  The foreign relations of the United States actually and potentially affect the state of the Union to a degree not widely realized and hardly surpassed by any other factor in the welfare of the whole Nation. The position of the United States in the moral,intellectual, and material relations of the family of nations should be a matter of vital interest to every patriotic citizen. The national prosperity and power impose upon us duties which we can not shirk if we are to be true to our ideals. The tremendous growth of the export trade of the United States has already made that trade a very real factor in the industrial and commercial prosperity of the country. With the development of our industries the foreign commerce of the United States must rapidly become a still more essential factor in its economic welfare. Whether we have a farseeing and wise diplomacy and are not recklessly plunged into unnecessary wars, and whether our foreign policies are based upon an intelligent grasp of present-day world conditions and a clear view of the potentialities of the future, or are governed by a temporary and timid expediency or by narrow views befitting an infant nation, are questions in the alternative consideration of which must convince any thoughtful citizen that no department of national polity offers greater opportunity for promoting the interests of the whole people on the one hand, or greater chance on the other of permanent national injury, than that which deals with the foreign relations of the United States. The fundamental foreign policies of the United States should be raised high above the conflict of partisanship and wholly dissociated from differences as to domestic policy. In its foreign affairs the United States should present to the world a united front. The intellectual, financial, and industrial interests of the country and the publicist, the wage earner, the farmer, and citizen of whatever occupation must cooperate in a spirit of high patriotism to promote that national solidarity which is indispensable to national efficiency and to the attainment of national ideals. The relations of the United States with all foreign powers remain upon a sound basis of peace, harmony, and friendship. A greater insistence upon justice to American citizens or interests wherever it may have been denied and a stronger emphasis of the need of mutuality in commercial and other relations have only served to strengthen our friendships with foreign countries by placing those friendships upon a firm foundation of realities as well as aspirations. Before briefly reviewing the more important events of the last year in our foreign relations, which it is my duty to do as charged with their conduct and because diplomatic affairs are not of a nature to make it appropriate that the Secretary of State make a formal annual report, I desire to touch upon some of the essentials to the safe management of the foreign relations of the United States and to endeavor, also, to define clearly certain concrete policies which are the logical modern corollaries of the undisputed and traditional fundamentals of the foreign policy of the United States. At the beginning of the present administration the United States, having fully entered upon its position as a world power, with the responsibilities thrust upon it by the results of the Spanish-American War, and already engaged in laying the groundwork of a vast foreign trade upon which it should one day become more and more dependent, found itself without the machinery for giving thorough attention to, and taking effective action upon, a mass of intricate business vital to American interests in every country in the world. The Department of State was an archaic and inadequate machine lacking most of the attributes of the foreign office of any great modern power. With an appropriation made upon my recommendation by the Congress on August 5, 1909, the Department of State was completely reorganized. There were created Divisions of LatinAmerican Affairs and of Far Eastern, Near Eastern, and Western European Affairs. To these divisions were called from the foreign service diplomatic and consular officers possessing experience and knowledge gained by actual service in different parts of the world and thus familiar with political and commercial conditions in the regions concerned. The work was highly specialized. The result is that where previously this Government from time to time would emphasize in its foreign relations one or another policy, now American interests in every quarter of the globe are being cultivated with equal assiduity. This principle of politico-geographical division possesses also the good feature of making possible rotation between the officers of the departmental, the diplomatic, and the consular branches of the foreign service, and thus keeps the whole diplomatic and consular establishments tinder the Department of State in close touch and equally inspired with the aims and policy of the Government. Through the newly created Division of Information the foreign service is kept fully informed of what transpires from day to day in the international relations of the country, and contemporary foreign comment affecting American interests is promptly brought to the attention of the department. The law offices of the department were greatly strengthened. There were added foreigntrade advisers to cooperate with the diplomatic and consular bureaus and the politico-geographical divisions in the innumerable matters where commercial diplomacy or consular work calls for such special knowledge. The same officers, together with the rest of the new organization, are able at all times to give to American citizens accurate information as to conditions in foreign countries with which they have business and likewise to cooperate more effectively with the Congress and also with the other executive departments. Expert knowledge and professional training must evidently be the essence of this reorganization. Without a trained foreign service there would not be men available for the work in the reorganized Department of State. President Cleveland had taken the first step toward introducing the merit system in the foreign service. That had been followed by the application of the merit principle, with excellent results, to the entire consular branch. Almost nothing, however, had been done in this direction with regard to the Diplomatic Service. In this age of commercial diplomacy it was evidently of the first importance to train an adequate personnel in that branch of the service. Therefore, on November 26, 1909, by an Executive order I placed the Diplomatic Service up to the grade of secretary of embassy, inclusive, upon exactly the same strict nonpartisan basis of the merit system, rigid examination for appointment and promotion only for efficiency, as had been maintained without exception in the Consular Service. How faithful to the merit system and how nonpartisan has been the conduct of the Diplomatic and Consular Services in the last four years may be judged from the following: Three ambassadors now serving held their present rank at the beginning of my administration. Of the ten ambassadors whom I have appointed, five were by promotion from the rank of minister. Nine ministers now serving held their present rank at the beginning of my administration. Of the thirty ministers whom I have appointed, eleven were promoted from the lower grades of the foreign service or from the Department of State. Of the nineteen missions in Latin America, where our relations are close and our interest is great, fifteen chiefs of mission are service men, three having entered the service during this administration. Thirty-seven secretaries of embassy or legation who have received their initial appointments after passing successfully the required examination were chosen for ascertained fitness, without regard to political affiliations. A dearth of candidates from Southern and Western States has alone made it impossible thus far completely to equalize all the States' representations in the foreign service. In the effort to equalize the representation of the various States in the Consular Service 1 have made sixteen of the twenty-nine new appointments as consul which have occurred during my administration from the Southern States. This is 55 per cent. Every other consular appointment made, including the promotion of eleven young men from the consular assistant and student interpreter corps, has been by promotion or transfer, based solely upon efficiency shown in the service. In order to assure to the business and other interests of the United States a continuance of the resulting benefits of this reform, I earnestly renew my previous recommendations of legislation making it permanent along some such lines as those of the measure now Pending in Congress. In connection with legislation for the amelioration of the foreign service, I wish to invite attention to the advisability of placing the salary appropriations upon a better basis. I believe that the best results would be obtained by a moderate scale of salaries, with adequate funds for the expense of proper representation, based in each case upon the scale and cost of living at each post, controlled by a system of accounting, and under the general direction of the Department of State. In line with the object which I have sought of placing our foreign service on a basis of permanency, I have at various times advocated provision by Congress for the acquisition of Government-owned buildings for the residence and offices of our diplomatic officers, so as to place them more nearly on an equality with similar officers of other nations and to do away with the discrimination which otherwise must necessarily be made, in some cases, in favor of men having large private fortunes. The act of Congress which I approved on February 17, 1911, was a right step in this direction. The Secretary of State has already made the limited recommendations permitted by the act for any one year, and it is my hope that the bill introduced in the House of Representatives to carry out these recommendations will be favorably acted on by the Congress during its present session. In some Latin-American countries the expense of governmentowned legations will be less than elsewhere, and it is certainly very urgent that in such countries as some of the Republics of Central America and the Caribbean, where it is peculiarly difficult to rent suitable quarters, the representatives of the United States should be justly and adequately provided with dignified and suitable official residences. Indeed, it is high time that the dignity and power of this great Nation should be fittingly signalized by proper buildings for the occupancy of the Nation's representatives everywhere abroad. The diplomacy of the present administration has sought to respond to modern ideas of commercial intercourse. This policy has been characterized as substituting dollars for bullets. It is one that appeals alike to idealistic humanitarian sentiments, to the dictates of sound policy and strategy, and to legitimate commercial aims. It I is an effort frankly directed to the increase of American trade upon the axiomatic principle that the Government of the United States shall extend all proper support to every legitimate and beneficial American enterprise abroad. How great have been the results of this diplomacy, coupled with the maximum and minimum provision of the tariff law, will be seen by some consideration of the wonder ful increase in the export trade of the United States. Because modern diplomacy is commercial, there has been a disposition in some quarters to attribute to it none but materialistic aims. How strikingly erroneous is such an impression may be seen from a study of the results by which the diplomacy of the United States can be judged. In the field of work toward the ideals of peace this Government negotiated, but to my regret was unable to consummate, two arbitration treaties which set the highest mark of the aspiration of nations toward the substitution of arbitration and reason for war in the settlement of international disputes. Through the efforts of American diplomacy several wars have been prevented or ended. I refer to the successful tripartite mediation of the Argentine Republic, Brazil, and the United States between Peru and Ecuador; the bringing of the boundary dispute between Panama and Costa Rica to peaceful arbitration; the staying of warlike preparations when Haiti and the Dominican Republic were on the verge of hostilities; the stopping of a war in Nicaragua; the halting of internecine strife in Honduras. The Government of the United States was thanked for its influence toward the restoration of amicable relations between the Argentine Republic and Bolivia. The diplomacy of the United States is active in seeking to assuage the remaining ill-feeling between this country and the Republic of Colombia. In the recent civil war in China the United States successfully joined with the other interested powers in urging an early cessation of hostilities. An agreement has been reached between the Governments of Chile and Peru whereby the celebrated TacnaArica dispute, which has so long embittered international relations on the west coast of South America, has at last been adjusted. Simultaneously came the news that the boundary dispute between Peru and Ecuador had entered upon a stage of amicable settlement. The position of the United States in reference to the Tacna-Arica dispute between Chile and Peru has been one of nonintervention, but one of friendly influence and pacific counsel throughout the period during which the dispute in question has been the subject of interchange of views between this Government and the two Governments immediately concerned. In the general easing of international tension on the west coast of South America the tripartite mediation, to which I have referred, has been a most potent and beneficent factor. In China the policy of encouraging financial investment to enable that country to help itself has had the result of giving new life and practical application to the open-door policy. The consistent purpose of the present administration has been to encourage the use of American capital in the development of China by the promotion of those essential reforms to which China is pledged by treaties with the United States and other powers. The hypothecation to foreign bankers in connection with certain industrial enterprises, such as the Hukuang railways, of the national revenues upon which these reforms depended, led the Department of State early in the administration to demand for American citizens participation in such enterprises, in order that the United States might have equal rights and an equal voice in all questions pertaining to the disposition of the public revenues concerned. The same policy of promoting international accord among the powers having similar treaty rights as ourselves in the matters of reform, which could not be put into practical effect without the common consent of all, was likewise adopted in the case of the loan desired by China for the reform of its currency. The principle of international cooperation in matters of common interest upon which our policy had already been based in all of the above instances has admittedly been a great factor in that concert of the powers which has been so happily conspicuous during the perilous period of transition through which the great Chinese nation has been passing. In Central America the aim has been to help such countries as Nicaragua and Honduras to help themselves. They are the immediate beneficiaries. The national benefit to the United States is twofold. First,. it is obvious that the Monroe doctrine is more vital in the neighborhood of the Panama Canal and the zone of the Caribbean than anywhere else. There, too, the maintenance of that doctrine falls most heavily upon the United States. It is therefore essential that the countries within that sphere shall be removed from the jeopardy involved by heavy foreign debt and chaotic national finances and from the ever-present danger of international complications due to disorder at home. Hence the United States has been glad to encourage and support American bankers who were willing to lend a helping hand to the financial rehabilitation of such countries because this financial rehabilitation and the protection of their customhouses from being the prey of wouldbe dictators would remove at one stroke the menace of foreign creditors and the menace of revolutionary disorder. The second advantage of the United States is one affecting chiefly all the southern and Gulf ports and the business and industry of the South. The Republics of Central America and the Caribbean possess great natural wealth. They need only a measure of stability and the means of financial regeneration to enter upon an era of peace and prosperity, bringing profit and happiness to themselves and at the same time creating conditions sure to lead to a flourishing interchange of trade with this country. I wish to call your especial attention to the recent occurrences in Nicaragua, for I believe the terrible events recorded there during the revolution of the past summer-the useless loss of life, the devastation of property, the bombardment of defenseless cities, the killing and wounding of women and children, the torturing of noncombatants to exact contributions, and the suffering of thousands of human beings-might have been averted had the Department of State, through approval of the loan convention by the Senate, been permitted to carry out its now well-developed policy of encouraging the extending of financial aid to weak Central American States with the primary objects of avoiding just such revolutions by assisting those Republics to rehabilitate their finances, to establish their currency on a stable basis, to remove the customhouses from the danger of revolutions by arranging for their secure administration, and to establish reliable banks. During this last revolution in Nicaragua, the Government of that Republic having admitted its inability to protect American life and property against acts of sheer lawlessness on the part of the malcontents, and having requested this Government to assume that office, it became necessary to land over 2,000 marines and bluejackets in Nicaragua. Owing to their presence the constituted Government of Nicaragua was free to devote its attention wholly to its internal troubles, and was thus enabled to stamp out the rebellion in a short space of time. When the Red Cross supplies sent to Granada had been exhausted, 8,000 persons having been given food in one day upon the arrival of the American forces, our men supplied other unfortunate, needy Nicaraguans from their own haversacks. I wish to congratulate the officers and men of the United States navy and Marine Corps who took part in reestablishing order in Nicaragua upon their splendid conduct, and to record with sorrow the death of seven American marines and bluejackets. Since the reestablishment of peace and order, elections have been held amid conditions of quiet and tranquility. Nearly all the American marines have now been withdrawn. The country should soon be on the road to recovery. The only apparent danger now threatening Nicaragua arises from the shortage of funds. Although American bankers have already rendered assistance, they may naturally be loath to advance a loan adequate to set the country upon its feet without the support of some such convention as that of June, 1911, upon which the Senate has not yet acted. In the general effort to contribute to the enjoyment of peace by those Republics which are near neighbors of the United States, the administration has enforced the so-called neutrality statutes with a new vigor, and those statutes were greatly strengthened in restricting the exportation of arms and munitions by the joint resolution of last March. It is still a regrettable fact that certain American ports are made the rendezvous of professional revolutionists and others engaged in intrigue against the peace of those Republics. It must be admitted that occasionally a revolution in this region is justified as a real popular movement to throw off the shackles of a vicious and tyrannical government. Such was the Nicaraguan revolution against the Zelaya regime. A nation enjoying our liberal institutions can not escape sympathy with a true popular movement, and one so well justified. In very many cases, however, revolutions in the Republics in question have no basis in principle, but are due merely to the machinations of conscienceless and ambitious men, and have no effect but to bring new suffering and fresh burdens to an already oppressed people. The question whether the use of American ports as foci of revolutionary intrigue can be best dealt with by a further amendment to the neutrality statutes or whether it would be safer to deal with special cases by special laws is one worthy of the careful consideration of the Congress. Impressed with the particular importance of the relations between the United States and the Republics of Central America and the Caribbean region, which of necessity must become still more intimate by reason of the mutual advantages which will be presented by the opening of the Panama Canal, I directed the Secretary of State last February to visit these Republics for the purpose of giving evidence of the sincere friendship and good will which the Government and people of the United States bear toward them. Ten Republics were visited. Everywhere he was received with a cordiality of welcome and a generosity of hospitality such as to impress me deeply and to merit our warmest thanks. The appreciation of the Governments and people of the countries visited, which has been appropriately shown in various ways, leaves me no doubt that his visit will conduce to that closer union and better understanding between the United States and those Republics which I have had it much at heart to promote. For two years revolution and counter-revolution has distraught the neighboring Republic of Mexico. Brigandage has involved a great deal of depredation upon foreign interests. There have constantly recurred questions of extreme delicacy. On several occasions very difficult situations have arisen on our frontier. Throughout this trying period, the policy of the United States has been one of patient nonintervention, steadfast recognition of constituted authority in the neighboring nation, and the exertion of every effort to care for American interests. I profoundly hope that the Mexican nation may soon resume the path of order, prosperity, and progress. To that nation in its sore troubles, the sympathetic friendship of the United States has been demonstrated to a high degree. There were in Mexico at the beginning of the revolution some thirty or forty thousand American citizens engaged in enterprises contributing greatly to the prosperity of that Republic and also benefiting the important trade between the two countries. The investment of American capital in Mexico has been estimated at $1,000,000,000. The responsibility of endeavoring to safeguard those interests and the dangers inseparable from propinquity to so turbulent a situation have been great, but I am happy to have been able to adhere to the policy above outlined-a policy which I hope may be soon justified by the complete success of the Mexican people in regaining the blessings of peace and good order. A most important work, accomplished in the past year by the American diplomatic officers in Europe, is the investigation of the agricultural credit system in the European countries. Both as a means to afford relief to the consumers of this country through a more thorough development of agricultural resources and as a means of more sufficiently maintaining the agricultural population, the project to establish credit facilities for the farmers is a concern of vital importance to this Nation. No evidence of prosperity among well-established farmers should blind us to the fact that lack of capital is preventing a development of the Nation's agricultural resources and an adequate increase of the land under cultivation; that agricultural production is fast falling behind the increase in population; and that, in fact, although these well-established farmers are maintained in increasing prosperity because of the natural increase in population, we are not developing the industry of agriculture. We are not breeding in proportionate numbers a race of independent and independence-loving landowners, for a lack of which no growth of cities can compensate. Our farmers have been our mainstay in times of crisis, and in future it must still largely be upon their stability and common sense that this democracy must rely to conserve its principles of self-government. The need of capital which American farmers feel to-day had been experienced by the farmers of Europe, with their centuries-old farms, many years ago. The problem had been successfully solved in the Old World and it was evident that the farmers of this country might profit by a study of their systems. I therefore ordered, through the Department of State, an investigation to be made by the diplomatic officers in Europe, and I have laid the results of this investigation before the governors of the various States with the hope that they will be used to advantage in their forthcoming meeting. In my last annual message I said that the fiscal year ended June 30, 1911, was noteworthy as marking the highest record of exports of American products to foreign countries. The fiscal year 1912 shows that this rate of advance has been maintained, the total domestic exports having a valuation approximately Of $2,200,000,000, as compared with a fraction over $2,000,000,000 the previous year. It is also significant that manufactured and partly manufactured articles continue to be the chief commodities forming the volume of our augmented exports, the demands of our own people for consumption requiring that an increasing proportion of our abundant agricultural products be kept at home. In the fiscal year 1911 the exports of articles in the various stages of manufacture, not including foodstuffs partly or wholly manufactured, amounted approximately to $907,500,000. In the fiscal year 1912 the total was nearly $1,022,000,000, a gain Of $114,000,000. The importance which our manufactures have assumed in the commerce of the world in competition with the manufactures of other countries again draws attention to the duty of this Government to use its utmost endeavors to secure impartial treatment for American products in all markets. Healthy commercial rivalry in international intercourse is best assured by the possession of proper means for protecting and promoting our foreign trade. It is natural that competitive countries should view with some concern this steady expansion of our commerce. If in some instance the measures taken by them to meet it are not entirely equitable, a remedy should be found. In former messages I have described the negotiations of the Department of State with foreign Governments for the adjustment of the maximum and minimum tariff as provided in section 2 of the tariff law of 1909. The advantages secured by the adjustment of our trade relations under this law have continued during the last year, and some additional cases of discriminatory treatment of which we had reason to complain have been removed. The Department of State has for the first time in the history of this country obtained substantial most-favored-nation treatment from all the countries of the world. There are, however, other instances which, while apparently not constituting undue discrimination in the sense of section 2, are nevertheless exceptions to the complete equity of tariff treatment for American products that the Department of State consistently has sought to obtain for American commerce abroad. These developments confirm the opinion conveyed to you in my annual message of 1911, that while the maximum and minimum provision of the tariff law of 1909 has been fully justified by the success achieved in removing previously existing undue discriminations against American products, yet experience has shown that this feature of the law should be amended in such way as to provide a fully effective means of meeting the varying degrees of discriminatory treatment of American commerce in foreign countries still encountered, as well as to protect against injurious treatment on the part of foreign Governments, through either legislative or administrative measures, the financial interests abroad of American citizens whose enterprises enlarge the market for American commodities. I can not too strongly recommend to the Congress the passage of some Stich enabling measure as the bill which was recommended by the Secretary of State in his letter of December 13, 1911. The object of the proposed legislation is, in brief, to enable the Executive to apply, as the case may require, to any or all commodities, whether or not on the free list from a country which discriminates against the United States, a graduated scale of duties tip to the maximum Of 25 per cent ad valorem provided in the present law. Flat tariffs are out of date. Nations no longer accord equal tariff treatment to all other nations irrespective of the treatment from them received. Stich a flexible power at the command of the Executive would serve to moderate any unfavorable tendencies on the part of those countries from which the importations into the United States are substantially confined to articles on the free list as well as of the countries which find a lucrative market in the United States for their products under existing customs rates. It is very necessary that the American Government should be equipped with weapons of negotiation adapted to modern economic conditions, in order that we may at all times be in a position to gain not only technically just but actually equitable treatment for our trade, and also for American enterprise and vested interests abroad. As illustrating the commercial benefits of the Nation derived from the new diplomacy and its effectiveness upon the material as well as the more ideal side, it may be remarked that through direct official efforts alone there have been obtained in the course of this administration, contracts from foreign Governments involving an expenditure of $50,000,000 in the factories of the United States. Consideration of this fact and some reflection upon the necessary effects of a scientific tariff system and a foreign service alert and equipped to cooperate with the business men of America carry the conviction that the gratifying increase in the export trade of this country is, in substantial amount, due to our improved governmental methods of protecting and stimulating it. It is germane to these observations to remark that in the two years that have elapsed since the successful negotiation of our new treaty with Japan, which at the time seemed to present so many practical difficulties, our export trade to that country has increased at the rate of over $1,000,000 a month. Our exports to Japan for the year ended June 30, 1910, were $21,959,310, while for the year ended June 30, 1912, the exports were $53,478,046, a net increase in the sale of American products of nearly 150 per cent. Under the special agreement entered into between the United States and Great Britain on August 18, 1910, for the arbitration of outstanding pecuniary claims, a schedule of claims and the terms of submission have been agreed upon by the two Governments, and together with the special agreement were approved by the Senate on July 19, 1911, but in accordance with the terms of the agreement they did not go into effect until confirmed by the two Governments by an exchange of notes, which was done on April 26 last. Negotiations, are still in progress for a supplemental schedule of claims to be submitted to arbitration under this agreement, and meanwhile the necessary preparations for the arbitration of the claims included in the first schedule have been undertaken and are being carried on under the authority of an appropriation made for that purpose at the last session of Congress. It is anticipated that the two Governments will be prepared to call upon the arbitration tribunal, established under this agreement, to meet at Washington early next year to proceed with this arbitration. The act adopted at the last session of Congress to give effect to the fur-seal convention Of July 7, 1911, between Great Britain, Japan, Russia, and the United States provided for the suspension of all land killing of seals on the Pribilof Islands for a period of five years, and an objection has now been presented to this provision by the other parties in interest, which raises the issue as to whether or not this prohibition of land killing is inconsistent with the spirit, if not the letter, of the treaty stipulations. The justification of establishing this close season depends, under the terms of the convention, upon how far, if at all, it is necessary for protecting and preserving the American fur-seal herd and for increasing its number. This is a question requiring examination of the present condition of the herd and the treatment which it needs in the light of actual experience and scientific investigation. A careful examination of the subject is now being made, and this Government will soon be in possession of a considerable amount of new information about the American seal herd, which has been secured during the past season and will be of great value in determining this question; and if it should appear that there is any uncertainty as to the real necessity for imposing a close season at this time I shall take an early opportunity to address a special message to Congress on this subject, in the belief that this Government should yield on this point rather than give the slightest ground for the charge that we have been in any way remiss in observing our treaty obligations. On the 20th of July last an agreement was concluded between the United States and Great Britain adopting, with certain modifications, the rules and method of procedure recommended in the award rendered by the North Atlantic Coast Fisheries Arbitration Tribunal on September 7, 1910, for the settlement hereafter, in accordance with the principles laid down in the award, of questions arising with reference to the exercise of the American fishing liberties under Article I of the treaty of October 20, 1818, between the United States and Great Britain. This agreement received the approval of the Senate on August I and was formally ratified by the two Governments on November 15 last. The rules and a method of procedure embodied in the award provided for determining by an impartial tribunal the reasonableness of any new fishery regulations on the treaty coasts of Newfoundland and Canada before such regulations could be enforced against American fishermen exercising their treaty liberties on those coasts, and also for determining the delimitation of bays on such coasts more than 10 miles wide, in accordance with the definition adopted by the tribunal of the meaning of the word " bays " as used in the treaty. In the subsequent negotiations between the two Governments, undertaken for the purpose of giving practical effect to these rules and methods of procedure, it was found that certain modifications therein were desirable from the point of view of both Govern, ments, and these negotiations have finally resulted in the agreement above mentioned by which the award recommendations as modified by mutual consent of the two Governments are finally adopted and made effective, thus bringing this century-old controversy to a final conclusion, which is equally beneficial and satisfactory to both Governments. In order to make possible the more effective performance of the work necessary for the confinement in their present channel of the waters of the lower Colorado River, and thus to protect the people of the Imperial Valley, as well as in order to reach with the Government of Mexico an understanding regarding the distribution of the waters of the Colorado River, in which both Governments are much interested, negotiations are going forward with a view to the establishment of a preliminary Colorado River commission, which shall have the powers necessary to enable it to do the needful work and with authority to study the question of the equitable distribution of the waters. There is every reason to believe that an understanding upon this point will be reached and that an agreement will be signed in the near future. In the interest of the people and city of El Paso this Government has been assiduous in its efforts to bring to an early settlement the long-standing Chamizal dispute with Mexico. Much has been ac- complished, and while the final solution of the dispute is not imme- diate, the favorable attitude lately assumed by the Mexican Government encourages the hope that this troublesome question will be satisfactorily and definitively settled at an early day. In pursuance of the convention of August 23, 1906, signed at the Third Pan American Conference, held at Rio de Janeiro, the International Commission of jurists met at that capital during the month of last June. At this meeting 16 American Republics were represented, including the United States, and comprehensive plans for the future work of the commission were adopted. At the next meeting fixed for June, 1914, committees already appointed are instructed to I report regarding topics assigned to them. In my message on foreign relations communicated to the two Houses of Congress December 7, 1911, 1 called especial attention to the assembling of the Opium Conference at The Hague, to the fact that that conference was to review all pertinent municipal laws relating to the opium and allied evils, and certainly all international rules regarding these evils, and to the -fact that it seemed to me most essential that the Congress should take immediate action on the antinarcotic legislation before the Congress, to which I had previously called attention by a special message. The international convention adopted by the conference conforms almost entirely to the principles contained in the proposed antinarcotic legislation which has been before the last two Congresses. It was most unfortunate that this Government, having taken the initiative in the international action which eventuated in the important international opium convention, failed to do its share in the great work by neglecting to pass the necessary legislation to correct the deplorable narcotic evils in the United States as well as to redeem international pledges upon which it entered by virtue of the abovementioned convention. The Congress at its present session should enact into law those bills now before it which have been so carefully drawn up in collaboration between the Department of State and the other executive departments, and which have behind them not only the moral sentiment of the country, but the practical support of all the legitimate trade interests likely to be affected. Since the international convention was signed, adherence to it has been made by several European States not represented at the conference at The Hague and also by seventeen Latin-American Republics. The war between Italy and Turkey came to a close in October last by the signature of a treaty of peace, subsequently to which the Ottoman Empire renounced sovereignty over Cyrenaica and Tripolitania in favor of Italy. During the past year the Near East has unfortunately been the theater of constant hostilities. Almost simultaneously with the conclusion of peace between Italy and Turkey and their arrival at an adjustment of the complex questions at issue between them, war broke out between Turkey on the one hand and Bulgaria, Greece, Montenegro, and Servia on the other. The United States has happily been involved neither directly nor indirectly with the causes or questions incident to any of these hostilities and has maintained in regard to them an attitude of absolute neutrality and of complete political disinterestedness. In the second war in which the Ottoman Empire has been engaged the loss of life and the consequent distress on both sides have been appalling, and the United States has found occasion, in the interest of humanity, to carry out the charitable desires of the American people, to extend a measure of relief to the sufferers on either side through the impartial medium of the Red Cross. Beyond this the chief care of the Government of the United States has been to make due provision for the protection of its national resident in belligerent territory. In the exercise of my duty in this matter I have dispatched to Turkish waters a specialservice squadron, consisting of two armored cruisers, in order that this Government may if need be bear its part in such measures as it may be necessary for the interested nations to adopt for the safeguarding of foreign lives and property in the Ottoman Empire in the event that a dangerous situation should develop. In the meanwhile the several interested European powers have promised to extend to American citizens the benefit of such precautionary or protective measures as they might adopt, in the same manner in which it has been the practice of this Government to extend its protection to all foreign residents in those countries of the Western Hemisphere in which it has from time to time been the task of the United States to act in the interest of peace and good order. The early appearance of a large fleet of European warships in the Bosphorus apparently assured the protection of foreigners in that quarter, where the presence of the American stationnaire the U. S. S. Scorpion sufficed, tinder the circumstances, to represent the United States. Our cruisers were thus left free to act if need be along the Mediterranean coasts should any unexpected contingency arise affecting the numerous American interests in the neighborhood of Smyrna and Beirut. The great preponderance of American material interests in the subarctic island of Spitzbergen, which has always been regarded politically as " no man's land," impels this Government to a continued and lively interest in the international dispositions to be made for the political governance and administration of that region. The conflict of certain claims of American citizens and others is in a fair way to adjustment, while the settlement of matters of administration, whether by international conference of the interested powers or otherwise, continues to be the subject of exchange of views between the Governments concerned. As a result of the efforts of this Government to place the Government of Liberia in position to pay its outstanding indebtedness and to maintain a stable and efficient government, negotiations for a loan of $1,700,000 have been successfully concluded, and it is anticipated that the payment of the old loan and the issuance of the bonds of the 1912 loan for the rehabilitation of the finances of Liberia will follow at an early date, when the new receivership will go into active operation. The new receivership will consist of a general receiver of customs designated by the Government of the United States and three receivers of customs designated by the Governments of Germany, France, and Great Britain, which countries have commercial interests in the Republic of Liberia. In carrying out the understanding between the Government of Liberia and that of the United States, and in fulfilling the terms of the agreement between the former Government and the American bankers, three competent exarmy officers are now effectively employed by the Liberian Government in reorganizing the police force of the Republic, not only to keep in order the native tribes in the hinterland but to serve as a necessary police force along the frontier. It is hoped that these measures will assure not only the continued existence but the prosperity and welfare of the Republic of Liberia. Liberia possesses fertility of soil and natural resources, which should insure to its people a reasonable prosperity. It was the duty of the United States to assist the Republic of Liberia in accordance with our historical interest and moral guardianship of a community founded by American citizens, as it was also the duty of the American Government to attempt to assure permanence to a country of much sentimental and perhaps future real interest to a large body of our citizens. The legation at Tangier is now in charge of our consul general, who is acting as charge d'affaires, as well as caring for our commercial interests in that country. In view of the fact that many of the foreign powers are now represented by charges d'affaires it has not been deemed necessary to appoint at the present time a minister to fill a vacancy occurring in that post. The political disturbances in China in the autumn and winter of 1911-12 resulted in the abdication of the Manchu rulers on February 12, followed by the formation of a provisional republican government empowered to conduct the affairs of the nation until a permanent government might be regularly established. The natural sympathy of the American people with the assumption of republican principles by the Chinese people was appropriately expressed in a concurrent resolution of Congress on April 17, 1912. A constituent assembly, composed of representatives duly chosen by the people of China in the elections that are now being held, has been called to meet in January next to adopt a permanent constitution and organize the Government of the nascent Republic. During the formative constitutional stage and pending definite action by the assembly, as expressive of the popular will, and the hoped-for establishment of a stable republican form of government, capable of fulfilling its international obligations, the United States is, according to precedent, maintaining full and friendly de facto relations with the provisional Government. The new condition of affairs thus created has presented many serious and complicated problems, both of internal rehabilitation and of international relations, whose solution it was realized would necessarily require much time and patience. From the beginning of the upheaval last autumn it was felt by the United States, in common with the other powers having large interests in China, that independent action by the foreign Governments in their own individual interests would add further confusion to a situation already complicated. A policy of international cooperation was accordingly adopted in an understanding, reached early in the disturbances, to act together for the protection of the lives and property of foreigners if menaced, to maintain an attitude of strict impartiality as between the contending factions, and to abstain from any endeavor to influence the Chinese in their organization of a new form of government. In view of the seriousness of the disturbances and their general character, the American minister at Peking was instructed at his discretion to advise our nationals in the affected districts to concentrate at such centers as were easily accessible to foreign troops or men of war. Nineteen of our naval vessels were stationed at various Chinese ports, and other measures were promptly taken for the adequate protection of American interests. It was further mutually agreed, in the hope of hastening an end to hostilities, that none of the interested powers would approve the making of loans by its nationals to either side. As soon, however, as a united provisional Government of China was assured, the United States joined in a favorable consideration of that Government's request for advances needed for immediate administrative necessities and later for a loan to effect a permanent national reorganization. The interested Governments had already, by common consent, adopted, in respect to the purposes, expenditure, and security of any loans to China made by their nationals, certain conditions which were held to be essential, not only to secure reasonable protection for the foreign investors, but also to safeguard and strengthen China's credit by discouraging indiscriminate borrowing and by insuring the application of the funds toward the establishment of the stable and effective government necessary to China's welfare. In June last representative banking groups of the United States, France, Germany, Great Britain, Japan, and Russia formulated, with the general sanction of their respective Governments, the guaranties that would be expected in relation to the expenditure and security of the large reorganization loan desired by China, which, however, have thus far proved unacceptable to the provisional Government. In August last I accredited the Secretary of State as special ambassador to Japan, charged with the mission of bearing to the imperial family, the Government, and the people of that Empire the sympathetic message of the American Commonwealth oil the sad occasion of the death of His Majesty the Emperor Mutsuhito, whose long and benevolent reign was the greater part of Japan's modern history. The kindly reception everywhere accorded to Secretary Knox showed that his mission was deeply appreciated by the Japanese nation and emphasized strongly the friendly relations that have for so many years existed between the two peoples. Our relations with the Argentine Republic are most friendly and cordial. So, also, are our relations with Brazil, whose Government has accepted the invitation of the United States to send two army officers to study at the Coast Artillery School at Fort Monroe. The long-standing Alsop claim, which had been the only hindrance to the healthy growth of the most friendly relations between the United States and Chile, having been eliminated through the submission of the question to His Britannic Majesty King George V as "amiable compositeur," it is a cause of much gratification to me that our relations with Chile are now established upon a firm basis of growing friendship. The Chilean Government has placed an officer of the United States Coast Artillery in charge of the Chilean Coast Artillery School, and has shown appreciation of American methods by confiding to an American firm important work for the Chilean coast defenses. Last year a revolution against the established Government of Ecuador broke out at the pricipal port of that Republic. Previous to this occurrence the chief American interest in Ecuador, represented by the Guayaquil & Quito Railway Co., incorporated in the United States, bad rendered extensive transportation and other services on account to the Ecuadorian Government, the amount of which ran into a sum which was steadily increasing and which the Ecuadorian Government had made no provision to pay, thereby threatening to crush out the very existence of this American enterprise. When tranquillity had been restored to Ecuador as a result of the triumphant progress of the Government forces from Quito, this Government interposed its good offices to the end that the American interests in Ecuador might be saved from complete extinction. As a part of the arrangement which was reached between the parties, and at the request of the Government of Ecuador, I have consented to name an arbitrator, who, acting under the terms of the railroad contract, with an arbitrator named by the Ecuadorian Government, will pass upon the claims that have arisen since the arrangement reached through the action of a similar arbitral tribunal in 1908. In pursuance of a request made some time ago by the Ecuadorian Government, the Department of State has given much attention to the problem of the proper sanitation of Guayaquil. As a result a detail of officers of the Canal Zone will be sent to Guayaquil to recommend measures that will lead to the complete permanent sanitation of this plague and fever infected region of that Republic, which has for so long constituted a menace to health conditions on the Canal Zone. It is hoped that the report which this mission will furnish will point out a way whereby the modicum of assistance which the United States may properly lend the Ecuadorian Government may be made effective in ridding the west coast of South America of a focus of contagion to the future commercial current passing through the Panama Canal. In the matter of the claim of John Celestine Landreau against the Government of Peru, which claim arises out of certain contracts and transactions in connection with the discovery and exploitation of guano, and which has been under discussion between the two Governments since 1874, 1 am glad to report that as the result of prolonged negotiations, which have been characterized by the utmost friendliness and good will on both sides, the Department of State has succeeded in securing the consent of Peru to the arbitration of the claim, and that the negotiations attending the drafting and signature of a protocol submitting the claim to an arbitral tribunal are proceeding with due celerity. An officer of the American Public Health Service and an American sanitary engineer are now on the way to Iquitos, in the employ of the Peruvian Government, to take charge of the sanitation of that river port. Peru is building a number of submarines in this country, and continues to show every desire to have American capital invested in the Republic. In July the United States sent undergraduate delegates to the Third International Students Congress held at Lima, American students having been for the first time invited to one of these meetings. The Republic of Uruguay has shown its appreciation of American agricultural and other methods by sending a large commission to this country and by employing many American experts to assist in building up agricultural and allied industries in Uruguay. Venezuela is paying off the last of the claims the settlement of which was provided for by the Washington protocols, including those of American citizens. Our relations with Venezuela are most cordial, and the trade of that Republic with the United States is now greater than with any other country. During the past summer the revolution against the administration which followed the assassination of President Caceres a year ago last November brought the Dominican Republic to the verge of administrative chaos, without offering any guaranties of eventual stability in the ultimate success of either party. In pursuance of the treaty relations of the United States with the Dominican Republic, which were threatened by the necessity of suspending the operation under American administration of the customhouses on the Haitian frontier, it was found necessary to dispatch special commissioners to the island to reestablish the customhouses and with a guard sufficient to insure needed protection to the customs administration. The efforts which have been made appear to have resulted in the restoration of normal conditions throughout the Republic. The good offices which the commissioners were able to exercise were instrumental in bringing the contending parties together and in furnishing a basis of adjustment which it is hoped will result in permanent benefit to the Dominican people. Mindful of