint trade within term statute wholly untrue reasonable restraint trade common law well understood clearly define rest discretion court must limit accomplish purpose lawful main contract order shall enforceable must incidental exceed need contract void test reasonableness never apply court common law contract combination conspiracy restraint trade whose purpose whose necessary effect would stifle competition control price establish monopoly court never assume power say contract combination conspiracy might lawful party moderate use power thus secure exact public great exorbitant price true many theorist others engage business violate statute hop line could draw court court authority ever attempt certainly nothing decision late two case dangerous theory judicial discretion enforce statute derive slight sanction year make statute effective purpose enact knight case discouraging seem remit state whole available power attack suppress evils trust slowly however error judgment correct last three four year heavy hand law laid upon great illegal combination exercise absolute dominion many industry criminal prosecution bring number pending jury felt averse convict jail sentence judge reluctant impose sentence men respectable stand society whose offense regard merely statutory still offense becomes well understand commit partakes study deliberate defiance law confident jury convict individual jail sentence impose standard oil case supreme circuit court find combination monopoly interstate business refine transport marketing petroleum product effect maintain different corporation stock hold new jersey company effect command dissolution combination direct transfer pro rata distribution new jersey company stock hold corporation among stockholder corporation individual defendant enjoin conspire combine restore monopoly agreement subsidiary corporation tend produce bring violation act enjoin tobacco case court find individual defendant number engage successful effort acquire complete dominion manufacture sale distribution tobacco country abroad do combination make purpose effect stifle competition control price establish monopoly manufacture tobacco also licorice use manufacture product cigars cigarette snuff tobacco suit present far complicate difficult case standard oil suit decree would effectuate court end violation statute single hold company case standard oil trust main company american tobacco company manufacture sell hold company plan adopt destroy combination restore competition involve redivision capital plant whole trust company constitute trust new company organize purpose decree make party number new old fourteen american tobacco company old readjust capital 92 liggett meyers tobacco company new capital lorillard company new capital reynolds tobacco company old capital chiefly engage manufacture sale chew smoke tobacco cigar former one tinfoil company divide two one capital one snuff company divide three company one capital another capital third capital licorice company two one capital another capital also tobacco company british corporation business abroad capital porto rican tobacco company capital corporation unite cigar store capital arrangement different kind business distribute two company division prominent brand tobacco product make competition possible necessary thus business country divide present independent company per cent american tobacco company per cent liggett meyers per cent lorillard company per cent reynolds company per cent stock thirteen company prefer common take defendant american tobacco company distribute among stockholder covenant restrict competition declare null performance enjoin preferred stock different company give vote power deny old organization ratio preferred stock common 78 40 constitutes decide change character ownership control company original suit defendant charge conspirator illegal combination acquire exercised unlawful dominion decree defendant hold amount stock various distributee company range 41 per cent maximum per cent minimum except case one small company porto rican tobacco company hold 45 per cent individual defendant enjoin three year buy stock except group thus prevent extend control period party suit new company make party enjoin perpetually way effect combination company violation statute way resumption old trust fourteen company enjoin acquire stock others company enjoin common director officer common buying selling agent common office lend money objection make certain independent tobacco company settlement unjust leave company large capital active business settlement would effective put equality would division capital plant trust small fraction amount nearly equal independent company contention result misunderstand law purpose intend thereby prevent accumulation large capital business enterprise combination secure reduce cost production sale distribution direct aggregation capital purpose stifle competition enhance control price establish monopoly shall decree defeated purpose restore competition large unit capital plant divide shall accomplish useful purpose statute purpose statute confiscate property capital offend trust method punishment fine imprisonment individual offender fine corporation forfeiture good transportation provide proceed equity specific remedy stop operation trust injunction prevent future use plant capital violation statute venture say history american law decree effective purpose enter court tobacco trust circuit judge noyes say judgment approve decree extent necessary tear apart combination force new form attendant burden ought demonstrate federal statute drastic statute accomplishes effective result long stand statute book must obey disobey without incur penalty hand successful reconstruction organization teach effect enforce statute destroy reconstruct demolish accordance condition congress declare shall exist among people united state assume present pro rata common ownership company former stockholder trust would insure continuance old single control company trust decree disintegrate erroneous base upon assumed inefficacy innocuousness judicial injunction company enjoin cooperation combination different manager director purchase sale agent many numerous stockholder reach thousand attempt secure concert action company view control market number large attempt could well conceal prime mover participant would subject contempt proceeding imprisonment summary character immediate result present situation necessarily activity company different manager competition must follow activity one company stagnation another short time inevitably lead change ownership stock opportunity continue cooperation must disappear critic speak dis integration trust mere change garment give consideration inevitable work decree understand little personal danger attempt evade set naught solemn injunction court whose object make plain decree whose inhibition set forth detail comprehensiveness effect two decision lead decree dissolve combination manufacturer electric lamp southern wholesale grocer association interlocutory decree powder trust direction circuit court compel dissolution combination similar history negotiating department justice look disintegration decree reorganization accordance law seem possible bring reorganization without general business disturbance act see effective accomplishment purpose enactment meet cry many different quarter repeal say obstructive business progress attempt restore method destructive competition small unit make impossible useful combination capital reduction cost production essential continued prosperity normal growth recent decision supreme court make clear nothing statute condemns combination capital mere bigness plant organize secure economy production reduction cost purpose necessary effect organization maintenance combination aggregation immense size stifle competition actual potential enhance price establish monopoly statute violate mere size sin law merge two business plant necessarily eliminate competition unit thus combine elimination contravention statute combination make purpose end particular competition order secure control enhance price create monopoly complaint make statute sufficiently definite description forbidden enable business men avoid violation suggestion may combination two corporation may run year subsequently attorney general may conclude wa violation statute suppose combiners innocent turn combination violation statute answer hypothetical case men attempt amass stupendous capital enable suppress competition control price establish monopoly know purpose act men thing without clearly mind merely purpose reduce cost production without thought suppress competition use bigness plant create convict time union make convict later unless happen later conclude suppress competition take usual method thus establish monopoly case hardly complain motive subsequently disclose attribute court original combination much say repeal statute constructive legislation intend accomplish purpose blaze clear path honest merchant business men follow may plan evolve submit discussion bring recent day fear continued execution law produce nothing glitter generality offer line distinction rule action definite clear supreme court lay enforce statute see indeed see decided enactment law shall describe denounce method competition unfair badge unlawful purpose denounced law attempt purpose suppress competitor underselling price unprofitable drive business make exclusive contract customer require give association manufacturer numerous kindred method stifle competition effect monopoly describe sufficient accuracy criminal statute one hand enable government shorten task prosecute single misdemeanor instead entire conspiracy hand serve purpose point detail business community must avoid special message congress january 7 1910 venture point disturbance business would probably attend dissolution offend trust say investigation possible prosecution corporation whose prosperity destruction affect comfort stockholder million wage earner employee associate tradesman must necessarily tend disturb confidence business community dry flowing source capital place hoard produce halt present prosperity suffering strained circumstance among innocent many fault guilty question wish message bring clearly consideration discussion congress whether order avoid possible business danger something do business combination may offer mean without great financial disturbance change