its treaty relations, and owing to the position of the Government of the United States as mediator between the Dominican Republic and Haiti in their boundary dispute, and because of the further fact that the revolutionary activities on the Haitian-Dominican frontier had become so active as practically to obliterate the line of demarcation that had been heretofore recognized pending the definitive settlement of the boundary in controversy, it was found necessary to indicate to the two island Governments a provisional de facto boundary line. This was done without prejudice to the rights or obligations of either country in a final settlement to be reached by arbitration. The tentative line chosen was one which, under the circumstances brought to the knowledge of this Government, seemed to conform to the best interests of the disputants. The border patrol which it had been found necessary to reestablish for customs purposes between the two countries was instructed provisionally to observe this line. The Republic of Cuba last May was in the throes of a lawless uprising that for a time threatened the destruction of a great deal of valuable property-much of it owned by Americans and other foreigners-as well as the existence of the Government itself. The armed forces of Cuba being inadequate to guard property from attack and at the same time properly to operate against the rebels, a force of American marines was dispatched from our naval station at Guantanamo into the Province of Oriente for the protection of American and other foreign life and property. The Cuban Government was thus able to use all its forces in putting down the outbreak, which it succeeded in doing in a period of six weeks. The presence of two American warships in the harbor of Habana during the most critical period of this disturbance contributed in great measure to allay the fears of the inhabitants, including a large foreign colony. There has been under discussion with the Government of Cuba for some time the question of the release by this Government of its leasehold rights at Bahia Honda, on the northern coast of Cuba, and the enlargement, in exchange therefor, of the naval station which has been established at Guantanamo Bay, on the south. As the result of the negotiations thus carried on an agreement has been reached between the two Governments providing for the suitable enlargement of the Guantanamo Bay station upon terms which are entirely fair and equitable to all parties concerned. At the request alike of the Government and both political parties in Panama, an American commission undertook supervision of the recent presidential election in that Republic, where our treaty relations, and, indeed, every geographical consideration, make the maintenance of order and satisfactory conditions of peculiar interest to the Government of the United States. The elections passed without disorder, and the new administration has entered upon its functions. The Government of Great Britain has asked the support of the United States for the protection of the interests of British holders of the foreign bonded debt of Guatemala. While this Government is hopeful of an arrangement equitable to the British bondholders, it is naturally unable to view the question apart from its relation to the broad subject of financial stability in Central America, in which the policy of the United States does not permit it to escape a vital interest. Through a renewal of negotiations between the Government of Guatemala and American bankers, the aim of which is a loan for the rehabilitation of Guatemalan finances, a way appears to be open by which the Government of Guatemala could promptly satisfy any equitable and just British claims, and at the same time so improve its whole financial position as to contribute greatly to the increased prosperity of the Republic and to redound to the benefit of foreign investments and foreign trade with that country. Failing such an arrangement, it may become impossible for the Government of the United States to escape its obligations in connection with such measures as may become necessary to exact justice to legitimate foreign claims. In the recent revolution in Nicaragua, which, it was generally admitted, might well have resulted in a general Central American conflict but for the intervention of the United States, the Government of Honduras was especially menaced; but fortunately peaceful conditions were maintained within the borders of that Republic. The financial condition of that country remains unchanged, no means having been found for the final adjustment of pressing outstanding foreign claims. This makes it the more regrettable that the financial convention between the United States and Honduras has thus far failed of ratification. The Government of the United States continues to hold itself ready to cooperate with the Government of Honduras, which it is believed, can not much longer delay the meeting of its foreign obligations, and it is hoped at the proper time American bankers will be willing to cooperate for this purpose. It is not possible to make to the Congress a communication upon the present foreign relations of the United States so detailed as to convey an adequate impression of the enormous increase in the importance and activities of those relations. If this Government is really to preserve to the American people that free opportunity in foreign markets which will soon be indispensable to our prosperity, even greater efforts must be made. Otherwise the American merchant, manufacturer, and exporter will find many a field in which American trade should logically predominate preempted through the more energetic efforts of other governments and other commercial nations. There are many ways in which through hearty cooperation the legislative and executive branches of this Government can do much. The absolute essential is the spirit of united effort and singleness of purpose. I will allude only to a very few specific examples of action which ought then to result. America can not take its proper place in the most important fields for its commercial activity and enterprise unless we have a merchant marine. American commerce and enterprise can not be effectively fostered in those fields unless we have good American banks in the countries referred to. We need American newspapers in those countries and proper means for public information about them. We need to assure the permanency of a trained foreign service. We need legislation enabling the members of the foreign service to be systematically brought in direct contact with the industrial, manufacturing, and exporting interests of this country in order that American business men may enter the foreign field with a clear perception of the exact conditions to be dealt with and the officers themselves may prosecute their work with a clear idea of what American industrial and manufacturing interests require. Congress should fully realize the conditions which obtain in the world as we find ourselves at the threshold of our middle age as a Nation. We have emerged full grown as a peer in the great concourse of nations. We have passed through various formative periods. We have been self-centered in the struggle to develop our domestic resources and deal with our domestic questions. The Nation is now too matured to continue in its foreign relations those temporary expedients natural to a people to whom domestic affairs are the sole concern. In the past our diplomacy has often consisted, in normal times, in a mere assertion of the right to international existence. We are now in a larger relation with broader rights of our own and obligations to others than ourselves. A number of great guiding principles were laid down early in the history of this Government. The recent task of our diplomacy has been to adjust those principles to the conditions of to-day, to develop their corollaries, to find practical applications of the old principles expanded to meet new situations. Thus are being evolved bases upon which can rest the superstructure of policies which must grow with the destined progress of this Nation. The successful conduct of our foreign relations demands a broad and a modern view. We can not meet new questions nor build for the future if we confine ourselves to outworn dogmas of the past and to the perspective appropriate at our emergence from colonial times and conditions. The opening of the Panama Canal will mark a new era in our international life and create new and worldwide conditions which, with their vast correlations and consequences, will obtain for hundreds of years to come. We must not wait for events to overtake us unawares. With continuity of purpose we must deal with the problems of our external relations by a diplomacy modern, resourceful, magnanimous, and fittingly expressive of the high ideals of a great nation.     On the 3d of December I sent a message to the Congress, which was confined to our foreign relations. The Secretary of State makes no report to the President or to Congress, and a review of the history of the transactions of the State Department in one year must therefore be included by the President in his annual message or Congress will not be fully informed of them. A full discussion of all the transactions of the Government, with a view to informing the Congress of the important events of the year and recommending new legislation, requires more space than one message of reasonable length affords. I have therefore adopted the course of sending three or four messages during the first ten days of the session, so as to include reference to the more important matters that should be brought to the attention of the Congress. The condition of the country with reference to business could hardly be better. While the four years of the administration now drawing to a close have not developed great speculative expansion or a wide field of new investment, the recovery and progress made from the depressing conditions following the panic of 1907 have been steady and the improvement has been clear and easily traced in the statistics. The business of the country is now on a solid basis. Credits are not unduly extended, and every phase of the situation seems in a state of preparedness for a period of unexampled prosperity. Manufacturing concerns are running at their full capacity and the demand for labor was never so constant and growing. The foreign trade of the country for this year will exceed $4,000,000,000, while the balance in our favor-that of the excess of exports over imports-will exceed $500,000,000. More than half our exports are manufactures or partly manufactured material, while our exports of farm products do not show the same increase because of domestic consumption. It is a year of bumper crops; ; the total money value of farm products will exceed $9,500,000,000. It is a year when the bushel or unit price of agricultural products has gradually fallen, and yet the total value of the entire crop is greater by over $1,000,000,000 than we have known in our history. The condition of the Treasury is very satisfactory. The total interest-bearing debt is $963,777,770, of which $134,631,980 constitute the Panama Canal loan. The noninterest-bearing debt is $378,301,284.90, including $346,681,016 of greenbacks. We have in the Treasury $150,000,000 in gold coin as a reserve against the outstanding greenbacks; and in addition we have a cash balance in the Treasury as a general fund of $167,152,478.99, or an increase of $26,975,552 over the general fund last year. For three years the expenditures of the Government have decreased under the influence of an effort to economize. This year presents an apparent exception. The estimate by the Secretary of the Treasury of the ordinary receipts, exclusive of postal revenues, for the year ending June 30, 1914, indicates that they will amount to $710,000,000. The sum of the estimates of the expenditures for that same year, exclusive of Panama Canal disbursements and postal disbursements payable from postal revenues, is $732,000,000, indicating a deficit Of $22,000,000. For the year ending June 30, 1913, similarly estimated receipts were $667,000,000, while the total corresponding estimate of expenditures for that year, submitted through the Secretary of the Treasury to Congress, amounted to $656,000,000. This shows an increase of $76,000,000 in the estimates for 1914 over the total estimates of 1913. This is due to an increase Of $25,000,000 in the estimate for rivers and harbors for the next year on projects and surveys authorized by Congress; to an increase under the new pension bill Of $32,500,000; and to an increase in the estimates for expenses of the Navy Department Of $24,000,000. The estimate for the Navy Department for the year 1913 included two battleships. Congress made provision for only one battleship, and therefore the Navy Department has deemed it necessary and proper to make an estimate which includes the first year's expenditure for three battleships in addition to the amount required for work on the uncompleted ships now under construction. In addition to the natural increase in the expenditures for the uncompleted ships, and the ad. ditional battleship estimated for, the other increases are due to the pay required for 4,000 or more additional enlisted men in the Navy; and to this must be added the additional cost of construction imposed by the change in the eight-hour law which makes it applicable to ships built in private shipyards. With the exceptions of these three items, the estimates show a reduction this year below the total estimates for 1913 of more than $5,000,000. The estimates for Panama Canal construction for 1914 are $17,000,000 less than for 1913 A time when panics seem far removed is the best time for us to prepare our financial system to withstand a storm. The most crying need this country has is a proper banking and currency system. The existing one is inadequate, and everyone who has studied the question admits it. It is the business of the National Government to provide a medium, automatically contracting and expanding in volume, to meet the needs of trade. Our present system lacks the indispensable quality of elasticity. The only part of our monetary medium that has elasticity is the bank-note currency. The peculiar provisions of the law requiring national banks to maintain reserves to meet the call of the depositors operates to increase the money stringency when it arises rather than to expand the supply of currency and relieve it. It operates upon each bank and furnishes a motive for the withdrawal of currency from the channels of trade by each bank to save itself, and offers no inducement whatever for the use of the reserve to expand the supply of currency to meet the exceptional demand. After the panic of 1907 Congress realized that the present system was not adapted to the country's needs and that under it panics were possible that might properly be avoided by legislative provision. Accordingly a monetary commission was appointed which made a report in February, 1912. The system which they recommended involved a National Reserve Association, which was, in certain of its faculties and functions, a bank, and which was given through its governing authorities the power, by issuing circulating notes for approved commercial paper, by fixing discounts, and by other methods of transfer of currency, to expand the supply of the monetary medium where it was most needed to prevent the export or hoarding of gold and generally to exercise such supervision over the supply of money in every part of the country as to prevent a stringency and a panic. The stock in this association was to be distributed to the banks of the whole United States, State and National, in a mixed proportion to bank units and to capital stock paid in. The control of the association was vested in a board of directors to be elected by representatives of the banks, except certain ex-officio directors, three Cabinet officers, and the Comptroller of the Currency. The President was to appoint the governor of the association from three persons to be selected by the directors, while the two deputy governors were to be elected by the board of directors. The details of the plan were worked out with great care and ability, and the plan in general seems to me to furnish the basis for a proper solution of our present difficulties. I feel that the Government might very properly be given a greater voice in the executive committee of the board of directors without danger of injecting politics into its management, but I think the federation system of banks is a good one, provided proper precautions are taken to prevent banks of large capital from absorbing power through ownership of stock in other banks. The objections to a central bank it seems to me are obviated if the ownership of the reserve association is distributed among all the banks of a country in which banking is free. The earnings of the reserve association are limited in percentage tit a reasonable and fixed amount, and the profits over and above this are to be turned into the Government Treasury. It is quite probable that still greater security against control by money centers may be worked into the plan. Certain it is, however, that the objections which were made in the past history of this country to a central bank as furnishing a monopoly of financial power to private individuals, would not apply to an association whose ownership and control is so widely distributed and is divided between all the banks of the country, State and National, on the one hand, and the Chief Executive through three department heads and his Comptroller of the Currency, on the other. The ancient hostility to a national bank, with its branches, in which is concentrated the privilege of doing a banking business and carrying on the financial transactions of the Government, has prevented the establishment of such a bank since it was abolished in the Jackson Administration. Our present national banking law has obviated objections growing out of the same cause by providing a free banking system in which any set of stockholders can establish a national bank if they comply with the conditions of law. It seems to me that the National Reserve Association meets the same objection in a similar way; that is, by giving to each bank, State and National, in accordance with its size, a certain share in the stock of the reserve association, nontransferable and only to be held by the bank while it performs its functions as a partner in the reserve association. The report of the commission recommends provisions for the imposition of a graduated tax on the expanded currency of such a character as to furnish a motive for reducing the issue of notes whenever their presence in the money market is not required by the exigencies of trade. In other words, the whole system has been worked out with the greatest care. Theoretically it presents a plan that ought to command support. Practically it may require modification in various of its provisions in order to make the security against, abuses by combinations among the banks impossible. But in the face of the crying necessity that there is for improvement in our present system, I urgently invite the attention of Congress to the proposed plan and the report of the commission, with the hope that an earnest consideration may suggest amendments and changes within the general plan which will lead to its adoption for the benefit of the country. There is no class in the community more interested in a safe and sane banking and currency system, one which will prevent panics and automatically furnish in each trade center the currency needed in the carrying on of the business at that center, than the wage earner. There is no class in the community whose experience better qualifies them to make suggestions as to the sufficiency of a currency and banking system than the bankers and business men. Ought we, therefore, to ignore their recommendations and reject their financial judgment as to the proper method of reforming our financial system merely because of the suspicion which exists against them in the minds of many of our fellow citizens? Is it not the duty of Congress to take up the plan suggested, examine it from all standpoints, give impartial consideration to the testimony of those whose experience ought to fit them to give the best advice on the subject, and then to adopt some plan which will secure the benefits desired? A banking and currency system seems far away from the wage earner and the farmer, but the fact is that they are vitally interested in a safe system of currency which shall graduate its volume to the amount needed and which shall prevent times of artificial stringency that frighten capital, stop employment, prevent the meeting of the pay roll, destroy local markets, and produce penury and want. I have regarded it as my duty in former messages to the Congress to urge the revision of the tariff upon principles of protection. It was my judgment that the customs duties ought to be revised downward, but that the reduction ought not to be below a rate which would represent the difference in the cost of production between the article in question at home and abroad, and for this and other reasons I vetoed several bills which were presented to me in the last session of this Congress. Now that a new Congress has been elected on a platform of a tariff for revenue only rather than a protective tariff, and is to revise the tariff on that basis, it is needless for me to occupy the time of this Congress with arguments or recommendations in favor of a protective tariff. Before passing from the tariff law, however, known as the Payne tariff law of August 5, 1909, 1 desire to call attention to section 38 of that act, assessing a special excise tax on corporations. It contains a provision requiring the levy of an additional 50 per cent to the annual tax in cases of neglect to verify the prescribed return or to file it before the time required by law. This additional charge of 50 per cent operates in some cases as a harsh penalty for what may have been a mere inadvertence or unintentional oversight, and the law should be so amended as to mitigate the severity of the charge in such instances. Provision should also be made for the refund of additional taxes heretofore collected because of such infractions in those cases where the penalty imposed has been so disproportionate to the offense as equitably to demand relief. The estimates for the next fiscal year have been assembled by the Secretary of the Treasury and by him transmitted to Congress. I purpose at a later day to submit to Congress a form of budget prepared for me and recommended by the President's Commission on Economy and Efficiency, with a view of suggesting the useful and informing character of a properly framed budget. The War Department combines within its jurisdiction functions which in other countries usually occupy three departments. It not only has the management of the Army and the coast defenses, but its jurisdiction extends to the government of the Philippines and of Porto Rico and the control of the receivership of the customs revenues of the Dominican Republic; it also includes the recommendation of all plans for the improvement of harbors and waterways and their execution when adopted; and, by virtue of an Executive order, the supervision of the construction of the Panama Canal. Our small Army now consists of 83,809 men, excluding the 5,000 Philippine scouts. Leaving out of consideration the Coast Artillery force, whose position is fixed in our various seacoast defenses, and the present garrisons of our various insular possessions, we have to-day within the continental United States a mobile Army of only about 35,000 men. This little force must be still further drawn upon to supply the new garrisons for the great naval base which is being established at Pearl Harbor, in the Hawaiian Islands, and to protect the locks now rapidly approaching completion at Panama. The forces remaining in the United States are now scattered in nearly 50 Posts, situated for a variety of historical reasons in 24 States. These posts contain only fractions of regiments, averaging less than 700 men each. In time of peace it has been our historical policy to administer these units separately by a geographical organization. In other words, our Army in time of peace has never been a united organization but merely scattered groups of companies, battalions, and regiments, and the first task in time of war has been to create out of these scattered units an Army fit for effective teamwork and cooperation. To the task of meeting these patent defects, the War Department has been addressing itself during the past year. For many years we had no officer or division whose business it was to study these problems and plan remedies for these defects. With the establishment of the General Staff nine years ago a body was created for this purpose. It has, necessarily, required time to overcome, even in its own personnel, the habits of mind engendered by a century of lack of method, but of late years its work has become systematic and effective, and it has recently been addressing itself vigorously to these problems. A comprehensive plan of Army reorganization was prepared by the War College Division of the General Staff. This plan was thoroughly discussed last summer at a series of open conferences held by the Secretary of War and attended by representatives from all branches of the Army and from Congress. In printed form it has been distributed to Members of Congress and throughout the Army and the National Guard, and widely through institutions of learning and elsewhere in the United States. In it, for the first time, we have a tentative chart for future progress. Under the influence of this study definite and effective steps have been taken toward Army reorganization so far as such reorganization lies within the Executive power. Hitherto there has been no difference of policy in the treatment of the organization of our foreign garrisons from those of troops within the United States. The difference of situation is vital, and the foreign garrison should be prepared to defend itself at an instant's notice against a foe who may command the sea. Unlike the troops in the United States, it can not count upon reinforcements or recruitment. It is an outpost upon which will fall the brunt of the first attack in case of war. The historical policy of the United States of carrying its regiments during time of peace at half strength has no application to our foreign garrisons. During the past year this defect has been remedied as to the Philippines garrison. The former garrison of 12 reduced regiments has been replaced by a garrison of 6 regiments at full strength, giving fully the same number of riflemen at an estimated economy in cost of maintenance of over $1,000,000 per year. This garrison is to be permanent. Its regimental units, instead of being transferred periodically back and forth from the United States, will remain in the islands. The officers and men composing these units will, however, serve a regular tropical detail as usual, thus involving no greater hardship upon the personnel and greatly increasing the effectiveness of the garrison. A similar policy is proposed for the Hawaiian and Panama garrisons as fast as the barracks for them are completed. I strongly urge upon Congress that the necessary appropriations for this purpose should be promptly made. It is, in my opinion, of first importance that these national outposts, upon which a successful home defense will, primarily, depend, should be finished and placed in effective condition at the earliest possible day. Simultaneously with the foregoing steps the War Department has been proceeding with the reorganization of the Army at home. The formerly disassociated units are being united into a tactical organization of three divisions, each consisting of two or three brigades of Infantry and, so far as practicable, a proper proportion of divisional Cavalry and Artillery. Of course, the extent to which this reform can be carried by the Executive is practically limited to a paper organization. The scattered units can be brought under a proper organization, but they will remain physically scattered until Congress supplies the necessary funds for grouping them in more concentrated posts. Until that is done the present difficulty of drilling our scattered groups together, and thus training them for the proper team play, can not be removed. But we shall, at least, have an Army which will know its own organization and will be inspected by its proper commanders, and to which, as a unit, emergency orders can be issued in time of war or other emergency. Moreover, the organization, which in many respects is necessarily a skeleton, will furnish a guide for future development. The separate regiments and companies will know the brigades and divisions to which they belong. They will be maneuvered together whenever maneuvers are established by Congress, and the gaps in their organization will show the pattern into which can be filled new troops as the Nation grows and a larger Army is provided. One of the most important reforms accomplished during the past year has been the legislation enacted in the Army appropriation bill of last summer, providing for a Regular Army reserve. Hitherto our national policy has assumed that at the outbreak of war our regiments would be immediately raised to full strength. But our laws have provided no means by which this could be accomplished, or by which the losses of the regiments when once sent to the front could be repaired. In this respect we have neglected the lessons learned by other nations. The new law provides that the soldier, after serving four years with colors, shall pass into a reserve for three years. At his option he may go 'into the reserve at the end of three years, remaining there for four years. While in the reserve he can be called to active duty only in case of war or other national emergency, and when so called and only in such case will receive a stated amount of pay for all of the period in which he has been a member of the reserve. The legislation is imperfect, in my opinion, in certain particulars, but it is a most important step in the right direction, and I earnestly hope that it will be carefully studied and perfected by Congress. Under existing law the National Guard constitutes, after the Regular Army, the first line of national defense. Its organization, discipline, training, and equipment, under recent legislation, have been assimilated, as far as possible, to those of the Regular Army, and its practical efficiency, under the effect of this training, has very greatly increased. Our citizen soldiers under present conditions have reached a stage of development beyond which they can not reasonably be asked to go without further direct assistance in the form of pay from the Federal Government. On the other hand, such pay from the National Treasury would not be justified unless it produced a proper equivalent in additional efficiency on the part of the National Guard. The Organized Militia to-day can not be ordered outside of the limits of the United States, and thus can not lawfully be used for general military purposes. The officers and men are ambitious and eager to make themselves thus available and to become an efficient national reserve of citizen soldiery. They are the only force of trained men, other than the Regular Army, upon which we can rely. The so-called militia pay bill, in the form agreed on between the authorities of the War Department and the representatives of the National Guard, in my opinion adequately meets these conditions and offers a proper return for the pay which it is proposed to give to the National Guard. I believe that its enactment into law would be a very long step toward providing this Nation with a first line of citizen soldiery, upon which its main reliance must depend in case of any national emergency. Plans for the organization of the National Guard into tactical divisions, on the same lines as those adopted for the Regular Army, are being formulated by the War College Division of the General Staff. The National Guard consists of only about 110,000 men. In any serious war in the past it has always been necessary, and in such a war in the future it doubtless will be necessary, for the Nation to depend, in addition to the Regular Army and the National Guard, upon a large force of volunteers. There is at present no adequate provision of law for the raising of such a force. There is now pending in Congress, however, a bill which makes such provision, and which I believe is admirably adapted to meet the exigencies which would be presented in case of war. The passage of the bill would not entail a dollar's expense upon the Government at this time or in the future until war comes. But if war comes the methods therein directed are in accordance with the best military judgment as to what they ought to be, and the act would prevent the necessity for a discussion of any legislation and the delays incident to its consideration and adoption. I earnestly urge its passage. The Army appropriation act of 191:2 also carried legislation for the consolidation of the Quartermaster's Department, the Subsistence Department, and the Pay Corps into a single supply department, to be known as the Quartermaster's Corps. It also provided for the organization of a special force of enlisted men, to be known as the Service Corps, gradually to replace many of the civilian employees engaged in the manual labor necessary in every army. I believe that both of these enactments will improve the administration of our military establishment. The consolidation of the supply corps has already been effected, and the organization of the service corps is being put into effect. All of the foregoing reforms are in the direction of economy and efficiency. Except for the slight increase necessary to garrison our outposts in Hawaii and Panama, they do not call for a larger Army, but they do tend to produce a much more efficient one. The only substantial new appropriations required are those which, as I have pointed out, are necessary to complete the fortifications and barracks at our naval bases and outposts beyond the sea. Porto Rico continues to show notable progress, both commercially and in the spread of education. Its external commerce has increased 17 per cent over the preceding year, bringing the total value up to $92,631,886, or more than five times the value of the commerce of the island in 1901. During the year 16o,657 Pupils were enrolled in the public schools, as against 145,525 for the preceding year, and as compared with 26,000 for the first year of American administration. Special efforts are under way for the promotion of vocational and industrial training, the need of which is particularly pressing in the island. When the bubonic plague broke out last June, the quick and efficient response of the people of Porto Rico to the demands of modern sanitation was strikingly shown by the thorough campaign which was instituted against the plague and the hearty public opinion which supported the Government's efforts to check its progress and to prevent its recurrence. The failure thus far to grant American citizenship continues to be the only ground of dissatisfaction. The bill conferring such citizenship has passed the House of Representatives and is now awaiting the action of the Senate. I am heartily in favor of the passage of this bill. I believe that the demand for citizenship is just, and that it is amply earned by sustained loyalty on the part of the inhabitants of the island. But it should be remembered that the demand must be, and in the minds of most Porto Ricans is, entirely disassociated from any thought of statehood. I believe that no substantial approved public opinion in the United States or in Porto Rico contemplates statehood for the island as the ultimate form of relations between us. I believe that the aim to be striven for is the fullest possible allowance of legal and fiscal self-government, with American citizenship as to the bond between us; in other words, a relation analogous to the present relation between Great Britain and such self-governing colonies as Canada and Australia. This would conduce to the fullest and most self-sustaining development of Porto Rico, while at the same time it would grant her the economic and political benefits of being under the American flag. A bill is pending in Congress which revolutionizes the carefully worked out scheme of government under which the Philippine Islands are now governed and which proposes to render them virtually autonomous at once and absolutely independent in eight years. Stich a proposal can only be founded on the assumption that we have now discharged our trusteeship to the Filipino people and our responsibility for them to the world, and that they are now prepared for selfgovernment as well as national sovereignty. A thorough and unbiased knowledge of the facts clearly shows that these assumptions are absolutely without justification. As to this, I believe that there is no substantial difference of opinion among any of those who have had the responsibility of facing Philippine problems in the administration of the islands, and I believe that no one to whom the future of this people is a responsible concern can countenance a policy fraught with the direst consequences to those on whose behalf it is ostensibly urged. In the Philippine Islands we have embarked upon an experiment unprecedented in dealing with dependent people. We are developing there conditions exclusively for their own welfare. We found an archipelago containing 24 tribes and races, speaking a great variety of languages, and with a population over 80 per cent of which could neither read nor write. Through the unifying forces of a common education, of commercial and economic development, and of gradual participation in local self-government we are endeavoring to evolve a homogeneous people fit to determine, when the time arrives, their own destiny. We are seeking to arouse a national spirit and not, as under the older colonial theory, to suppress such a spirit. The character of the work we have been doing is keenly recognized in the Orient, and our success thus far followed with not a little envy by those who, initiating the same policy, find themselves hampered by conditions grown up in earlier days and under different theories of administration. But our work is far from done. Our duty to the Filipinos is far from discharged. Over half a million Filipino students are now in the Philippine schools helping to mold the men of the future into a homogeneous people, but there still remain more than a million Filipino children of school age yet to be reached. Freed from American control the integrating forces of a common education and a common language will cease and the educational system now well started will slip back into inefficiency and disorder. An enormous increase in the commercial development of the islands has been made since they were virtually granted full access to our markets three years ago, with every prospect of increasing development and diversified industries. Freed from American control such development is bound to decline. Every observer speaks of the great progress in public works for the benefit of the Filipinos, of harbor improvements, of roads and railways, of irrigation and artesian wells, public buildings, and better means of communication. But large parts of the islands are still unreached, still even unexplored, roads and railways are needed in many parts, irrigation systems are still to be installed, and wells to be driven. Whole villages and towns are still without means of communication other than almost impassable roads and trails. Even the great progress in sanitation, which has successfully suppressed smallpox, the bubonic plague, and Asiatic cholera, has found the cause of and a cure for beriberi, has segregated the lepers, has helped to make Manila the most healthful city in the Orient, and to free life throughout the whole archipelago from its former dread diseases, is nevertheless incomplete in many essentials of permanence in sanitary policy. Even more remains to be accomplished. If freed from American control sanitary progress is bound to be arrested and all that has been achieved likely to be lost. Concurrent with the economic, social, and industrial development of the islands has been the development of the political capacity of the people. By their progressive participation in government the Filipinos are being steadily and hopefully trained for self-government. Under Spanish control they shared in no way in the government. Under American control they have shared largely and increasingly. Within the last dozen years they have gradually been given complete autonomy in the municipalities, the right to elect two-thirds of the provincial governing boards and the lower house of the insular legislature. They have four native members out of nine members of the commission, or upper house. The chief justice and two justices of the supreme court, about one-half of the higher judicial positions, and all of the justices of the peach are natives. In the classified civil service the proportion of Filipinos increased from 51 per cent in 1904 to 67 per cent in 1911. Thus to-day all the municipal employees, over go per cent of the provincial employees, and 60 per cent of the officials and employees of the central government are Filipinos. The ideal which has been kept in mind in our political guidance of the islands has been real popular self-government and not mere paper independence. I am happy to say that the Filipinos have done well enough in the places they have filled and in the discharge of the political power with which they have been intrusted to warrant the belief that they can be educated and trained to complete self-government. But the present satisfactory results are due to constant support and supervision at every step by Americans. If the task we have undertaken is higher than that assumed by other nations, its accomplishment must demand even more patience. We must not forget that we found the Filipinos wholly untrained in government. Up to our advent all other experience sought to repress rather than encourage political power. It takes long time and much experience to ingrain political habits of steadiness and efficiency. Popular self-government ultimately must rest upon common habits of thought and upon a reasonably developed public opinion. No such foundations for selfgovernment, let alone independence are now present in the Philippine Islands. Disregarding even their racial heterogeneity and the lack of ability to think as a nation, it is sufficient to point out that under liberal franchise privileges only about 3 per cent of the Filipinos vote and only 5 per cent of the people are said to read the public press. To confer independence upon the Filipinos now is, therefore, to subject the great mass of their people to the dominance of an oligarchical and, probably, exploiting minority. Such a course will be as cruel to those people as it would be shameful to us. Our true course is to pursue steadily and courageously the path we have thus far followed; to guide the Filipinos into self-sustaining pursuits; to continue the cultivation of sound political habits through education and political practice; to encourage the diversification of industries, and to realize the advantages of their industrial education by conservatively approved cooperative methods, at once checking the dangers of concentrated wealth and building up a sturdy, independent citizenship. We should do all this with a disinterested endeavor to secure for the Filipinos economic independence and to fit them for complete self-government, with the power to decide eventually, according to their own largest good, whether such self-government shall be accompanied by independence. A present declaration even of future independence would retard progress by the dissension and disorder it would arouse. On our part it would be a disingenuous attempt, under the guise of conferring a benefit on them, to relieve ourselves from the heavy and difficult burden which thus far we have been bravely and consistently sustaining. It would be a disguised policy of scuttle. It would make the helpless Filipino the football of oriental politics, tinder the protection of a guaranty of their independence, which we would be powerless to enforce. There are pending before Congress a large number of bills proposing to grant privileges of erecting dams for the purpose of creating water power in our navigable rivers. The pendency of these bills has brought out an important defect in the existing general dam act. That act does not, in my opinion, grant sufficient power to the Federal Government in dealing with the construction of such dams to exact protective conditions in the interest of navigation. It does not permit the Federal Government, as a condition of its permit, to require that a part of the value thus created shall be applied to the further general improvement and protection of the stream. I believe this to be one of the most important matters of internal improvement now confronting the Government. Most of the navigable rivers of this country are comparatively long and shallow. In order that they may be made fully useful for navigation there has come into vogue a method of improvement known as canalization, or the slack-water method, which consists in building a series of dams and locks, each of which will create a long pool of deep navigable water. At each of these dams there is usually created also water power of commercial value. If the water power thus created can be made available for the further improvement of navigation in the stream, it is manifest that the improvement will be much more quickly effected on the one hand, and, on the other, that the burden on the general taxpayers of the country will be very much reduced. Private interests seeking permits to build water-power dams in navigable streams usually urge that they thus improve navigation, and that if they do not impair navigation they should be allowed to take for themselves the entire profits of the water-power development. Whatever they may do by way of relieving the Government of the expense of improving navigation should be given due consideration, but it must be apparent that there may be a profit beyond a reasonably liberal return upon the private investment which is a potential asset of the Government in carrying out a comprehensive policy of waterway development. It is no objection to the retention and use of such an asset by the Government that a comprehensive waterway policy will include the protection and development of the other public uses of water, which can not and should not be ignored in making and executing plans for the protection and development of navigation. It is also equally clear that inasmuch as the water power thus created is or may be an incident of a general scheme of waterway improvement within the constitutional jurisdiction of the Federal Government, the regulation of such water power lies also within that jurisdiction. In my opinion constructive statesmanship requires that legislation should be enacted which will permit the development of navigation in these great rivers to go hand in hand with the utilization of this by-product of water power, created in the course of the same improvement, and that the general dam act should be so amended as to make this possible. I deem it highly important that the Nation should adopt a consistent and harmonious treatment of these water-power projects, which will preserve for this purpose their value to the Government, whose right it is to grant the permit. Any other policy is equivalent to throwing away a most valuable national asset. During the past year the work of construction upon the canal has progressed most satisfactorily. About 87 per cent of the excavation work has been completed, and more than 93 per cent of the concrete for all the locks is in place. In view of the great interest which has been manifested as to some slides in the Culebra Cut, I am glad to say that the report of Col. Goethals should allay any apprehension on this point. It is gratifying to note that none of the slides which occurred during this year would have interfered with the passage of the ships had the canal, in fact, been in operation, and when the slope pressures will have been finally adjusted and the growth of vegetation will minimize erosion in the banks of the cut, the slide problem will be practically solved and an ample stability assured for the Culebra Cut. Although the official date of the opening has been set for January 1, 1915, the canal will, in fact, from present indications, be opened for shipping during the latter half of 1913. No fixed date can as yet be set, but shipping interests will be advised as soon as assurances can be given that vessels can pass through without unnecessary delay. Recognizing the administrative problem in the management of the canal, Congress in the act of August 24, 1912, has made admirable provisions for executive responsibility in the control of the canal and the government of the Canal Zone. The problem of most efficient organization is receiving careful consideration, so that a scheme of organization and control best adapted to the conditions of the canal may be formulated and put in operation as expeditiously as possible. Acting tinder the authority conferred on me by Congress, I have, by Executive proclamation, promulgated the following schedule of tolls for ships passing through the canal, based upon the thorough report of Emory R. Johnson, special commissioner on traffic and tolls: I. On merchant vessels carrying passengers or cargo, $1.20 per net vessel ton-each 100 cubic feet-of actual earning capacity. 2. On vessels in ballast without passengers or cargo, 40 per cent less than the rate of tolls for vessels with passengers or cargo. 