character organization extent business one within line law federal control supervision secure compliance statute generally industrial combination call principal business sale good many state foreign market word interstate foreign business far exceed business do one state fact justify federal government grant federal charter combination make sell interstate foreign commerce product useful manufacture limitation secure compliance law possible frame statute offer protection federal company harmful vexatious unnecessary invasion state shall subject reasonable taxation control state respect purely local business corporation organize act prohibit acquire hold stock corporation except special reason upon approval proper federal authority thus avoid creation national auspex hold company subordinate corporation different state effective agency creation great trust monopoly prohibition act combination restraint trade effectively enforce essential national government shall provide creation national corporation carry legitimate business throughout united state conflict law different state union respect foreign corporation make difficult impossible one corporation comply requirement carry business number different state renew recommendation enactment general law provide voluntary formation corporation engage trade commerce among state foreign nation every argument advance law every explanation time offer possible objection confirm experience since enforcement antitrust statute result actual dissolution active commercial organization even manifest denunciation conspiracy restraint trade mean denial organization large enough intrusted interstate foreign trade make clear purely negative statute like law may well supplement specific provision build regulation legitimate national foreign commerce draft decree dissolution present trust view reorganization legitimate corporation make especially apparent court provide administrative machinery make necessary inquiry preparatory reorganization pursue inquiry empower invoke aid bureau corporation determine suitable reorganization disintegrate part circuit court attorney general greatly aid frame decree tobacco trust dissolution expert bureau corporation set forth detail term section statute might supply constructive legislation permit aid formation combination capital federal corporation subject rigid rule organization procedure include effective publicity close supervision issue stock bond executive bureau commission department commerce labor time doubt might well submit propose plan future business must distinctly understood incorporation federal law could exempt company thus form incorporators manager prosecution law subsequent illegal conduct publicity procedure opportunity frequent consultation bureau commission charge incorporation legitimate purpose transaction would offer great security successful prosecution violation law would practical wise stich bureau commission might well invest also duty already refer aid court dissolution recreation trust within law executive tribunal dignity power comptroller currency interstate commerce commission exercise supervisory power important class corporation federal regulation draft federal incorporation law would offer ample opportunity prevent many manifest evils corporate management include irresponsibility control hand real owner recommend federal charter thus grant shall voluntary least experience justifies mandatory provision benefit derived operation great business protection charter would attract anxious keep within line law large combination fail take advantage federal incorporation right complain failure ascribe unwillingness submit transaction careful official scrutiny competent supervision publicity attendant upon enjoyment charter opportunity thus suggest federal incorporation seem tome suitable constructive legislation need facilitate square great industrial enterprise rule action lay law statute construe supreme court must continue line distinction legitimate business must enforce unless banish individualism business reduce one common system regulation control price like prevails respect public utility apply business would long step toward state socialism act expression effort freedomloving people preserve equality opportunity result confident determination people maintain future growth preserve uncontrolled unrestricted enterprise individual industry ingenuity intelligence independent courage twenty year statute upon statute book know general purpose approve many violator cynical assume impotence seem impossible enforcement slowly mill court ground gradually majesty law assert many die become live force others saw evil grow hop destroy efficacy see power heavy object near achievement hear call repeal plea interfere business prosperity advise general term statute way evil stamping cure abandon work twenty year try another experiment another term year say act do good say face effect northern security decree decree way drastic inhibitive detail either standard oil decree tobacco decree stop time powerful movement toward control railroad country single hand power could healthful influence republic even though exercise general supervision interstate commission desire make ruthless combination monopoly lawful energy direct toward reduction cost production public benefit healthful competition toward new way mean make permanent hand absolute control condition price prevail whole field industry individual enterprise effort paralyze spirit commercial freedom dead relation united state country continue past twelve month upon basis usual good friendly intercourse year pass mark important general movement part power broader arbitration recognition manifold benefit mankind extension policy settlement international dispute arbitration rather war response widespread demand advance direction part people united state great britain france new arbitration treaty negotiate last spring great britain france term de sign express preamble treaty extend scope obligation policy arbitration adopt present treaty government pave way treat united state great britain negotiated important modification alliance japan french government also expedite negotiation signal good new treaty submit senate awaiting advice consent ratification essential important treaty long know earnest hope receive prompt favorable action glad report july 5 last american claim alsop government chile finally disposed decision britannic majesty george v amiable compositeur matter refer determination majesty make award nearly claimant promptly pay chile settlement controversy happily eliminate relation republic chile united state question two decade give two foreign office serious concern make possible unobstructed development relation friendship aim government every possible way cultivate illustration practical beneficent application principle arbitration underlie broad spirit conciliation happy advert part united state facilitate amicable settlement dispute menace peace panama costa rica haiti dominican republic since date independence colombia costa rica seek solution boundary dispute come heritage colombia new republic panama upon begin life independent nation although disputant submit question decision president france term arbitration treaty exact interpretation provision award render matter serious disagreement two country contend widely different line even term decision subsequently since t903 boundary question bad subject fruitless diplomatic negotiation party january 1910 request government agent represent meet conference department state subsequently conclude protocol submit controversy arbitral judgment chief justice united state consent act capacity boundary commission accord international agreement appoint expect argument shortly proceed dispute honorably satisfactorily terminate month ago appear dominican republic haiti enter upon hostility complication grow acrimonious boundary dispute effort many year fail solve government unite state friendly interposition good office succeed prevail upon party place reliance upon form pacific settlement accordingly friendly suggestion government two government empower commissioner meet washington conference state department order arrange term submission arbitration boundary controversy arbitration chamizal boundary question mexico unfortunately abortive earnest effort part government importance command felt early practical adjustment prove possible past year republic venezuela celebrate one hundredth anniversary independence united state send honor event special embassy caracas cordial reception generous hospitality show gratify proof good relation friendship exist country unite state recent political event mexico receive attention government exceedingly delicate difficult situation create along southern border necessity take measure properly safeguard american interest government unite state desire secure proper observance enforcement neutrality statutes federal government issue direction appropriate officer exercise diligent vigilant regard requirement rule law although condition actual arm conflict exist official recognition belligerency involve technical neutrality obligation international law 6th march last absence secretary state personal interview wilson ambassador united state mexico report condition mexico much critical press dispatch disclose president diaz volcano popular uprise small outbreak occur symptomatic whole condition large per cent people sympathy insurrection general explosion probable time case fear american resident mexico might assail large american investment might injure destroyed conference secretary war secretary navy thought wise assemble army division full strength san antonio brigade three regiment galveston brigade infantry los angeles district southern california together squadron battleship cruiser transport galveston small squadron ship san diego time representative city mexico express president diaz hope apprehension might result unfounded conjecture military maneuver assure significance concern government mobilization effect great promptness 15th march secretary war secretary navy letter address chief staff issue follow instruction seem duty commander chief place troop sufficient number congress shall direct enter mexico save american life property effective movement may promptly make meantime movement troop texas elsewhere near boundary accompany sincere assurance utmost goodwill toward present mexican government