3. Upon naval vessels, other than transports, colliers, hospital ships, and supply ships, 50 cents per displacement ton. 4. Upon Army and Navy transports, colliers, hospital ships, and supply ships, $1.20 per net ton, the vessels to be measured by the same rules as are employed in determining the net tonnage of merchant vessels. Rules for the determination of the tonnage upon which toll charges are based are now in course of preparation and will be promulgated in due season. The proclamation which I have issued in respect to the Panama Canal tolls is in accord with the Panama Canal act passed by this Congress August 24, 1912. We have been advised that the British Government has prepared a protest against the act and its enforcement in so far as it relieves from the payment of tolls American ships engaged in the American coastwise trade on the ground that it violates British rights tinder the Hay-Pauncefote treaty concerning the Panama Canal. When the protest is presented, it will be promptly considered and an effort made to reach a satisfactory adjustment of any differ. ences there may be between the two Governments. The promulgation of an efficient workmen's compensation act, adapted to the particular conditions of the zone, is awaiting adequate appropriation by Congress for the payment of claims arising thereunder. I urge that speedy provision be made in order that we may install upon the zone a system of settling claims for injuries in best accord with modern humane, social, and industrial theories. As the completion of the canal grows nearer, and as the wonderful executive work of Col. Goethals becomes more conspicuous in the eyes of the country and of the world, it seems to me wise and proper to make provision by law for such reward to him as may be commensurate with the service that he has rendered to his country. I suggest that this reward take the form of an appointment of Col. Goethals as a major general in the Army of the United States, and that the law authorizing such appointment be accompanied with a provision permitting his designation as Chief of Engineers upon the retirement of the present incumbent of that office. The Navy of the United States is in a greater state of efficiency and is more powerful than it has ever been before, but in the emulation which exists between different countries in respect to the increase of naval and military armaments this condition is not a permanent one. In view of the many improvements and increases by foreign Governments the slightest halt on our part in respect to new construction throws us back and reduces us from a naval power of the first rank and places us among the nations of the second rank. In the past 15 years the Navy has expanded rapidly and yet far less rapidly than our country. From now on reduced expenditures in the Navy means reduced military strength. The world's history has shown the importance of sea power both for adequate defense and for the support of important and definite policies. I had the pleasure of attending this autumn a mobilization of the Atlantic Fleet, and was glad to observe and note the preparedness of the fleet for instant action. The review brought before the President and the Secretary of the Navy a greater and more powerful collection of vessels than had ever been gathered in American waters. The condition of the fleet and of the officers and enlisted men and of the equipment of the vessels entitled those in authority to the greatest credit. I again commend to Congress the giving of legislative sanction to the appointment of the naval aids to the Secretary of the Navy. These aids and the council of aids appointed by the Secretary of the Navy to assist him in the conduct of his department have proven to be. of the highest utility. They have furnished an executive com mittee of the most skilled naval experts, who have coordinated the action of the various bureaus in the Navy, and by their advice have enabled the Secretary to give an administration at the same time economical and most efficient. Never before has the United States had a Navy that compared in efficiency with its present one, but never before have the requirements with respect to naval warfare been higher and more exacting than now. A year ago Congress refused to appropriate for more than one battleship. In this I think a great mistake of policy was made, and I urgently recommend that this Congress make tip for the mistake of the last session by appropriations authorizing the construction of three battleships, in addition to destroyers, fuel ships, and the other auxiliary vessels as shown in the building program of the general board. We are confronted by a condition in respect to the navies of the world which requires us, if we would maintain our Navy as an insurance of peace, to augment our naval force by at least two battleships a year and by battle cruisers, gunboats, torpedo destroyers, and submarine boats in a proper proportion. We have no desire for war. We would go as far as any nation in the world to avoid war, but we are a world power. Our population, our wealth, our definite policies, our responsibilities in the Pacific and the Atlantic, our defense of the Panama Canal, together with our enormous world trade and our missionary outposts on the frontiers of civilization, require us to recognize our position as one of the foremost in the family of nations, and to clothe ourselves with sufficient naval power to give force to our reasonable demands, and to give weight to our influence in those directions of progress that a powerful Christian nation should advocate. I observe that the Secretary of the Navy devotes some space to a change in the disciplinary system in vogue in that branch of the service. I think there is nothing quite so unsatisfactory to either the Army or the Navy as the severe punishments necessarily inflicted by court-martial for desertions and purely military offenses, and I am glad to hear that the British have solved this important and difficult matter in a satisfactory way. I commend to the consideration of Congress the details of the new disciplinary system, and recommend that laws be passed putting the same into force both in the Army and the Navy. I invite the attention of Congress to that part of the report of the Secretary of the Navy in which he recommends the formation of a naval reserve by the organization of the ex-sailors of the Navy. I repeat my recommendation made last year that proper provision should be made for the rank of the commander in chief of the squadrons and fleets of the Navy. The inconvenience attending the necessary precedence that most foreign admirals have over our own whenever they meet in official functions ought to be avoided. It impairs the prestige of our Navy and is a defect that can be very easily removed. This department has been very active in the enforcement of the law. It has been better organized and with a larger force than ever before in the history of the Government. The prosecutions which have been successfully concluded and which are now pending testify to the effectiveness of the departmental work. The prosecution of trusts under the Sherman antitrust law has gone on without restraint or diminution, and decrees similar to those entered in the Standard Oil and the Tobacco cases have been entered in other suits, like the suits against the Powder Trust and the Bathtub Trust. I am very strongly convinced that a steady, consistent course in this regard, with a continuing of Supreme Court decisions upon new phases of the trust question not already finally decided is going to offer a solution of this much-discussed and troublesome issue in a quiet, calm, and judicial way, without any radical legislation changing the governmental policy in regard to combinations now denounced by the Sherman antitrust law. I have already recommended as an aid in this matter legislation which would declare unlawful certain well-known phases of unfair competition in interstate trade, and I have also advocated voluntary national incorporation for the larger industrial enterprises, with provision for a closer supervision by the Bureau of Corporations, or a board appointed for the purpose, so as to make more certain compliance with the antitrust law on the one hand and to give greater security to the stockholders against possible prosecutions on the other. I believe, however, that the orderly course of litigation in the courts and the regular prosecution of trusts charged with the violation of the antitrust law is producing among business men a clearer and clearer perception of the line of distinction between business that is to be encouraged and business that is to be condemned, and that in this quiet way the question of trusts can be settled and competition retained as an economic force to secure reasonableness in prices and freedom and independence in trade. I am glad to bring to the attention of Congress the fact that the Supreme Court has radically altered the equity rules governing the procedure on the equity side of all Federal courts, and though, as these changes have not been yet put in practice so as to enable us to state from actual results what the reform will accomplish, they are of such a character that we can reasonably prophesy that they will greatly reduce the time and cost of litigation in such courts. The court has adopted many of the shorter methods of the present English procedure, and while it may take a little while for the profession to accustom itself to these methods, it is certain greatly to facilitate litigation. The action of the Supreme Court has been so drastic and so full of appreciation of the necessity for a great reform in court procedure that I have no hesitation in following tip this action with a recommendation which I foreshadowed in my message of three years ago, that the sections of the statute governing the procedure in the Federal courts on the common-law side should be so amended as to give to the Supreme Court the same right to make rules of procedure in common law as they have, since the beginning of the court, exercised in equity. I do not doubt that a full consideration of the subject will enable the court while giving effect to the substantial differences in right and remedy between the system of common law and the system of equity so to unite the two procedures into the form of one civil action and to shorten the procedure in such civil action as to furnish a model to all the State courts exercising concurrent jurisdiction with the Federal courts of first instance. Under the statute now in force the common-law procedure in each Federal court is made to conform to the procedure in the State in which the court is held. In these days, when we should be making progress in court procedure, such a conformity statute makes the Federal method too dependent upon the action of State legislatures. I can but think it a great opportunity for Congress to intrust to the highest tribunal in this country, evidently imbued with a strong spirit in favor of a reform of procedure, the power to frame a model code of procedure, which, while preserving all that is valuable and necessary of the rights and remedies at common law and in equity, shall lessen the burden of the poor litigant to a minimum in the expedition and cheapness with which his cause can be fought or defended through Federal courts to final judgment. The workman's compensation act reported by the special commission appointed by Congress and the Executive, which passed the Senate and is now pending in the House, the passage of which I have in previous messages urged upon Congress, I venture again to call to its attention. The opposition to it which developed in the Senate, but which was overcome by a majority in that body, seemed to me to grow out rather of a misapprehension of its effect than of opposition to its principle. I say again that I think no act can have a better effect directly upon the relations between the employer and employee than this act applying to railroads and common carriers of an interstate character, and I am sure that the passage of the act would greatly relieve the courts of the heaviest burden of litigation that they have, and would enable them to dispatch other business with a speed never before attained in courts of justice in this country.     This is the third of a series of messages in which I have brought to the attention of the Congress the important transactions of the Government in each of its departments during the last year and have discussed needed reforms. I recommend the adoption of legislation which shall make it the duty of heads of departments-the members of the President's Cabinet -at convenient times to attend the session of the House and the Senate, which shall provide seats for them in each House, and give them the opportunity to take part in all discussions and to answer questions of which they have had due notice. The rigid holding apart of the executive and the legislative branches of this Government has not worked for the great advantage of either. There has been much lost motion in the machinery, due to the lack of cooperation and interchange of views face to face between the representatives of the Executive and the Members of the two legislative branches of the Government. It was never intended that they should be separated in the sense of not being in constant effective touch and relationship to each other. The legislative and the executive each performs its own appropriate function, but these functions must be coordinated. Time and time again debates have arisen in each House upon issues which the information of a particular department head would have enabled him, if present, to end at once by a simple explanation or statement. Time and time again a forceful and earnest presentation of facts and arguments by the representative of the Executive whose duty it is to enforce the law would have brought about a useful reform by amendment, which in the absence of such a statement has failed of passage. I do not think I am mistaken in saying that the presence of the members of the Cabinet on the floor of each House would greatly contribute to the enactment of beneficial legislation. Nor would this in any degree deprive either the legislative or the executive of the independence which separation of the two branches has been intended to promote. It would only facilitate their cooperation in the public interest. On the other hand, I am sure that the necessity and duty imposed upon department heads of appearing in each Ilouse and in answer to searching questions, of rendering upon their feet an account of what they have done, or what has been done by the administration, will spur each member of the Cabinet to closer attention to the details of his department, to greater familiarity with its needs, and to greater care to avoid the just criticism which the answers brought out in questions put and discussions arising between the Members of either House and the members of the Cabinet may properly evoke. Objection is made that the members of the administration having no vote could exercise no power on the floor of the House, and could not assume that attitude of authority and control which the English parliamentary Government have and which enables them to meet the responsibilities the English system thrusts upon them. I agree that in certain respects it would be more satisfactory if members of the Cabinet could at the same time be Members of both Houses, with voting power, but this is impossible under our system; and while a lack of this feature may detract from the influence of the department chiefs, it will not prevent the good results which I have described above both in the matter of legislation and in the matter of administration. The enactment of such a law would be quite within the power of Congress without constitutional amendment, and it has such possibilities of usefulness that we might well make the experiment, and if we are disappointed the misstep can be easily retraced by a repeal of the enabling legislation. This is not a new proposition. In the House of Representatives, in the Thirty-eighth Congress, the proposition was referred to a select committee of seven Members. The committee made an extensive report, and urged the adoption of the reform. The report showed that our history had not been without illustration of the necessity and the examples of the practice by pointing out that in early days Secretaries were repeatedly called to the presence of either Rouse for consultation, advice, and information. It also referred to remarks of Mr. justice Story in his Commentaries on the Constitution, in which he urgently presented the wisdom of such a change. This report is to be found in Volume I of the Reports of Committees of the First Session of the Thirty-eighth Congress, April 6, 1864. Again, on February 4, 1881, a select committee of the Senate recommended the passage of a similar bill, and made a report, In which, while approving the separation of the three branches, the executive, legislative, and judicial, they point out as a reason for the proposed change that, although having a separate existence, the branches are "to cooperate, each with the other, as the different members of the human body must cooperate, with each other in order to form the figure and perform the duties of a perfect man." The report concluded as follows: 
  This system will require the selection of the strongest men to be heads of departments and will require them to be well equipped with the knowledge of their offices. It will also require the strongest men to be the leaders of Congress and participate in debate. It will bring these strong men in contact, perhaps into conflict, to advance the public weal, and thus stimulate their abilities and their efforts, and will thus assuredly result to the good of the country. If it should appear by actual experience that the heads of departments in fact have not time to perform the additional duty imposed on them by this bill, the force in their offices should be increased or the duties devolving on them personally should be diminished. An undersecretary should be appointed to whom could be confided that routine of administration which requires only order and accuracy. The principal officers could then confine their attention to those duties which require wise discretion and intellectual activity. Thus they would have abundance of time for their duties under this bill. Indeed, your committee believes that the public interest would be subserved if the Secretaries were relieved of the harassing cares of distributing clerkships and closely supervising the mere machinery of the departments. Your committee believes that the adoption of this bill and the effective execution of its provisions will be the first step toward a sound civil-service reform which will secure a larger wisdom in the adoption of policies and a better system in their execution. It would be difficult to mention the names of higher authority in the practical knowledge of our Government than those which are appended to this report. The Postal Savings Bank System has been extended so that it now includes 4,004 fourth-class post offices', as well as 645 branch offices and stations in the larger cities. There are now 12,812 depositories at which patrons of the system may open accounts. The number of depositors is 300,000 and the amount of their deposits is approximately $28,000,000, not including $1,314,140 which has been with drawn by depositors for the purpose of buying postal savings bonds. Experience demonstrates the value of dispensing with the pass-book and introducing in its place a certificate of deposit. The gross income of the postal savings system for the fiscal year ending June 30, 1913, will amount to $700,000 and the interest payable to depositors to $300,000. The cost of supplies, equipment, and salaries is $700,000. It thus appears that the system lacks $300,000 a year of paying interest and expenses. It is estimated, however, that when the deposits have reached the sum Of $50,000,000, which at the present rate they soon will do, the system will be self-sustaining. By law the postal savings funds deposited at each post office are required to be redeposited in local banks. State and national banks to the number of 7,357 have qualified as depositories for these funds. Such deposits are secured by bonds aggregating $54,000,000. Of this amount, $37,000,000 represent municipal bonds. In several messages I have favored and recommended the adoption of a system of parcel post. In the postal appropriation act of last year a general system was provided and its installation was directed by the 1st of January. This has entailed upon the Post Office Department a great deal of very heavy labor, but the Postmaster General informs me that on the date selected, to wit, the 1st of January, near at hand, the department will be in readiness to meet successfully the requirements of the public. A trial, during the past three years, of the system of classifying fourth-class postmasters in that part of the country lying between the Mississippi River on the west, Canada on the north, the Atlantic Ocean on the east, and Mason and Dixon's line on the south has been sufficiently satisfactory to justify the postal authorities in recommending the extension of the order to include all the fourth-class postmasters in the country. In September, 1912, upon the suggestion of the Postmaster General, I directed him to prepare an order which should put the system in effect, except in Alaska, Guam, Hawaii, Porto Rico, and Samoa. Under date of October 15 1 issued such an order which affected 36,000 postmasters. By the order the post offices were divided into groups A and B. Group A includes all postmasters whose compensation is $500 or more, and group B those whose compensation is less than that sum. Different methods are pursued in the selection of the postmasters for group A and group, B. Criticism has been made of this order on the ground that the motive for it was political. Nothing could be further from the truth. The order was made before the election and in the interest of efficient public service. I have several times requested Congress to give me authority to put first-, second-, and third-class postmasters, and all other local officers, including internal-revenue officers, customs officers, United States marshals, and the local agents of the other departments under the classification of the civil-service law by taking away the necessity for confirming such appointments by the Senate. I deeply regret the failure of Congress to follow these recommendations. The change would have taken out of politics practically every local officer and would have entirely cured the evils growing out of what under the present law must always remain a remnant of the spoils system. It is expected that the establishment of a parcel post on January 1st will largely increase the amount of mail matter to be transported by the railways, and Congress should be prompt to provide a way by which they may receive the additional compensation to which they will be entitled. The Postmaster General urges that the department's plan for a complete readjustment of the system of paying the railways for carrying the mails be adopted, substituting space for weight as the principal factor in fixing compensation. Under this plan it will be possible to determine without delay what additional payment should be made on account of the parcel post. The Postmaster General's recommendation is based on the results of a far-reaching investigation begun early in the administration with the object of determining what it costs the railways to carry the mails. The statistics obtained during the course of the inquiry show that while many of the railways, and particularly the large systems, were making profits from mail transportations, certain of the lines were actually carrying the mails at a loss. As a result of the investigation the department, after giving the subject careful consideration, decided to urge the abandonment of the present plan of fixing compensation on the basis of the weight of the mails carried, a plan that has proved to be exceedingly expensive and in other respects unsatisfactory. Under the method proposed the railway companies will annually submit to the department reports showing what it costs them to carry the mails, and this cost will be apportioned on the basis of the car space engaged, payment to be allowed at the rate thus determined in amounts that will cover the cost and a reasonable profit. If a railway is not satisfied with the manner in which the department apportions the cost in fixing compensation, it is to have the right, tinder the new plan, of appealing to the Interstate Commerce Commission. This feature of the proposed law would seem to insure a fair treatment of the railways. It is hoped that Congress will give the matter immediate attention and that the method of compensation recommended by the department or some other suitable plan will be promptly authorized. The Interior Department, in the problems of administration included within its jurisdiction, presents more difficult questions than any other. This has been due perhaps to temporary causes of a political character, but more especially to the inherent difficulty in the performance of some of the functions which are assigned to it. Its chief duty is the guardianship of the public domain and the disposition of that domain to private ownership under homestead, mining, and other laws, by which patents from the Government to the individual are authorized on certain conditions. During the last decade the public seemed to become suddenly aware that a very large part of its domain had passed from its control into private ownership, under laws not well adapted to modern conditions, and also that in the doing of this the provisions of existing law and regulations adopted in accordance with law had not been strictly observed, and that in the transfer of title much fraud had intervened, to the pecuniary benefit of dishonest persons. There arose thereupon a demand for conservation of the public domain, its protection against fraudulent diminution, and the preservation of that part of it from private acquisition which it seemed necessary to keep for future public use. The movement, excellent in the intention which prompted it, and useful in its results, has nevertheless had some bad effects, which the western country has recently been feeling and in respect of which there is danger of a reaction toward older abuses unless we can attain the golden mean, which consists in the prevention of the mere expIoitation of the public domain for private purposes while at the same, time facilitating its development for the benefit of the local public. The land laws need complete revision to secure proper conservation on the one hand of land that ought to be kept in public use and, on the other hand, prompt disposition of those lands which ought to be disposed in private ownership or turned over to private use by properly guarded leases. In addition to this there are not enough officials in our Land Department with legal knowledge sufficient promptly to make the decisions which are called for. The whole land-laws system should be reorganized, and not until it is reorganized, will decisions be made as promptly as they ought, or will men who have earned title to public land under the statute receive their patents within a reasonably short period. The present administration has done what it could in this regard, but the necessity for reform and change by a revision of the laws and an increase and reorganization of the force remains, and I submit to Congress the wisdom of a full examination of this subject, in order that a very large and important part of our people in the West may be relieved from a just cause of irritation. I invite your attention to the discussion by the Secretary of the Interior of the need for legislation with respect to mining claims, leases of coal lands in this country and in Alaska , and for similar disposition of oil, phosphate, and potash lands, and also to his discussion of the proper use to be made of water-power sites held by the Government. Many of these lands are now being withheld from use by the public under the general withdrawal act which was passed by the last Congress. That act was not for the purpose of disposing of the question, but it was for the purpose of preserving the lands until the question could be solved. I earnestly urge that the matter is of the highest importance to our western fellow citizens and ought to command the immediate attention of the legislative branch of the Government. Another function which the Interior Department has to perform is that of the guardianship of Indians. In spite of everything which has been said in criticism of the policy of our Government toward the Indians, the amount of wealth which is now held by it for these wards per capita shows that the Government has been generous; but the management of so large an estate, with the great variety of circumstances that surround each tribe and each case, calls for the exercise of the highest business discretion, and the machinery provided in the Indian Bureau for the discharge of this function is entirely inadequate. The position of Indian commissioner demands the exercise of business ability of the first order, and it is difficult to secure such talent for the salary provided. The condition of health of the Indian and the prevalence in the tribes of curable diseases has been exploited recently in the press. In a message to Congress at its last session I brought this subject to its attention and invited a special appropriation, in order that our facilities for overcoming diseases among the Indians might be properlv increased, but no action was then taken by Congress on the subject, nor has such appropriation been made since. The commission appointed by authority of the Congress to report on proper method of securing railroad development in Alaska is formulating its report, and I expect to have an opportunity before the end of this session to submit its recommendations. The far-reaching utility of the educational system carried on by the Department of Agriculture for the benefit of the farmers of our country calls for no elaboration. Each year there is a growth in the variety of facts which it brings out for the benefit of the farmer, and each year confirms the wisdom of the expenditure of the appropriations made for that department. The Department of Agriculture is charged with the execution of the pure-food law. The passage of this encountered much opposition from manufacturers and others who feared the effect upon their business of the enforcement of its provisions. The opposition aroused the just indignation of the public, and led to an intense sympathy with the severe and rigid enforcement of the provisions of the new law. It had to deal in many instances with the question whether or not products of large business enterprises, in the form of food preparations, were deleterious to the public health; and while in a great majority of instances this issue was easily determinable, there were not a few cases in which it was hard to draw the line between a useful and a harmful food preparation. In cases like this when a decision involved the destruction of great business enterprises representing the investment of large capital and the expenditure of great energy and ability, the danger of serious injustice was very considerable in the enforcement of a new law under the spur of great public indignation. The public officials charged with executing the law might do injustice in heated controversy through unconscious pride of opinion and obstinacy of conclusion. For this reason President Roosevelt felt justified in creating a board of experts, known as the Remsen Board, to whom in cases of much importance an appeal might be taken and a review had of a decision of the Bureau of Chemistry in the Agricultural Department. I heartily agree that it was wise to create this board in order that injustice might not be done. The questions which arise are not generally those involving palpable injury to health, but they are upon the narrow and doubtful line in respect of which it is better to be in some error not dangerous than to be radically destructive. I think that the time has come for Congress to recognize the necessity for some such tribunal of appeal and to make specific statutory provision for it. While we are struggling to suppress an evil of great proportions like that of impure food, we must provide machinery in the law itself to prevent its becoming an instrument of oppression, and we ought to enable those whose business is threatened with annihilation to have some tribunal and some form of appeal in which they have a complete day in court. I referred in my first message to the question of improving the system of agricultural credits. The Secretary of Agriculture has made an investigation into the matter of credits in this country, and I commend a consideration of the information which through his agents he has been able to collect. It does not in any way minimize the importance of the proposal, but it gives more accurate information upon some of the phases of the question than we have heretofore had. I commend to Congress an examination of the report of the Secretary of Commerce and Labor, and especially that part in which he discusses the office of the Bureau of Corporations, the value to commerce of a proposed trade commission, and the steps which he has taken to secure the organization of a national chamber of commerce. I heartily commend his view that the plan of a trade commission which looks to the fixing of prices is altogether impractical and ought not for a moment to be considered as a possible solution of the trust question. The trust question in the enforcement of the Sherman antitrust law is gradually solving itself, is maintaining the principle and restoring the practice of competition, and if the law is quietly but firmly enforced, business will adjust itself to the statutory requirements, and the unrest in commercial circles provoked by the trust discussion will disappear. In conformity with a joint resolution of Congress, an Executive proclamation was issued last February, inviting the nations of the world to participate in the Panama-Pacific International Exposition to be held at San Francisco to celebrate the construction of the Panama, Canal. A sympathetic response was immediately forthcoming, and several nations have already selected the sites for their buildings. In furtherance of my invitation, a special commission visited European countries during the past summer, and received assurance of hearty cooperation in the task of bringing together a universal industrial, military, and naval display on an unprecedented scale. It is evident that the exposition will be an accurate mirror of the world's activities as they appear 400 years after the date of the discovery of the Pacific Ocean. It is the duty of the United States to make the nations welcome at San Francisco and to facilitate such acquaintance between them and ourselves as will promote the expansion of commerce and familiarize the world with the new trade route through the Panama Canal. The action of the State governments and individuals assures a comprehensive exhibit of the resources of this country and of the progress of the people. This participation by State and individuals should be supplemented by an adequate showing of the varied and unique activities of the National Government. The United States can not with good grace invite foreign governments to erect buildings and make expensive exhibits while itself refusing to participate. Nor would it be wise to forego the opportunity to join with other nations in the inspiring interchange of ideas tending to promote intercourse, friendship, and commerce. It is the duty of the Government to foster and build up commerce through the canal, just as it was the duty of the Government to construct it. I earnestly recommend the appropriation at this session of such a sum as will enable the United States to construct a suitable building, install a governmental exhibit, and otherwise participate in the Panama-Pacific International Exposition in a manner commensurate with the dignity of a nation whose guests are to be the people of the world. I recommend also such legislation as will facilitate the entry of material intended for exhibition and protect foreign exhibitors against infringement of patents and the unauthorized copying of patterns and designs. All aliens sent to San Francisco to construct and care for foreign buildings and exhibits should be admitted without restraint or embarrassment. The city of Washington is a beautiful city, with a population of 352,936, of whom 98,667 are colored. The annual municipal budget is about $14,ooo,ooo. The presence of the National Capital and other governmental structures constitutes the chief beauty and interest of the city. The public grounds are extensive, and the opportunities for improving the city and making it still more attractive are very great. Under a plan adopted some years ago, one half the cost of running the city is paid by taxation upon the property, real and personal, of the citizens and residents, and the other half is borne by the General Government. The city is expanding at a remarkable rate, and this can only be accounted for by the coming here from other parts of the country of well-to-do people who, having finished their business careers elsewhere, build and make this their permanent place of residence. On the whole, the city as a municipality is very well governed. It is well lighted, the water supply is good, the streets are well paved, the police force is well disciplined, crime is not flagrant, and while it has purlieus and centers of vice, like other large cities, they are not exploited, they do not exercise any influence or control in the government of the city, and they are suppressed in as far as it has been found practicable. Municipal graft is inconsiderable. There are interior courts in the city that are noisome and centers of disease and the refuge of criminals, but Congress has begun to clean these out, and progress has been made in the case of the most notorious of these, which is known as "Willow Tree Alley." This movement should continue. The mortality for the past year was at the rate Of 17.80 per 1,000 of both races; among the whites it was 14.61 per thousand, and among the blacks 26.12 per thousand. These are the lowest mortality rates ever recorded in the District. One of the most crying needs in the government of the District is a tribunal or public authority for the purpose of supervising the corporations engaged in the operation of public utilities. Such a bill is pending in Congress and ought to pass. Washington should show itself under the direction of Congress to be a city with a model form of government, but as long as such authority over public utilities is withheld from the municipal government, it must always be de- fective. Without undue criticism of the present street railway accommodations, it can be truly said that under the spur of a public utilities commission they might be substantially improved. While the school system of Washington perhaps might be bettered in the economy of its management and the distribution of its buildings, its usefulness has nevertheless greatly increased in recent years, and it now offers excellent facilities for primary and secondary education. From time to time there is considerable agitation in Washington in favor of granting the citizens of the city the franchise and constituting an elective government. I am strongly opposed to this change. The history of Washington discloses a number of experiments of this kind, which have always been abandoned as unsatisfactory. The truth is this is a city governed by a popular body, to wit, the Congress of the United States, selected from the people of the United States, who own Washington. The people who come here to live do so with the knowledge of the origin of the city and the restrictions, and therefore voluntarily give up the privilege of living in a municipality governed by popular vote. Washington is so unique in its origin and in its use for housing and localizing the sovereignty of the Nation that the people who live here must regard its peculiar character and must be content to subject themselves to the control of a body selected by all the people of the Nation. I agree that there are certain inconveniences growing out of the government of a city by a national legislature like Congress, and it would perhaps be possible to lessen these by the delegation by Congress to the District Commissioners of greater legislative power for the enactment of local laws than they now possess, especially those of a police character. Every loyal American has a personal pride in the beauty of Washington and in its development and growth. There is no one with a proper appreciation of our Capital City who would favor a niggardly policy in respect to expenditures from the National Treasury to add to the attractiveness of this city, which belongs to every citizen of the entire country, and which no citizen visits without a sense of pride of ownership. We have had restored by a Commission of Fine Arts, at the instance of a committee of the Senate, the original plan of the French engineer L'Enfant for the city of Washington, and we know with great certainty the course which the improvement of Washington should take. Why should there be delay in making this improvement in so far as it involves the extension of the parking system and the construction of greatly needed public buildings ? Appropriate buildings for the State Department, the Department of justice, and the Department of Commerce and Labor have been projected, plans have been approved, and nothing is wanting but the appropriations for the beginning and completion of the structures. A hall of archives is also badly needed, but nothing has been done toward its construction, although the land for it has long been bought and paid for. Plans have been made for the union of Potomac Park with the valley of Rock Creek and Rock Creek Park, and the necessity for the connection between the Soldiers' Home and Rock Creek Park calls for no comment. I ask again why there should be delay in carrying out these plans We have the money in the Treasury, the plans are national in their scope, and the improvement should be treated as a national project. The plan will find a hearty approval throughout the country. I am quite sure, from the information which I have, that, at comparatively small expense, from that part of the District of Columbia which was retroceded to Virginia, the portion including the Arlington estate, Fort Myer, and the palisades of the Potomac can be acquired by purchase and the jurisdiction of the State of Virginia over this land ceded to the Nation. This ought to be done. The construction of the Lincoln Memorial and of a memorial bridge from the base of the Lincoln Monument to Arlington would be an appropriate and symbolic expression of the union of the North and the South at the Capital of the Nation. I urge upon Congress the appointment of a commission to undertake these national improvements, and to submit a plan for their execution; and when the plan has been submitted and approved, and the work carried out, Washington will really become what it ought to be-the most beautiful city in the world.
The foreign relations of the United States actually and potentially affect the state of the Union to a degree not widely realized and hardly surpassed by any other factor in the welfare of the whole Nation. The position of the United States in the moral,intellectual, and material relations of the family of nations should be a matter of vital interest to every patriotic citizen. The national prosperity and power impose upon us duties which we can not shirk if we are to be true to our ideals. The tremendous growth of the export trade of the United States has already made that trade a very real factor in the industrial and commercial prosperity of the country. With the development of our industries the foreign commerce of the United States must rapidly become a still more essential factor in its economic welfare. Whether we have a farseeing and wise diplomacy and are not recklessly plunged into unnecessary wars, and whether our foreign policies are based upon an intelligent grasp of present-day world conditions and a clear view of the potentialities of the future, or are governed by a temporary and timid expediency or by narrow views befitting an infant nation, are questions in the alternative consideration of which must convince any thoughtful citizen that no department of national polity offers greater opportunity for promoting the interests of the whole people on the one hand, or greater chance on the other of permanent national injury, than that which deals with the foreign relations of the United States. The fundamental foreign policies of the United States should be raised high above the conflict of partisanship and wholly dissociated from differences as to domestic policy. In its foreign affairs the United States should present to the world a united front. The intellectual, financial, and industrial interests of the country and the publicist, the wage earner, the farmer, and citizen of whatever occupation must cooperate in a spirit of high patriotism to promote that national solidarity which is indispensable to national efficiency and to the attainment of national ideals. The relations of the United States with all foreign powers remain upon a sound basis of peace, harmony, and friendship. A greater insistence upon justice to American citizens or interests wherever it may have been denied and a stronger emphasis of the need of mutuality in commercial and other relations have only served to strengthen our friendships with foreign countries by placing those friendships upon a firm foundation of realities as well as aspirations. Before briefly reviewing the more important events of the last year in our foreign relations, which it is my duty to do as charged with their conduct and because diplomatic affairs are not of a nature to make it appropriate that the Secretary of State make a formal annual report, I desire to touch upon some of the essentials to the safe management of the foreign relations of the United States and to endeavor, also, to define clearly certain concrete policies which are the logical modern corollaries of the undisputed and traditional fundamentals of the foreign policy of the United States. At the beginning of the present administration the United States, having fully entered upon its position as a world power, with the responsibilities thrust upon it by the results of the Spanish-American War, and already engaged in laying the groundwork of a vast foreign trade upon which it should one day become more and more dependent, found itself without the machinery for giving thorough attention to, and taking effective action upon, a mass of intricate business vital to American interests in every country in the world. The Department of State was an archaic and inadequate machine lacking most of the attributes of the foreign office of any great modern power. With an appropriation made upon my recommendation by the Congress on August 5, 1909, the Department of State was completely reorganized. There were created Divisions of LatinAmerican Affairs and of Far Eastern, Near Eastern, and Western European Affairs. To these divisions were called from the foreign service diplomatic and consular officers possessing experience and knowledge gained by actual service in different parts of the world and thus familiar with political and commercial conditions in the regions concerned. The work was highly specialized. The result is that where previously this Government from time to time would emphasize in its foreign relations one or another policy, now American interests in every quarter of the globe are being cultivated with equal assiduity. This principle of politico-geographical division possesses also the good feature of making possible rotation between the officers of the departmental, the diplomatic, and the consular branches of the foreign service, and thus keeps the whole diplomatic and consular establishments tinder the Department of State in close touch and equally inspired with the aims and policy of the Government. Through the newly created Division of Information the foreign service is kept fully informed of what transpires from day to day in the international relations of the country, and contemporary foreign comment affecting American interests is promptly brought to the attention of the department. The law offices of the department were greatly strengthened. There were added foreigntrade advisers to cooperate with the diplomatic and consular bureaus and the politico-geographical divisions in the innumerable matters where commercial diplomacy or consular work calls for such special knowledge. The same officers, together with the rest of the new organization, are able at all times to give to American citizens accurate information as to conditions in foreign countries with which they have business and likewise to cooperate more effectively with the Congress and also with the other executive departments. Expert knowledge and professional training must evidently be the essence of this reorganization. Without a trained foreign service there would not be men available for the work in the reorganized Department of State. President Cleveland had taken the first step toward introducing the merit system in the foreign service. That had been followed by the application of the merit principle, with excellent results, to the entire consular branch. Almost nothing, however, had been done in this direction with regard to the Diplomatic Service. In this age of commercial diplomacy it was evidently of the first importance to train an adequate personnel in that branch of the service. Therefore, on November 26, 1909, by an Executive order I placed the Diplomatic Service up to the grade of secretary of embassy, inclusive, upon exactly the same strict nonpartisan basis of the merit system, rigid examination for appointment and promotion only for efficiency, as had been maintained without exception in the Consular Service. How faithful to the merit system and how nonpartisan has been the conduct of the Diplomatic and Consular Services in the last four years may be judged from the following: Three ambassadors now serving held their present rank at the beginning of my administration. Of the ten ambassadors whom I have appointed, five were by promotion from the rank of minister. Nine ministers now serving held their present rank at the beginning of my administration. Of the thirty ministers whom I have appointed, eleven were promoted from the lower grades of the foreign service or from the Department of State. Of the nineteen missions in Latin America, where our relations are close and our interest is great, fifteen chiefs of mission are service men, three having entered the service during this administration. Thirty-seven secretaries of embassy or legation who have received their initial appointments after passing successfully the required examination were chosen for ascertained fitness, without regard to political affiliations. A dearth of candidates from Southern and Western States has alone made it impossible thus far completely to equalize all the States' representations in the foreign service. In the effort to equalize the representation of the various States in the Consular Service 1 have made sixteen of the twenty-nine new appointments as consul which have occurred during my administration from the Southern States. This is 55 per cent. Every other consular appointment made, including the promotion of eleven young men from the consular assistant and student interpreter corps, has been by promotion or transfer, based solely upon efficiency shown in the service. In order to assure to the business and other interests of the United States a continuance of the resulting benefits of this reform, I earnestly renew my previous recommendations of legislation making it permanent along some such lines as those of the measure now Pending in Congress. In connection with legislation for the amelioration of the foreign service, I wish to invite attention to the advisability of placing the salary appropriations upon a better basis. I believe that the best results would be obtained by a moderate scale of salaries, with adequate funds for the expense of proper representation, based in each case upon the scale and cost of living at each post, controlled by a system of accounting, and under the general direction of the Department of State. In line with the object which I have sought of placing our foreign service on a basis of permanency, I have at various times advocated provision by Congress for the acquisition of Government-owned buildings for the residence and offices of our diplomatic officers, so as to place them more nearly on an equality with similar officers of other nations and to do away with the discrimination which otherwise must necessarily be made, in some cases, in favor of men having large private fortunes. The act of Congress which I approved on February 17, 1911, was a right step in this direction. The Secretary of State has already made the limited recommendations permitted by the act for any one year, and it is my hope that the bill introduced in the House of Representatives to carry out these recommendations will be favorably acted on by the Congress during its present session. In some Latin-American countries the expense of governmentowned legations will be less than elsewhere, and it is certainly very urgent that in such countries as some of the Republics of Central America and the Caribbean, where it is peculiarly difficult to rent suitable quarters, the representatives of the United States should be justly and adequately provided with dignified and suitable official residences. Indeed, it is high time that the dignity and power of this great Nation should be fittingly signalized by proper buildings for the occupancy of the Nation's representatives everywhere abroad. The diplomacy of the present administration has sought to respond to modern ideas of commercial intercourse. This policy has been characterized as substituting dollars for bullets. It is one that appeals alike to idealistic humanitarian sentiments, to the dictates of sound policy and strategy, and to legitimate commercial aims. It I is an effort frankly directed to the increase of American trade upon the axiomatic principle that the Government of the United States shall extend all proper support to every legitimate and beneficial American enterprise abroad. How great have been the results of this diplomacy, coupled with the maximum and minimum provision of the tariff law, will be seen by some consideration of the wonder ful increase in the export trade of the United States. Because modern diplomacy is commercial, there has been a disposition in some quarters to attribute to it none but materialistic aims. How strikingly erroneous is such an impression may be seen from a study of the results by which the diplomacy of the United States can be judged. In the field of work toward the ideals of peace this Government negotiated, but to my regret was unable to consummate, two arbitration treaties which set the highest mark of the aspiration of nations toward the substitution of arbitration and reason for war in the settlement of international disputes. Through the efforts of American diplomacy several wars have been prevented or ended. I refer to the successful tripartite mediation of the Argentine Republic, Brazil, and the United States between Peru and Ecuador; the bringing of the boundary dispute between Panama and Costa Rica to peaceful arbitration; the staying of warlike preparations when Haiti and the Dominican Republic were on the verge of hostilities; the stopping of a war in Nicaragua; the halting of internecine strife in Honduras. The Government of the United States was thanked for its influence toward the restoration of amicable relations between the Argentine Republic and Bolivia. The diplomacy of the United States is active in seeking to assuage the remaining ill-feeling between this country and the Republic of Colombia. In the recent civil war in China the United States successfully joined with the other interested powers in urging an early cessation of hostilities. An agreement has been reached between the Governments of Chile and Peru whereby the celebrated TacnaArica dispute, which has so long embittered international relations on the west coast of South America, has at last been adjusted. Simultaneously came the news that the boundary dispute between Peru and Ecuador had entered upon a stage of amicable settlement. The position of the United States in reference to the Tacna-Arica dispute between Chile and Peru has been one of nonintervention, but one of friendly influence and pacific counsel throughout the period during which the dispute in question has been the subject of interchange of views between this Government and the two Governments immediately concerned. In the general easing of international tension on the west coast of South America the tripartite mediation, to which I have referred, has been a most potent and beneficent factor. In China the policy of encouraging financial investment to enable that country to help itself has had the result of giving new life and practical application to the open-door policy. The consistent purpose of the present administration has been to encourage the use of American capital in the development of China by the promotion of those essential reforms to which China is pledged by treaties with the United States and other powers. The hypothecation to foreign bankers in connection with certain industrial enterprises, such as the Hukuang railways, of the national revenues upon which these reforms depended, led the Department of State early in the administration to demand for American citizens participation in such enterprises, in order that the United States might have equal rights and an equal voice in all questions pertaining to the disposition of the public revenues concerned. The same policy of promoting international accord among the powers having similar treaty rights as ourselves in the matters of reform, which could not be put into practical effect without the common consent of all, was likewise adopted in the case of the loan desired by China for the reform of its currency. The principle of international cooperation in matters of common interest upon which our policy had already been based in all of the above instances has admittedly been a great factor in that concert of the powers which has been so happily conspicuous during the perilous period of transition through which the great Chinese nation has been passing. In Central America the aim has been to help such countries as Nicaragua and Honduras to help themselves. They are the immediate beneficiaries. The national benefit to the United States is twofold. First,. it is obvious that the Monroe doctrine is more vital in the neighborhood of the Panama Canal and the zone of the Caribbean than anywhere else. There, too, the maintenance of that doctrine falls most heavily upon the United States. It is therefore essential that the countries within that sphere shall be removed from the jeopardy involved by heavy foreign debt and chaotic national finances and from the ever-present danger of international complications due to disorder at home. Hence the United States has been glad to encourage and support American bankers who were willing to lend a helping hand to the financial rehabilitation of such countries because this financial rehabilitation and the protection of their customhouses from being the prey of wouldbe dictators would remove at one stroke the menace of foreign creditors and the menace of revolutionary disorder. The second advantage of the United States is one affecting chiefly all the southern and Gulf ports and the business and industry of the South. The Republics of Central America and the Caribbean possess great natural wealth. They need only a measure of stability and the means of financial regeneration