large frequent patrol along border prevent insurrectionary expedition american soil hold hand exist government healthy moral effect prevent attack upon american property subsequent general internecine strife sudden mobilization division troop great test army full useful instruction maneuver thus make possible occupy troop officer great advantage assumption press contemplate intervention mexican soil protect american life property course gratuitous seriously doubt whether authority circumstance would exercise without express congressional approval indeed know already decline without mexican consent order troop cavalry protect breakwater construct across border mexico mouth colorado river save imperial valley although insurrectos scatter mexican troop take horse supply frighten workman away determine purpose however position danger american live property mexico threaten exist government render helpless insurrection promptly execute congressional order protect effect meantime send letter secretary call attention thing connection presence division southwest doubtless occur wish emphasize first place want make mobilization training army wish would give time war college advise carry maneuver useful character plan continue next three month time may expect either ambassador wilson fear realize chaos consequence ensue present government mexico readjust matter secure result devoutly wish troop return post understand washington aleshire say could probably meet additional expense whole movement present appropriation troop continue texas three month sincerely hope observe newspaper blank cartridge presume error easy procure use soon maneuver begin second texas state ordinarily peaceful put troop without run risk collision people state especially live texas near border sympathize insurrectos federal soldier reason beg careful prevent friction kind able cuba army pacification something troop maintain year without trouble hope thing texas please give attention advise officer command necessity great circumspection regard third one great trouble concentration troop danger disease suppose adopt modern method prevent necessary stamp epidemic much part campaign hardly seem necessary call attention finally wish examine question patrol border put many troop work practicable engage order prevent use borderland carry insurrection give assurance mexican ambassador point sincerely hope experience always remember army navy useful mean education greatly disappointed result injury disaster force take good deal responsibility order mobilization ready answer use utmost care avoid difficulty point may copy letter make leave carter general command may think wise necessary guide course regard confidential happy record fact apprehension effect presence large military force texas prove groundless disturbance occur conduct troop exemplary public reception treatment could desire notwithstanding presence large number mexican refugee border territory time time communication receive ambassador wilson return mexico confirm view mass american troop neighborhood good effect dispatch april 3 1911 ambassador say continue gravity situation chaos would ensue constitutional authority eventually overthrown thus greatly increase danger american live property already subject confirm wisdom president take military precaution make every allowance dignity sovereignty friendly state due national abroad charge responsibility safeguard life property bound say department military disposition frontier produce effective impression mexican mind may moment prove guaranty safety national property eventuate condition require active measure president congress sporadic attack might make upon life property national ultimate result would order adequate protection insurrection continue resulted engagement regular mexican troop insurgent along border several instance bullet contend force struck american citizen engage lawful occupation american soil proper protest make invasion american right mexican authority april 17 1911 1 receive follow telegram governor arizona result fight across international line within gunshot range heart douglas five american wound side line everything point repetition casualty federal seem disposed keep agreement fire douglas position insurrectionist fight occurs east southeast intrenchment people live douglas put danger life judgment radical measure need protect innocent people anything do stop fight agua prieta ittiation call action impossible safeguard people douglas unless town vacate anything do relieve situation acute conference secretary state follow telegram send governor sloan april 18 1911 make public dispatch receive make urgent demand upon mexican government issue instruction prevent fire across border mexican federal troop wait reply meantime send direct warning mexican insurgent force near douglas infer dispatch party attempt heed warn strain exigency contest wild bullet still find way douglas situation might justify order troop cross border attempt stop fighting fire upon combatant american side take step must face possibility resistance great bloodshed also danger motif misconstrue misrepresented thus inflame mexican popular indignation many thousand american mexico jeopardize life property pressure general intervention condition might practicable resist impossible foresee reckon consequence course must use great avoid pending urgent representation mexican government therefore order troop douglas cross border must ask local authority case danger recurs direct people douglas place bullet reach thus avoid casualty loath endanger americans necessarily expose take radical step prevent injury american side border avoid temporary inconvenience glad say invasion american right substantial character occur presence large military naval force available prompt action near mexican border prove fortunate somewhat try condition present invasion american right movement theretofore take place event necessary bring mobilization must bad sinister significance hand presence troop time unfortunate kill wound american citizen douglas make clear restraint exercised government regard occurrence due lack force power deal promptly aggressively due real desire use every mean possible avoid direct intervention affair neighbor whose friendship value anxious retain policy action government base upon earnest friendliness mexican people whole matter gratification note attitude strict impartiality faction mexico sincere friendship neighbor nation without regard party allegiance generally recognize result even closer sympathetic understand two republic warmer regard one action suppress violence restore tranquillity throughout mexican republic peculiar interest government concern safeguard american life property country government unite state occasion accord permission passage body mexican rurales douglas arizona tia juana mexico suppression general lawlessness bad time exist region northern low california may 25 1911 president diaz resign senor de la barra choose provisional president election president vice president thereafter hold throughout republic senor francisco 1 madero formally declare elect october 15 chief magistracy november 6 president madero enter upon duty office since inauguration president madero plot unearthed present government begin new insurrection pursue consistent policy administration adopt begin direct investigation conspiracy charge investigation result indictment bernardo reyes others seizure number officer men horse accoutrement assemble upon soil texas purpose invade mexico similar proceeding take insurrection diaz government result indictment prosecution person find engage violate neutrality law united state aid uprising record government respect recognition constitute authority mexico therefore clear situation central america take occasion past emphasize strongly importance attribute consummation convention republic nicaragua honduras country earnestly recommend necessary advice consent senate accord treaty make possible central american republic enter upon era genuine economic national development government nicaragua already take favorable action convention find necessary pending exchange final ratification enter negotiation american banker purpose secure temporary loan relieve present financial tension iii connection temporary loan hope consummate ultimate operation convention complete lasting economic regeneration government nicaragua also decide engage american citizen collector general custom claim commission service two american citizen seek work american financial adviser accomplish last good inestimable benefit prosperity commerce peace republic consider ratification convention nicaragua honduras rest unite state heavy responsibility fact rejection might destroy progress make consign republic concern still deep submergence bankruptcy revolution national jeopardy relation republic panama peculiarly important due mutual obligation vast interest create canal continued usual friendly manner glad make appropriate expression attitude sympathetic interest endeavor neighbor undertake development rich resource country reference internal political affair republic obvious concern maintenance public peace constitutional order foster general interest create actual relation two country without manifestation preference success either political party pan american union formerly know bureau american republic maintain joint contribution american nation past year enlarge practical work international organization continue prove usefillness agency mutual development commerce well acquaintance closer intercourse united state sister american republic past year mark relation china conclusion two important international loan one construction hukuang railway carry currency reform china pledge treaty united state great britain japan mention make last annual message remember early 1909 agreement consummate among british french german financial group whereby propose lend chinese government fund construction railways province hunan hupeh reserve national privilege engineering construction line furnish material require work negotiation government group concerned agreement reach whereby american british french german national participate upon equal term important useful undertaking thereupon financial group support respective government begin negotiation chinese government terminate loan china privilege increase amount cooperative construction trunk line immense advantage materially otherwise china greatly facilitate development bountiful resource empire hand large portion fund expend material american product equal preference three lending nation contract provide branch extension subsequently build term opportunity american material reach considerable proportion know interest united state reform chinese currency chinese government autumn 1910 seek assistance american government procure fund accomplish reform course subsequent negotiation combine proposed currency loan one certain industrial development manchuria two loan aggregate sum originally solely american enterprise american government consistently desire secure sympathetic practical cooperation great power toward maintain principle equality opportunity administrative integrity china urge chinese government admit participation currency loan associate american group hukuang loan immense importance reform contemplate make loan preliminary comprehensive fiscal reform incalculable benefit china foreign interest alike since strengthen chinese empire promote rapid development international trade negotiation begin understood financial adviser employ china connection reform order absolute equality respect among lend nation might scrupulously observe american government propose nomination neutral adviser agree china government concerned september 28 1911 vissering president dutch java bank financier wide experience orient recommend chinese government post monetary adviser especially important present ancient chinese empire shake civil war incidental awaken many influence activity modernization cooperative policy good understanding foster international project refer general sympathy view among power interested far east safeguarding interest national government use best effort continuance traditional policy sympathy friendship toward chinese empire people confident hope economic administrative development constant disposition contribute welfare proper way consistent attitude strict impartiality contend faction first time history two country chinese cruiser haichi command admiral ching recently visit new york officer men give cordial welcome treaty commerce navigation unite state japan sign 1894 would strict interpretation provision terminate july 17 1912 japan general treaty power however terminate 1911 japanese government express earnest desire conduct negotiation new treaty united state simultaneously negotiation power number important question involve treaty include immigration laborer revision custom tariff right americans hold real estate japan united state consent waive technicality enter upon negotiation new treaty understanding continuance throughout life treaty effective measure restriction immigration laborer american territory operation entire satisfaction government since 1908 japanese government accept basis negotiation new treaty quickly conclude result highly satisfactory settlement question refer satisfactory adjustment also effect question grow annexation korea japan recent visit admiral count togo united state nation guest afford welcome opportunity demonstrate friendly feel happily exist two country change sovereigns siam american minister bangkok accredit special capacity represent united state coronation ceremony new king europe near east past time considerable political unrest moroccan question month great anxiety happily appear reach stage need longer regard concern ottoman empire occupy period strife albania war italy greece balkan country disquiet potentiality situation less felt persia scene long internal struggle condition uneasiness european diplomacy thus far without direct political concern united state war unhappily exist italy turkey government direct political interest take occasion suitable time issue proclamation neutrality conflict time necessary step take safeguard personal interest american citizen organization far affect war spite attendant economic uncertainty detriment commerce united state gain markedly commercial stand certain nation near east turkey especially begin come close relation united state new interest american manufacturer exporter possibility region hop foundation lay large mutually beneficial exchange commodity two country new interest turkey american good indicate fact party prominent merchant large city turkey recently visit united state study condition manufacture export get personal touch american merchant view cooperate intelligently open market turkey adjacent country manufacture another indication new interest america commerce near east recent visit large party american merchant manufacturer central eastern europe entertain prominent official organization large city new bond friendship understand establish lead closer great commercial interchange 22d june present year mark coronation britannic majesty king george honor auspicious occasion send special embassy london courteous cordial welcome extend government representative majesty people great britain emphasize strong bond friendship happily exist two nation result determine effort part great britain united state settle outstanding difference number treaty enter two country recent year nearly unsettle question importance either adjust agreement arrangement make settlement arbitration number unsettled question refer consist pecuniary claim present country order many claim possible settled arbitration special agreement purpose enter two government 18th day august 1910 accordance article 11 general arbitration treaty great britain april 4 19o8 pursuant provision special agreement schedule claim already agree upon special agreement together schedule receive approval senate submit purpose last session congress negotiation two government preparation additional schedule claim already well advanced intention submit schedule soon agree upon senate approval order arbitration proceeding may undertake early date connection attention congress particularly call necessity appropriation cover expense incur submit claim arbitration pursuance act congress approve june 23 1910 secretary state joint committee library enter contract sculptor albert jaeger execution bronze replica statue von steuben erect washington presentation majesty german emperor german nation recognition gift statue frederick great make emperor people united state presentation make september 2 last representative commission special mission government purpose german emperor convey telegraph behalf german people expression appreciative thanks action congress direction state department ambassador russia recently series conference minister foreign affair russia view secure clearer understand construction treaty 1832 russia united state modification exist russian regulation may find interfere way full recognition right american citizen treaty believe government russia address seriously need change present practice treaty sufficient progress make warrant continuance conference hope may soon remove justification complaint treaty violation prevalent country expect immediately christmas recess shall able make communication congress subject negotiation amelioration condition find exist liberia american commission undertaken department state conclude necessary certain formality arrange secure loan hop place republic practical financial economic footing national constituent assembly regularly elect vote portuguese people june 19 last unanimously proclaim republican form government official recognition government unite state give new republic afternoon day negotiation betterment condition exist spitzbergen island adjustment conflict claim american citizen norwegian subject land archipelago still progress supplementary protocol hague convention establishment international prize court mention last annual message embody stipulation provide alternative procedure would remove constitutional objection part hague convention provide may appeal propose court decision national court receive signature government party original convention ratified government unite state together prize court convention deposit ratification government netherlands awaits action power declaration sign london february 26 1909 rule international law recognize within mean article 7 hague convention establishment international prize court controversy nearly year source serious friction united state power border upon north pacific ocean whose subject permit engage pelagic sealing herd breed ground within jurisdiction unite state last satisfactorily adjust conclusion north pacific seal convention enter united state great britain japan russia 7th july last convention conservation measure great importance carry spirit reciprocal concession advantage upon base every reason believe result preserve furseal herd north pacific ocean restore former value purpose commerce also afford permanently satisfactory settlement question solution seem total destruction fur seal another aspect also convention importance furnishes illustration feasibility secure general international game law protection mammal sea preservation importance nation world attention congress especially call necessity legislation part unite state purpose fulfilling obligation assume convention senate give advice consent 24th day july last conference international union protection industrial property authority congress convene washington may 16 1911 close labor june 2 1911 signature three act follow convention revise paris convention march 20 1883 protection industrial property modify additional act sign brussels december 14 1900 2 arrangement replace arrangement sign madrid april 14 1891 international registration additional act regard thereto sign brussels december 14 1900 3 arrangement replace arrangement sign madrid april 14 18gi relate repression false indication production merchandise united state signatory first convention promptly submit senate special message transmit congress 11th january 19ii concurred recommendation make secretary state regard certain needful legislation control interstate foreign traffic opium menacing drug quote annual message december 7 1909 announce result international opium commission hold shanghai february 1909 invitation unite state laid government report commission show china make remarkable progress admirable effort toward eradication opium evil interested government permit commercial interest prevent cooperation reform result collateral investigation opium question country recommend manufacture sale use opium united state rigorously control legislation