to enter upon an era of peace and prosperity, bringing profit and happiness to themselves and at the same time creating conditions sure to lead to a flourishing interchange of trade with this country. I wish to call your especial attention to the recent occurrences in Nicaragua, for I believe the terrible events recorded there during the revolution of the past summer-the useless loss of life, the devastation of property, the bombardment of defenseless cities, the killing and wounding of women and children, the torturing of noncombatants to exact contributions, and the suffering of thousands of human beings-might have been averted had the Department of State, through approval of the loan convention by the Senate, been permitted to carry out its now well-developed policy of encouraging the extending of financial aid to weak Central American States with the primary objects of avoiding just such revolutions by assisting those Republics to rehabilitate their finances, to establish their currency on a stable basis, to remove the customhouses from the danger of revolutions by arranging for their secure administration, and to establish reliable banks. During this last revolution in Nicaragua, the Government of that Republic having admitted its inability to protect American life and property against acts of sheer lawlessness on the part of the malcontents, and having requested this Government to assume that office, it became necessary to land over 2,000 marines and bluejackets in Nicaragua. Owing to their presence the constituted Government of Nicaragua was free to devote its attention wholly to its internal troubles, and was thus enabled to stamp out the rebellion in a short space of time. When the Red Cross supplies sent to Granada had been exhausted, 8,000 persons having been given food in one day upon the arrival of the American forces, our men supplied other unfortunate, needy Nicaraguans from their own haversacks. I wish to congratulate the officers and men of the United States navy and Marine Corps who took part in reestablishing order in Nicaragua upon their splendid conduct, and to record with sorrow the death of seven American marines and bluejackets. Since the reestablishment of peace and order, elections have been held amid conditions of quiet and tranquility. Nearly all the American marines have now been withdrawn. The country should soon be on the road to recovery. The only apparent danger now threatening Nicaragua arises from the shortage of funds. Although American bankers have already rendered assistance, they may naturally be loath to advance a loan adequate to set the country upon its feet without the support of some such convention as that of June, 1911, upon which the Senate has not yet acted. In the general effort to contribute to the enjoyment of peace by those Republics which are near neighbors of the United States, the administration has enforced the so-called neutrality statutes with a new vigor, and those statutes were greatly strengthened in restricting the exportation of arms and munitions by the joint resolution of last March. It is still a regrettable fact that certain American ports are made the rendezvous of professional revolutionists and others engaged in intrigue against the peace of those Republics. It must be admitted that occasionally a revolution in this region is justified as a real popular movement to throw off the shackles of a vicious and tyrannical government. Such was the Nicaraguan revolution against the Zelaya regime. A nation enjoying our liberal institutions can not escape sympathy with a true popular movement, and one so well justified. In very many cases, however, revolutions in the Republics in question have no basis in principle, but are due merely to the machinations of conscienceless and ambitious men, and have no effect but to bring new suffering and fresh burdens to an already oppressed people. The question whether the use of American ports as foci of revolutionary intrigue can be best dealt with by a further amendment to the neutrality statutes or whether it would be safer to deal with special cases by special laws is one worthy of the careful consideration of the Congress. Impressed with the particular importance of the relations between the United States and the Republics of Central America and the Caribbean region, which of necessity must become still more intimate by reason of the mutual advantages which will be presented by the opening of the Panama Canal, I directed the Secretary of State last February to visit these Republics for the purpose of giving evidence of the sincere friendship and good will which the Government and people of the United States bear toward them. Ten Republics were visited. Everywhere he was received with a cordiality of welcome and a generosity of hospitality such as to impress me deeply and to merit our warmest thanks. The appreciation of the Governments and people of the countries visited, which has been appropriately shown in various ways, leaves me no doubt that his visit will conduce to that closer union and better understanding between the United States and those Republics which I have had it much at heart to promote. For two years revolution and counter-revolution has distraught the neighboring Republic of Mexico. Brigandage has involved a great deal of depredation upon foreign interests. There have constantly recurred questions of extreme delicacy. On several occasions very difficult situations have arisen on our frontier. Throughout this trying period, the policy of the United States has been one of patient nonintervention, steadfast recognition of constituted authority in the neighboring nation, and the exertion of every effort to care for American interests. I profoundly hope that the Mexican nation may soon resume the path of order, prosperity, and progress. To that nation in its sore troubles, the sympathetic friendship of the United States has been demonstrated to a high degree. There were in Mexico at the beginning of the revolution some thirty or forty thousand American citizens engaged in enterprises contributing greatly to the prosperity of that Republic and also benefiting the important trade between the two countries. The investment of American capital in Mexico has been estimated at $1,000,000,000. The responsibility of endeavoring to safeguard those interests and the dangers inseparable from propinquity to so turbulent a situation have been great, but I am happy to have been able to adhere to the policy above outlined-a policy which I hope may be soon justified by the complete success of the Mexican people in regaining the blessings of peace and good order. A most important work, accomplished in the past year by the American diplomatic officers in Europe, is the investigation of the agricultural credit system in the European countries. Both as a means to afford relief to the consumers of this country through a more thorough development of agricultural resources and as a means of more sufficiently maintaining the agricultural population, the project to establish credit facilities for the farmers is a concern of vital importance to this Nation. No evidence of prosperity among well-established farmers should blind us to the fact that lack of capital is preventing a development of the Nation's agricultural resources and an adequate increase of the land under cultivation; that agricultural production is fast falling behind the increase in population; and that, in fact, although these well-established farmers are maintained in increasing prosperity because of the natural increase in population, we are not developing the industry of agriculture. We are not breeding in proportionate numbers a race of independent and independence-loving landowners, for a lack of which no growth of cities can compensate. Our farmers have been our mainstay in times of crisis, and in future it must still largely be upon their stability and common sense that this democracy must rely to conserve its principles of self-government. The need of capital which American farmers feel to-day had been experienced by the farmers of Europe, with their centuries-old farms, many years ago. The problem had been successfully solved in the Old World and it was evident that the farmers of this country might profit by a study of their systems. I therefore ordered, through the Department of State, an investigation to be made by the diplomatic officers in Europe, and I have laid the results of this investigation before the governors of the various States with the hope that they will be used to advantage in their forthcoming meeting. In my last annual message I said that the fiscal year ended June 30, 1911, was noteworthy as marking the highest record of exports of American products to foreign countries. The fiscal year 1912 shows that this rate of advance has been maintained, the total domestic exports having a valuation approximately Of $2,200,000,000, as compared with a fraction over $2,000,000,000 the previous year. It is also significant that manufactured and partly manufactured articles continue to be the chief commodities forming the volume of our augmented exports, the demands of our own people for consumption requiring that an increasing proportion of our abundant agricultural products be kept at home. In the fiscal year 1911 the exports of articles in the various stages of manufacture, not including foodstuffs partly or wholly manufactured, amounted approximately to $907,500,000. In the fiscal year 1912 the total was nearly $1,022,000,000, a gain Of $114,000,000. The importance which our manufactures have assumed in the commerce of the world in competition with the manufactures of other countries again draws attention to the duty of this Government to use its utmost endeavors to secure impartial treatment for American products in all markets. Healthy commercial rivalry in international intercourse is best assured by the possession of proper means for protecting and promoting our foreign trade. It is natural that competitive countries should view with some concern this steady expansion of our commerce. If in some instance the measures taken by them to meet it are not entirely equitable, a remedy should be found. In former messages I have described the negotiations of the Department of State with foreign Governments for the adjustment of the maximum and minimum tariff as provided in section 2 of the tariff law of 1909. The advantages secured by the adjustment of our trade relations under this law have continued during the last year, and some additional cases of discriminatory treatment of which we had reason to complain have been removed. The Department of State has for the first time in the history of this country obtained substantial most-favored-nation treatment from all the countries of the world. There are, however, other instances which, while apparently not constituting undue discrimination in the sense of section 2, are nevertheless exceptions to the complete equity of tariff treatment for American products that the Department of State consistently has sought to obtain for American commerce abroad. These developments confirm the opinion conveyed to you in my annual message of 1911, that while the maximum and minimum provision of the tariff law of 1909 has been fully justified by the success achieved in removing previously existing undue discriminations against American products, yet experience has shown that this feature of the law should be amended in such way as to provide a fully effective means of meeting the varying degrees of discriminatory treatment of American commerce in foreign countries still encountered, as well as to protect against injurious treatment on the part of foreign Governments, through either legislative or administrative measures, the financial interests abroad of American citizens whose enterprises enlarge the market for American commodities. I can not too strongly recommend to the Congress the passage of some Stich enabling measure as the bill which was recommended by the Secretary of State in his letter of December 13, 1911. The object of the proposed legislation is, in brief, to enable the Executive to apply, as the case may require, to any or all commodities, whether or not on the free list from a country which discriminates against the United States, a graduated scale of duties tip to the maximum Of 25 per cent ad valorem provided in the present law. Flat tariffs are out of date. Nations no longer accord equal tariff treatment to all other nations irrespective of the treatment from them received. Stich a flexible power at the command of the Executive would serve to moderate any unfavorable tendencies on the part of those countries from which the importations into the United States are substantially confined to articles on the free list as well as of the countries which find a lucrative market in the United States for their products under existing customs rates. It is very necessary that the American Government should be equipped with weapons of negotiation adapted to modern economic conditions, in order that we may at all times be in a position to gain not only technically just but actually equitable treatment for our trade, and also for American enterprise and vested interests abroad. As illustrating the commercial benefits of the Nation derived from the new diplomacy and its effectiveness upon the material as well as the more ideal side, it may be remarked that through direct official efforts alone there have been obtained in the course of this administration, contracts from foreign Governments involving an expenditure of $50,000,000 in the factories of the United States. Consideration of this fact and some reflection upon the necessary effects of a scientific tariff system and a foreign service alert and equipped to cooperate with the business men of America carry the conviction that the gratifying increase in the export trade of this country is, in substantial amount, due to our improved governmental methods of protecting and stimulating it. It is germane to these observations to remark that in the two years that have elapsed since the successful negotiation of our new treaty with Japan, which at the time seemed to present so many practical difficulties, our export trade to that country has increased at the rate of over $1,000,000 a month. Our exports to Japan for the year ended June 30, 1910, were $21,959,310, while for the year ended June 30, 1912, the exports were $53,478,046, a net increase in the sale of American products of nearly 150 per cent. Under the special agreement entered into between the United States and Great Britain on August 18, 1910, for the arbitration of outstanding pecuniary claims, a schedule of claims and the terms of submission have been agreed upon by the two Governments, and together with the special agreement were approved by the Senate on July 19, 1911, but in accordance with the terms of the agreement they did not go into effect until confirmed by the two Governments by an exchange of notes, which was done on April 26 last. Negotiations, are still in progress for a supplemental schedule of claims to be submitted to arbitration under this agreement, and meanwhile the necessary preparations for the arbitration of the claims included in the first schedule have been undertaken and are being carried on under the authority of an appropriation made for that purpose at the last session of Congress. It is anticipated that the two Governments will be prepared to call upon the arbitration tribunal, established under this agreement, to meet at Washington early next year to proceed with this arbitration. The act adopted at the last session of Congress to give effect to the fur-seal convention Of July 7, 1911, between Great Britain, Japan, Russia, and the United States provided for the suspension of all land killing of seals on the Pribilof Islands for a period of five years, and an objection has now been presented to this provision by the other parties in interest, which raises the issue as to whether or not this prohibition of land killing is inconsistent with the spirit, if not the letter, of the treaty stipulations. The justification of establishing this close season depends, under the terms of the convention, upon how far, if at all, it is necessary for protecting and preserving the American fur-seal herd and for increasing its number. This is a question requiring examination of the present condition of the herd and the treatment which it needs in the light of actual experience and scientific investigation. A careful examination of the subject is now being made, and this Government will soon be in possession of a considerable amount of new information about the American seal herd, which has been secured during the past season and will be of great value in determining this question; and if it should appear that there is any uncertainty as to the real necessity for imposing a close season at this time I shall take an early opportunity to address a special message to Congress on this subject, in the belief that this Government should yield on this point rather than give the slightest ground for the charge that we have been in any way remiss in observing our treaty obligations. On the 20th of July last an agreement was concluded between the United States and Great Britain adopting, with certain modifications, the rules and method of procedure recommended in the award rendered by the North Atlantic Coast Fisheries Arbitration Tribunal on September 7, 1910, for the settlement hereafter, in accordance with the principles laid down in the award, of questions arising with reference to the exercise of the American fishing liberties under Article I of the treaty of October 20, 1818, between the United States and Great Britain. This agreement received the approval of the Senate on August I and was formally ratified by the two Governments on November 15 last. The rules and a method of procedure embodied in the award provided for determining by an impartial tribunal the reasonableness of any new fishery regulations on the treaty coasts of Newfoundland and Canada before such regulations could be enforced against American fishermen exercising their treaty liberties on those coasts, and also for determining the delimitation of bays on such coasts more than 10 miles wide, in accordance with the definition adopted by the tribunal of the meaning of the word " bays " as used in the treaty. In the subsequent negotiations between the two Governments, undertaken for the purpose of giving practical effect to these rules and methods of procedure, it was found that certain modifications therein were desirable from the point of view of both Govern, ments, and these negotiations have finally resulted in the agreement above mentioned by which the award recommendations as modified by mutual consent of the two Governments are finally adopted and made effective, thus bringing this century-old controversy to a final conclusion, which is equally beneficial and satisfactory to both Governments. In order to make possible the more effective performance of the work necessary for the confinement in their present channel of the waters of the lower Colorado River, and thus to protect the people of the Imperial Valley, as well as in order to reach with the Government of Mexico an understanding regarding the distribution of the waters of the Colorado River, in which both Governments are much interested, negotiations are going forward with a view to the establishment of a preliminary Colorado River commission, which shall have the powers necessary to enable it to do the needful work and with authority to study the question of the equitable distribution of the waters. There is every reason to believe that an understanding upon this point will be reached and that an agreement will be signed in the near future. In the interest of the people and city of El Paso this Government has been assiduous in its efforts to bring to an early settlement the long-standing Chamizal dispute with Mexico. Much has been ac- complished, and while the final solution of the dispute is not imme- diate, the favorable attitude lately assumed by the Mexican Government encourages the hope that this troublesome question will be satisfactorily and definitively settled at an early day. In pursuance of the convention of August 23, 1906, signed at the Third Pan American Conference, held at Rio de Janeiro, the International Commission of jurists met at that capital during the month of last June. At this meeting 16 American Republics were represented, including the United States, and comprehensive plans for the future work of the commission were adopted. At the next meeting fixed for June, 1914, committees already appointed are instructed to I report regarding topics assigned to them. In my message on foreign relations communicated to the two Houses of Congress December 7, 1911, 1 called especial attention to the assembling of the Opium Conference at The Hague, to the fact that that conference was to review all pertinent municipal laws relating to the opium and allied evils, and certainly all international rules regarding these evils, and to the -fact that it seemed to me most essential that the Congress should take immediate action on the antinarcotic legislation before the Congress, to which I had previously called attention by a special message. The international convention adopted by the conference conforms almost entirely to the principles contained in the proposed antinarcotic legislation which has been before the last two Congresses. It was most unfortunate that this Government, having taken the initiative in the international action which eventuated in the important international opium convention, failed to do its share in the great work by neglecting to pass the necessary legislation to correct the deplorable narcotic evils in the United States as well as to redeem international pledges upon which it entered by virtue of the abovementioned convention. The Congress at its present session should enact into law those bills now before it which have been so carefully drawn up in collaboration between the Department of State and the other executive departments, and which have behind them not only the moral sentiment of the country, but the practical support of all the legitimate trade interests likely to be affected. Since the international convention was signed, adherence to it has been made by several European States not represented at the conference at The Hague and also by seventeen Latin-American Republics. The war between Italy and Turkey came to a close in October last by the signature of a treaty of peace, subsequently to which the Ottoman Empire renounced sovereignty over Cyrenaica and Tripolitania in favor of Italy. During the past year the Near East has unfortunately been the theater of constant hostilities. Almost simultaneously with the conclusion of peace between Italy and Turkey and their arrival at an adjustment of the complex questions at issue between them, war broke out between Turkey on the one hand and Bulgaria, Greece, Montenegro, and Servia on the other. The United States has happily been involved neither directly nor indirectly with the causes or questions incident to any of these hostilities and has maintained in regard to them an attitude of absolute neutrality and of complete political disinterestedness. In the second war in which the Ottoman Empire has been engaged the loss of life and the consequent distress on both sides have been appalling, and the United States has found occasion, in the interest of humanity, to carry out the charitable desires of the American people, to extend a measure of relief to the sufferers on either side through the impartial medium of the Red Cross. Beyond this the chief care of the Government of the United States has been to make due provision for the protection of its national resident in belligerent territory. In the exercise of my duty in this matter I have dispatched to Turkish waters a specialservice squadron, consisting of two armored cruisers, in order that this Government may if need be bear its part in such measures as it may be necessary for the interested nations to adopt for the safeguarding of foreign lives and property in the Ottoman Empire in the event that a dangerous situation should develop. In the meanwhile the several interested European powers have promised to extend to American citizens the benefit of such precautionary or protective measures as they might adopt, in the same manner in which it has been the practice of this Government to extend its protection to all foreign residents in those countries of the Western Hemisphere in which it has from time to time been the task of the United States to act in the interest of peace and good order. The early appearance of a large fleet of European warships in the Bosphorus apparently assured the protection of foreigners in that quarter, where the presence of the American stationnaire the YOU. S. S. Scorpion sufficed, tinder the circumstances, to represent the United States. Our cruisers were thus left free to act if need be along the Mediterranean coasts should any unexpected contingency arise affecting the numerous American interests in the neighborhood of Smyrna and Beirut. The great preponderance of American material interests in the subarctic island of Spitzbergen, which has always been regarded politically as " no man's land," impels this Government to a continued and lively interest in the international dispositions to be made for the political governance and administration of that region. The conflict of certain claims of American citizens and others is in a fair way to adjustment, while the settlement of matters of administration, whether by international conference of the interested powers or otherwise, continues to be the subject of exchange of views between the Governments concerned. As a result of the efforts of this Government to place the Government of Liberia in position to pay its outstanding indebtedness and to maintain a stable and efficient government, negotiations for a loan of $1,700,000 have been successfully concluded, and it is anticipated that the payment of the old loan and the issuance of the bonds of the 1912 loan for the rehabilitation of the finances of Liberia will follow at an early date, when the new receivership will go into active operation. The new receivership will consist of a general receiver of customs designated by the Government of the United States and three receivers of customs designated by the Governments of Germany, France, and Great Britain, which countries have commercial interests in the Republic of Liberia. In carrying out the understanding between the Government of Liberia and that of the United States, and in fulfilling the terms of the agreement between the former Government and the American bankers, three competent exarmy officers are now effectively employed by the Liberian Government in reorganizing the police force of the Republic, not only to keep in order the native tribes in the hinterland but to serve as a necessary police force along the frontier. It is hoped that these measures will assure not only the continued existence but the prosperity and welfare of the Republic of Liberia. Liberia possesses fertility of soil and natural resources, which should insure to its people a reasonable prosperity. It was the duty of the United States to assist the Republic of Liberia in accordance with our historical interest and moral guardianship of a community founded by American citizens, as it was also the duty of the American Government to attempt to assure permanence to a country of much sentimental and perhaps future real interest to a large body of our citizens. The legation at Tangier is now in charge of our consul general, who is acting as charge d'affaires, as well as caring for our commercial interests in that country. In view of the fact that many of the foreign powers are now represented by charges d'affaires it has not been deemed necessary to appoint at the present time a minister to fill a vacancy occurring in that post. The political disturbances in China in the autumn and winter of 1911-12 resulted in the abdication of the Manchu rulers on February 12, followed by the formation of a provisional republican government empowered to conduct the affairs of the nation until a permanent government might be regularly established. The natural sympathy of the American people with the assumption of republican principles by the Chinese people was appropriately expressed in a concurrent resolution of Congress on April 17, 1912. A constituent assembly, composed of representatives duly chosen by the people of China in the elections that are now being held, has been called to meet in January next to adopt a permanent constitution and organize the Government of the nascent Republic. During the formative constitutional stage and pending definite action by the assembly, as expressive of the popular will, and the hoped-for establishment of a stable republican form of government, capable of fulfilling its international obligations, the United States is, according to precedent, maintaining full and friendly de facto relations with the provisional Government. The new condition of affairs thus created has presented many serious and complicated problems, both of internal rehabilitation and of international relations, whose solution it was realized would necessarily require much time and patience. From the beginning of the upheaval last autumn it was felt by the United States, in common with the other powers having large interests in China, that independent action by the foreign Governments in their own individual interests would add further confusion to a situation already complicated. A policy of international cooperation was accordingly adopted in an understanding, reached early in the disturbances, to act together for the protection of the lives and property of foreigners if menaced, to maintain an attitude of strict impartiality as between the contending factions, and to abstain from any endeavor to influence the Chinese in their organization of a new form of government. In view of the seriousness of the disturbances and their general character, the American minister at Peking was instructed at his discretion to advise our nationals in the affected districts to concentrate at such centers as were easily accessible to foreign troops or men of war. Nineteen of our naval vessels were stationed at various Chinese ports, and other measures were promptly taken for the adequate protection of American interests. It was further mutually agreed, in the hope of hastening an end to hostilities, that none of the interested powers would approve the making of loans by its nationals to either side. As soon, however, as a united provisional Government of China was assured, the United States joined in a favorable consideration of that Government's request for advances needed for immediate administrative necessities and later for a loan to effect a permanent national reorganization. The interested Governments had already, by common consent, adopted, in respect to the purposes, expenditure, and security of any loans to China made by their nationals, certain conditions which were held to be essential, not only to secure reasonable protection for the foreign investors, but also to safeguard and strengthen China's credit by discouraging indiscriminate borrowing and by insuring the application of the funds toward the establishment of the stable and effective government necessary to China's welfare. In June last representative banking groups of the United States, France, Germany, Great Britain, Japan, and Russia formulated, with the general sanction of their respective Governments, the guaranties that would be expected in relation to the expenditure and security of the large reorganization loan desired by China, which, however, have thus far proved unacceptable to the provisional Government. In August last I accredited the Secretary of State as special ambassador to Japan, charged with the mission of bearing to the imperial family, the Government, and the people of that Empire the sympathetic message of the American Commonwealth oil the sad occasion of the death of His Majesty the Emperor Mutsuhito, whose long and benevolent reign was the greater part of Japan's modern history. The kindly reception everywhere accorded to Secretary Knox showed that his mission was deeply appreciated by the Japanese nation and emphasized strongly the friendly relations that have for so many years existed between the two peoples. Our relations with the Argentine Republic are most friendly and cordial. So, also, are our relations with Brazil, whose Government has accepted the invitation of the United States to send two army officers to study at the Coast Artillery School at Fort Monroe. The long-standing Alsop claim, which had been the only hindrance to the healthy growth of the most friendly relations between the United States and Chile, having been eliminated through the submission of the question to His Britannic Majesty King George V as "amiable compositeur," it is a because of much gratification to me that our relations with Chile are now established upon a firm basis of growing friendship. The Chilean Government has placed an officer of the United States Coast Artillery in charge of the Chilean Coast Artillery School, and has shown appreciation of American methods by confiding to an American firm important work for the Chilean coast defenses. Last year a revolution against the established Government of Ecuador broke out at the pricipal port of that Republic. Previous to this occurrence the chief American interest in Ecuador, represented by the Guayaquil & Quito Railway Co., incorporated in the United States, bad rendered extensive transportation and other services on account to the Ecuadorian Government, the amount of which ran into a sum which was steadily increasing and which the Ecuadorian Government had made no provision to pay, thereby threatening to crush out the very existence of this American enterprise. When tranquillity had been restored to Ecuador as a result of the triumphant progress of the Government forces from Quito, this Government interposed its good offices to the end that the American interests in Ecuador might be saved from complete extinction. As a part of the arrangement which was reached between the parties, and at the request of the Government of Ecuador, I have consented to name an arbitrator, who, acting under the terms of the railroad contract, with an arbitrator named by the Ecuadorian Government, will pass upon the claims that have arisen since the arrangement reached through the action of a similar arbitral tribunal in 1908. In pursuance of a request made some time ago by the Ecuadorian Government, the Department of State has given much attention to the problem of the proper sanitation of Guayaquil. As a result a detail of officers of the Canal Zone will be sent to Guayaquil to recommend measures that will lead to the complete permanent sanitation of this plague and fever infected region of that Republic, which has for so long constituted a menace to health conditions on the Canal Zone. It is hoped that the report which this mission will furnish will point out a way whereby the modicum of assistance which the United States may properly lend the Ecuadorian Government may be made effective in ridding the west coast of South America of a focus of contagion to the future commercial current passing through the Panama Canal. In the matter of the claim of John Celestine Landreau against the Government of Peru, which claim arises out of certain contracts and transactions in connection with the discovery and exploitation of guano, and which has been under discussion between the two Governments since 1874, 1 am glad to report that as the result of prolonged negotiations, which have been characterized by the utmost friendliness and good will on both sides, the Department of State has succeeded in securing the consent of Peru to the arbitration of the claim, and that the negotiations attending the drafting and signature of a protocol submitting the claim to an arbitral tribunal are proceeding with due celerity. An officer of the American Public Health Service and an American sanitary engineer are now on the way to Iquitos, in the employ of the Peruvian Government, to take charge of the sanitation of that river port. Peru is building a number of submarines in this country, and continues to show every desire to have American capital invested in the Republic. In July the United States sent undergraduate delegates to the Third International Students Congress held at Lima, American students having been for the first time invited to one of these meetings. The Republic of Uruguay has shown its appreciation of American agricultural and other methods by sending a large commission to this country and by employing many American experts to assist in building up agricultural and allied industries in Uruguay. Venezuela is paying off the last of the claims the settlement of which was provided for by the Washington protocols, including those of American citizens. Our relations with Venezuela are most cordial, and the trade of that Republic with the United States is now greater than with any other country. During the past summer the revolution against the administration which followed the assassination of President Caceres a year ago last November brought the Dominican Republic to the verge of administrative chaos, without offering any guaranties of eventual stability in the ultimate success of either party. In pursuance of the treaty relations of the United States with the Dominican Republic, which were threatened by the necessity of suspending the operation under American administration of the customhouses on the Haitian frontier, it was found necessary to dispatch special commissioners to the island to reestablish the customhouses and with a guard sufficient to insure needed protection to the customs administration. The efforts which have been made appear to have resulted in the restoration of normal conditions throughout the Republic. The good offices which the commissioners were able to exercise were instrumental in bringing the contending parties together and in furnishing a basis of adjustment which it is hoped will result in permanent benefit to the Dominican people. Mindful of its treaty relations, and owing to the position of the Government of the United States as mediator between the Dominican Republic and Haiti in their boundary dispute, and because of the further fact that the revolutionary activities on the Haitian-Dominican frontier had become so active as practically to obliterate the line of demarcation that had been heretofore recognized pending the definitive settlement of the boundary in controversy, it was found necessary to indicate to the two island Governments a provisional de facto boundary line. This was done without prejudice to the rights or obligations of either country in a final settlement to be reached by arbitration. The tentative line chosen was one which, under the circumstances brought to the knowledge of this Government, seemed to conform to the best interests of the disputants. The border patrol which it had been found necessary to reestablish for customs purposes between the two countries was instructed provisionally to observe this line. The Republic of Cuba last May was in the throes of a lawless uprising that for a time threatened the destruction of a great deal of valuable property-much of it owned by Americans and other foreigners-as well as the existence of the Government itself. The armed forces of Cuba being inadequate to guard property from attack and at the same time properly to operate against the rebels, a force of American marines was dispatched from our naval station at Guantanamo into the Province of Oriente for the protection of American and other foreign life and property. The Cuban Government was thus able to use all its forces in putting down the outbreak, which it succeeded in doing in a period of six weeks. The presence of two American warships in the harbor of Habana during the most critical period of this disturbance contributed in great measure to allay the fears of the inhabitants, including a large foreign colony. There has been under discussion with the Government of Cuba for some time the question of the release by this Government of its leasehold rights at Bahia Honda, on the northern coast of Cuba, and the enlargement, in exchange therefor, of the naval station which has been established at Guantanamo Bay, on the south. As the result of the negotiations thus carried on an agreement has been reached between the two Governments providing for the suitable enlargement of the Guantanamo Bay station upon terms which are entirely fair and equitable to all parties concerned. At the request alike of the Government and both political parties in Panama, an American commission undertook supervision of the recent presidential election in that Republic, where our treaty relations, and, indeed, every geographical consideration, make the maintenance of order and satisfactory conditions of peculiar interest to the Government of the United States. The elections passed without disorder, and the new administration has entered upon its functions. The Government of Great Britain has asked the support of the United States for the protection of the interests of British holders of the foreign bonded debt of Guatemala. While this Government is hopeful of an arrangement equitable to the British bondholders, it is naturally unable to view the question apart from its relation to the broad subject of financial stability in Central America, in which the policy of the United States does not permit it to escape a vital interest. Through a renewal of negotiations between the Government of Guatemala and American bankers, the aim of which is a loan for the rehabilitation of Guatemalan finances, a way appears to be open by which the Government of Guatemala could promptly satisfy any equitable and just British claims, and at the same time so improve its whole financial position as to contribute greatly to the increased prosperity of the Republic and to redound to the benefit of foreign investments and foreign trade with that country. Failing such an arrangement, it may become impossible for the Government of the United States to escape its obligations in connection with such measures as may become necessary to exact justice to legitimate foreign claims. In the recent revolution in Nicaragua, which, it was generally admitted, might well have resulted in a general Central American conflict but for the intervention of the United States, the Government of Honduras was especially menaced; but fortunately peaceful conditions were maintained within the borders of that Republic. The financial condition of that country remains unchanged, no means having been found for the final adjustment of pressing outstanding foreign claims. This makes it the more regrettable that the financial convention between the United States and Honduras has thus far failed of ratification. The Government of the United States continues to hold itself ready to cooperate with the Government of Honduras, which it is believed, can not much longer delay the meeting of its foreign obligations, and it is hoped at the proper time American bankers will be willing to cooperate for this purpose. It is not possible to make to the Congress a communication upon the present foreign relations of the United States so detailed as to convey an adequate impression of the enormous increase in the importance and activities of those relations. If this Government is really to preserve to the American people that free opportunity in foreign markets which will soon be indispensable to our prosperity, even greater efforts must be made. Otherwise the American merchant, manufacturer, and exporter will find many a field in which American trade should logically predominate preempted through the more energetic efforts of other governments and other commercial nations. There are many ways in which through hearty cooperation the legislative and executive branches of this Government can do much. The absolute essential is the spirit of united effort and singleness of purpose. I will allude only to a very few specific examples of action which ought then to result. America can not take its proper place in the most important fields for its commercial activity and enterprise unless we have a merchant marine. American commerce and enterprise can not be effectively fostered in those fields unless we have good American banks in the countries referred to. We need American newspapers in those countries and proper means for public information about them. We need to assure the permanency of a trained foreign service. We need legislation enabling the members of the foreign service to be systematically brought in direct contact with the industrial, manufacturing, and exporting interests of this country in order that American business men may enter the foreign field with a clear perception of the exact conditions to be dealt with and the officers themselves may prosecute their work with a clear idea of what American industrial and manufacturing interests require. Congress should fully realize the conditions which obtain in the world as we find ourselves at the threshold of our middle age as a Nation. We have emerged full grown as a peer in the great concourse of nations. We have passed through various formative periods. We have been self-centered in the struggle to develop our domestic resources and deal with our domestic questions. The Nation is now too matured to continue in its foreign relations those temporary expedients natural to a people to whom domestic affairs are the sole concern. In the past our diplomacy has often consisted, in normal times, in a mere assertion of the right to international existence. We are now in a larger relation with broader rights of our own and obligations to others than ourselves. A number of great guiding principles were laid down early in the history of this Government. The recent task of our diplomacy has been to adjust those principles to the conditions of to-day, to develop their corollaries, to find practical applications of the old principles expanded to meet new situations. Thus are being evolved bases upon which can rest the superstructure of policies which must grow with the destined progress of this Nation. The successful conduct of our foreign relations demands a broad and a modern view. We can not meet new questions nor build for the future if we confine ourselves to outworn dogmas of the past and to the perspective appropriate at our emergence from colonial times and conditions. The opening of the Panama Canal will mark a new era in our international life and create new and worldwide conditions which, with their vast correlations and consequences, will obtain for hundreds of years to come. We must not wait for events to overtake us unawares. With continuity of purpose we must deal with the problems of our external relations by a diplomacy modern, resourceful, magnanimous, and fittingly expressive of the high ideals of a great nation. On the 3d of December I sent a message to the Congress, which was confined to our foreign relations. The Secretary of State makes no report to the President or to Congress, and a review of the history of the transactions of the State Department in one year must therefore be included by the President in his annual message or Congress will not be fully informed of them. A full discussion of all the transactions of the Government, with a view to informing the Congress of the important events of the year and recommending new legislation, requires more space than one message of reasonable length affords. I have therefore adopted the course of sending three or four messages during the first ten days of the session, so as to include reference to the more important matters that should be brought to the attention of the Congress. The condition of the country with reference to business could hardly be better. While the four years of the administration now drawing to a close have not developed great speculative expansion or a wide field of new investment, the recovery and progress made from the depressing conditions following the panic of 1907 have been steady and the improvement has been clear and easily traced in the statistics. The business of the country is now on a solid basis. Credits are not unduly extended, and every phase of the situation seems in a state of preparedness for a period of unexampled prosperity. Manufacturing concerns are running at their full capacity and the demand for labor was never so constant and growing. The foreign trade of the country for this year will exceed $4,000,000,000, while the balance in our favor-that of the excess of exports over imports-will exceed $500,000,000. More than half our exports are manufactures or partly manufactured material, while our exports of farm products do not show the same increase because of domestic consumption. It is a year of bumper crops; ; the total money value of farm products will exceed $9,500,000,000. It is a year when the bushel or unit price of agricultural products has gradually fallen, and yet the total value of the entire crop is greater by over $1,000,000,000 than we have known in our history. The condition of the Treasury is very satisfactory. The total interest-bearing debt is $963,777,770, of which $134,631,980 constitute the Panama Canal loan. The noninterest-bearing debt is $378,301,284.90, including $346,681,016 of greenbacks. We have in the Treasury $150,000,000 in gold coin as a reserve against the outstanding greenbacks; and in addition we have a cash balance in the Treasury as a general fund of $167,152,478.99, or an increase of $26,975,552 over the general fund last year. For three years the expenditures of the Government have decreased under the influence of an effort to economize. This year presents an apparent exception. The estimate by the Secretary of the Treasury of the ordinary receipts, exclusive of postal revenues, for the year ending June 30, 1914, indicates that they will amount to $710,000,000. The sum of the estimates of the expenditures for that same year, exclusive of Panama Canal disbursements and postal disbursements payable from postal revenues, is $732,000,000, indicating a deficit Of $22,000,000. For the year ending June 30, 1913, similarly estimated receipts were $667,000,000, while the total corresponding estimate of expenditures for that year, submitted through the Secretary of the Treasury to Congress, amounted to $656,000,000. This shows an increase of $76,000,000 in the estimates for 1914 over the total estimates of 1913. This is due to an increase Of $25,000,000 in the estimate for rivers and harbors for the next year on projects and surveys authorized by Congress; to an increase under the new pension bill Of $32,500,000; and to an increase in the estimates for expenses of the Navy Department Of $24,000,000. The estimate for the Navy Department for the year 1913 included two battleships. Congress made provision for only one battleship, and therefore the Navy Department has deemed it necessary and proper to make an estimate which includes the first year's expenditure for three battleships in addition to the amount required for work on the uncompleted ships now under construction. In addition to the natural increase in the expenditures for the uncompleted ships, and the ad. ditional battleship estimated for, the other increases are due to the pay required for 4,000 or more additional enlisted men in the Navy; and to this must be added the additional cost of construction imposed by the change in the eight-hour law which makes it applicable to ships built in private shipyards. With the exceptions of these three items, the estimates show a reduction this year below the total estimates for 1913 of more than $5,000,000. The estimates for Panama Canal construction for 1914 are $17,000,000 less than for 1913 A time when panics seem far removed is the best time for us to prepare our financial system to withstand a storm. The most crying need this country has is a proper banking and currency system. The existing one is inadequate, and everyone who has studied the question admits it. It is the business of the National Government to provide a medium, automatically contracting and expanding in volume, to meet the needs of trade. Our present system lacks the indispensable quality of elasticity. The only part of our monetary medium that has elasticity is the bank-note currency. The peculiar provisions of the law requiring national banks to maintain reserves to meet the call of the depositors operates to increase the money stringency when it arises rather than to expand the supply of currency and relieve it. It operates upon each bank and furnishes a motive for the withdrawal of currency from the channels of trade by each bank to save itself, and offers no inducement whatever for the use of the reserve to expand the supply of currency to meet the exceptional demand. After the panic of 1907 Congress realized that the present system was not adapted to the country's needs and that under it panics were possible that might properly be avoided by legislative provision. Accordingly a monetary commission was appointed which made a report in February, 1912. The system which they recommended involved a National Reserve Association, which was, in certain of its faculties and functions, a bank, and which was given through its governing authorities the power, by issuing circulating notes for approved commercial paper, by fixing discounts, and by other methods of transfer of currency, to expand the supply of the monetary medium where it was most needed to prevent the export or hoarding of gold and generally to exercise such supervision over the supply of money in every part of the country as to prevent a stringency and a panic. The stock in this association was to be distributed to the banks of the whole United States, State and National, in a mixed proportion to bank units and to capital stock paid in. The control of the association was vested in a board of directors to be elected by representatives of the banks, except certain ex-officio directors, three Cabinet officers, and the Comptroller of the Currency. The President was to appoint the governor of the association from three persons to be selected by the directors, while the two deputy governors were to be elected by the board of directors. The details of the plan were worked out with great care and ability, and the plan in general seems to me to furnish the basis for a proper solution of our present difficulties. I feel that the Government might very properly be given a greater voice in the executive committee of the board of directors without danger of injecting politics into its management, but I think the federation system of banks is a good one, provided proper precautions are taken to prevent banks of large capital from absorbing power through ownership of stock in other banks. The objections to a central bank it seems to me are obviated if the ownership of the reserve association is distributed among