prior time continuation policy government secure cooperation interested nation united state propose international opium conference full power purpose clothe force international law resolution adopt commission together essential corollary power concern cordially respond proposal government glad able announce representative power assemble conference hague first month since passage act twenty state animate modify pharmacy law bring accord spirit act thus stamping measure intrastate traffic opium drug although urged congress passage certain measure federal control interstate foreign traffic drug action yet take view fact sit hague important conference review municipal law different nation mitigation opium ally evils conference certainly deal international aspect evils seem essential congress take immediate action legislation already call attention special message four important convention sign fourth pan american conference buenos air provide regulation trademark patent copyright arbitration pecuniary claim advice consent senate ratify part united state ratification deposit government argentine republic accordance requirement convention advise similiar action take signatory government one notable advance international morality accomplish recent year arrangement enter april 13th present year united state power repression circulation obscene publication last annual message refer tariff negotiation department state foreign country connection application series proclamation minimum tariff united state importation several country state general operation section 2 new tariff law prove guaranty continued commercial peace although unfortunately instance foreign government deal arbitrarily american interest within jurisdiction manner injurious inequitable past year instance discriminatory treatment remove regret say remain case differential treatment adverse commerce united state none instance appear amount undue discrimination sense section 2 tariff law august 5 1909 exception complete degree equality tariff treatment department state consistently seek obtain american commerce abroad double tariff feature tariff law 1909 amply justify result achieve remove former prevent new undue discrimination american commerce believe time come amendment feature law way provide graduate mean meet vary degree discriminatory treatment american commerce foreign country well protect financial interest abroad american citizen arbitrary injurious treatment part foreign government either legislative administrative measure would seem desirable maximum tariff united state embrace within purview free list case present time order might reasonable significance government country importation united state confine virtually articles free list fiscal year end june 30 1911 show great progress development american trade noteworthy mark high record export american product foreign country valuation excess export show gain precede year widespread appreciation express business interest country regard practical value facility offer department state department commerce labor furtherance american commerce conference officer washington expert knowledge trade condition foreign country consular officer commercial agent department commerce labor leave absence visit principal industrial center united state find great value trade conference regard particularly promising method governmental aid foreign trade promotion department commerce labor arrange give publicity expect arrival itinerary consular officer commercial agent leave unite state order trade organization may arrange conference indicated increasingly clear obtain maintain equity substantial equality treatment essential flourish foreign trade becomes year year important industrial commercial welfare united state flexibility tariff sufficient give take negotiation department state behalf commerce industry need hardly reiterate conviction speedily build american merchant marine necessary assure favorable transportation facility great commerce well supplement navy adequate reserve ship men would economic advantage keep home part vast sum pay foreign shipping carry american good great commercial nation pay heavy subsidy merchant marine obvious without wise aid congress united state must lag behind matter merchant marine present anomalous position legislation facilitate extension american bank foreign country another matter foreign trade need assistance interest foreign commerce nonpartisan factor prosperity broad land dissemination useful information coordination effort certain unofficial association do good work toward promotion foreign commerce regret however great number association comparative lack cooperation fail secure efficiency commensurate public interest agency department commerce labor case directly department state transmits reputable business interest information commercial opportunity supplement regular publish consular report central organization touch association chamber commerce throughout country able keep purely american interest closer touch different phase commercial affair would believe great value organization might manage committee compose small number actively carry work large association might add committee member ex officio one two official department state one two official department commerce labor representative appropriate committee congress authority success organization would evidently enhance congress see fit prescribe scope organization legislation would give official stand example national red cross factor continuance establishment departmental diplomatic consular upon high plane place recent reorganization government would abreast time foster interest foreign trade rest must leave energy enterprise business men entire organization improve developed especial regard requirement commercial interest country rapid growth foreign trade make utmost importance governmental agency trade aid protected possess high degree efficiency foreign representative maintain upon generous scale far salaries establishment concerned selection advancement officer definitely permanently regulate law service shall fail attract men high character ability experience past year partial application rule diplomatic consular service leave doubt mind wisdom wider permanent extension principle branch foreign service men select appointment mean exist executive regulation far high average intelligence ability men appoint regulation promulgate moreover feel exist rule reasonable hope permanence tenure good behavior promotion meritorious service serve bring zealous activity interest country never exist could exist earnest conviction enactment law general principle exist regulation fail effect improvement branch foreign service provide great inducement young men character ability seek career abroad service government incentive already service put forth great effort attain high standard successful conduct international relation commerce require therefore commend favorable action congress enactment law apply diplomatic consular service principle embody section 1753 revised statute united state act january 16 1883 executive order june 27 1906 november 26 1909 consideration important subject desire recall attention congress favorable report make lowden bill improvement foreign service foreign affair committee house representative available statistic show strictness merit system apply foreign service recent year absolute nonpartisan selection consul secretary indeed far select view political consideration actually choose disproportionate extent state would unrepresented foreign service system hop permanently obsolete legislation perpetuation present system examination promotion upon merit efficiency would greatest value commerical international interest annual message congress december 1909 stated section 2 act august 5 1909 appoint tariff board three member cooperate state department administration maximum minimum clause act make glossary encyclopedia exist tariff render term intelligible ordinary reader investigate industrial condition cost production home abroad view determine extent exist tariff rate actually exemplify protective principle duty make adequate adequate equalize difference cost production home abroad state believed investigation would great value basis accurate legislation time time recommend congress revision certain schedule accordance finding board last session congress bill create permanent tariff board five member three political party pass house fail enactment slight difference agreement reach adjournment appropriation act provide permanent tariff board create statute report congress schedule k december 1911 therefore carry far lay within power purpose bill permanent tariff board appoint march 19li board five add two member party affiliation would fulfil statutory requirement direct make report schedule k tariff act december year message august 17 1911 accompany veto wool bill say judgment schedule k revise rate reduce veto base ground since tariff board would make december detailed report wool wool manufacture special reference relation exist rate duty relative cost abroad public policy fair regard interest producer manufacturer one hand consumer demand legislation hastily enact absence information possess time adequate knowledge fact determine whether propose act accord pledge support fair reasonable protective policy legislation might prove temporary inflict upon great industry evil continue uncertainty herewith submit report tariff board schedule board unanimous finding basis finding recommend congress proceed consideration schedule view revision general reduction rate report show present method assess duty raw specific rate grease pound unscoured exclude wool high shrinkage scour fine quality american market thereby lessen range wool available domestic manufacturer duty scour wool 33 cent per pound prohibitory operate exclude importation clean foreign wool inferior grade nevertheless valuable material manufacturing import grease heavy shrinkage wool import might use displace cheap substitute use make precede paragraph little plain take instance hundred pound wool import present duty 11 11 cent pound would make duty hundred pound 11 merchantable part wool thus import weight wool hundred pound scour wool shrink 80 per cent wool duty case would amount 11 11 20 pound scoured wool course would prohibitory wool shrink 50 per cent would 11 50 pound wool near average great bulk wool import australia principal source import wool discrimination could overcome assess duty ad valorem term method open objection first increase administrative difficulty tend decrease revenue undervaluation second price advance ad valorem rate increase duty per pound time consumer need relief producer best stand competition price decline duty decreased time consumer least burdened price producer need protection another method meeting difficulty tax grease pound assess specific duty grease wool term scour content obviates chief evil present system namely discrimination due different shrinkage thereby tend greatly equalize duty board report method feasible practice could administer without great expense scour content wool basis user wool make calculation duty kind would fit usages trade one effect method assessment would regardless rate duty would increase supply variety wool make available american market wools low fine quality exclude report show detail difficulty involve attempt state categorical term cost wool production great difference cost different region different type wool find however take variety account average cost production whole american clip high cost chief compete country amount somewhat less present duty report show duty noils wool waste shoddy adjusted rate 33 cent scour wool prohibitory measure duty scour wool prohibitory general assess rate high high duty pay clean content wool actually import reduce adjusted rate wool bear proper proportion real rate levy actual wool import duty many class wool manufacture prohibitory greatly excess difference cost production abroad true top yarn exception worst yarns high grade low medium grade cloth heavy weight top 52 cent pound value yarn 65 cent value rate 100 per cent correspondingly higher rate low value cheap medium grade cloth exist rate frequently run 150 per cent cheap good 200 per cent largely due part duty levy ostensibly compensate manufacturer enhance cost raw material due duty wool matter fact compensatory duty numerous class good much excess amount need strict compensation hand finding show duty run high ad valorem equivalent prohibitory since good import price domestic fabric raise full amount duty set sample 16 english fabric completely exclude present tariff rate find total foreign value duty would assess fabric import foreign value plus amount duty nominal duty 183 per cent fact however practically identical fabric domestic make sell time show enhanced price foreign market value 67 per cent although duty increase price domestic good anything like full amount none less true prohibitive duty eliminate possibility foreign competition even time scarcity form temptation monopoly conspiracy control domestic price much excess difference cost production abroad reduce point accord principle finding board show industry actual manufacturing cost aside question price material much high country abroad make yarn cloth domestic woolen worst manufacturer general advantage form superior machinery efficient labor offset high wage pay country finding show cost turn wool yarn country double lead compete country cost turn yarn cloth somewhat double protective policy great industry involve welfare hundred thousand people establish despite handicap recommend revision reduction therefore urge action take fact mind end important establish industry may jeopardize tariff board report equitable method find levy purely specific duty woolen worst fabric except compensatory duty rate must ad valorem manufacture important realize however flat ad valorem rate fabric make work fairly effectively single rate high enough equalize difference manufacturing cost home abroad highly finish good involve labor would prohibitory cheap good labor cost small proportion total value conversely rate adequate equalize difference cheap good would remove protection manufacture increase one strike feature trade development recent year therefore recommend revision importance graduate scale ad valorem duty cloths carefully consider applied venture say legislative ever present complete exhaustive report difficult complicate subject relative cost wool woolens world monument thoroughness industry impartiality accuracy men engage make chosen political party allow partisan spirit prompt control inquiries unanimous finding feel sure report print studied value compendium exact knowledge respect schedule tariff convince wisdom make board permanent order may treat schedule tariff treat keep bureau information date current change economic world part function tariff board propose rate duty function merely present finding fact rate duty may fairly determine light adequate knowledge accord economic policy follow present report finding fact board show ample reason revision downward schedule k accord protective principle present data relative cost price may determine rate fairly equalize difference production cost recommend revision proceed financial condition government show close last fiscal year june 30 1911 satisfactory ordinary receipt general fund exclude postal revenue amount disbursement general fund current expense capital outlay exclude postal panama canal disbursement include interest public debt amount leave surplus postal revenue receipt amount payment make postal service postal revenue amount left surplus postal receipt disbursement first time 27 year surplus occur debt unite state june 30 1911 amount igo debt interest cease amounted debt bearing interest include greenback national bank note redeem fractional currency amount total interest noninterest bear debt amount actual disbursement exclusive panama canal postal service year end june 30 1911 actual disbursement year end june 30 1910 exclusive panama canal postal service disbursement make decrease yearly expenditure year 1911 1910 year end june 30 1912 estimate receipt exclusive postal revenue total estimate exclusive panama canal postal expenditure payable postal revenue amount decrease 1912 estimate 1911 estimate year end june 30 1913 estimate receipt exclusive postal revenue total estimated appropriation exclusive panama canal postal disbursement payable postal revenue amount decrease 1913 estimate 1912 estimate postal revenue expansion business department normal increase post office extension service increase outlay sum department year postmaster general assure next year receipt least equal expenditure probably exceed surplus year fair equitable therefore determine economy government run exclude transaction department like post office department rely support upon receipt calculation heretofore make comparison economy year proper custom include statement deficit post office department pay treasury calculation actual increase expense government arise increase population general expansion governmental function except post office number year show normal increase 4 per cent year direct exercise great care keep expense estimate succeed reduce total disbursement year credit government show well government sale panama canal 3 per cent bond bond give owner privilege use basis circulation privilege extend would affect general market value sale therefore measure credit government premium realize upon bond make actual interest rate transaction per cent treasury department efficiency economy work keep steadily provision make elimination 134 position come year two hundred statutory position eliminate last year office treasury washington 141 position year 1910 make elimination 542 statutory position since march 4 1909 do without discharge anybody normal resignation death equal elimination place system transfer take care person whose position drop field service department position eliminate present time make total net reduction treasury position number meantime efficiency work departmeat increase matter first importance come congress action session monetary reform congress arrange early introduction great question report monetary commission commission appoint recommend solution banking currency problem long confront nation furnish fact data necessary enable congress take action commission appoint impressive urgent popular demand legislative relief suddenly arise distress situation people cause deplorable panic 1907 congress decide could give immediately relief require would provide commission furnish mean prompt action later date order work thoroughness precision commission take time make report country undoubtedly hop prompt action report convenience congress permit recognition gross imperfection mark inadequacy banking currency system even quiet financial period long stand later mature recognition fact system responsible extraordinary devastation waste business paralysis recur period panic though member monetary commission considerable time work open large number people openly work press largely note discussed work proceed report commission promise represent national movement detail report still consider therefore much time commend immense importance monetary reform urge prompt consideration action commission report receive express satisfaction plan propose promise embrace main feature meet approval great preponderance practical professional opinion country likely meet equal approval congress exceedingly fortunate wise undisputed policy maintain unchanged main feature bank system render impossible introduce central bank central bank would certainly resist plan could introduce would probably defeat central bank could part plan discuss consider troublesome question eliminate ingenious novel propose national reserve association appear simply logical outgrowth best present system fact fulfillment system exactly management association organize question still open seem desirable bank would association main manage agency bank act trusted good anybody else chiefly conduct mainly banker work must form government supervision ultimate control favor reasonable representation government management entertain fear introduction politics undesirable influence properly measure government representation trust bank country possess requisite standard place upon foot perfect equality opportunity national system state system fairly recognize leave eventually coalesce shall prove tendency evolution develop impartially bank one system give permit advantage opportunity system trust also new legislation carefully completely protect assure individuality independence bank end tendency may ever toward consolidation money bank power nation shall defeat always possible course correct feature new law may practice prove unwise law sure