all the banks of a country in which banking is free. The earnings of the reserve association are limited in percentage tit a reasonable and fixed amount, and the profits over and above this are to be turned into the Government Treasury. It is quite probable that still greater security against control by money centers may be worked into the plan. Certain it is, however, that the objections which were made in the past history of this country to a central bank as furnishing a monopoly of financial power to private individuals, would not apply to an association whose ownership and control is so widely distributed and is divided between all the banks of the country, State and National, on the one hand, and the Chief Executive through three department heads and his Comptroller of the Currency, on the other. The ancient hostility to a national bank, with its branches, in which is concentrated the privilege of doing a banking business and carrying on the financial transactions of the Government, has prevented the establishment of such a bank since it was abolished in the Jackson Administration. Our present national banking law has obviated objections growing out of the same because by providing a free banking system in which any set of stockholders can establish a national bank if they comply with the conditions of law. It seems to me that the National Reserve Association meets the same objection in a similar way; that is, by giving to each bank, State and National, in accordance with its size, a certain share in the stock of the reserve association, nontransferable and only to be held by the bank while it performs its functions as a partner in the reserve association. The report of the commission recommends provisions for the imposition of a graduated tax on the expanded currency of such a character as to furnish a motive for reducing the issue of notes whenever their presence in the money market is not required by the exigencies of trade. In other words, the whole system has been worked out with the greatest care. Theoretically it presents a plan that ought to command support. Practically it may require modification in various of its provisions in order to make the security against, abuses by combinations among the banks impossible. But in the face of the crying necessity that there is for improvement in our present system, I urgently invite the attention of Congress to the proposed plan and the report of the commission, with the hope that an earnest consideration may suggest amendments and changes within the general plan which will lead to its adoption for the benefit of the country. There is no class in the community more interested in a safe and sane banking and currency system, one which will prevent panics and automatically furnish in each trade center the currency needed in the carrying on of the business at that center, than the wage earner. There is no class in the community whose experience better qualifies them to make suggestions as to the sufficiency of a currency and banking system than the bankers and business men. Ought we, therefore, to ignore their recommendations and reject their financial judgment as to the proper method of reforming our financial system merely because of the suspicion which exists against them in the minds of many of our fellow citizens? Is it not the duty of Congress to take up the plan suggested, examine it from all standpoints, give impartial consideration to the testimony of those whose experience ought to fit them to give the best advice on the subject, and then to adopt some plan which will secure the benefits desired? A banking and currency system seems far away from the wage earner and the farmer, but the fact is that they are vitally interested in a safe system of currency which shall graduate its volume to the amount needed and which shall prevent times of artificial stringency that frighten capital, stop employment, prevent the meeting of the pay roll, destroy local markets, and produce penury and want. I have regarded it as my duty in former messages to the Congress to urge the revision of the tariff upon principles of protection. It was my judgment that the customs duties ought to be revised downward, but that the reduction ought not to be below a rate which would represent the difference in the cost of production between the article in question at home and abroad, and for this and other reasons I vetoed several bills which were presented to me in the last session of this Congress. Now that a new Congress has been elected on a platform of a tariff for revenue only rather than a protective tariff, and is to revise the tariff on that basis, it is needless for me to occupy the time of this Congress with arguments or recommendations in favor of a protective tariff. Before passing from the tariff law, however, known as the Payne tariff law of August 5, 1909, 1 desire to call attention to section 38 of that act, assessing a special excise tax on corporations. It contains a provision requiring the levy of an additional 50 per cent to the annual tax in cases of neglect to verify the prescribed return or to file it before the time required by law. This additional charge of 50 per cent operates in some cases as a harsh penalty for what may have been a mere inadvertence or unintentional oversight, and the law should be so amended as to mitigate the severity of the charge in such instances. Provision should also be made for the refund of additional taxes heretofore collected because of such infractions in those cases where the penalty imposed has been so disproportionate to the offense as equitably to demand relief. The estimates for the next fiscal year have been assembled by the Secretary of the Treasury and by him transmitted to Congress. I purpose at a later day to submit to Congress a form of budget prepared for me and recommended by the President's Commission on Economy and Efficiency, with a view of suggesting the useful and informing character of a properly framed budget. The War Department combines within its jurisdiction functions which in other countries usually occupy three departments. It not only has the management of the Army and the coast defenses, but its jurisdiction extends to the government of the Philippines and of Porto Rico and the control of the receivership of the customs revenues of the Dominican Republic; it also includes the recommendation of all plans for the improvement of harbors and waterways and their execution when adopted; and, by virtue of an Executive order, the supervision of the construction of the Panama Canal. Our small Army now consists of 83,809 men, excluding the 5,000 Philippine scouts. Leaving out of consideration the Coast Artillery force, whose position is fixed in our various seacoast defenses, and the present garrisons of our various insular possessions, we have to-day within the continental United States a mobile Army of only about 35,000 men. This little force must be still further drawn upon to supply the new garrisons for the great naval base which is being established at Pearl Harbor, in the Hawaiian Islands, and to protect the locks now rapidly approaching completion at Panama. The forces remaining in the United States are now scattered in nearly 50 Posts, situated for a variety of historical reasons in 24 States. These posts contain only fractions of regiments, averaging less than 700 men each. In time of peace it has been our historical policy to administer these units separately by a geographical organization. In other words, our Army in time of peace has never been a united organization but merely scattered groups of companies, battalions, and regiments, and the first task in time of war has been to create out of these scattered units an Army fit for effective teamwork and cooperation. To the task of meeting these patent defects, the War Department has been addressing itself during the past year. For many years we had no officer or division whose business it was to study these problems and plan remedies for these defects. With the establishment of the General Staff nine years ago a body was created for this purpose. It has, necessarily, required time to overcome, even in its own personnel, the habits of mind engendered by a century of lack of method, but of late years its work has become systematic and effective, and it has recently been addressing itself vigorously to these problems. A comprehensive plan of Army reorganization was prepared by the War College Division of the General Staff. This plan was thoroughly discussed last summer at a series of open conferences held by the Secretary of War and attended by representatives from all branches of the Army and from Congress. In printed form it has been distributed to Members of Congress and throughout the Army and the National Guard, and widely through institutions of learning and elsewhere in the United States. In it, for the first time, we have a tentative chart for future progress. Under the influence of this study definite and effective steps have been taken toward Army reorganization so far as such reorganization lies within the Executive power. Hitherto there has been no difference of policy in the treatment of the organization of our foreign garrisons from those of troops within the United States. The difference of situation is vital, and the foreign garrison should be prepared to defend itself at an instant's notice against a foe who may command the sea. Unlike the troops in the United States, it can not count upon reinforcements or recruitment. It is an outpost upon which will fall the brunt of the first attack in case of war. The historical policy of the United States of carrying its regiments during time of peace at half strength has no application to our foreign garrisons. During the past year this defect has been remedied as to the Philippines garrison. The former garrison of 12 reduced regiments has been replaced by a garrison of 6 regiments at full strength, giving fully the same number of riflemen at an estimated economy in cost of maintenance of over $1,000,000 per year. This garrison is to be permanent. Its regimental units, instead of being transferred periodically back and forth from the United States, will remain in the islands. The officers and men composing these units will, however, serve a regular tropical detail as usual, thus involving no greater hardship upon the personnel and greatly increasing the effectiveness of the garrison. A similar policy is proposed for the Hawaiian and Panama garrisons as fast as the barracks for them are completed. I strongly urge upon Congress that the necessary appropriations for this purpose should be promptly made. It is, in my opinion, of first importance that these national outposts, upon which a successful home defense will, primarily, depend, should be finished and placed in effective condition at the earliest possible day. Simultaneously with the foregoing steps the War Department has been proceeding with the reorganization of the Army at home. The formerly disassociated units are being united into a tactical organization of three divisions, each consisting of two or three brigades of Infantry and, so far as practicable, a proper proportion of divisional Cavalry and Artillery. Of course, the extent to which this reform can be carried by the Executive is practically limited to a paper organization. The scattered units can be brought under a proper organization, but they will remain physically scattered until Congress supplies the necessary funds for grouping them in more concentrated posts. Until that is done the present difficulty of drilling our scattered groups together, and thus training them for the proper team play, can not be removed. But we shall, at least, have an Army which will know its own organization and will be inspected by its proper commanders, and to which, as a unit, emergency orders can be issued in time of war or other emergency. Moreover, the organization, which in many respects is necessarily a skeleton, will furnish a guide for future development. The separate regiments and companies will know the brigades and divisions to which they belong. They will be maneuvered together whenever maneuvers are established by Congress, and the gaps in their organization will show the pattern into which can be filled new troops as the Nation grows and a larger Army is provided. One of the most important reforms accomplished during the past year has been the legislation enacted in the Army appropriation bill of last summer, providing for a Regular Army reserve. Hitherto our national policy has assumed that at the outbreak of war our regiments would be immediately raised to full strength. But our laws have provided no means by which this could be accomplished, or by which the losses of the regiments when once sent to the front could be repaired. In this respect we have neglected the lessons learned by other nations. The new law provides that the soldier, after serving four years with colors, shall pass into a reserve for three years. At his option he may go 'into the reserve at the end of three years, remaining there for four years. While in the reserve he can be called to active duty only in case of war or other national emergency, and when so called and only in such case will receive a stated amount of pay for all of the period in which he has been a member of the reserve. The legislation is imperfect, in my opinion, in certain particulars, but it is a most important step in the right direction, and I earnestly hope that it will be carefully studied and perfected by Congress. Under existing law the National Guard constitutes, after the Regular Army, the first line of national defense. Its organization, discipline, training, and equipment, under recent legislation, have been assimilated, as far as possible, to those of the Regular Army, and its practical efficiency, under the effect of this training, has very greatly increased. Our citizen soldiers under present conditions have reached a stage of development beyond which they can not reasonably be asked to go without further direct assistance in the form of pay from the Federal Government. On the other hand, such pay from the National Treasury would not be justified unless it produced a proper equivalent in additional efficiency on the part of the National Guard. The Organized Militia to-day can not be ordered outside of the limits of the United States, and thus can not lawfully be used for general military purposes. The officers and men are ambitious and eager to make themselves thus available and to become an efficient national reserve of citizen soldiery. They are the only force of trained men, other than the Regular Army, upon which we can rely. The so-called militia pay bill, in the form agreed on between the authorities of the War Department and the representatives of the National Guard, in my opinion adequately meets these conditions and offers a proper return for the pay which it is proposed to give to the National Guard. I believe that its enactment into law would be a very long step toward providing this Nation with a first line of citizen soldiery, upon which its main reliance must depend in case of any national emergency. Plans for the organization of the National Guard into tactical divisions, on the same lines as those adopted for the Regular Army, are being formulated by the War College Division of the General Staff. The National Guard consists of only about 110,000 men. In any serious war in the past it has always been necessary, and in such a war in the future it doubtless will be necessary, for the Nation to depend, in addition to the Regular Army and the National Guard, upon a large force of volunteers. There is at present no adequate provision of law for the raising of such a force. There is now pending in Congress, however, a bill which makes such provision, and which I believe is admirably adapted to meet the exigencies which would be presented in case of war. The passage of the bill would not entail a dollar's expense upon the Government at this time or in the future until war comes. But if war comes the methods therein directed are in accordance with the best military judgment as to what they ought to be, and the act would prevent the necessity for a discussion of any legislation and the delays incident to its consideration and adoption. I earnestly urge its passage. The Army appropriation act of 191:2 also carried legislation for the consolidation of the Quartermaster's Department, the Subsistence Department, and the Pay Corps into a single supply department, to be known as the Quartermaster's Corps. It also provided for the organization of a special force of enlisted men, to be known as the Service Corps, gradually to replace many of the civilian employees engaged in the manual labor necessary in every army. I believe that both of these enactments will improve the administration of our military establishment. The consolidation of the supply corps has already been effected, and the organization of the service corps is being put into effect. All of the foregoing reforms are in the direction of economy and efficiency. Except for the slight increase necessary to garrison our outposts in Hawaii and Panama, they do not call for a larger Army, but they do tend to produce a much more efficient one. The only substantial new appropriations required are those which, as I have pointed out, are necessary to complete the fortifications and barracks at our naval bases and outposts beyond the sea. Porto Rico continues to show notable progress, both commercially and in the spread of education. Its external commerce has increased 17 per cent over the preceding year, bringing the total value up to $92,631,886, or more than five times the value of the commerce of the island in 1901. During the year 16o,657 Pupils were enrolled in the public schools, as against 145,525 for the preceding year, and as compared with 26,000 for the first year of American administration. Special efforts are under way for the promotion of vocational and industrial training, the need of which is particularly pressing in the island. When the bubonic plague broke out last June, the quick and efficient response of the people of Porto Rico to the demands of modern sanitation was strikingly shown by the thorough campaign which was instituted against the plague and the hearty public opinion which supported the Government's efforts to check its progress and to prevent its recurrence. The failure thus far to grant American citizenship continues to be the only ground of dissatisfaction. The bill conferring such citizenship has passed the House of Representatives and is now awaiting the action of the Senate. I am heartily in favor of the passage of this bill. I believe that the demand for citizenship is just, and that it is amply earned by sustained loyalty on the part of the inhabitants of the island. But it should be remembered that the demand must be, and in the minds of most Porto Ricans is, entirely disassociated from any thought of statehood. I believe that no substantial approved public opinion in the United States or in Porto Rico contemplates statehood for the island as the ultimate form of relations between us. I believe that the aim to be striven for is the fullest possible allowance of legal and fiscal self-government, with American citizenship as to the bond between us; in other words, a relation analogous to the present relation between Great Britain and such self-governing colonies as Canada and Australia. This would conduce to the fullest and most self-sustaining development of Porto Rico, while at the same time it would grant her the economic and political benefits of being under the American flag. A bill is pending in Congress which revolutionizes the carefully worked out scheme of government under which the Philippine Islands are now governed and which proposes to render them virtually autonomous at once and absolutely independent in eight years. Stich a proposal can only be founded on the assumption that we have now discharged our trusteeship to the Filipino people and our responsibility for them to the world, and that they are now prepared for selfgovernment as well as national sovereignty. A thorough and unbiased knowledge of the facts clearly shows that these assumptions are absolutely without justification. As to this, I believe that there is no substantial difference of opinion among any of those who have had the responsibility of facing Philippine problems in the administration of the islands, and I believe that no one to whom the future of this people is a responsible concern can countenance a policy fraught with the direst consequences to those on whose behalf it is ostensibly urged. In the Philippine Islands we have embarked upon an experiment unprecedented in dealing with dependent people. We are developing there conditions exclusively for their own welfare. We found an archipelago containing 24 tribes and races, speaking a great variety of languages, and with a population over 80 per cent of which could neither read nor write. Through the unifying forces of a common education, of commercial and economic development, and of gradual participation in local self-government we are endeavoring to evolve a homogeneous people fit to determine, when the time arrives, their own destiny. We are seeking to arouse a national spirit and not, as under the older colonial theory, to suppress such a spirit. The character of the work we have been doing is keenly recognized in the Orient, and our success thus far followed with not a little envy by those who, initiating the same policy, find themselves hampered by conditions grown up in earlier days and under different theories of administration. But our work is far from done. Our duty to the Filipinos is far from discharged. Over half a million Filipino students are now in the Philippine schools helping to mold the men of the future into a homogeneous people, but there still remain more than a million Filipino children of school age yet to be reached. Freed from American control the integrating forces of a common education and a common language will cease and the educational system now well started will slip back into inefficiency and disorder. An enormous increase in the commercial development of the islands has been made since they were virtually granted full access to our markets three years ago, with every prospect of increasing development and diversified industries. Freed from American control such development is bound to decline. Every observer speaks of the great progress in public works for the benefit of the Filipinos, of harbor improvements, of roads and railways, of irrigation and artesian wells, public buildings, and better means of communication. But large parts of the islands are still unreached, still even unexplored, roads and railways are needed in many parts, irrigation systems are still to be installed, and wells to be driven. Whole villages and towns are still without means of communication other than almost impassable roads and trails. Even the great progress in sanitation, which has successfully suppressed smallpox, the bubonic plague, and Asiatic cholera, has found the because of and a cure for beriberi, has segregated the lepers, has helped to make Manila the most healthful city in the Orient, and to free life throughout the whole archipelago from its former dread diseases, is nevertheless incomplete in many essentials of permanence in sanitary policy. Even more remains to be accomplished. If freed from American control sanitary progress is bound to be arrested and all that has been achieved likely to be lost. Concurrent with the economic, social, and industrial development of the islands has been the development of the political capacity of the people. By their progressive participation in government the Filipinos are being steadily and hopefully trained for self-government. Under Spanish control they shared in no way in the government. Under American control they have shared largely and increasingly. Within the last dozen years they have gradually been given complete autonomy in the municipalities, the right to elect two-thirds of the provincial governing boards and the lower house of the insular legislature. They have four native members out of nine members of the commission, or upper house. The chief justice and two justices of the supreme court, about one-half of the higher judicial positions, and all of the justices of the peach are natives. In the classified civil service the proportion of Filipinos increased from 51 per cent in 1904 to 67 per cent in 1911. Thus to-day all the municipal employees, over go per cent of the provincial employees, and 60 per cent of the officials and employees of the central government are Filipinos. The ideal which has been kept in mind in our political guidance of the islands has been real popular self-government and not mere paper independence. I am happy to say that the Filipinos have done well enough in the places they have filled and in the discharge of the political power with which they have been intrusted to warrant the belief that they can be educated and trained to complete self-government. But the present satisfactory results are due to constant support and supervision at every step by Americans. If the task we have undertaken is higher than that assumed by other nations, its accomplishment must demand even more patience. We must not forget that we found the Filipinos wholly untrained in government. Up to our advent all other experience sought to repress rather than encourage political power. It takes long time and much experience to ingrain political habits of steadiness and efficiency. Popular self-government ultimately must rest upon common habits of thought and upon a reasonably developed public opinion. No such foundations for selfgovernment, let alone independence are now present in the Philippine Islands. Disregarding even their racial heterogeneity and the lack of ability to think as a nation, it is sufficient to point out that under liberal franchise privileges only about 3 per cent of the Filipinos vote and only 5 per cent of the people are said to read the public press. To confer independence upon the Filipinos now is, therefore, to subject the great mass of their people to the dominance of an oligarchical and, probably, exploiting minority. Such a course will be as cruel to those people as it would be shameful to us. Our true course is to pursue steadily and courageously the path we have thus far followed; to guide the Filipinos into self-sustaining pursuits; to continue the cultivation of sound political habits through education and political practice; to encourage the diversification of industries, and to realize the advantages of their industrial education by conservatively approved cooperative methods, at once checking the dangers of concentrated wealth and building up a sturdy, independent citizenship. We should do all this with a disinterested endeavor to secure for the Filipinos economic independence and to fit them for complete self-government, with the power to decide eventually, according to their own largest good, whether such self-government shall be accompanied by independence. A present declaration even of future independence would retard progress by the dissension and disorder it would arouse. On our part it would be a disingenuous attempt, under the guise of conferring a benefit on them, to relieve ourselves from the heavy and difficult burden which thus far we have been bravely and consistently sustaining. It would be a disguised policy of scuttle. It would make the helpless Filipino the football of oriental politics, tinder the protection of a guaranty of their independence, which we would be powerless to enforce. There are pending before Congress a large number of bills proposing to grant privileges of erecting dams for the purpose of creating water power in our navigable rivers. The pendency of these bills has brought out an important defect in the existing general dam act. That act does not, in my opinion, grant sufficient power to the Federal Government in dealing with the construction of such dams to exact protective conditions in the interest of navigation. It does not permit the Federal Government, as a condition of its permit, to require that a part of the value thus created shall be applied to the further general improvement and protection of the stream. I believe this to be one of the most important matters of internal improvement now confronting the Government. Most of the navigable rivers of this country are comparatively long and shallow. In order that they may be made fully useful for navigation there has come into vogue a method of improvement known as canalization, or the slack-water method, which consists in building a series of dams and locks, each of which will create a long pool of deep navigable water. At each of these dams there is usually created also water power of commercial value. If the water power thus created can be made available for the further improvement of navigation in the stream, it is manifest that the improvement will be much more quickly effected on the one hand, and, on the other, that the burden on the general taxpayers of the country will be very much reduced. Private interests seeking permits to build water-power dams in navigable streams usually urge that they thus improve navigation, and that if they do not impair navigation they should be allowed to take for themselves the entire profits of the water-power development. Whatever they may do by way of relieving the Government of the expense of improving navigation should be given due consideration, but it must be apparent that there may be a profit beyond a reasonably liberal return upon the private investment which is a potential asset of the Government in carrying out a comprehensive policy of waterway development. It is no objection to the retention and use of such an asset by the Government that a comprehensive waterway policy will include the protection and development of the other public uses of water, which can not and should not be ignored in making and executing plans for the protection and development of navigation. It is also equally clear that inasmuch as the water power thus created is or may be an incident of a general scheme of waterway improvement within the constitutional jurisdiction of the Federal Government, the regulation of such water power lies also within that jurisdiction. In my opinion constructive statesmanship requires that legislation should be enacted which will permit the development of navigation in these great rivers to go hand in hand with the utilization of this by-product of water power, created in the course of the same improvement, and that the general dam act should be so amended as to make this possible. I deem it highly important that the Nation should adopt a consistent and harmonious treatment of these water-power projects, which will preserve for this purpose their value to the Government, whose right it is to grant the permit. Any other policy is equivalent to throwing away a most valuable national asset. During the past year the work of construction upon the canal has progressed most satisfactorily. About 87 per cent of the excavation work has been completed, and more than 93 per cent of the concrete for all the locks is in place. In view of the great interest which has been manifested as to some slides in the Culebra Cut, I am glad to say that the report of Col. Goethals should allay any apprehension on this point. It is gratifying to note that none of the slides which occurred during this year would have interfered with the passage of the ships had the canal, in fact, been in operation, and when the slope pressures will have been finally adjusted and the growth of vegetation will minimize erosion in the banks of the cut, the slide problem will be practically solved and an ample stability assured for the Culebra Cut. Although the official date of the opening has been set for January 1, 1915, the canal will, in fact, from present indications, be opened for shipping during the latter half of 1913. No fixed date can as yet be set, but shipping interests will be advised as soon as assurances can be given that vessels can pass through without unnecessary delay. Recognizing the administrative problem in the management of the canal, Congress in the act of August 24, 1912, has made admirable provisions for executive responsibility in the control of the canal and the government of the Canal Zone. The problem of most efficient organization is receiving careful consideration, so that a scheme of organization and control best adapted to the conditions of the canal may be formulated and put in operation as expeditiously as possible. Acting tinder the authority conferred on me by Congress, I have, by Executive proclamation, promulgated the following schedule of tolls for ships passing through the canal, based upon the thorough report of Emory R. Johnson, special commissioner on traffic and tolls: I. On merchant vessels carrying passengers or cargo, $1.20 per net vessel ton-each 100 cubic feet-of actual earning capacity. 2. On vessels in ballast without passengers or cargo, 40 per cent less than the rate of tolls for vessels with passengers or cargo. 3. Upon naval vessels, other than transports, colliers, hospital ships, and supply ships, 50 cents per displacement ton. 4. Upon Army and Navy transports, colliers, hospital ships, and supply ships, $1.20 per net ton, the vessels to be measured by the same rules as are employed in determining the net tonnage of merchant vessels. Rules for the determination of the tonnage upon which toll charges are based are now in course of preparation and will be promulgated in due season. The proclamation which I have issued in respect to the Panama Canal tolls is in accord with the Panama Canal act passed by this Congress August 24, 1912. We have been advised that the British Government has prepared a protest against the act and its enforcement in so far as it relieves from the payment of tolls American ships engaged in the American coastwise trade on the ground that it violates British rights tinder the Hay-Pauncefote treaty concerning the Panama Canal. When the protest is presented, it will be promptly considered and an effort made to reach a satisfactory adjustment of any differ. ences there may be between the two Governments. The promulgation of an efficient workmen's compensation act, adapted to the particular conditions of the zone, is awaiting adequate appropriation by Congress for the payment of claims arising thereunder. I urge that speedy provision be made in order that we may install upon the zone a system of settling claims for injuries in best accord with modern humane, social, and industrial theories. As the completion of the canal grows nearer, and as the wonderful executive work of Col. Goethals becomes more conspicuous in the eyes of the country and of the world, it seems to me wise and proper to make provision by law for such reward to him as may be commensurate with the service that he has rendered to his country. I suggest that this reward take the form of an appointment of Col. Goethals as a major general in the Army of the United States, and that the law authorizing such appointment be accompanied with a provision permitting his designation as Chief of Engineers upon the retirement of the present incumbent of that office. The Navy of the United States is in a greater state of efficiency and is more powerful than it has ever been before, but in the emulation which exists between different countries in respect to the increase of naval and military armaments this condition is not a permanent one. In view of the many improvements and increases by foreign Governments the slightest halt on our part in respect to new construction throws us back and reduces us from a naval power of the first rank and places us among the nations of the second rank. In the past 15 years the Navy has expanded rapidly and yet far less rapidly than our country. From now on reduced expenditures in the Navy means reduced military strength. The world's history has shown the importance of sea power both for adequate defense and for the support of important and definite policies. I had the pleasure of attending this autumn a mobilization of the Atlantic Fleet, and was glad to observe and note the preparedness of the fleet for instant action. The review brought before the President and the Secretary of the Navy a greater and more powerful collection of vessels than had ever been gathered in American waters. The condition of the fleet and of the officers and enlisted men and of the equipment of the vessels entitled those in authority to the greatest credit. I again commend to Congress the giving of legislative sanction to the appointment of the naval aids to the Secretary of the Navy. These aids and the council of aids appointed by the Secretary of the Navy to assist him in the conduct of his department have proven to be. of the highest utility. They have furnished an executive com mittee of the most skilled naval experts, who have coordinated the action of the various bureaus in the Navy, and by their advice have enabled the Secretary to give an administration at the same time economical and most efficient. Never before has the United States had a Navy that compared in efficiency with its present one, but never before have the requirements with respect to naval warfare been higher and more exacting than now. A year ago Congress refused to appropriate for more than one battleship. In this I think a great mistake of policy was made, and I urgently recommend that this Congress make tip for the mistake of the last session by appropriations authorizing the construction of three battleships, in addition to destroyers, fuel ships, and the other auxiliary vessels as shown in the building program of the general board. We are confronted by a condition in respect to the navies of the world which requires us, if we would maintain our Navy as an insurance of peace, to augment our naval force by at least two battleships a year and by battle cruisers, gunboats, torpedo destroyers, and submarine boats in a proper proportion. We have no desire for war. We would go as far as any nation in the world to avoid war, but we are a world power. Our population, our wealth, our definite policies, our responsibilities in the Pacific and the Atlantic, our defense of the Panama Canal, together with our enormous world trade and our missionary outposts on the frontiers of civilization, require us to recognize our position as one of the foremost in the family of nations, and to clothe ourselves with sufficient naval power to give force to our reasonable demands, and to give weight to our influence in those directions of progress that a powerful Christian nation should advocate. I observe that the Secretary of the Navy devotes some space to a change in the disciplinary system in vogue in that branch of the service. I think there is nothing quite so unsatisfactory to either the Army or the Navy as the severe punishments necessarily inflicted by court-martial for desertions and purely military offenses, and I am glad to hear that the British have solved this important and difficult matter in a satisfactory way. I commend to the consideration of Congress the details of the new disciplinary system, and recommend that laws be passed putting the same into force both in the Army and the Navy. I invite the attention of Congress to that part of the report of the Secretary of the Navy in which he recommends the formation of a naval reserve by the organization of the ex-sailors of the Navy. I repeat my recommendation made last year that proper provision should be made for the rank of the commander in chief of the squadrons and fleets of the Navy. The inconvenience attending the necessary precedence that most foreign admirals have over our own whenever they meet in official functions ought to be avoided. It impairs the prestige of our Navy and is a defect that can be very easily removed. This department has been very active in the enforcement of the law. It has been better organized and with a larger force than ever before in the history of the Government. The prosecutions which have been successfully concluded and which are now pending testify to the effectiveness of the departmental work. The prosecution of trusts under the Sherman antitrust law has gone on without restraint or diminution, and decrees similar to those entered in the Standard Oil and the Tobacco cases have been entered in other suits, like the suits against the Powder Trust and the Bathtub Trust. I am very strongly convinced that a steady, consistent course in this regard, with a continuing of Supreme Court decisions upon new phases of the trust question not already finally decided is going to offer a solution of this much-discussed and troublesome issue in a quiet, calm, and judicial way, without any radical legislation changing the governmental policy in regard to combinations now denounced by the Sherman antitrust law. I have already recommended as an aid in this matter legislation which would declare unlawful certain well-known phases of unfair competition in interstate trade, and I have also advocated voluntary national incorporation for the larger industrial enterprises, with provision for a closer supervision by the Bureau of Corporations, or a board appointed for the purpose, so as to make more certain compliance with the antitrust law on the one hand and to give greater security to the stockholders against possible prosecutions on the other. I believe, however, that the orderly course of litigation in the courts and the regular prosecution of trusts charged with the violation of the antitrust law is producing among business men a clearer and clearer perception of the line of distinction between business that is to be encouraged and business that is to be condemned, and that in this quiet way the question of trusts can be settled and competition retained as an economic force to secure reasonableness in prices and freedom and independence in trade. I am glad to bring to the attention of Congress the fact that the Supreme Court has radically altered the equity rules governing the procedure on the equity side of all Federal courts, and though, as these changes have not been yet put in practice so as to enable us to state from actual results what the reform will accomplish, they are of such a character that we can reasonably prophesy that they will greatly reduce the time and cost of litigation in such courts. The court has adopted many of the shorter methods of the present English procedure, and while it may take a little while for the profession to accustom itself to these methods, it is certain greatly to facilitate litigation. The action of the Supreme Court has been so drastic and so full of appreciation of the necessity for a great reform in court procedure that I have no hesitation in following tip this action with a recommendation which I foreshadowed in my message of three years ago, that the sections of the statute governing the procedure in the Federal courts on the common-law side should be so amended as to give to the Supreme Court the same right to make rules of procedure in common law as they have, since the beginning of the court, exercised in equity. I do not doubt that a full consideration of the subject will enable the court while giving effect to the substantial differences in right and remedy between the system of common law and the system of equity so to unite the two procedures into the form of one civil action and to shorten the procedure in such civil action as to furnish a model to all the State courts exercising concurrent jurisdiction with the Federal courts of first instance. Under the statute now in force the common-law procedure in each Federal court is made to conform to the procedure in the State in which the court is held. In these days, when we should be making progress in court procedure, such a conformity statute makes the Federal method too dependent upon the action of State legislatures. I can but think it a great opportunity for Congress to intrust to the highest tribunal in this country, evidently imbued with a strong spirit in favor of a reform of procedure, the power to frame a model code of procedure, which, while preserving all that is valuable and necessary of the rights and remedies at common law and in equity, shall lessen the burden of the poor litigant to a minimum in the expedition and cheapness with which his because can be fought or defended through Federal courts to final judgment. The workman's compensation act reported by the special commission appointed by Congress and the Executive, which passed the Senate and is now pending in the House, the passage of which I have in previous messages urged upon Congress, I venture again to call to its attention. The opposition to it which developed in the Senate, but which was overcome by a majority in that body, seemed to me to grow out rather of a misapprehension of its effect than of opposition to its principle. I say again that I think no act can have a better effect directly upon the relations between the employer and employee than this act applying to railroads and common carriers of an interstate character, and I am sure that the passage of the act would greatly relieve the courts of the heaviest burden of litigation that they have, and would enable them to dispatch other business with a speed never before attained in courts of justice in this country. This is the third of a series of messages in which I have brought to the attention of the Congress the important transactions of the Government in each of its departments during the last year and have discussed needed reforms. I recommend the adoption of legislation which shall make it the duty of heads of departments-the members of the President's Cabinet -at convenient times to attend the session of the House and the Senate, which shall provide seats for them in each House, and give them the opportunity to take part in all discussions and to answer questions of which they have had due notice. The rigid holding apart of the executive and the legislative branches of this Government has not worked for the great advantage of either. There has been much lost motion in the machinery, due to the lack of cooperation and interchange of views face to face between the representatives of the Executive and the Members of the two legislative branches of the Government. It was never intended that they should be separated in the sense of not being in constant effective touch and relationship to each other. The legislative and the executive each performs its own appropriate function, but these functions must be coordinated. Time and time again debates have arisen in each House upon issues which the information of a particular department head would have enabled him, if present, to end at once by a simple explanation or statement. Time and time again a forceful and earnest presentation of facts and arguments by the representative of the Executive whose duty it is to enforce the law would have brought about a useful reform by amendment, which in the absence of such a statement has failed of passage. I do not think I am mistaken in saying that the presence of the members of the Cabinet on the floor of each House would greatly contribute to the enactment of beneficial legislation. Nor would this in any degree deprive either the legislative or the executive of the independence which separation of the two branches has been intended to promote. It would only facilitate their cooperation in the public interest. On the other hand, I am sure that the necessity and duty imposed upon department heads of appearing in each Ilouse and in answer to searching questions, of rendering upon their feet an account of what they have done, or what has been done by the administration, will spur each member of the Cabinet to closer attention to the details of his department, to greater familiarity with its needs, and to greater care to avoid the just criticism which the answers brought out in questions put and discussions arising between the Members of either House and the members of the Cabinet may properly evoke. Objection is made that the members of the administration having no vote could exercise no power on the floor of the House, and could not assume that attitude of authority and control which the English parliamentary Government have and which enables them to meet the responsibilities the English system thrusts upon them. I agree that in certain respects it would be more satisfactory if members of the Cabinet could at the same time be Members of both Houses, with voting power, but this is impossible under our system; and while a lack of this feature may detract from the influence of the department chiefs, it will not prevent the good results which I have described above both in the matter of legislation and in the matter of administration. The enactment of such a law would be quite within the power of Congress without constitutional amendment, and it has such possibilities of usefulness that we might well make the experiment, and if we are disappointed the misstep can be easily retraced by a repeal of the enabling legislation. This is not a new proposition. In the House of Representatives, in the Thirty-eighth Congress, the proposition was referred to a select committee of seven Members. The committee made an extensive report, and urged the adoption of the reform. The report showed that our history had not been without illustration of the necessity and the examples of the practice by pointing out that in early days Secretaries were repeatedly called to the presence of either Rouse for consultation, advice, and information. It also referred to remarks of Mr. justice Story in his Commentaries on the Constitution, in which he urgently presented the wisdom of such a change. This report is to be found in Volume I of the Reports of Committees of the First Session of the Thirty-eighth Congress, April 6, 1864. Again, on February 4, 1881, a select committee of the Senate recommended the passage of a similar bill, and made a report, In which, while approving the separation of the three branches, the executive, legislative, and judicial, they point out as a reason for the proposed change that, although having a separate existence, the branches are "to cooperate, each with the other, as the different members of the human body must cooperate, with each other in order to form the figure and perform the duties of a perfect man." The report concluded as follows: This system will require the selection of the strongest men to be heads of departments and will require them to be well equipped with the knowledge of their offices. It will also require the strongest men to be the leaders of Congress and participate in debate. It will bring these strong men in contact, perhaps into conflict, to advance the public weal, and thus stimulate their abilities and their efforts, and will thus assuredly result to the good of the country. If it should appear by actual experience that the heads of departments in fact have not time to perform the additional duty imposed on them by this bill, the force in their offices should be increased or the duties devolving on them personally should be diminished. An undersecretary should be appointed to whom could be confided that routine of administration which requires only order and accuracy. The principal officers could then confine their attention to those duties which require wise discretion and intellectual activity. Thus they would have abundance of time for their duties under this bill. Indeed, your committee believes that the public interest would be subserved if the Secretaries were relieved of the harassing cares of distributing clerkships and closely supervising the mere machinery of the departments. Your committee believes that the adoption of this bill and the effective execution of its provisions will be the first step toward a sound civil-service reform which will secure a larger wisdom in the adoption of policies and a better system in their execution. It would be difficult to mention the names of higher authority in the practical knowledge of our Government than those which are appended to this report. The Postal Savings Bank System has been extended so that it now includes 4,004 fourth-class post offices', as well as 645 branch offices and stations in the larger cities. There are now 12,812 depositories at which patrons of the system may open accounts. The number of depositors is 300,000 and the amount of their deposits is approximately $28,000,000, not including $1,314,140 which has been with drawn by depositors for the purpose of buying postal savings bonds. Experience demonstrates the value of dispensing with the pass-book and introducing in its place a certificate of deposit. The gross income of the postal savings system for the fiscal year ending June 30, 1913, will amount to $700,000 and the interest payable to depositors to $300,000. The cost of supplies, equipment, and salaries is $700,000. It thus appears that the system lacks $300,000 a year of paying interest and expenses. It is estimated, however, that when the deposits have reached the sum Of $50,000,000, which at the present rate they soon will do, the system will be self-sustaining. By law the postal savings funds deposited at each post office are required to be redeposited in local banks. State and national banks to the number of 7,357 have qualified as depositories for these funds. Such deposits are secured by bonds aggregating $54,000,000. Of this amount, $37,000,000 represent municipal bonds. In several messages I have favored and recommended the adoption of a system of parcel post. In the postal appropriation act of last year a general system was provided and its installation was directed by the 1st of January. This has entailed upon the Post Office Department a great deal of very heavy labor, but the Postmaster General informs me that on the date selected, to wit, the 1st of January, near at hand, the department will be in readiness to meet successfully the requirements of the public. A trial, during the past three years, of the system of classifying fourth-class postmasters in that part of the country lying between the Mississippi River on the west, Canada on the north, the Atlantic Ocean on the east, and Mason and Dixon's line on the south has been sufficiently satisfactory to justify the postal authorities in recommending the extension of the order to include all the fourth-class postmasters in the country. In September, 1912, upon the suggestion of the Postmaster General, I directed him to prepare an order which should put the system in effect, except in Alaska, Guam, Hawaii, Porto Rico, and Samoa. Under date of October 15 1 issued such an order which affected 36,000 postmasters. By the order the post offices were divided into groups A and B. Group A includes all postmasters whose compensation is $500 or more, and group B those whose compensation is less than that sum. Different methods are pursued in the selection of the postmasters for group A and group, B. Criticism has been made of this order on the ground that the motive for it was political. Nothing could be further from the truth. The order was made before the election and in the interest of efficient public service. I have several times requested Congress to give me authority to put first-, second-, and third-class postmasters, and all other local officers, including internal-revenue officers, customs officers, United States marshals, and the local agents of the other departments under the classification of the civil-service law by taking away the necessity for confirming such appointments by the Senate. I deeply regret the failure of Congress to follow these recommendations. The change would have taken out of politics practically every local officer and would have entirely cured the evils growing out of what under the present law must always remain a remnant of the spoils system. It is expected that the establishment of a parcel post on January 1st will largely increase the amount of mail matter to be transported by the railways, and Congress should be prompt to provide a way by which they may receive the additional compensation to which they will be entitled. The Postmaster General urges that the department's plan for a complete readjustment of the system of paying the railways for carrying the mails be adopted, substituting space for weight as the principal factor in fixing compensation. Under this plan it will be possible to determine without delay what additional payment should be made on account of the parcel post. The Postmaster General's recommendation is based on the results of a far-reaching investigation begun early in the administration with the object of determining what it costs the railways to carry the mails. The statistics obtained during the course of the inquiry show that while many of the railways, and particularly the large systems, were making profits from mail transportations, certain of the lines were actually carrying the mails at a loss. As a result of the investigation the department, after giving the subject careful consideration, decided to urge the abandonment of the present plan of fixing compensation on the basis of the weight of the mails carried, a plan that has proved to be exceedingly expensive and in other respects unsatisfactory. Under the method proposed the railway companies will annually submit to the department reports showing what it costs them to carry the mails, and this cost will be apportioned on the basis of the car space engaged, payment to be allowed at the rate thus determined in amounts that will cover the cost and a reasonable profit. If a railway is not satisfied with the manner in which the department apportions the cost in fixing compensation, it is to have the right, tinder the new plan, of appealing to the Interstate Commerce Commission. This feature of the proposed law would seem to insure a fair treatment of the railways. It is hoped that Congress will give the matter immediate attention and that the method of compensation recommended by the department or some other suitable plan will be promptly authorized. The Interior Department, in the problems of administration included within its jurisdiction, presents more difficult questions than any other. This has been due perhaps to temporary causes of a political character, but more especially to the inherent difficulty in the performance of some of the functions which are assigned to it. Its chief duty is the guardianship of the public domain and the disposition of that domain to private ownership under homestead, mining, and other laws, by which patents from the Government to the individual are authorized on certain conditions. During the last decade the public seemed to become suddenly aware that a very large part of its domain had passed from its control into private ownership, under laws not well adapted to modern conditions, and also that in the doing of this the provisions of existing law and regulations adopted in accordance with law had not been strictly observed, and that in the transfer of title much fraud had intervened, to the pecuniary benefit of dishonest persons. There arose thereupon a demand for conservation of the public domain, its protection against fraudulent diminution, and the preservation of that part of it from private acquisition which it seemed necessary to keep for future public use. The movement, excellent in the intention which prompted it, and useful in its results, has nevertheless had some bad effects, which the western country has recently been feeling and in respect of which there is danger of a reaction toward older abuses unless we can attain the golden mean, which consists in the prevention of the mere expIoitation of the public domain for private purposes while at the same, time facilitating its development for the benefit of the local public. The land laws need complete revision to secure proper conservation on the one hand of land that ought to be kept in public use and, on the other hand, prompt disposition of those lands which ought to be disposed in private ownership or turned over to private use by properly guarded leases. In addition to this there are not enough officials in our Land Department with legal knowledge sufficient promptly to make the decisions which are called for. The whole land-laws system should be reorganized, and not until it is reorganized, will decisions be made as promptly as they ought, or will men who have earned title to public land under the statute receive their patents within a reasonably short period. The present administration has done what it could in this regard, but the necessity for reform and change by a revision of the laws and an increase and reorganization of the force remains, and I submit to Congress the wisdom of a full examination of this subject, in order that a very large and important part of our people in the West may be relieved from a just because of irritation. I invite your attention to the discussion by the Secretary of the Interior of the need for legislation with respect to mining claims, leases of coal lands in this country and in Alaska , and for similar disposition of oil, phosphate, and potash lands, and also to his discussion of the proper use to be made of water-power sites held by the Government. Many of these lands are now being withheld from use by the public under the general withdrawal act which was passed by the last Congress. That act was not for the purpose of disposing of the question, but it was for the purpose of preserving the lands until the question could be solved. I earnestly urge that the matter is of the highest importance to our western fellow citizens and ought to command the immediate attention of the legislative branch of the Government. Another function which the Interior Department has to perform is that of the guardianship of Indians. In spite of everything which has been said in criticism of the policy of our Government toward the Indians, the amount of wealth which is now held by it for these wards per capita shows that the Government has been generous; but the management of so large an estate, with the great variety of circumstances that surround each tribe and each case, calls for the exercise of the highest business discretion, and the machinery provided in the Indian Bureau for the discharge of this function is entirely inadequate. The position of Indian commissioner demands the exercise of business ability of the first order, and it is difficult to secure such talent for the salary provided. The condition of health of the Indian and the prevalence in the tribes of curable diseases has been exploited recently in the press. In a message to Congress at its last session I brought this subject to its attention and invited a special appropriation, in order that our facilities for overcoming diseases among the Indians might be properlv increased, but no action was then taken by Congress on the subject, nor has such appropriation been made since. The commission appointed by authority of the Congress to report on proper method of securing railroad development in Alaska is formulating its report, and I expect to have an opportunity before the end of this session to submit its recommendations. The far-reaching utility of the educational system carried on by the Department of Agriculture for the benefit of the farmers of our country calls for no elaboration. Each year there is a growth in the variety of facts which it brings out for the benefit of the farmer, and each year confirms the wisdom of the expenditure of the appropriations made for that department. The Department of Agriculture is charged with the execution of the pure-food law. The passage of this encountered much opposition from manufacturers and others who feared the effect upon their business of the enforcement of its provisions. The opposition aroused the just indignation of the public, and led to an intense sympathy with the severe and rigid enforcement of the provisions of the new law. It had to deal in many instances with the question whether or not products of large business enterprises, in the form of food preparations, were deleterious to the public health; and while in a great majority of instances this issue was easily determinable, there were not a few cases in which it was hard to draw the line between a useful and a harmful food preparation. In cases like this when a decision involved the destruction of great business enterprises representing the investment of large capital and the expenditure of great energy and ability, the danger of serious injustice was very considerable in the enforcement of a new law under the spur of great public indignation. The public officials charged with executing the law might do injustice in heated controversy through unconscious pride of opinion and obstinacy of conclusion. For this reason President Roosevelt felt justified in creating a board of experts, known as the Remsen Board, to whom in cases of much importance an appeal might be taken and a review had of a decision of the Bureau of Chemistry in the Agricultural Department. I heartily agree that it was wise to create this board in order that injustice might not be done. The questions which arise are not generally those involving palpable injury to health, but they are upon the narrow and doubtful line in respect of which it is better to be in some error not dangerous than to be radically destructive. I think that the time has come for Congress to recognize the necessity for some such tribunal of appeal and to make specific statutory provision for it. While we are struggling to suppress an evil of great proportions like that of impure food, we must provide machinery in the law itself to prevent its becoming an instrument of oppression, and we ought to enable those whose business is threatened with annihilation to have some tribunal and some form of appeal in which they have a complete day in court. I referred in my first message to the question of improving the system of agricultural credits. The Secretary of Agriculture has made an investigation into the matter of credits in this country, and I commend a consideration of the information which through his agents he has been able to collect. It does not in any way minimize the importance of the proposal, but it gives more accurate information upon some of the phases of the question than we have heretofore had. I commend to Congress an examination of the report of the Secretary of Commerce and Labor, and especially that part in which he discusses the office of the Bureau of Corporations, the value to commerce of a proposed trade commission, and the steps which he has taken to secure the organization of a national chamber of commerce. I heartily commend his view that the plan of a trade commission which looks to the fixing of prices is altogether impractical and ought not for a moment to be considered as a possible solution of the trust question. The trust question in the enforcement of the Sherman antitrust law is gradually solving itself, is maintaining the principle and restoring the practice of competition, and if the law is quietly but firmly enforced, business will adjust itself to the statutory requirements, and the unrest in commercial circles provoked by the trust discussion will disappear. In conformity with a joint resolution of Congress, an Executive proclamation was issued last February, inviting the nations of the world to participate in the Panama-Pacific International Exposition to be held at San Francisco to celebrate the construction of the Panama, Canal. A sympathetic response was immediately forthcoming, and several nations have already selected the sites for their buildings. In furtherance of my invitation, a special commission visited European countries during the past summer, and received assurance of hearty cooperation in the task of bringing together a universal industrial, military, and naval display on an unprecedented scale. It is evident that the exposition will be an accurate mirror of the world's activities as they appear 400 years after the date of the discovery of the Pacific Ocean. It is the duty of the United States to make the nations welcome at San Francisco and to facilitate such acquaintance between them and ourselves as will promote the expansion of commerce and familiarize the world with the new trade route through the Panama Canal. The action of the State governments and individuals assures a comprehensive exhibit of the resources of this country and of the progress of the people. This participation by State and individuals should be supplemented by an adequate showing of the varied and unique activities of the National Government. The United States can not with good grace invite foreign governments to erect buildings and make expensive exhibits while itself refusing to participate. Nor would it be wise to forego the opportunity to join with other nations in the inspiring interchange of ideas tending to promote intercourse, friendship, and commerce. It is the duty of the Government to foster and build up commerce through the canal, just as it was the duty of the Government to construct it. I earnestly recommend the appropriation at this session of such a sum as will enable the United States to construct a suitable building, install a governmental exhibit, and otherwise participate in the Panama-Pacific International Exposition in a manner commensurate with the dignity of a nation whose guests are to be the people of the world. I recommend also such legislation as will facilitate the entry of material intended for exhibition and protect foreign exhibitors against infringement of patents and the unauthorized copying of patterns and designs. All aliens sent to San Francisco to construct and care for foreign buildings and exhibits should be admitted without restraint or embarrassment. The city of Washington is a beautiful city, with a population of 352,936, of whom 98,667 are colored. The annual municipal budget is about $14,ooo,ooo. The presence of the National Capital and other governmental structures constitutes the chief beauty and interest of the city. The public grounds are extensive, and the opportunities for improving the city and making it still more attractive are very great. Under a plan adopted some years ago, one half the cost of running the city is paid by taxation upon the property, real and personal, of the citizens and residents, and the other half is borne by the General Government. The city is expanding at a remarkable rate, and this can only be accounted for by the coming here from other parts of the country of well-to-do people who, having finished their business careers elsewhere, build and make this their permanent place of residence. On the whole, the city as a municipality is very well governed. It is well lighted, the water supply is good, the streets are well paved, the police force is well disciplined, crime is not flagrant, and while it has purlieus and centers of vice, like other large cities, they are not exploited, they do not exercise any influence or control in the government of the city, and they are suppressed in as far as it has been found practicable. Municipal graft is inconsiderable. There are interior courts in the city that are noisome and centers of disease and the refuge of criminals, but Congress has begun to clean these out, and progress has been made in the case of the most notorious of these, which is known as "Willow Tree Alley." This movement should continue. The mortality for the past year was at the rate Of 17.80 per 1,000 of both races; among the whites it was 14.61 per thousand, and among the blacks 26.12 per thousand. These are the lowest mortality rates ever recorded in the District. One of the most crying needs in the government of the District is a tribunal or public authority for the purpose of supervising the corporations engaged in the operation of public utilities. Such a bill is pending in Congress and ought to pass. Washington should show itself under the direction of Congress to be a city with a model form of government, but as long as such authority over public utilities is withheld from the municipal government, it must always be de- fective. Without undue criticism of the present street railway accommodations, it can be truly said that under the spur of a public utilities commission they might be substantially improved. While the school system of Washington perhaps might be bettered in the economy of its management and the distribution of its buildings, its usefulness has nevertheless greatly increased in recent years, and it now offers excellent facilities for primary and secondary education. From time to time there is considerable agitation in Washington in favor of granting the citizens of the city the franchise and constituting an elective government. I am strongly opposed to this change. The history of Washington discloses a number of experiments of this kind, which have always been abandoned as unsatisfactory. The truth is this is a city governed by a popular body, to wit, the Congress of the United States, selected from the people of the United States, who own Washington. The people who come here to live do so with the knowledge of the origin of the city and the restrictions, and therefore voluntarily give up the privilege of living in a municipality governed by popular vote. Washington is so unique in its origin and in its use for housing and localizing the sovereignty of the Nation that the people who live here must regard its peculiar character and must be content to subject themselves to the control of a body selected by all the people of the Nation. I agree that there are certain inconveniences growing out of the government of a city by a national legislature like Congress, and it would perhaps be possible to lessen these by the delegation by Congress to the District Commissioners of greater legislative power for the enactment of local laws than they now possess, especially those of a police character. Every loyal American has a personal pride in the beauty of Washington and in its development and growth. There is no one with a proper appreciation of our Capital City who would favor a niggardly policy in respect to expenditures from the National Treasury to add to the attractiveness of this city, which belongs to every citizen of the entire country, and which no citizen visits without a sense of pride of ownership. We have had restored by a Commission of Fine Arts, at the instance of a committee of the Senate, the original plan of the French engineer L'Enfant for the city of Washington, and we know with great certainty the course which the improvement of Washington should take. Why should there be delay in making this improvement in so far as it involves the extension of the parking system and the construction of greatly needed public buildings ? Appropriate buildings for the State Department, the Department of justice, and the Department of Commerce and Labor have been projected, plans have been approved, and nothing is wanting but the appropriations for the beginning and completion of the structures. A hall of archives is also badly needed, but nothing has been done toward its construction, although the land for it has long been bought and paid for. Plans have been made for the union of Potomac Park with the valley of Rock Creek and Rock Creek Park, and the necessity for the connection between the Soldiers' Home and Rock Creek Park calls for no comment. I ask again why there should be delay in carrying out these plans We have the money in the Treasury, the plans are national in their scope, and the improvement should be treated as a national project. The plan will find a hearty approval throughout the country. I am quite sure, from the information which I have, that, at comparatively small expense, from that part of the District of Columbia which was retroceded to Virginia, the portion including the Arlington estate, Fort Myer, and the palisades of the Potomac can be acquired by purchase and the jurisdiction of the State of Virginia over this land ceded to the Nation. This ought to be done. The construction of the Lincoln Memorial and of a memorial bridge from the base of the Lincoln Monument to Arlington would be an appropriate and symbolic expression of the union of the North and the South at the Capital of the Nation. I urge upon Congress the appointment of a commission to undertake these national improvements, and to submit a plan for their execution; and when the plan has been submitted and approved, and the work carried out, Washington will really become what it ought to be-the most beautiful city in the world.
the foreign relations of the united states actually and potentially affect the state of the union to a degree not widely realized and hardly surpassed by any other factor in the welfare of the whole nation the position of the united states in the moral intellectual and material relations of the family of nations should be a matter of vital interest to every patriotic citizen the national prosperity and power impose upon us duties which we can not shirk if we are to be true to our ideals the tremendous growth of the export trade of the united states has already made that trade a very real factor in the industrial and commercial prosperity of the country with the development of our industries the foreign commerce of the united states must rapidly become a still more essential factor in its economic welfare whether we have a farseeing and wise diplomacy and are not recklessly plunged into unnecessary wars and whether our foreign policies are based upon an intelligent grasp of world conditions and a clear view of the potentialities of the future or are governed by a temporary and timid expediency or by narrow views befitting an infant nation are questions in the alternative consideration of which must convince any thoughtful citizen that no department of national polity offers greater opportunity for promoting the interests of the whole people on the one hand or greater chance on the other of permanent national injury than that which deals with the foreign relations of the united states the fundamental foreign policies of the united states should be raised high above the conflict of partisanship and wholly dissociated from differences as to domestic policy in its foreign affairs the united states should present to the world a united front the intellectual financial and industrial interests of the country and the publicist the wage earner the farmer and citizen of whatever occupation must cooperate in a spirit of high patriotism to promote that national solidarity which is indispensable to national efficiency and to the attainment of national ideals the relations of the united states with all foreign powers remain upon a sound basis of peace harmony and friendship a greater insistence upon justice to american citizens or interests wherever it may have been denied and a stronger emphasis of the need of mutuality in commercial and other relations have only served to strengthen our friendships with foreign countries by placing those friendships upon a firm foundation of realities as well as aspirations before briefly reviewing the more important events of the last year in our foreign relations which it is my duty to do as charged with their conduct and because diplomatic affairs are not of a nature to make it appropriate that the secretary of state make a formal annual report i desire to touch upon some of the essentials to the safe management of the foreign relations of the united states and to endeavor also to define clearly certain concrete policies which are the logical modern corollaries of the undisputed and traditional fundamentals of the foreign policy of the united states at the beginning of the present administration the united states having fully entered upon its position as a world power with the responsibilities thrust upon it by the results of the war and already engaged in laying the groundwork of a vast foreign trade upon which it should one day become more and more dependent found itself without the machinery for giving thorough attention to and taking effective action upon a mass of intricate business vital to american interests in every country in the world the department of state was an archaic and inadequate machine lacking most of the attributes of the foreign office of any great modern power with an appropriation made upon my recommendation by the congress on august 5 1909 the department of state was completely reorganized there were created divisions of latinamerican affairs and of far eastern near eastern and western european affairs to these divisions were called from the foreign service diplomatic and consular officers possessing experience and knowledge gained by actual service in different parts of the world and thus familiar with political and commercial conditions in the regions concerned the work was highly specialized the result is that where previously this government from time to time would emphasize in its foreign relations one or another policy now american interests in every quarter of the globe are being cultivated with equal assiduity this principle of division possesses also the good feature of making possible rotation between the officers of the departmental the diplomatic and the consular branches of the foreign service and thus keeps the whole diplomatic and consular establishments tinder the department of state in close touch and equally inspired with the aims and policy of the government through the newly created division of information the foreign service is kept fully informed of what transpires from day to day in the international relations of the country and contemporary foreign comment affecting american interests is promptly brought to the attention of the department the law offices of the department were greatly strengthened there were added foreigntrade advisers to cooperate with the diplomatic and consular bureaus and the divisions in the innumerable matters where commercial diplomacy or consular work calls for such special knowledge the same officers together with the rest of the new organization are able at all times to give to american citizens accurate information as to conditions in foreign countries with which they have business and likewise to cooperate more effectively with the congress and also with the other executive departments expert knowledge and professional training must evidently be the essence of this reorganization without a trained foreign service there would not be men available for the work in the reorganized department of state president cleveland had taken the first step toward introducing the merit system in the foreign service that had been followed by the application of the merit principle with excellent results to the entire consular branch almost nothing however had been done in this direction with regard to the diplomatic service in this age of commercial diplomacy it was evidently of the first importance to train an adequate personnel in that branch of the service therefore on november 26 1909 by an executive order i placed the diplomatic service up to the grade of secretary of embassy inclusive upon exactly the same strict nonpartisan basis of the merit system rigid examination for appointment and promotion only for efficiency as had been maintained without exception in the consular service how faithful to the merit system and how nonpartisan has been the conduct of the diplomatic and consular services in the last four years may be judged from the following three ambassadors now serving held their present rank at the beginning of my administration of the ten ambassadors whom i have appointed five were by promotion from the rank of minister nine ministers now serving held their present rank at the beginning of my administration of the thirty ministers whom i have appointed eleven were promoted from the lower grades of the foreign service or from the department of state of the nineteen missions in latin america where our relations are close and our interest is great fifteen chiefs of mission are service men three having entered the service during this administration secretaries of embassy or legation who have received their initial appointments after passing successfully the required examination were chosen for ascertained fitness without regard to political affiliations a dearth of candidates from southern and western states has alone made it impossible thus far completely to equalize all the states representations in the foreign service in the effort to equalize the representation of the various states in the consular service 1 have made sixteen of the new appointments as consul which have occurred during my administration from the southern states this is 55 per cent every other consular appointment made including the promotion of eleven young men from the consular assistant and student interpreter corps has been by promotion or transfer based solely upon efficiency shown in the service in order to assure to the business and other interests of the united states a continuance of the resulting benefits of this reform i earnestly renew my previous recommendations of legislation making it permanent along some such lines as those of the measure now pending in congress in connection with legislation for the amelioration of the foreign service i wish to invite attention to the advisability of placing the salary appropriations upon a better basis i believe that the best results would be obtained by a moderate scale of salaries with adequate funds for the expense of proper representation based in each case upon the scale and cost of living at each post controlled by a system of accounting and under the general direction of the department of state in line with the object which i have sought of placing our foreign service on a basis of permanency i have at various times advocated provision by congress for the acquisition of buildings for the residence and offices of our diplomatic officers so as to place them more nearly on an equality with similar officers of other nations and to do away with the discrimination which otherwise must necessarily be made in some cases in favor of men having large private fortunes the act of congress which i approved on february 17 1911 was a right step in this direction the secretary of state has already made the limited recommendations permitted by the act for any one year and it is my hope that the bill introduced in the house of representatives to carry out these recommendations will be favorably acted on by the congress during its present session in some countries the expense of governmentowned legations will be less than elsewhere and it is certainly very urgent that in such countries as some of the republics of central america and the caribbean where it is peculiarly difficult to rent suitable quarters the representatives of the united states should be justly and adequately provided with dignified and suitable official residences indeed it is high time that the dignity and power of this great nation should be fittingly signalized by proper buildings for the occupancy of the nation representatives everywhere abroad the diplomacy of the present administration has sought to respond to modern ideas of commercial intercourse this policy has been characterized as substituting dollars for bullets it is one that appeals alike to idealistic humanitarian sentiments to the dictates of sound policy and strategy and to legitimate commercial aims it i is an effort frankly directed to the increase of american trade upon the axiomatic principle that the government of the united states shall extend all proper support to every legitimate and beneficial american enterprise abroad how great have been the results of this diplomacy coupled with the maximum and minimum provision of the tariff law will be seen by some consideration of the wonder ful increase in the export trade of the united states because modern diplomacy is commercial there has been a disposition in some quarters to attribute to it none but materialistic aims how strikingly erroneous is such an impression may be seen from a study of the results by which the diplomacy of the united states can be judged in the field of work toward the ideals of peace this government negotiated but to my regret was unable to consummate two arbitration treaties which set the highest mark of the aspiration of nations toward the substitution of arbitration and reason for war in the settlement of international disputes through the efforts of american diplomacy several wars have been prevented or ended i refer to the successful tripartite mediation of the argentine republic brazil and the united states between peru and ecuador the bringing of the boundary dispute between panama and costa rica to peaceful arbitration the staying of warlike preparations when haiti and the dominican republic were on the verge of hostilities the stopping of a war in nicaragua the halting of internecine strife in honduras the government of the united states was thanked for its influence toward the restoration of amicable relations between the argentine republic and bolivia the diplomacy of the united states is active in seeking to assuage the remaining between this country and the republic of colombia in the recent civil war in china the united states successfully joined with the other interested powers in urging an early cessation of hostilities an agreement has been reached between the governments of chile and peru whereby the celebrated tacnaarica dispute which has so long embittered international relations on the west coast of south america has at last been adjusted simultaneously came the news that the boundary dispute between peru and ecuador had entered upon a stage of amicable settlement the position of the united states in reference to the dispute between chile and peru has been one of nonintervention but one of friendly influence and pacific counsel throughout the period during which the dispute in question has been the subject of interchange of views between this government and the two governments immediately concerned in the general easing of international tension on the west coast of south america the tripartite mediation to which i have referred has been a most potent and beneficent factor in china the policy of encouraging financial investment to enable that country to help itself has had the result of giving new life and practical application to the policy the consistent purpose of the present administration has been to encourage the use of american capital in the development of china by the promotion of those essential reforms to which china is pledged by treaties with the united states and other powers the hypothecation to foreign bankers in connection with certain industrial enterprises such as the hukuang railways of the national revenues upon which these reforms depended led the department of state early in the administration to demand for american citizens participation in such enterprises in order that the united states might have equal rights and an equal voice in all questions pertaining to the disposition of the public revenues concerned the same policy of promoting international accord among the powers having similar treaty rights as ourselves in the matters of reform which could not be put into practical effect without the common consent of all was likewise adopted in the case of the loan desired by china for the reform of its currency the principle of international cooperation in matters of common interest upon which our policy had already been based in all of the above instances has admittedly been a great factor in that concert of the powers which has been so happily conspicuous during the perilous period of transition through which the great chinese nation has been passing in central america the aim has been to help such countries as nicaragua and honduras to help themselves they are the immediate beneficiaries the national benefit to the united states is twofold first it is obvious that the monroe doctrine is more vital in the neighborhood of the panama canal and the zone of the caribbean than anywhere else there too the maintenance of that doctrine falls most heavily upon the united states it is therefore essential that the countries within that sphere shall be removed from the jeopardy involved by heavy foreign debt and chaotic national finances and from the danger of international complications due to disorder at home hence the united states has been glad to encourage and support american bankers who were willing to lend a helping hand to the financial rehabilitation of such countries because this financial rehabilitation and the protection of their customhouses from being the prey of wouldbe dictators would remove at one stroke the menace of foreign creditors and the menace of revolutionary disorder the second advantage of the united states is one affecting chiefly all the southern and gulf ports and the business and industry of the south the republics of central america and the caribbean possess great natural wealth they need only a measure of stability and the means of financial regeneration to enter upon an era of peace and prosperity bringing profit and happiness to themselves and at the same time creating conditions sure to lead to a flourishing interchange of trade with this country i wish to call your especial attention to the recent occurrences in nicaragua for i believe the terrible events recorded there during the revolution of the past useless loss of life the devastation of property the bombardment of defenseless cities the killing and wounding of women and children the torturing of noncombatants to exact contributions and the suffering of thousands of human have been averted had the department of state through approval of the loan convention by the senate been permitted to carry out its now policy of encouraging the extending of financial aid to weak central american states with the primary objects of avoiding just such revolutions by assisting those republics to rehabilitate their finances to establish their currency on a stable basis to remove the customhouses from the danger of revolutions by arranging for their secure administration and to establish reliable banks during this last revolution in nicaragua the government of that republic having admitted its inability to protect american life and property against acts of sheer lawlessness on the part of the malcontents and having requested this government to assume that office it became necessary to land over marines and bluejackets in nicaragua owing to their presence the constituted government of nicaragua was free to devote its attention wholly to its internal troubles and was thus enabled to stamp out the rebellion in a short space of time when the red cross supplies sent to granada had been exhausted persons having been given food in one day upon the arrival of the american forces our men supplied other unfortunate needy nicaraguans from their own haversacks i wish to congratulate the officers and men of the united states navy and marine corps who took part in reestablishing order in nicaragua upon their splendid conduct and to record with sorrow the death of seven american marines and bluejackets since the reestablishment of peace and order elections have been held amid conditions of quiet and tranquility nearly all the american marines have now been withdrawn the country should soon be on the road to recovery the only apparent danger now threatening nicaragua arises from the shortage of funds although american bankers have already rendered assistance they may naturally be loath to advance a loan adequate to set the country upon its feet without the support of some such convention as that of june 1911 upon which the senate has not yet acted in the general effort to contribute to the enjoyment of peace by those republics which are near neighbors of the united states the administration has enforced the neutrality statutes with a new vigor and those statutes were greatly strengthened in restricting the exportation of arms and munitions by the joint resolution of last march it is still a regrettable fact that certain american ports are made the rendezvous of professional revolutionists and others engaged in intrigue against the peace of those republics it must be admitted that occasionally a revolution in this region is justified as a real popular movement to throw off the shackles of a vicious and tyrannical government such was the nicaraguan revolution against the zelaya regime a nation enjoying our liberal institutions can not escape sympathy with a true popular movement and one so well justified in very many cases however revolutions in the republics in question have no basis in principle but are due merely to the machinations of conscienceless and ambitious men and have no effect but to bring new suffering and fresh burdens to an already oppressed people the question whether the use of american ports as foci of revolutionary intrigue can be best dealt with by a further amendment to the neutrality statutes or whether it would be safer to deal with special cases by special laws is one worthy of the careful consideration of the congress impressed with the particular importance of the relations between the united states and the republics of central america and the caribbean region which of necessity must become still more intimate by reason of the mutual advantages which will be presented by the opening of the panama canal i directed the secretary of state last february to visit these republics for the purpose of giving evidence of the sincere friendship and good will which the government and people of the united states bear toward them ten republics were visited everywhere he was received with a cordiality of welcome and a generosity of hospitality such as to impress me deeply and to merit our warmest thanks the appreciation of the governments and people of the countries visited which has been appropriately shown in various ways leaves me no doubt that his visit will conduce to that closer union and better understanding between the united states and those republics which i have had it much at heart to promote for two years revolution and has distraught the neighboring republic of mexico brigandage has involved a great deal of depredation upon foreign interests there have constantly recurred questions of extreme delicacy on several occasions very difficult situations have arisen on our frontier throughout this trying period the policy of the united states has been one of patient nonintervention steadfast recognition of constituted authority in the neighboring nation and the exertion of every effort to care for american interests i profoundly hope that the mexican nation may soon resume the path of order prosperity and progress to that nation in its sore troubles the sympathetic friendship of the united states has been demonstrated to a high degree there were in mexico at the beginning of the revolution some thirty or forty thousand american citizens engaged in enterprises contributing greatly to the prosperity of that republic and also benefiting the important trade between the two countries the investment of american capital in mexico has been estimated at the responsibility of endeavoring to safeguard those interests and the dangers inseparable from propinquity to so turbulent a situation have been great but i am happy to have been able to adhere to the policy above policy which i hope may be soon justified by the complete success of the mexican people in regaining the blessings of peace and good order a most important work accomplished in the past year by the american diplomatic officers in europe is the investigation of the agricultural credit system in the european countries both as a means to afford relief to the consumers of this country through a more thorough development of agricultural resources and as a means of more sufficiently maintaining the agricultural population the project to establish credit facilities for the farmers is a concern of vital importance to this nation no evidence of prosperity among farmers should blind us to the fact that lack of capital is preventing a development of the nation agricultural resources and an adequate increase of the land under cultivation that agricultural production is fast falling behind the increase in population and that in fact although these farmers are maintained in increasing prosperity because of the natural increase in population we are not developing the industry of agriculture we are not breeding in proportionate numbers a race of independent and landowners for a lack of which no growth of cities can compensate our farmers have been our mainstay in times of crisis and in future it must still largely be upon their stability and common sense that this democracy must rely to conserve its principles of the need of capital which american farmers feel had been experienced by the farmers of europe with their farms many years ago the problem had been successfully solved in the old world and it was evident that the farmers of this country might profit by a study of their systems i therefore ordered through the department of state an investigation to be made by the diplomatic officers in europe and i have laid the results of this investigation before the governors of the various states with the hope that they will be used to advantage in their forthcoming meeting in my last annual message i said that the fiscal year ended june 30 1911 was noteworthy as marking the highest record of exports of american products to foreign countries the fiscal year 1912 shows that this rate of advance has been maintained the total domestic exports having a valuation approximately of as compared with a fraction over the previous year it is also significant that manufactured and partly manufactured articles continue to be the chief commodities forming the volume of our augmented exports the demands of our own people for consumption requiring that an increasing proportion of our abundant agricultural products be kept at home in the fiscal year 1911 the exports of articles in the various stages of manufacture not including foodstuffs partly or wholly manufactured amounted approximately to in the fiscal year 1912 the total was nearly a gain of the importance which our manufactures have assumed in the commerce of the world in competition with the manufactures of other countries again draws attention to the duty of this government to use its utmost endeavors to secure impartial treatment for american products in all markets healthy commercial rivalry in international intercourse is best assured by the possession of proper means for protecting and promoting our foreign trade it is natural that competitive countries should view with some concern this steady expansion of our commerce if in some instance the measures taken by them to meet it are not entirely equitable a remedy should be found in former messages i have described the negotiations of the department of state with foreign governments for the adjustment of the maximum and minimum tariff as provided in section 2 of the tariff law of 1909 the advantages secured by the adjustment of our trade relations under this law have continued during the last year and some additional cases of discriminatory treatment of which we had reason to complain have been removed the department of state has for the first time in the history of this country obtained substantial treatment from all the countries of the world there are however other instances which while apparently not constituting undue discrimination in the sense of section 2 are nevertheless exceptions to the complete equity of tariff treatment for american products that the department of state consistently has sought to obtain for american commerce abroad these developments confirm the opinion conveyed to you in my annual message of 1911 that while the maximum and minimum provision of the tariff law of 1909 has been fully justified by the success achieved in removing previously existing undue discriminations against american products yet experience has shown that this feature of the law should be amended in such way as to provide a fully effective means of meeting the varying degrees of discriminatory treatment of american commerce in foreign countries still encountered as well as to protect against injurious treatment on the part of foreign governments through either legislative or administrative measures the financial interests abroad of american citizens whose enterprises enlarge the market for american commodities i can not too strongly recommend to the congress the passage of some stich enabling measure as the bill which was recommended by the secretary of state in his letter of december 13 1911 the object of the proposed legislation is in brief to enable the executive to apply as the case may require to any or all commodities whether or not on the free list from a country which discriminates against the united states a graduated scale of duties tip to the maximum of 25 per cent ad valorem provided in the present law flat tariffs are out of date nations no longer accord equal tariff treatment to all other nations irrespective of the treatment from them received stich a flexible power at the command of the executive would serve to moderate any unfavorable tendencies on the part of those countries from which the importations into the united states are substantially confined to articles on the free list as well as of the countries which find a lucrative market in the united states for their products under existing customs rates it is very necessary that the american government should be equipped with weapons of negotiation adapted to modern economic conditions in order that we may at all times be in a position to gain not only technically just but actually equitable treatment for our trade and also for american enterprise and vested interests abroad as illustrating the commercial benefits of the nation derived from the new diplomacy and its effectiveness upon the material as well as the more ideal side it may be remarked that through direct official efforts alone there have been obtained in the course of this administration contracts from foreign governments involving an expenditure of in the factories of the united states consideration of this fact and some reflection upon the necessary effects of a scientific tariff system and a foreign service alert and equipped to cooperate with the business men of america carry the conviction that the gratifying increase in the export trade of this country is in substantial amount due to our improved governmental methods of protecting and stimulating it it is germane to these observations to remark that in the two years that have elapsed since the successful negotiation of our new treaty with japan which at the time seemed to present so many practical difficulties our export trade to that country has increased at the rate of over a month our exports to japan for the year ended june 30 1910 were while for the year ended june 30 1912 the exports were a net increase in the sale of american products of nearly 150 per cent under the special agreement entered into between the united states and great britain on august 18 1910 for the arbitration of outstanding pecuniary claims a schedule of claims and the terms of submission have been agreed upon by the two governments and together with the special agreement were approved by the senate on july 19 1911 but in accordance with the terms of the agreement they did not go into effect until confirmed by the two governments by an exchange of notes which was done on april 26 last negotiations are still in progress for a supplemental schedule of claims to be submitted to arbitration under this agreement and meanwhile the necessary preparations for the arbitration of the claims included in the first schedule have been undertaken and are being carried on under the authority of an appropriation made for that purpose at the last session of congress it is anticipated that the two governments will be prepared to call upon the arbitration tribunal established under this agreement to meet at washington early next year to proceed with this arbitration the act adopted at the last session of congress to give effect to the convention of july 7 1911 between great britain japan russia and the united states provided for the suspension of all land killing of seals on the pribilof islands for a period of five years and an objection has now been presented to this provision by the other parties in interest which raises the issue as to whether or not this prohibition of land killing is inconsistent with the spirit if not the letter of the treaty stipulations the justification of establishing this close season depends under the terms of the convention upon how far if at all it is necessary for protecting and preserving the american herd and for increasing its number this is a question requiring examination of the present condition of the herd and the treatment which it needs in the light of actual experience and scientific investigation a careful examination of the subject is now being made and this government will soon be in possession of a considerable amount of new information about the american seal herd which has been secured during the past season and will be of great value in determining this question and if it should appear that there is any uncertainty as to the real necessity for imposing a close season at this time i shall take an early opportunity to address a special message to congress on this subject in the belief that this government should yield on this point rather than give the slightest ground for the charge that we have been in any way remiss in observing our treaty obligations on the 20th of july last an agreement was concluded between the united states and great britain adopting with certain modifications the rules and method of procedure recommended in the award rendered by the north atlantic coast fisheries arbitration tribunal on september 7 1910 for the settlement hereafter in accordance with the principles laid down in the award of questions arising with reference to the exercise of the american fishing liberties under article i of the treaty of october 20 1818 between the united states and great britain this agreement received the approval of the senate