enact condition unusual knowledge authority also include well remember possibility future amendment present prospect reform encourage u would singularly unfortunate monetary question chance become party issue sincerely hope exceed amount consideration receive people nation wholly nonpartisan congress set nonpartisan seal upon monetary commission appoint commend question favorable consideration congress speak spirit great number fellow citizen without think party partisanship feel remarkable earnestness reform necessary interest people congress dill purpose increase efficiency decrease expense army contain four principal feature first consolidation general staff adjutant general inspector general department second consolidation quartermaster department subsistence pay department third creation army service corps fourth extension enlistment period three five year establishment army service corp propose bill thoroughly accord convinced establishment corp result material economy great increase efficiency army repeatedly recommend predecessor also believe consolidation staff corp make result increase efficiency economy along line provide bill consideration oppose plan result would break interfere essential principle detail system staff corp establish act february 2 1901 oppose plan result would give officer select chief staff member general staff corp great permanency office exist law neither chief staff member general staff corp remain office period four year must interval two year successive tour duty bill refer provide certain person shall become permanent member general staff corp certain others subject redetail without interval two year provision fraught danger welfare army would practically nullify main purpose law create make consolidation reduction make total number officer army perform duty impose law past recommend increase number officer 6oo order provide sufficient officer perform class staff duty tc reduce number line officer detach command congress last session increase total number officer 2oo enough promotion line army slow officer attain command rank age early enough properly exercise would mistake retard already slow promotion throw back line arm number officer absorb rovided another feature bill believe mistake propose increase term enlistment three five ear believe would better enlist men six year release end three year active service put reserve remain three year reenlistments largely confine noncommissioned officer enlist men skilled grade plan payment comparatively small compensation three year reserve would keep large bodv men call government train ready army united state good condition show able meet emergency successful mobilization army division i5 ooo ooo men take place along border mexico recent disturbance country marvelous freedom ordinary camp disease typhoid fever measles refer report secretary war show effectiveness sanitary regulation treatment medical corp discipline army invoke high commendation beg renew recommendation last year congress appropriate memorial amphitheater arlington fund require construct upon plan already approve satisfactory progress make panama canal last year continue every reason believe canal complete early 1st july 1913 unless something unforeseen occur 18 month time promise engineer near enough completion canal make imperatively necessary legislation enact fix method canal shall maintain control zone govern fact statutory law authority president maintain government zone authority give amendment spooner act expire term limitation year ago since time government continue advice attorney general absence action congress necessarily imply authority part executive maintain government territory see law execute fact able thus get along important day construction without legislation expressly formulating government zone delegate creation president reason supposing may continue kind government construction finish implied authority president maintain civil government zone may derive mandatory direction give original spooner act command build canal certainly canal complete put permanent management ought specific statutory authority regulation control government zone hold chief main purpose operate canal fully concur secretary war problem simply management great public work government local republic every provision must direct toward successful maintenance canal avenue commerce provision government live within zone subordinate main purpose zone 40 mile long 10 mile wide population soon work construction complete town make population desert comparatively natives continue residence control ought approximate military government one judge two justice peace sufficient attend judicial litigated business fundamental law congress zone govern order president issue war department today provision make guaranty life liberty property beyond government military reservation manage connection great highway trade last annual message discuss length reason government assume task furnish ship use canal whether naval vessel others supply coal oil necessity must replenish either pass canal together dock facility repair every character think wise government government must establish naval vessel large depot dry dock warehouse may easily enlarge secure world public use canal reasonable price certainty discrimination wish avail facility renew recommendation respect toll canal within limit shall seem wise congress power fix toll give president order arrive proper conclusion must experiment do congress delegate power one act expeditiously confident united state power relieve payment toll part ship congress deems wise canal money build right charge toll use toll must everyone deal ship practice many government subsidize merchant vessel well establish general subsidy equal toll equivalent remission toll hold discrimination use canal practice suez canal make clear experiment toll make president would doubtless disclose great burden toll coastwise trade atlantic pacific coast could bear without prevent usefulness competition transcontinental railroad one chief reason build canal set competition bring two shore closer together practical trade problem may toll wholly remit think best principle believe cost government work panama canal ought impose gradually certainly upon trade creates make possible far consistent development world trade canal benefit intend secure east west coastwise trade ought labor secure canal toll sufficient amount ultimately meet debt assume pay interest respect philippine urgently join recommendation secretary war act february 6 1905 limit indebtedness may incur philippine government construction public work increase 15 ooo ooo finance government excellent condition maximum sum mention quite low compare amount indebtedness government similar resource success attend expenditure useful improvement harbor place island justifies require additional expenditure like purpose also join recommendation legislature philippine island authorize provide naturalization filipino others present law treat alien enable become citizen philippine island pending investigation congress last session one committees disposition friar land secretary dickinson direct friar land sold excess limit fix public land congress pas upon subject conclude investigation order obstruction disposition land expect direct secretary war return practice opinion attorney general enable u dispose land much promptly prepare sink fund meet bond issue purchase land doubt whatever attorney general construction proper one interest everyone land shall promptly dispose danger create monopoly ownership land statute construe nothing two tract acres unimproved remote province likely dispose bulk rest land subject limitation shall first offer present tenant lessor hold small tract estimate river harbor improvement reach come year wish urge whenever project adopt congress one complete money economically expend construction year great ultimate economy especial application improvement mississippi river large branch seem increase money annually expend improvement ohio river formally adopt congress would interest public similar change ought make present congress amount appropriate missouri river engineer say cost improvement missouri river kansas city louis order secure 6 foot permanent channel reach least three recommendation chief engineer improvement adopt expend upon annually particular improvement especially entitle attention congress company organize kansas city capital build steamer barge actually use river transportation order show do way affect rate kansas city louis order manifest good faith confidence respect improvement urgently recommend appropriation improvement increase recommend completion contract annually work may do 10 year project navigable waterway lake michigan mouth illinois river thence via mississippi gulf mexico one national importance view work already accomplished sanitary district chicago agency state illinois construct difficult costly stretch waterway make asset nation view fact people illinois authorized expenditure carry waterway 62 mile far utica feel fit work supplemented government expenditure recommend special board engineer waterway utica mouth illinois river make upon line provide waterway nation otherwise benefit state full extent recommend term service say special board engineer continue empowered reopen question treatment low illinois river negotiate properly constitute commission represent state illinois agree upon plan improvement low illinois river upon extent united state may properly cooperate state illinois secure construction navigable waterway lockport mouth illinois river conjunction development water power state lockport utica report attorney general show subject close examination account clerk federal court find good many disclose irregularity dishonesty considerable difficulty secure effective prosecution removal clerk thus derelict certainly unduly prejudiced federal court fact long confidential relation grow tenure life part judge practical tenure life part clerk calculate secure strictness deal judge clerk respect fee account assures clerk conduct freedom overcharge carelessness relationship judge clerk make ungracious member bar complain clerk department examiner make charge hear court order removal clerk judgment recovery fee case reluctantly enter judge reason recommend amendment law whereby president shall give power remove clerk provision need interfere right judge appoint clerk remove last message recommend congress authorize payment finding judgment court claim matter french spoliation case appropriation pay judgment since 1905 finding award obtain bitter fight government succeed 75 per cent case amount award ought matter good faith part government pay limitation liability master servant personal injury occasion fault abandon civilized country provision make whereby employee injured course employment compensate loss work ability irrespective negligence principle upon provision proceeds accidental injury workman modern industry vast complexity inherent danger arise complicated machinery use great force steam electricity regard risk industry loss borne equitable proportion profit engage therein recognition last congress authorize appointment commission investigate subject employer liability workmen compensation report result investigation president congress commission appoint work hold hearing gather data consider subject expect able report first year accordance provision law hop expect commission suggest legislation enable u put place present wasteful sometimes unjust system employer liability plan compensation afford certain definite relief employee injure course employment industry subject regulate power congress promotion movement prevention delay unnecessary cost litigation glad say supreme court take step reform present equity rule federal court may near future expect revision long step right direction american bar association recommend congress several bill expedite procedure one already pass house unanimously february 6 1911 directs judgment set aside reverse new trial grant unless appear court examination entire error complain injuriously affect substantial right party also provide submission issue fact jury reserve question law subsequent argument decision hope bill pas senate become law simplify procedure law another bill amend chapter ii judicial code order avoid error plead present association one enlarge jurisdiction supreme court permit court examine upon writ error case right title claim constitution statute treaty united state whether decision court right title favor measure interest justice pass begin present administration 1909 postal service arrears extent much large deficit record brief space two year turn surplus accomplish without curtailment postal facility may see fact establish new post office delivery carrier add service 186 city new rural route establish cover mile force postal employee increase two year average annual salary substantial increase january 3 1911 depository establish experimentally 48 state territory three month successful operation system extend rapidly feasible post office first second third class constitute presidential grade end year practically designated system extend post office business select post office depositories consideration give efficiency postmaster office rating satisfactory department designate withhold designation postmaster unsatisfactory rating salutary effect service deposit keep pace extension system amount end first month operation experimental office increase july 11 month operation reach total sum distribute among bank protect tinder law bond deposited treasurer united state method adopt conduct system certificate issue evidence deposit account depositor keep post office instead department compare practice country enter deposit pass book keep central office ledger account depositor use certificate result great economy administration depositor thus far number approximately include 40 nationality native american largely predominate english italian come next first conversion deposit united state bond bear interest rate per cent occur july 1 1911 amount deposit exchange little 6 per cent total outstanding certificate deposit june 30 issue bond value coupon form register form step take immediately establishment rural parcel post estimate appropriation need maintenance postal service ensue fiscal year item insert cover preliminary expense establish parcel post rural mail route well cover investigation object final establishment general parcel post railway steamboat transportation rout department believe initial expense establish system defray parcel post full operation rural route bring sufficient revenue meet cost also surplus utilized pay expense parcel post city delivery service hop congress authorize immediate establishment limit parcel post rural route may select provide delivery along route parcel exceed eleven pound weight limit international parcel post post office route emanate another route emanate office preliminary service prepare way thorough comprehensive inquiry contemplate ask appropriation mention enable department gain definite information concern practical operation general system time extend benefit service class people others specially need suggestion general parcel post awaken great opposition part think effect destroy business country storekeeper instead think change greatly increase business benefit reduction cost living bring ought make come certain 2d november last review fight fleet battleship vessel assemble new york harbor consist 24 battleship 2 armor cruiser 2 cruiser 22 destroyer 12 torpedo boat 8 submarine attendant vessel make 98 vessel class tonnage ton saw fleet struck preparedness high military efficiency american proud personnel fleet deficient number torpedo destroyer cruiser collier well large battleship cruiser become important feature foreign navy notably british german japanese building plan year contemplate two battleship two collier small vessel build much rapidly case emergency battleships certainly ought continue policy two battleship year panama canal finish first line reserve line number 40 available vessel proper armament size reorganization navy appointment four aid secretary continue demonstrate usefulness would difficult administer affair navy without expert counsel advice aid renew recommendation make last year aid recognize statute certain navy present size admiral active command high rear admiral recognize grade order admiral fleet admiral vice admiral rear admiral great battleship fleet command rear admiral four rear admiral order question precedence arise naval officer european navy american rear admiral though command ten time force foreign vice admiral must yield precedence latter absurdity ought prevail avoid creation two three position flag rank rear admiral attend open new train school north chicago glad note opportunity give draw upon young men country interior farm store shop office insure high average intelligence character among showed wonderful improvement discipline drill short week presence naval station make invite attention consideration new system detention punishment army navy enlist men obtain great britain make greatly well control men adopt similar system like treasury department war department navy department give much attention economy administration cut number unnecessary expense reduce estimate except construction increase involve urge upon congress necessity immediate increase men enlist strength navy provide estimate four thousand need man available vessel service enlist men rating careful computation show april 1912 men require vessel commission apprentice seaman keep train time secretary navy recommended abolition certain small unnecessary navy yard order furnish complete comprehensive report refer question navy yard joint board army navy board shortly make report secretary navy advises recommendation subject present early come year measure economy contain proper handling subject great important interest nation shall present congress separate subject apart annual message concentration necessary work naval vessel navy yard coast vital necessity proper economy government expenditure attain secretary navy strive unify various corp navy extent possible thereby stimulate navy spirit distinguish corp spirit warm support officer naval officer first specialist afterwards mean officer take least one specialty ordnance construction engineering practically do specialist like pay officer naval constructor line propose make line combatant corp obviously line necessitates amalgamate pay officer also engage technical work produce finish ship present case single exception naval constructor propose amalgamate line urge upon congress desirability establish council national defense bill establish council congress last winter hop legislation pas present session purpose council determine general policy national defense recommend congress president measure relate shall deem necessary expedient machinery provide readiness army navy may improve program military naval requirement shall coordinate properly scrutinize view necessity whole nation rather separate department consideration matter pending disposed agricultural department department commerce labor refer excellent report secretary department shall able submit congress christmas holiday question conservation resource arise alaska west question rate mail matter post office department law require submission report commission economy efficiency 31st december shall therefore able submit report work commission assemble congress holiday already advocate last annual message adoption retirement system contributory feature reduce minimum cost government pension pay considerable reflection much oppose pension system involve contribution employee think experience government justifies view cry necessity contributory system possibly preliminary governmental outlay order cover initial cost set system go contribution accumulate manifest every side nothing much promote economy efficiency government system wish renew recommendation local office throughout country include collector internal revenue collector customs postmaster four class immigration commissioner marshal law cover classified service necessity confirmation senate remove president others whose time take distribute patronage custom prevail since begin government accordance recommendation senator congressmen majority party relieve burden confident change would greatly reduce cost administering government would add greatly efficiency would take away power use patronage government political purpose officer recommend senator congressman political motif political service render impossible expect office appointee regard tenure less dependent upon continued political service patron regulation however stiff rigid prevent regulation view method motive selection plainly inconsistent deem hardly worthy respect