on august i and was formally ratified by the two governments on november 15 last the rules and a method of procedure embodied in the award provided for determining by an impartial tribunal the reasonableness of any new fishery regulations on the treaty coasts of newfoundland and canada before such regulations could be enforced against american fishermen exercising their treaty liberties on those coasts and also for determining the delimitation of bays on such coasts more than 10 miles wide in accordance with the definition adopted by the tribunal of the meaning of the word bays as used in the treaty in the subsequent negotiations between the two governments undertaken for the purpose of giving practical effect to these rules and methods of procedure it was found that certain modifications therein were desirable from the point of view of both govern ments and these negotiations have finally resulted in the agreement above mentioned by which the award recommendations as modified by mutual consent of the two governments are finally adopted and made effective thus bringing this controversy to a final conclusion which is equally beneficial and satisfactory to both governments in order to make possible the more effective performance of the work necessary for the confinement in their present channel of the waters of the lower colorado river and thus to protect the people of the imperial valley as well as in order to reach with the government of mexico an understanding regarding the distribution of the waters of the colorado river in which both governments are much interested negotiations are going forward with a view to the establishment of a preliminary colorado river commission which shall have the powers necessary to enable it to do the needful work and with authority to study the question of the equitable distribution of the waters there is every reason to believe that an understanding upon this point will be reached and that an agreement will be signed in the near future in the interest of the people and city of el paso this government has been assiduous in its efforts to bring to an early settlement the chamizal dispute with mexico much has been complished and while the final solution of the dispute is not diate the favorable attitude lately assumed by the mexican government encourages the hope that this troublesome question will be satisfactorily and definitively settled at an early day in pursuance of the convention of august 23 1906 signed at the third pan american conference held at rio de janeiro the international commission of jurists met at that capital during the month of last june at this meeting 16 american republics were represented including the united states and comprehensive plans for the future work of the commission were adopted at the next meeting fixed for june 1914 committees already appointed are instructed to i report regarding topics assigned to them in my message on foreign relations communicated to the two houses of congress december 7 1911 1 called especial attention to the assembling of the opium conference at the hague to the fact that that conference was to review all pertinent municipal laws relating to the opium and allied evils and certainly all international rules regarding these evils and to the that it seemed to me most essential that the congress should take immediate action on the antinarcotic legislation before the congress to which i had previously called attention by a special message the international convention adopted by the conference conforms almost entirely to the principles contained in the proposed antinarcotic legislation which has been before the last two congresses it was most unfortunate that this government having taken the initiative in the international action which eventuated in the important international opium convention failed to do its share in the great work by neglecting to pass the necessary legislation to correct the deplorable narcotic evils in the united states as well as to redeem international pledges upon which it entered by virtue of the abovementioned convention the congress at its present session should enact into law those bills now before it which have been so carefully drawn up in collaboration between the department of state and the other executive departments and which have behind them not only the moral sentiment of the country but the practical support of all the legitimate trade interests likely to be affected since the international convention was signed adherence to it has been made by several european states not represented at the conference at the hague and also by seventeen republics the war between italy and turkey came to a close in october last by the signature of a treaty of peace subsequently to which the ottoman empire renounced sovereignty over cyrenaica and tripolitania in favor of italy during the past year the near east has unfortunately been the theater of constant hostilities almost simultaneously with the conclusion of peace between italy and turkey and their arrival at an adjustment of the complex questions at issue between them war broke out between turkey on the one hand and bulgaria greece montenegro and servia on the other the united states has happily been involved neither directly nor indirectly with the causes or questions incident to any of these hostilities and has maintained in regard to them an attitude of absolute neutrality and of complete political disinterestedness in the second war in which the ottoman empire has been engaged the loss of life and the consequent distress on both sides have been appalling and the united states has found occasion in the interest of humanity to carry out the charitable desires of the american people to extend a measure of relief to the sufferers on either side through the impartial medium of the red cross beyond this the chief care of the government of the united states has been to make due provision for the protection of its national resident in belligerent territory in the exercise of my duty in this matter i have dispatched to turkish waters a specialservice squadron consisting of two armored cruisers in order that this government may if need be bear its part in such measures as it may be necessary for the interested nations to adopt for the safeguarding of foreign lives and property in the ottoman empire in the event that a dangerous situation should develop in the meanwhile the several interested european powers have promised to extend to american citizens the benefit of such precautionary or protective measures as they might adopt in the same manner in which it has been the practice of this government to extend its protection to all foreign residents in those countries of the western hemisphere in which it has from time to time been the task of the united states to act in the interest of peace and good order the early appearance of a large fleet of european warships in the bosphorus apparently assured the protection of foreigners in that quarter where the presence of the american stationnaire the you scorpion sufficed tinder the circumstances to represent the united states our cruisers were thus left free to act if need be along the mediterranean coasts should any unexpected contingency arise affecting the numerous american interests in the neighborhood of smyrna and beirut the great preponderance of american material interests in the subarctic island of spitzbergen which has always been regarded politically as no man land impels this government to a continued and lively interest in the international dispositions to be made for the political governance and administration of that region the conflict of certain claims of american citizens and others is in a fair way to adjustment while the settlement of matters of administration whether by international conference of the interested powers or otherwise continues to be the subject of exchange of views between the governments concerned as a result of the efforts of this government to place the government of liberia in position to pay its outstanding indebtedness and to maintain a stable and efficient government negotiations for a loan of have been successfully concluded and it is anticipated that the payment of the old loan and the issuance of the bonds of the 1912 loan for the rehabilitation of the finances of liberia will follow at an early date when the new receivership will go into active operation the new receivership will consist of a general receiver of customs designated by the government of the united states and three receivers of customs designated by the governments of germany france and great britain which countries have commercial interests in the republic of liberia in carrying out the understanding between the government of liberia and that of the united states and in fulfilling the terms of the agreement between the former government and the american bankers three competent exarmy officers are now effectively employed by the liberian government in reorganizing the police force of the republic not only to keep in order the native tribes in the hinterland but to serve as a necessary police force along the frontier it is hoped that these measures will assure not only the continued existence but the prosperity and welfare of the republic of liberia liberia possesses fertility of soil and natural resources which should insure to its people a reasonable prosperity it was the duty of the united states to assist the republic of liberia in accordance with our historical interest and moral guardianship of a community founded by american citizens as it was also the duty of the american government to attempt to assure permanence to a country of much sentimental and perhaps future real interest to a large body of our citizens the legation at tangier is now in charge of our consul general who is acting as charge as well as caring for our commercial interests in that country in view of the fact that many of the foreign powers are now represented by charges it has not been deemed necessary to appoint at the present time a minister to fill a vacancy occurring in that post the political disturbances in china in the autumn and winter of resulted in the abdication of the manchu rulers on february 12 followed by the formation of a provisional republican government empowered to conduct the affairs of the nation until a permanent government might be regularly established the natural sympathy of the american people with the assumption of republican principles by the chinese people was appropriately expressed in a concurrent resolution of congress on april 17 1912 a constituent assembly composed of representatives duly chosen by the people of china in the elections that are now being held has been called to meet in january next to adopt a permanent constitution and organize the government of the nascent republic during the formative constitutional stage and pending definite action by the assembly as expressive of the popular will and the establishment of a stable republican form of government capable of fulfilling its international obligations the united states is according to precedent maintaining full and friendly de facto relations with the provisional government the new condition of affairs thus created has presented many serious and complicated problems both of internal rehabilitation and of international relations whose solution it was realized would necessarily require much time and patience from the beginning of the upheaval last autumn it was felt by the united states in common with the other powers having large interests in china that independent action by the foreign governments in their own individual interests would add further confusion to a situation already complicated a policy of international cooperation was accordingly adopted in an understanding reached early in the disturbances to act together for the protection of the lives and property of foreigners if menaced to maintain an attitude of strict impartiality as between the contending factions and to abstain from any endeavor to influence the chinese in their organization of a new form of government in view of the seriousness of the disturbances and their general character the american minister at peking was instructed at his discretion to advise our nationals in the affected districts to concentrate at such centers as were easily accessible to foreign troops or men of war nineteen of our naval vessels were stationed at various chinese ports and other measures were promptly taken for the adequate protection of american interests it was further mutually agreed in the hope of hastening an end to hostilities that none of the interested powers would approve the making of loans by its nationals to either side as soon however as a united provisional government of china was assured the united states joined in a favorable consideration of that government request for advances needed for immediate administrative necessities and later for a loan to effect a permanent national reorganization the interested governments had already by common consent adopted in respect to the purposes expenditure and security of any loans to china made by their nationals certain conditions which were held to be essential not only to secure reasonable protection for the foreign investors but also to safeguard and strengthen china credit by discouraging indiscriminate borrowing and by insuring the application of the funds toward the establishment of the stable and effective government necessary to china welfare in june last representative banking groups of the united states france germany great britain japan and russia formulated with the general sanction of their respective governments the guaranties that would be expected in relation to the expenditure and security of the large reorganization loan desired by china which however have thus far proved unacceptable to the provisional government in august last i accredited the secretary of state as special ambassador to japan charged with the mission of bearing to the imperial family the government and the people of that empire the sympathetic message of the american commonwealth oil the sad occasion of the death of his majesty the emperor mutsuhito whose long and benevolent reign was the greater part of japan modern history the kindly reception everywhere accorded to secretary knox showed that his mission was deeply appreciated by the japanese nation and emphasized strongly the friendly relations that have for so many years existed between the two peoples our relations with the argentine republic are most friendly and cordial so also are our relations with brazil whose government has accepted the invitation of the united states to send two army officers to study at the coast artillery school at fort monroe the alsop claim which had been the only hindrance to the healthy growth of the most friendly relations between the united states and chile having been eliminated through the submission of the question to his britannic majesty king george v as amiable compositeur it is a because of much gratification to me that our relations with chile are now established upon a firm basis of growing friendship the chilean government has placed an officer of the united states coast artillery in charge of the chilean coast artillery school and has shown appreciation of american methods by confiding to an american firm important work for the chilean coast defenses last year a revolution against the established government of ecuador broke out at the pricipal port of that republic previous to this occurrence the chief american interest in ecuador represented by the guayaquil quito railway incorporated in the united states bad rendered extensive transportation and other services on account to the ecuadorian government the amount of which ran into a sum which was steadily increasing and which the ecuadorian government had made no provision to pay thereby threatening to crush out the very existence of this american enterprise when tranquillity had been restored to ecuador as a result of the triumphant progress of the government forces from quito this government interposed its good offices to the end that the american interests in ecuador might be saved from complete extinction as a part of the arrangement which was reached between the parties and at the request of the government of ecuador i have consented to name an arbitrator who acting under the terms of the railroad contract with an arbitrator named by the ecuadorian government will pass upon the claims that have arisen since the arrangement reached through the action of a similar arbitral tribunal in 1908 in pursuance of a request made some time ago by the ecuadorian government the department of state has given much attention to the problem of the proper sanitation of guayaquil as a result a detail of officers of the canal zone will be sent to guayaquil to recommend measures that will lead to the complete permanent sanitation of this plague and fever infected region of that republic which has for so long constituted a menace to health conditions on the canal zone it is hoped that the report which this mission will furnish will point out a way whereby the modicum of assistance which the united states may properly lend the ecuadorian government may be made effective in ridding the west coast of south america of a focus of contagion to the future commercial current passing through the panama canal in the matter of the claim of john celestine landreau against the government of peru which claim arises out of certain contracts and transactions in connection with the discovery and exploitation of guano and which has been under discussion between the two governments since 1874 1 am glad to report that as the result of prolonged negotiations which have been characterized by the utmost friendliness and good will on both sides the department of state has succeeded in securing the consent of peru to the arbitration of the claim and that the negotiations attending the drafting and signature of a protocol submitting the claim to an arbitral tribunal are proceeding with due celerity an officer of the american public health service and an american sanitary engineer are now on the way to iquitos in the employ of the peruvian government to take charge of the sanitation of that river port peru is building a number of submarines in this country and continues to show every desire to have american capital invested in the republic in july the united states sent undergraduate delegates to the third international students congress held at lima american students having been for the first time invited to one of these meetings the republic of uruguay has shown its appreciation of american agricultural and other methods by sending a large commission to this country and by employing many american experts to assist in building up agricultural and allied industries in uruguay venezuela is paying off the last of the claims the settlement of which was provided for by the washington protocols including those of american citizens our relations with venezuela are most cordial and the trade of that republic with the united states is now greater than with any other country during the past summer the revolution against the administration which followed the assassination of president caceres a year ago last november brought the dominican republic to the verge of administrative chaos without offering any guaranties of eventual stability in the ultimate success of either party in pursuance of the treaty relations of the united states with the dominican republic which were threatened by the necessity of suspending the operation under american administration of the customhouses on the haitian frontier it was found necessary to dispatch special commissioners to the island to reestablish the customhouses and with a guard sufficient to insure needed protection to the customs administration the efforts which have been made appear to have resulted in the restoration of normal conditions throughout the republic the good offices which the commissioners were able to exercise were instrumental in bringing the contending parties together and in furnishing a basis of adjustment which it is hoped will result in permanent benefit to the dominican people mindful of its treaty relations and owing to the position of the government of the united states as mediator between the dominican republic and haiti in their boundary dispute and because of the further fact that the revolutionary activities on the frontier had become so active as practically to obliterate the line of demarcation that had been heretofore recognized pending the definitive settlement of the boundary in controversy it was found necessary to indicate to the two island governments a provisional de facto boundary line this was done without prejudice to the rights or obligations of either country in a final settlement to be reached by arbitration the tentative line chosen was one which under the circumstances brought to the knowledge of this government seemed to conform to the best interests of the disputants the border patrol which it had been found necessary to reestablish for customs purposes between the two countries was instructed provisionally to observe this line the republic of cuba last may was in the throes of a lawless uprising that for a time threatened the destruction of a great deal of valuable of it owned by americans and other well as the existence of the government itself the armed forces of cuba being inadequate to guard property from attack and at the same time properly to operate against the rebels a force of american marines was dispatched from our naval station at guantanamo into the province of oriente for the protection of american and other foreign life and property the cuban government was thus able to use all its forces in putting down the outbreak which it succeeded in doing in a period of six weeks the presence of two american warships in the harbor of habana during the most critical period of this disturbance contributed in great measure to allay the fears of the inhabitants including a large foreign colony there has been under discussion with the government of cuba for some time the question of the release by this government of its leasehold rights at bahia honda on the northern coast of cuba and the enlargement in exchange therefor of the naval station which has been established at guantanamo bay on the south as the result of the negotiations thus carried on an agreement has been reached between the two governments providing for the suitable enlargement of the guantanamo bay station upon terms which are entirely fair and equitable to all parties concerned at the request alike of the government and both political parties in panama an american commission undertook supervision of the recent presidential election in that republic where our treaty relations and indeed every geographical consideration make the maintenance of order and satisfactory conditions of peculiar interest to the government of the united states the elections passed without disorder and the new administration has entered upon its functions the government of great britain has asked the support of the united states for the protection of the interests of british holders of the foreign bonded debt of guatemala while this government is hopeful of an arrangement equitable to the british bondholders it is naturally unable to view the question apart from its relation to the broad subject of financial stability in central america in which the policy of the united states does not permit it to escape a vital interest through a renewal of negotiations between the government of guatemala and american bankers the aim of which is a loan for the rehabilitation of guatemalan finances a way appears to be open by which the government of guatemala could promptly satisfy any equitable and just british claims and at the same time so improve its whole financial position as to contribute greatly to the increased prosperity of the republic and to redound to the benefit of foreign investments and foreign trade with that country failing such an arrangement it may become impossible for the government of the united states to escape its obligations in connection with such measures as may become necessary to exact justice to legitimate foreign claims in the recent revolution in nicaragua which it was generally admitted might well have resulted in a general central american conflict but for the intervention of the united states the government of honduras was especially menaced but fortunately peaceful conditions were maintained within the borders of that republic the financial condition of that country remains unchanged no means having been found for the final adjustment of pressing outstanding foreign claims this makes it the more regrettable that the financial convention between the united states and honduras has thus far failed of ratification the government of the united states continues to hold itself ready to cooperate with the government of honduras which it is believed can not much longer delay the meeting of its foreign obligations and it is hoped at the proper time american bankers will be willing to cooperate for this purpose it is not possible to make to the congress a communication upon the present foreign relations of the united states so detailed as to convey an adequate impression of the enormous increase in the importance and activities of those relations if this government is really to preserve to the american people that free opportunity in foreign markets which will soon be indispensable to our prosperity even greater efforts must be made otherwise the american merchant manufacturer and exporter will find many a field in which american trade should logically predominate preempted through the more energetic efforts of other governments and other commercial nations there are many ways in which through hearty cooperation the legislative and executive branches of this government can do much the absolute essential is the spirit of united effort and singleness of purpose i will allude only to a very few specific examples of action which ought then to result america can not take its proper place in the most important fields for its commercial activity and enterprise unless we have a merchant marine american commerce and enterprise can not be effectively fostered in those fields unless we have good american banks in the countries referred to we need american newspapers in those countries and proper means for public information about them we need to assure the permanency of a trained foreign service we need legislation enabling the members of the foreign service to be systematically brought in direct contact with the industrial manufacturing and exporting interests of this country in order that american business men may enter the foreign field with a clear perception of the exact conditions to be dealt with and the officers themselves may prosecute their work with a clear idea of what american industrial and manufacturing interests require congress should fully realize the conditions which obtain in the world as we find ourselves at the threshold of our middle age as a nation we have emerged full grown as a peer in the great concourse of nations we have passed through various formative periods we have been in the struggle to develop our domestic resources and deal with our domestic questions the nation is now too matured to continue in its foreign relations those temporary expedients natural to a people to whom domestic affairs are the sole concern in the past our diplomacy has often consisted in normal times in a mere assertion of the right to international existence we are now in a larger relation with broader rights of our own and obligations to others than ourselves a number of great guiding principles were laid down early in the history of this government the recent task of our diplomacy has been to adjust those principles to the conditions of to develop their corollaries to find practical applications of the old principles expanded to meet new situations thus are being evolved bases upon which can rest the superstructure of policies which must grow with the destined progress of this nation the successful conduct of our foreign relations demands a broad and a modern view we can not meet new questions nor build for the future if we confine ourselves to outworn dogmas of the past and to the perspective appropriate at our emergence from colonial times and conditions the opening of the panama canal will mark a new era in our international life and create new and worldwide conditions which with their vast correlations and consequences will obtain for hundreds of years to come we must not wait for events to overtake us unawares with continuity of purpose we must deal with the problems of our external relations by a diplomacy modern resourceful magnanimous and fittingly expressive of the high ideals of a great nation on the 3d of december i sent a message to the congress which was confined to our foreign relations the secretary of state makes no report to the president or to congress and a review of the history of the transactions of the state department in one year must therefore be included by the president in his annual message or congress will not be fully informed of them a full discussion of all the transactions of the government with a view to informing the congress of the important events of the year and recommending new legislation requires more space than one message of reasonable length affords i have therefore adopted the course of sending three or four messages during the first ten days of the session so as to include reference to the more important matters that should be brought to the attention of the congress the condition of the country with reference to business could hardly be better while the four years of the administration now drawing to a close have not developed great speculative expansion or a wide field of new investment the recovery and progress made from the depressing conditions following the panic of 1907 have been steady and the improvement has been clear and easily traced in the statistics the business of the country is now on a solid basis credits are not unduly extended and every phase of the situation seems in a state of preparedness for a period of unexampled prosperity manufacturing concerns are running at their full capacity and the demand for labor was never so constant and growing the foreign trade of the country for this year will exceed while the balance in our of the excess of exports over exceed more than half our exports are manufactures or partly manufactured material while our exports of farm products do not show the same increase because of domestic consumption it is a year of bumper crops the total money value of farm products will exceed it is a year when the bushel or unit price of agricultural products has gradually fallen and yet the total value of the entire crop is greater by over than we have known in our history the condition of the treasury is very satisfactory the total debt is of which constitute the panama canal loan the debt is including of greenbacks we have in the treasury in gold coin as a reserve against the outstanding greenbacks and in addition we have a cash balance in the treasury as a general fund of or an increase of over the general fund last year for three years the expenditures of the government have decreased under the influence of an effort to economize this year presents an apparent exception the estimate by the secretary of the treasury of the ordinary receipts exclusive of postal revenues for the year ending june 30 1914 indicates that they will amount to the sum of the estimates of the expenditures for that same year exclusive of panama canal disbursements and postal disbursements payable from postal revenues is indicating a deficit of for the year ending june 30 1913 similarly estimated receipts were while the total corresponding estimate of expenditures for that year submitted through the secretary of the treasury to congress amounted to this shows an increase of in the estimates for 1914 over the total estimates of 1913 this is due to an increase of in the estimate for rivers and harbors for the next year on projects and surveys authorized by congress to an increase under the new pension bill of and to an increase in the estimates for expenses of the navy department of the estimate for the navy department for the year 1913 included two battleships congress made provision for only one battleship and therefore the navy department has deemed it necessary and proper to make an estimate which includes the first year expenditure for three battleships in addition to the amount required for work on the uncompleted ships now under construction in addition to the natural increase in the expenditures for the uncompleted ships and the ad ditional battleship estimated for the other increases are due to the pay required for or more additional enlisted men in the navy and to this must be added the additional cost of construction imposed by the change in the law which makes it applicable to ships built in private shipyards with the exceptions of these three items the estimates show a reduction this year below the total estimates for 1913 of more than the estimates for panama canal construction for 1914 are less than for 1913 a time when panics seem far removed is the best time for us to prepare our financial system to withstand a storm the most crying need this country has is a proper banking and currency system the existing one is inadequate and everyone who has studied the question admits it it is the business of the national government to provide a medium automatically contracting and expanding in volume to meet the needs of trade our present system lacks the indispensable quality of elasticity the only part of our monetary medium that has elasticity is the currency the peculiar provisions of the law requiring national banks to maintain reserves to meet the call of the depositors operates to increase the money stringency when it arises rather than to expand the supply of currency and relieve it it operates upon each bank and furnishes a motive for the withdrawal of currency from the channels of trade by each bank to save itself and offers no inducement whatever for the use of the reserve to expand the supply of currency to meet the exceptional demand after the panic of 1907 congress realized that the present system was not adapted to the country needs and that under it panics were possible that might properly be avoided by legislative provision accordingly a monetary commission was appointed which made a report in february 1912 the system which they recommended involved a national reserve association which was in certain of its faculties and functions a bank and which was given through its governing authorities the power by issuing circulating notes for approved commercial paper by fixing discounts and by other methods of transfer of currency to expand the supply of the monetary medium where it was most needed to prevent the export or hoarding of gold and generally to exercise such supervision over the supply of money in every part of the country as to prevent a stringency and a panic the stock in this association was to be distributed to the banks of the whole united states state and national in a mixed proportion to bank units and to capital stock paid in the control of the association was vested in a board of directors to be elected by representatives of the banks except certain directors three cabinet officers and the comptroller of the currency the president was to appoint the governor of the association from three persons to be selected by the directors while the two deputy governors were to be elected by the board of directors the details of the plan were worked out with great care and ability and the plan in general seems to me to furnish the basis for a proper solution of our present difficulties i feel that the government might very properly be given a greater voice in the executive committee of the board of directors without danger of injecting politics into its management but i think the federation system of banks is a good one provided proper precautions are taken to prevent banks of large capital from absorbing power through ownership of stock in other banks the objections to a central bank it seems to me are obviated if the ownership of the reserve association is distributed among all the banks of a country in which banking is free the earnings of the reserve association are limited in percentage tit a reasonable and fixed amount and the profits over and above this are to be turned into the government treasury it is quite probable that still greater security against control by money centers may be worked into the plan certain it is however that the objections which were made in the past history of this country to a central bank as furnishing a monopoly of financial power to private individuals would not apply to an association whose ownership and control is so widely distributed and is divided between all the banks of the country state and national on the one hand and the chief executive through three department heads and his comptroller of the currency on the other the ancient hostility to a national bank with its branches in which is concentrated the privilege of doing a banking business and carrying on the financial transactions of the government has prevented the establishment of such a bank since it was abolished in the jackson administration our present national banking law has obviated objections growing out of the same because by providing a free banking system in which any set of stockholders can establish a national bank if they comply with the conditions of law it seems to me that the national reserve association meets the same objection in a similar way that is by giving to each bank state and national in accordance with its size a certain share in the stock of the reserve association nontransferable and only to be held by the bank while it performs its functions as a partner in the reserve association the report of the commission recommends provisions for the imposition of a graduated tax on the expanded currency of such a character as to furnish a motive for reducing the issue of notes whenever their presence in the money market is not required by the exigencies of trade in other words the whole system has been worked out with the greatest care theoretically it presents a plan that ought to command support practically it may require modification in various of its provisions in order to make the security against abuses by combinations among the banks impossible but in the face of the crying necessity that there is for improvement in our present system i urgently invite the attention of congress to the proposed plan and the report of the commission with the hope that an earnest consideration may suggest amendments and changes within the general plan which will lead to its adoption for the benefit of the country there is no class in the community more interested in a safe and sane banking and currency system one which will prevent panics and automatically furnish in each trade center the currency needed in the carrying on of the business at that center than the wage earner there is no class in the community whose experience better qualifies them to make suggestions as to the sufficiency of a currency and banking system than the bankers and business men ought we therefore to ignore their recommendations and reject their financial judgment as to the proper method of reforming our financial system merely because of the suspicion which exists against them in the minds of many of our fellow citizens is it not the duty of congress to take up the plan suggested examine it from all standpoints give impartial consideration to the testimony of those whose experience ought to fit them to give the best advice on the subject and then to adopt some plan which will secure the benefits desired a banking and currency system seems far away from the wage earner and the farmer but the fact is that they are vitally interested in a safe system of currency which shall graduate its volume to the amount needed and which shall prevent times of artificial stringency that frighten capital stop employment prevent the meeting of the pay roll destroy local markets and produce penury and want i have regarded it as my duty in former messages to the congress to urge the revision of the tariff upon principles of protection it was my judgment that the customs duties ought to be revised downward but that the reduction ought not to be below a rate which would represent the difference in the cost of production between the article in question at home and abroad and for this and other reasons i vetoed several bills which were presented to me in the last session of this congress now that a new congress has been elected on a platform of a tariff for revenue only rather than a protective tariff and is to revise the tariff on that basis it is needless for me to occupy the time of this congress with arguments or recommendations in favor of a protective tariff before passing from the tariff law however known as the payne tariff law of august 5 1909 1 desire to call attention to section 38 of that act assessing a special excise tax on corporations it contains a provision requiring the levy of an additional 50 per cent to the annual tax in cases of neglect to verify the prescribed return or to file it before the time required by law this additional charge of 50 per cent operates in some cases as a harsh penalty for what may have been a mere inadvertence or unintentional oversight and the law should be so amended as to mitigate the severity of the charge in such instances provision should also be made for the refund of additional taxes heretofore collected because of such infractions in those cases where the penalty imposed has been so disproportionate to the offense as equitably to demand relief the estimates for the next fiscal year have been assembled by the secretary of the treasury and by him transmitted to congress i purpose at a later day to submit to congress a form of budget prepared for me and recommended by the president commission on economy and efficiency with a view of suggesting the useful and informing character of a properly framed budget the war department combines within its jurisdiction functions which in other countries usually occupy three departments it not only has the management of the army and the coast defenses but its jurisdiction extends to the government of the philippines and of porto rico and the control of the receivership of the customs revenues of the dominican republic it also includes the recommendation of all plans for the improvement of harbors and waterways and their execution when adopted and by virtue of an executive order the supervision of the construction of the panama canal our small army now consists of men excluding the philippine scouts leaving out of consideration the coast artillery force whose position is fixed in our various seacoast defenses and the present garrisons of our various insular possessions we have within the continental united states a mobile army of only about men this little force must be still further drawn upon to supply the new garrisons for the great naval base which is being established at pearl harbor in the hawaiian islands and to protect the locks now rapidly approaching completion at panama the forces remaining in the united states are now scattered in nearly 50 posts situated for a variety of historical reasons in 24 states these posts contain only fractions of regiments averaging less than 700 men each in time of peace it has been our historical policy to administer these units separately by a geographical organization in other words our army in time of peace has never been a united organization but merely scattered groups of companies battalions and regiments and the first task in time of war has been to create out of these scattered units an army fit for effective teamwork and cooperation to the task of meeting these patent defects the war department has been addressing itself during the past year for many years we had no officer or division whose business it was to study these problems and plan remedies for these defects with the establishment of the general staff nine years ago a body was created for this purpose it has necessarily required time to overcome even in its own personnel the habits of mind engendered by a century of lack of method but of late years its work has become systematic and effective and it has recently been addressing itself vigorously to these problems a comprehensive plan of army reorganization was prepared by the war college division of the general staff this plan was thoroughly discussed last summer at a series of open conferences held by the secretary of war and attended by representatives from all branches of the army and from congress in printed form it has been distributed to members of congress and throughout the army and the national guard and widely through institutions of learning and elsewhere in the united states in it for the first time we have a tentative chart for future progress under the influence of this study definite and effective steps have been taken toward army reorganization so far as such reorganization lies within the executive power hitherto there has been no difference of policy in the treatment of the organization of our foreign garrisons from those of troops within the united states the difference of situation is vital and the foreign garrison should be prepared to defend itself at an instant notice against a foe who may command the sea unlike the troops in the united states it can not count upon reinforcements or recruitment it is an outpost upon which will fall the brunt of the first attack in case of war the historical policy of the united states of carrying its regiments during time of peace at half strength has no application to our foreign garrisons during the past year this defect has been remedied as to the philippines garrison the former garrison of 12 reduced regiments has been replaced by a garrison of 6 regiments at full strength giving fully the same number of riflemen at an estimated economy in cost of maintenance of over per year this garrison is to be permanent its regimental units instead of being transferred periodically back and forth from the united states will remain in the islands the officers and men composing these units will however serve a regular tropical detail as usual thus involving no greater hardship upon the personnel and greatly increasing the effectiveness of the garrison a similar policy is proposed for the hawaiian and panama garrisons as fast as the barracks for them are completed i strongly urge upon congress that the necessary appropriations for this purpose should be promptly made it is in my opinion of first importance that these national outposts upon which a successful home defense will primarily depend should be finished and placed in effective condition at the earliest possible day simultaneously with the foregoing steps the war department has been proceeding with the reorganization of the army at home the formerly disassociated units are being united into a tactical organization of three divisions each consisting of two or three brigades of infantry and so far as practicable a proper proportion of divisional cavalry and artillery of course the extent to which this reform can be carried by the executive is practically limited to a paper organization the scattered units can be brought under a proper organization but they will remain physically scattered until congress supplies the necessary funds for grouping them in more concentrated posts until that is done the present difficulty of drilling our scattered groups together and thus training them for the proper team play can not be removed but we shall at least have an army which will know its own organization and will be inspected by its proper commanders and to which as a unit emergency orders can be issued in time of war or other emergency moreover the organization which in many respects is necessarily a skeleton will furnish a guide for future development the separate regiments and companies will know the brigades and divisions to which they belong they will be maneuvered together whenever maneuvers are established by congress and the gaps in their organization will show the pattern into which can be filled new troops as the nation grows and a larger army is provided one of the most important reforms accomplished during the past year has been the legislation enacted in the army appropriation bill of last summer providing for a regular army reserve hitherto our national policy has assumed that at the outbreak of war our regiments would be immediately raised to full strength but our laws have provided no means by which this could be accomplished or by which the losses of the regiments when once sent to the front could be repaired in this respect we have neglected the lessons learned by other nations the new law provides that the soldier after serving four years with colors shall pass into a reserve for three years at his option he may go the reserve at the end of three years remaining there for four years while in the reserve he can be called to active duty only in case of war or other national emergency and when so called and only in such case will receive a stated amount of pay for all of the period in which he has been a member of the reserve the legislation is imperfect in my opinion in certain particulars but it is a most important step in the right direction and i earnestly hope that it will be carefully studied and perfected by congress under existing law the national guard constitutes after the regular army the first line of national defense its organization discipline training and equipment under recent legislation have been assimilated as far as possible to those of the regular army and its practical efficiency under the effect of this training has very greatly increased our citizen soldiers under present conditions have reached a stage of development beyond which they can not reasonably be asked to go without further direct assistance in the form of pay from the federal government on the other hand such pay from the national treasury would not be justified unless it produced a proper equivalent in additional efficiency on the part of the national guard the organized militia can not be ordered outside of the limits of the united states and thus can not lawfully be used for general military purposes the officers and men are ambitious and eager to make themselves thus available and to become an efficient national reserve of citizen soldiery they are the only force of trained men other than the regular army upon which we can rely the militia pay bill in the form agreed on between the authorities of the war department and the representatives of the national guard in my opinion adequately meets these conditions and offers a proper return for the pay which it is proposed to give to the national guard i believe that its enactment into law would be a very long step toward providing this nation with a first line of citizen soldiery upon which its main reliance must depend in case of any national emergency plans for the organization of the national guard into tactical divisions on the same lines as those adopted for the regular army are being formulated by the war college division of the general staff the national guard consists of only about men in any serious war in the past it has always been necessary and in such a war in the future it doubtless will be necessary for the nation to depend in addition to the regular army and the national guard upon a large force of volunteers there is at present no adequate provision of law for the raising of such a force there is now pending in congress however a bill which makes such provision and which i believe is admirably adapted to meet the exigencies which would be presented in case of war the passage of the bill would not entail a dollar expense upon the government at this time or in the future until war comes but if war comes the methods therein directed are in accordance with the best military judgment as to what they ought to be and the act would prevent the necessity for a discussion of any legislation and the delays incident to its consideration and adoption i earnestly urge its passage the army appropriation act of also carried legislation for the consolidation of the quartermaster department the subsistence department and the pay corps into a single supply department to be known as the quartermaster corps it also provided for the organization of a special force of enlisted men to be known as the service corps gradually to replace many of the civilian employees engaged in the manual labor necessary in every army i believe that both of these enactments will improve the administration of our military establishment the consolidation of the supply corps has already been effected and the organization of the service corps is being put into effect all of the foregoing reforms are in the direction of economy and efficiency except for the slight increase necessary to garrison our outposts in hawaii and panama they do not call for a larger army but they do tend to produce a much more efficient one the only substantial new appropriations required are those which as i have pointed out are necessary to complete the fortifications and barracks at our naval bases and outposts beyond the sea porto rico continues to show notable progress both commercially and in the spread of education its external commerce has increased 17 per cent over the preceding year bringing the total value up to or more than five times the value of the commerce of the island in 1901 during the year pupils were enrolled in the public schools as against for the preceding year and as compared with for the first year of american administration special efforts are under way for the promotion of vocational and industrial training the need of which is particularly pressing in the island when the bubonic plague broke out last june the quick and efficient response of the people of porto rico to the demands of modern sanitation was strikingly shown by the thorough campaign which was instituted against the plague and the hearty public opinion which supported the government efforts to check its progress and to prevent its recurrence the failure thus far to grant american citizenship continues to be the only ground of dissatisfaction the bill conferring such citizenship has passed the house of representatives and is now awaiting the action of the senate i am heartily in favor of the passage of this bill i believe that the demand for citizenship is just and that it is amply earned by sustained loyalty on the part of the inhabitants of the island but it should be remembered that the demand must be and in the minds of most porto ricans is entirely disassociated from any thought of statehood i believe that no substantial approved public opinion in the united states or in porto rico contemplates statehood for the island as the ultimate form of relations between us i believe that the aim to be striven for is the fullest possible allowance of legal and fiscal with american citizenship as to the bond between us in other words a relation analogous to the present relation between great britain and such colonies as canada and australia this would conduce to the fullest and most development of porto rico while at the same time it would grant her the economic and political benefits of being under the american flag a bill is pending in congress which revolutionizes the carefully worked out scheme of government under which the philippine islands are now governed and which proposes to render them virtually autonomous at once and absolutely independent in eight years stich a proposal can only be founded on the assumption that we have now discharged our trusteeship to the filipino people and our responsibility for them to the world and that they are now prepared for selfgovernment as well as national sovereignty a thorough and unbiased knowledge of the facts clearly shows that these assumptions are absolutely without justification as to this i believe that there is no substantial difference of opinion among any of those who have had the responsibility of facing philippine problems in the administration of the islands and i believe that no one to whom the future of this people is a responsible concern can countenance a policy fraught with the direst consequences to those on whose behalf it is ostensibly urged in the philippine islands we have embarked upon an experiment unprecedented in dealing with dependent people we are developing there conditions exclusively for their own welfare we found an archipelago containing 24 tribes and races speaking a great variety of languages and with a population over 80 per cent of which could neither read nor write through the unifying forces of a common education of commercial and economic development and of gradual participation in local we are endeavoring to evolve a homogeneous people fit to determine when the time arrives their own destiny we are seeking to arouse a national spirit and not as under the older colonial theory to suppress such a spirit the character of the work we have been doing is keenly recognized in the orient and our success thus far followed with not a little envy by those who initiating the same policy find themselves hampered by conditions grown up in earlier days and under different theories of administration but our work is far from done our duty to the filipinos is far from discharged over half a million filipino students are now in the philippine schools helping to mold the men of the future into a homogeneous people but there still remain more than a million filipino children of school age yet to be reached freed from american control the integrating forces of a common education and a common language will cease and the educational system now well started will slip back into inefficiency and disorder an enormous increase in the commercial development of the islands has been made since they were virtually granted full access to our markets three years ago with every prospect of increasing development and diversified industries freed from american control such development is bound to decline every observer speaks of the great progress in public works for the benefit of the filipinos of harbor improvements of roads and railways of irrigation and artesian wells public buildings and better means of communication but large parts of the islands are still unreached still even unexplored roads and railways are needed in many parts irrigation systems are still to be installed and wells to be driven whole villages and towns are still without means of communication other than almost impassable roads and trails even the great progress in sanitation which has successfully suppressed smallpox the bubonic plague and asiatic cholera has found the because of and a cure for beriberi has segregated the lepers has helped to make manila the most healthful city in the orient and to free life throughout the whole archipelago from its former dread diseases is nevertheless incomplete in many essentials of permanence in sanitary policy even more remains to be accomplished if freed from american control sanitary progress is bound to be arrested and all that has been achieved likely to be lost concurrent with the economic social and industrial development of the islands has been the development of the political capacity of the people by their progressive participation in government the filipinos are being steadily and hopefully trained for under spanish control they shared in no way in the government under american control they have shared largely and increasingly within the last dozen years they have gradually been given complete autonomy in the municipalities the right to elect of the provincial governing boards and the lower house of the insular legislature they have four native members out of nine members of the commission or upper house the chief justice and two justices of the supreme court about of the higher judicial positions and all of the justices of the peach are natives in the classified civil service the proportion of filipinos increased from 51 per cent in 1904 to 67 per cent in 1911 thus all the municipal employees over go per cent of the provincial employees and 60 per cent of the officials and employees of the central government are filipinos the ideal which has been kept in mind in our political guidance of the islands has been real popular and not mere paper independence i am happy to say that the filipinos have done well enough in the places they have filled and in the discharge of the political power with which they have been intrusted to warrant the belief that they can be educated and trained to complete but the present satisfactory results are due to constant support and supervision at every step by americans if the task we have undertaken is higher than that assumed by other nations its accomplishment must demand even more patience we must not forget that we found the filipinos wholly untrained in government up to our advent all other experience sought to repress rather than encourage political power it takes long time and much experience to ingrain political habits of steadiness and efficiency popular ultimately must rest upon common habits of thought and upon a reasonably developed public opinion no such foundations for selfgovernment let alone independence are now present in the philippine islands disregarding even their racial heterogeneity and the lack of ability to think as a nation it is sufficient to point out that under liberal franchise privileges only about 3 per cent of the filipinos vote and only 5 per cent of the people are said to read the public press to confer independence upon the filipinos now is therefore to subject the great mass of their people to the dominance of an oligarchical and probably exploiting minority such a course will be as cruel to those people as it would be shameful to us our true course is to pursue steadily and courageously the path we have thus far followed to guide the filipinos into pursuits to continue the cultivation of sound political habits through education and political practice to encourage the diversification of industries and to realize the advantages of their industrial education by conservatively approved cooperative methods at once checking the dangers of concentrated wealth and building up a sturdy independent citizenship we should do all this with a disinterested endeavor to secure for the filipinos economic independence and to fit them for complete with the power to decide eventually according to their own largest good whether such shall be accompanied by independence a present declaration even of future independence would retard progress by the dissension and disorder it would arouse on our part it would be a disingenuous attempt under the guise of conferring a benefit on them to relieve ourselves from the heavy and difficult burden which thus far we have been bravely and consistently sustaining it would be a disguised policy of scuttle it would make the helpless filipino the football of oriental politics tinder the protection of a guaranty of their independence which we would be powerless to enforce there are pending before congress a large number of bills proposing to grant privileges of erecting dams for the purpose of creating water power in our navigable rivers the pendency of these bills has brought out an important defect in the existing general dam act that act does not in my opinion grant sufficient power to the federal government in dealing with the construction of such dams to exact protective conditions in the interest of navigation it does not permit the federal government as a condition of its permit to require that a part of the value thus created shall be applied to the further general improvement and protection of the stream i believe this to be one of the most important matters of internal improvement now confronting the government most of the navigable rivers of this country are comparatively long and shallow in order that they may be made fully useful for navigation there has come into vogue a method of improvement known as canalization or the method which consists in building a series of dams and locks each of which will create a long pool of deep navigable water at each of these dams there is usually created also water power of commercial value if the water power thus created can be made available for the further improvement of navigation in the stream it is manifest that the improvement will be much more quickly effected on the one hand and on the other that the burden on the general taxpayers of the country will be very much reduced private interests seeking permits to build dams in navigable streams usually urge that they thus improve navigation and that if they do not impair navigation they should be allowed to take for themselves the entire profits of the development whatever they may do by way of relieving the government of the expense of improving navigation should be given due consideration but it must be apparent that there may be a profit beyond a reasonably liberal return upon the private investment which is a potential asset of the government in carrying out a comprehensive policy of waterway development it is no objection to the retention and use of such an asset by the government that a comprehensive waterway policy will include the protection and development of the other public uses of water which can not and should not be ignored in making and executing plans for the protection and development of navigation it is also equally clear that inasmuch as the water power thus created is or may be an incident of a general scheme of waterway improvement within the constitutional jurisdiction of the federal government the regulation of such water power lies also within that jurisdiction in my opinion constructive statesmanship requires that legislation should be enacted which will permit the development of navigation in these great rivers to go hand in hand with the utilization of this of water power created in the course of the same improvement and that the general dam act should be so amended as to make this possible i deem it highly important that the nation should adopt a consistent and harmonious treatment of these projects which will preserve for this purpose their value to the government whose right it is to grant the permit any other policy is equivalent to throwing away a most valuable national asset during the past year the work of construction upon the canal has progressed most satisfactorily about 87 per cent of the excavation work has been completed and more than 93 per cent of the concrete for all the locks is in place in view of the great interest which has been manifested as to some slides in the culebra cut i am glad to say that the report of goethals should allay any apprehension on this point it is gratifying to note that none of the slides which occurred during this year would have interfered with the passage of the ships had the canal in fact been in operation and when the slope pressures will have been finally adjusted and the growth of vegetation will minimize erosion in the banks of the cut the slide problem will be practically solved and an ample stability assured for the culebra cut although the official date of the opening has been set for january 1 1915 the canal will in fact from present indications be opened for shipping during the latter half of 1913 no fixed date can as yet be set but shipping interests will be advised as soon as assurances can be given that vessels can pass through without unnecessary delay recognizing the administrative problem in the management of the canal congress in the act of august 24 1912 has made admirable provisions for executive responsibility in the control of the canal and the government of the canal zone the problem of most efficient organization is receiving careful consideration so that a scheme of organization and control best adapted to the conditions of the canal may be formulated and put in operation as expeditiously as possible acting tinder the authority conferred on me by congress i have by executive proclamation promulgated the following schedule of tolls for ships passing through the canal based upon the thorough report of emory johnson special commissioner on traffic and tolls i on merchant vessels carrying passengers or cargo per net vessel 100 cubic actual earning capacity 2 on vessels in ballast without passengers or cargo 40 per cent less than the rate of tolls for vessels with passengers or cargo 3 upon naval vessels other than transports colliers hospital ships and supply ships 50 cents per displacement ton 4 upon army and navy transports colliers hospital ships and supply ships per net ton the vessels to be measured by the same rules as are employed in determining the net tonnage of merchant vessels rules for the determination of the tonnage upon which toll charges are based are now in course of preparation and will be promulgated in due season the proclamation which i have issued in respect to the panama canal tolls is in accord with the panama canal act passed by this congress august 24 1912 we have been advised that the british government has prepared a protest against the act and its enforcement in so far as it relieves from the payment of tolls american ships engaged in the american coastwise trade on the ground that it violates british rights tinder the treaty concerning the panama canal when the protest is presented it will be promptly considered and an effort made to reach a satisfactory adjustment of any differ ences there may be between the two governments the promulgation of an efficient workmen compensation act adapted to the particular conditions of the zone is awaiting adequate appropriation by congress for the payment of claims arising thereunder i urge that speedy provision be made in order that we may install upon the zone a system of settling claims for injuries in best accord with modern humane social and industrial theories as the completion of the canal grows nearer and as the wonderful executive work of goethals becomes more conspicuous in the eyes of the country and of the world it seems to me wise and proper to make provision by law for such reward to him as may be commensurate with the service that he has rendered to his country i suggest that this reward take the form of an appointment of goethals as a major general in the army of the united states and that the law authorizing such appointment be accompanied with a provision permitting his designation as chief of engineers upon the retirement of the present incumbent of that office the navy of the united states is in a greater state of efficiency and is more powerful than it has ever been before but in the emulation which exists between different countries in respect to the increase of naval and military armaments this condition is not a permanent one in view of the many improvements and increases by foreign governments the slightest halt on our part in respect to new construction throws us back and reduces us from a naval power of the first rank and places us among the nations of the second rank in the past 15 years the navy has expanded rapidly and yet far less rapidly than our country from now on reduced expenditures in the navy means reduced military strength the world history has shown the importance of sea power both for adequate defense and for the support of important and definite policies i had the pleasure of attending this autumn a mobilization of the atlantic fleet and was glad to observe and note the preparedness of the fleet for instant action the review brought before the president and the secretary of the navy a greater and more powerful collection of vessels than had ever been gathered in american waters the condition of the fleet and of the officers and enlisted men and of the equipment of the vessels entitled those in authority to the greatest credit i again commend to congress the giving of legislative sanction to the appointment of the naval aids to the secretary of the navy these aids and the council of aids appointed by the secretary of the navy to assist him in the conduct of his department have proven to be of the highest utility they have furnished an executive com mittee of the most skilled naval experts who have coordinated the action of the various bureaus in the navy and by their advice have enabled the secretary to give an administration at the same time economical and most efficient never before has the united states had a navy that compared in efficiency with its present one but never before have the requirements with respect to naval warfare been higher and more exacting than now a year ago congress refused to appropriate for more than one battleship in this i think a great mistake of policy was made and i urgently recommend that this congress make tip for the mistake of the last session by appropriations authorizing the construction of three battleships in addition to destroyers fuel ships and the other auxiliary vessels as shown in the building program of the general board we are confronted by a condition in respect to the navies of the world which requires us if we would maintain our navy as an insurance of peace to augment our naval force by at least two battleships a year and by battle cruisers gunboats torpedo destroyers and submarine boats in a proper proportion we have no desire for war we would go as far as any nation in the world to avoid war but we are a world power our population our wealth our definite policies our responsibilities in the pacific and the atlantic our defense of the panama canal together with our enormous world trade and our missionary outposts on the frontiers of civilization require us to recognize our position as one of the foremost in the family of nations and to clothe ourselves with sufficient naval power to give force to our reasonable demands and to give weight to our influence in those directions of progress that a powerful christian nation should advocate i observe that the secretary of the navy devotes some space to a change in the disciplinary system in vogue in that branch of the service i think there is nothing quite so unsatisfactory to either the army or the navy as the severe punishments necessarily inflicted by for desertions and purely military offenses and i am glad to hear that the british have solved this important and difficult matter in a satisfactory way i commend to the consideration of congress the details of the new disciplinary system and recommend that laws be passed putting the same into force both in the army and the navy i invite the attention of congress to that part of the report of the secretary of the navy in which he recommends the formation of a naval reserve by the organization of the of the navy i repeat my recommendation made last year that proper provision should be made for the rank of the commander in chief of the squadrons and fleets of the navy the inconvenience attending the necessary precedence that most foreign admirals have over our own whenever they meet in official functions ought to be avoided it impairs the prestige of our navy and is a defect that can be very easily removed this department has been very active in the enforcement of the law it has been better organized and with a larger force than ever before in the history of the government the prosecutions which have been successfully concluded and which are now pending testify to the effectiveness of the departmental work the prosecution of trusts under the sherman antitrust law has gone on without restraint or diminution and decrees similar to those entered in the standard oil and the tobacco cases have been entered in other suits like the suits against the powder trust and the bathtub trust i am very strongly convinced that a steady consistent course in this regard with a continuing of supreme court decisions upon new phases of the trust question not already finally decided is going to offer a solution of this and troublesome issue in a quiet calm and judicial way without any radical legislation changing the governmental policy in regard to combinations now denounced by the sherman antitrust law i have already recommended as an aid in this matter legislation which would declare unlawful certain phases of unfair competition in interstate trade and i have also advocated voluntary national incorporation for the larger industrial enterprises with provision for a closer supervision by the bureau of corporations or a board appointed for the purpose so as to make more certain compliance with the antitrust law on the one hand and to give greater security to the stockholders against possible prosecutions on the other i believe however that the orderly course of litigation in the courts and the regular prosecution of trusts charged with the violation of the antitrust law is producing among business men a clearer and clearer perception of the line of distinction between business that is to be encouraged and business that is to be condemned and that in this quiet way the question of trusts can be settled and competition retained as an economic force to secure reasonableness in prices and freedom and independence in trade i am glad to bring to the attention of congress the fact that the supreme court has radically altered the equity rules governing the procedure on the equity side of all federal courts and though as these changes have not been yet put in practice so as to enable us to state from actual results what the reform will accomplish they are of such a character that we can reasonably prophesy that they will greatly reduce the time and cost of litigation in such courts the court has adopted many of the shorter methods of the present english procedure and while it may take a little while for the profession to accustom itself to these methods it is certain greatly to facilitate litigation the action of the supreme court has been so drastic and so full of appreciation of the necessity for a great reform in court procedure that i have no hesitation in following tip this action with a recommendation which i foreshadowed in my message of three years ago that the sections of the statute governing the procedure in the federal courts on the side should be so amended as to give to the supreme court the same right to make rules of procedure in common law as they have since the beginning of the court exercised in equity i do not doubt that a full consideration of the subject will enable the court while giving effect to the substantial differences in right and remedy between the system of common law and the system of equity so to unite the two procedures into the form of one civil action and to shorten the procedure in such civil action as to furnish a model to all the state courts exercising concurrent jurisdiction with the federal courts of first instance under the statute now in force the procedure in each federal court is made to conform to the procedure in the state in which the court is held in these days when we should be making progress in court procedure such a conformity statute makes the federal method too dependent upon the action of state legislatures i can but think it a great opportunity for congress to intrust to the highest tribunal in this country evidently imbued with a strong spirit in favor of a reform of procedure the power to frame a model code of procedure which while preserving all that is valuable and necessary of the rights and remedies at common law and in equity shall lessen the burden of the poor litigant to a minimum in the expedition and cheapness with which his because can be fought or defended through federal courts to final judgment the workman compensation act reported by the special commission appointed by congress and the executive which passed the senate and is now pending in the house the passage of which i have in previous messages urged upon congress i venture again to call to its attention the opposition to it which developed in the senate but which was overcome by a majority in that body seemed to me to grow out rather of a misapprehension of its effect than of opposition to its principle i say again that i think no act can have a better effect directly upon the relations between the employer and employee than this act applying to railroads and common carriers of an interstate character and i am sure that the passage of the act would greatly relieve the courts of the heaviest burden of litigation that they have and would enable them to dispatch other business with a speed never before attained in courts of justice in this country this is the third of a series of messages in which i have brought to the attention of the congress the important transactions of the government in each of its departments during the last year and have discussed needed reforms i recommend the adoption of legislation which shall make it the duty of heads of members of the president cabinet convenient times to attend the session of the house and the senate which shall provide seats for them in each house and give them the opportunity to take part in all discussions and to answer questions of which they have had due notice the rigid holding apart of the executive and the legislative branches of this government has not worked for the great advantage of either there has been much lost motion in the machinery due to the lack of cooperation and interchange of views face to face between the representatives of the executive and the members of the two legislative branches of the government it was never intended that they should be separated in the sense of not being in constant effective touch and relationship to each other the legislative and the executive each performs its own appropriate function but these functions must be coordinated time and time again debates have arisen in each house upon issues which the information of a particular department head would have enabled him if present to end at once by a simple explanation or statement time and time again a forceful and earnest presentation of facts and arguments by the representative of the executive whose duty it is to enforce the law would have brought about a useful reform by amendment which in the absence of such a statement has failed of passage i do not think i am mistaken in saying that the presence of the members of the cabinet on the floor of each house would greatly contribute to the enactment of beneficial legislation nor would this in any degree deprive either the legislative or the executive of the independence which separation of the two branches has been intended to promote it would only facilitate their cooperation in the public interest on the other hand i am sure that the necessity and duty imposed upon department heads of appearing in each ilouse and in answer to searching questions of rendering upon their feet an account of what they have done or what has been done by the administration will spur each member of the cabinet to closer attention to the details of his department to greater familiarity with its needs and to greater care to avoid the just criticism which the answers brought out in questions put and discussions arising between the members of either house and the members of the cabinet may properly evoke objection is made that the members of the administration having no vote could exercise no power on the floor of the house and could not assume that attitude of authority and control which the english parliamentary government have and which enables them to meet the responsibilities the english system thrusts upon them i agree that in certain respects it would be more satisfactory if members of the cabinet could at the same time be members of both houses with voting power but this is impossible under our system and while a lack of this feature may detract from the influence of the department chiefs it will not prevent the good results which i have described above both in the matter of legislation and in the matter of administration the enactment of such a law would be quite within the power of congress without constitutional amendment and it has such possibilities of usefulness that we might well make the experiment and if we are disappointed the misstep can be easily retraced by a repeal of the enabling legislation this is not a new proposition in the house of representatives in the congress the proposition was referred to a select committee of seven members the committee made an extensive report and urged the adoption of the reform the report showed that our history had not been without illustration of the necessity and the examples of the practice by pointing out that in early days secretaries were repeatedly called to the presence of either rouse for consultation advice and information it also referred to remarks of justice story in his commentaries on the constitution in which he urgently presented the wisdom of such a change this report is to be found in volume i of the reports of committees of the first session of the congress april 6 1864 again on february 4 1881 a select committee of the senate recommended the passage of a similar bill and made a report in which while approving the separation of the three branches the executive legislative and judicial they point out as a reason for the proposed change that although having a separate existence the branches are to cooperate each with the other as the different members of the human body must cooperate with each other in order to form the figure and perform the duties of a perfect man the report concluded as follows this system will require the selection of the strongest men to be heads of departments and will require them to be well equipped with the knowledge of their offices it will also require the strongest men to be the leaders of congress and participate in debate it will bring these strong men in contact perhaps into conflict to advance the public weal and thus stimulate their abilities and their efforts and will thus assuredly result to the good of the country if it should appear by actual experience that the heads of departments in fact have not time to perform the additional duty imposed on them by this bill the force in their offices should be increased or the duties devolving on them personally should be diminished an undersecretary should be appointed to whom could be confided that routine of administration which requires only order and accuracy the principal officers could then confine their attention to those duties which require wise discretion and intellectual activity thus they would have abundance of time for their duties under this bill indeed your committee believes that the public interest would be subserved if the secretaries were relieved of the harassing cares of distributing clerkships and closely supervising the mere machinery of the departments your committee believes that the adoption of this bill and the effective execution of its provisions will be the first step toward a sound reform which will secure a larger wisdom in the adoption of policies and a better system in their execution it would be difficult to mention the names of higher authority in the practical knowledge of our government than those which are appended to this report the postal savings bank system has been extended so that it now includes post offices as well as 645 branch offices and stations in the larger cities there are now depositories at which patrons of the system may open accounts the number of depositors is and the amount of their deposits is approximately not including which has been with drawn by depositors for the purpose of buying postal savings bonds experience demonstrates the value of dispensing with the and introducing in its place a certificate of deposit the gross income of the postal savings system for the fiscal year ending june 30 1913 will amount to and the interest payable to depositors to the cost of supplies equipment and salaries is it thus appears that the system lacks a year of paying interest and expenses it is estimated however that when the deposits have reached the sum of which at the present rate they soon will do the system will be by law the postal savings funds deposited at each post office are required to be redeposited in local banks state and national banks to the number of have qualified as depositories for these funds such deposits are secured by bonds aggregating of this amount represent municipal bonds in several messages i have favored and recommended the adoption of a system of parcel post in the postal appropriation act of last year a general system was provided and its installation was directed by the 1st of january this has entailed upon the post office department a great deal of very heavy labor but the postmaster general informs me that on the date selected to wit the 1st of january near at hand the department will be in readiness to meet successfully the requirements of the public a trial during the past three years of the system of classifying postmasters in that part of the country lying between the mississippi river on the west canada on the north the atlantic ocean on the east and mason and dixon line on the south has been sufficiently satisfactory to justify the postal authorities in recommending the extension of the order to include all the postmasters in the country in september 1912 upon the suggestion of the postmaster general i directed him to prepare an order which should put the system in effect except in alaska guam hawaii porto rico and samoa under date of october 15 1 issued such an order which affected postmasters by the order the post offices were divided into groups a and b group a includes all postmasters whose compensation is 500 or more and group b those whose compensation is less than that sum different methods are pursued in the selection of the postmasters for group a and group b criticism has been made of this order on the ground that the motive for it was political nothing could be further from the truth the order was made before the election and in the interest of efficient public service i have several times requested congress to give me authority to put and postmasters and all other local officers including officers customs officers united states marshals and the local agents of the other departments under the classification of the law by taking away the necessity for confirming such appointments by the senate i deeply regret the failure of congress to follow these recommendations the change would have taken out of politics practically every local officer and would have entirely cured the evils growing out of what under the present law must always remain a remnant of the spoils system it is expected that the establishment of a parcel post on january 1st will largely increase the amount of mail matter to be transported by the railways and congress should be prompt to provide a way by which they may receive the additional compensation to which they will be entitled the postmaster general urges that the department plan for a complete readjustment of the system of paying the railways for carrying the mails be adopted substituting space for weight as the principal factor in fixing compensation under this plan it will be possible to determine without delay what additional payment should be made on account of the parcel post the postmaster general recommendation is based on the results of a investigation begun early in the administration with the object of determining what it costs the railways to carry the mails the statistics obtained during the course of the inquiry show that while many of the railways and particularly the large systems were making profits from mail transportations certain of the lines were actually carrying the mails at a loss as a result of the investigation the department after giving the subject careful consideration decided to urge the abandonment of the present plan of fixing compensation on the basis of the weight of the mails carried a plan that has proved to be exceedingly expensive and in other respects unsatisfactory under the method proposed the railway companies will annually submit to the department reports showing what it costs them to carry the mails and this cost will be apportioned on the basis of the car space engaged payment to be allowed at the rate thus determined in amounts that will cover the cost and a reasonable profit if a railway is not satisfied with the manner in which the department apportions the cost in fixing compensation it is to have the right tinder the new plan of appealing to the interstate commerce commission this feature of the proposed law would seem to insure a fair treatment of the railways it is hoped that congress will give the matter immediate attention and that the method of compensation recommended by the department or some other suitable plan will be promptly authorized the interior department in the problems of administration included within its jurisdiction presents more difficult questions than any other this has been due perhaps to temporary causes of a political character but more especially to the inherent difficulty in the performance of some of the functions which are assigned to it its chief duty is the guardianship of the public domain and the disposition of that domain to private ownership under homestead mining and other laws by which patents from the government to the individual are authorized on certain conditions during the last decade the public seemed to become suddenly aware that a very large part of its domain had passed from its control into private ownership under laws not well adapted to modern conditions and also that in the doing of this the provisions of existing law and regulations adopted in accordance with law had not been strictly observed and that in the transfer of title much fraud had intervened to the pecuniary benefit of dishonest persons there arose thereupon a demand for conservation of the public domain its protection against fraudulent diminution and the preservation of that part of it from private acquisition which it seemed necessary to keep for future public use the movement excellent in the intention which prompted it and useful in its results has nevertheless had some bad effects which the western country has recently been feeling and in respect of which there is danger of a reaction toward older abuses unless we can attain the golden mean which consists in the prevention of the mere expioitation of the public domain for private purposes while at the same time facilitating its development for the benefit of the local public the land laws need complete revision to secure proper conservation on the one hand of land that ought to be kept in public use and on the other hand prompt disposition of those lands which ought to be disposed in private ownership or turned over to private use by properly guarded leases in addition to this there are not enough officials in our land department with legal knowledge sufficient promptly to make the decisions which are called for the whole system should be reorganized and not until it is reorganized will decisions be made as promptly as they ought or will men who have earned title to public land under the statute receive their patents within a reasonably short period the present administration has done what it could in this regard but the necessity for reform and change by a revision of the laws and an increase and reorganization of the force remains and i submit to congress the wisdom of a full examination of this subject in order that a very large and important part of our people in the west may be relieved from a just because of irritation i invite your attention to the discussion by the secretary of the interior of the need for legislation with respect to mining claims leases of coal lands in this country and in alaska and for similar disposition of oil phosphate and potash lands and also to his discussion of the proper use to be made of sites held by the government many of these lands are now being withheld from use by the public under the general withdrawal act which was passed by the last congress that act was not for the purpose of disposing of the question but it was for the purpose of preserving the lands until the question could be solved i earnestly urge that the matter is of the highest importance to our western fellow citizens and ought to command the immediate attention of the legislative branch of the government another function which the interior department has to perform is that of the guardianship of indians in spite of everything which has been said in criticism of the policy of our government toward the indians the amount of wealth which is now held by it for these wards per capita shows that the government has been generous but the management of so large an estate with the great variety of circumstances that surround each tribe and each case calls for the exercise of the highest business discretion and the machinery provided in the indian bureau for the discharge of this function is entirely inadequate the position of indian commissioner demands the exercise of business ability of the first order and it is difficult to secure such talent for the salary provided the condition of health of the indian and the prevalence in the tribes of curable diseases has been exploited recently in the press in a message to congress at its last session i brought this subject to its attention and invited a special appropriation in order that our facilities for overcoming diseases among the indians might be properlv increased but no action was then taken by congress on the subject nor has such appropriation been made since the commission appointed by authority of the congress to report on proper method of securing railroad development in alaska is formulating its report and i expect to have an opportunity before the end of this session to submit its recommendations the utility of the educational system carried on by the department of agriculture for the benefit of the farmers of our country calls for no elaboration each year there is a growth in the variety of facts which it brings out for the benefit of the farmer and each year confirms the wisdom of the expenditure of the appropriations made for that department the department of agriculture is charged with the execution of the law the passage of this encountered much opposition from manufacturers and others who feared the effect upon their business of the enforcement of its provisions the opposition aroused the just indignation of the public and led to an intense sympathy with the severe and rigid enforcement of the provisions of the new law it had to deal in many instances with the question whether or not products of large business enterprises in the form of food preparations were deleterious to the public health and while in a great majority of instances this issue was easily determinable there were not a few cases in which it was hard to draw the line between a useful and a harmful food preparation in cases like this when a decision involved the destruction of great business enterprises representing the investment of large capital and the expenditure of great energy and ability the danger of serious injustice was very considerable in the enforcement of a new law under the spur of great public indignation the public officials charged with executing the law might do injustice in heated controversy through unconscious pride of opinion and obstinacy of conclusion for this reason president roosevelt felt justified in creating a board of experts known as the remsen board to whom in cases of much importance an appeal might be taken and a review had of a decision of the bureau of chemistry in the agricultural department i heartily agree that it was wise to create this board in order that injustice might not be done the questions which arise are not generally those involving palpable injury to health but they are upon the narrow and doubtful line in respect of which it is better to be in some error not dangerous than to be radically destructive i think that the time has come for congress to recognize the necessity for some such tribunal of appeal and to make specific statutory provision for it while we are struggling to suppress an evil of great proportions like that of impure food we must provide machinery in the law itself to prevent its becoming an instrument of oppression and we ought to enable those whose business is threatened with annihilation to have some tribunal and some form of appeal in which they have a complete day in court i referred in my first message to the question of improving the system of agricultural credits the secretary of agriculture has made an investigation into the matter of credits in this country and i commend a consideration of the information which through his agents he has been able to collect it does not in any way minimize the importance of the proposal but it gives more accurate information upon some of the phases of the question than we have heretofore had i commend to congress an examination of the report of the secretary of commerce and labor and especially that part in which he discusses the office of the bureau of corporations the value to commerce of a proposed trade commission and the steps which he has taken to secure the organization of a national chamber of commerce i heartily commend his view that the plan of a trade commission which looks to the fixing of prices is altogether impractical and ought not for a moment to be considered as a possible solution of the trust question the trust question in the enforcement of the sherman antitrust law is gradually solving itself is maintaining the principle and restoring the practice of competition and if the law is quietly but firmly enforced business will adjust itself to the statutory requirements and the unrest in commercial circles provoked by the trust discussion will disappear in conformity with a joint resolution of congress an executive proclamation was issued last february inviting the nations of the world to participate in the international exposition to be held at san francisco to celebrate the construction of the panama canal a sympathetic response was immediately forthcoming and several nations have already selected the sites for their buildings in furtherance of my invitation a special commission visited european countries during the past summer and received assurance of hearty cooperation in the task of bringing together a universal industrial military and naval display on an unprecedented scale it is evident that the exposition will be an accurate mirror of the world activities as they appear 400 years after the date of the discovery of the pacific ocean it is the duty of the united states to make the nations welcome at san francisco and to facilitate such acquaintance between them and ourselves as will promote the expansion of commerce and familiarize the world with the new trade route through the panama canal the action of the state governments and individuals assures a comprehensive exhibit of the resources of this country and of the progress of the people this participation by state and individuals should be supplemented by an adequate showing of the varied and unique activities of the national government the united states can not with good grace invite foreign governments to erect buildings and make expensive exhibits while itself refusing to participate nor would it be wise to forego the opportunity to join with other nations in the inspiring interchange of ideas tending to promote intercourse friendship and commerce it is the duty of the government to foster and build up commerce through the canal just as it was the duty of the government to construct it i earnestly recommend the appropriation at this session of such a sum as will enable the united states to construct a suitable building install a governmental exhibit and otherwise participate in the international exposition in a manner commensurate with the dignity of a nation whose guests are to be the people of the world i recommend also such legislation as will facilitate the entry of material intended for exhibition and protect foreign exhibitors against infringement of patents and the unauthorized copying of patterns and designs all aliens sent to san francisco to construct and care for foreign buildings and exhibits should be admitted without restraint or embarrassment the city of washington is a beautiful city with a population of of whom are colored the annual municipal budget is about 14 ooo ooo the presence of the national capital and other governmental structures constitutes the chief beauty and interest of the city the public grounds are extensive and the opportunities for improving the city and making it still more attractive are very great under a plan adopted some years ago one half the cost of running the city is paid by taxation upon the property real and personal of the citizens and residents and the other half is borne by the general government the city is expanding at a remarkable rate and this can only be accounted for by the coming here from other parts of the country of people who having finished their business careers elsewhere build and make this their permanent place of residence on the whole the city as a municipality is very well governed it is well lighted the water supply is good the streets are well paved the police force is well disciplined crime is not flagrant and while it has purlieus and centers of vice like other large cities they are not exploited they do not exercise any influence or control in the government of the city and they are suppressed in as far as it has been found practicable municipal graft is inconsiderable there are interior courts in the city that are noisome and centers of disease and the refuge of criminals but congress has begun to clean these out and progress has been made in the case of the most notorious of these which is known as willow tree alley this movement should continue the mortality for the past year was at the rate of per of both races among the whites it was per thousand and among the blacks per thousand these are the lowest mortality rates ever recorded in the district one of the most crying needs in the government of the district is a tribunal or public authority for the purpose of supervising the corporations engaged in the operation of public utilities such a bill is pending in congress and ought to pass washington should show itself under the direction of congress to be a city with a model form of government but as long as such authority over public utilities is withheld from the municipal government it must always be fective without undue criticism of the present street railway accommodations it can be truly said that under the spur of a public utilities commission they might be substantially improved while the school system of washington perhaps might be bettered in the economy of its management and the distribution of its buildings its usefulness has nevertheless greatly increased in recent years and it now offers excellent facilities for primary and secondary education from time to time there is considerable agitation in washington in favor of granting the citizens of the city the franchise and constituting an elective government i am strongly opposed to this change the history of washington discloses a number of experiments of this kind which have always been abandoned as unsatisfactory the truth is this is a city governed by a popular body to wit the congress of the united states selected from the people of the united states who own washington the people who come here to live do so with the knowledge of the origin of the city and the restrictions and therefore voluntarily give up the privilege of living in a municipality governed by popular vote washington is so unique in its origin and in its use for housing and localizing the sovereignty of the nation that the people who live here must regard its peculiar character and must be content to subject themselves to the control of a body selected by all the people of the nation i agree that there are certain inconveniences growing out of the government of a city by a national legislature like congress and it would perhaps be possible to lessen these by the delegation by congress to the district commissioners of greater legislative power for the enactment of local laws than they now possess especially those of a police character every loyal american has a personal pride in the beauty of washington and in its development and growth there is no one with a proper appreciation of our capital city who would favor a niggardly policy in respect to expenditures from the national treasury to add to the attractiveness of this city which belongs to every citizen of the entire country and which no citizen visits without a sense of pride of ownership we have had restored by a commission of fine arts at the instance of a committee of the senate the original plan of the french engineer for the city of washington and we know with great certainty the course which the improvement of washington should take why should there be delay in making this improvement in so far as it involves the extension of the parking system and the construction of greatly needed public buildings appropriate buildings for the state department the department of justice and the department of commerce and labor have been projected plans have been approved and nothing is wanting but the appropriations for the beginning and completion of the structures a hall of archives is also badly needed but nothing has been done toward its construction although the land for it has long been bought and paid for plans have been made for the union of potomac park with the valley of rock creek and rock creek park and the necessity for the connection between the soldiers home and rock creek park calls for no comment i ask again why there should be delay in carrying out these plans we have the money in the treasury the plans are national in their scope and the improvement should be treated as a national project the plan will find a hearty approval throughout the country i am quite sure from the information which i have that at comparatively small expense from that part of the district of columbia which was retroceded to virginia the portion including the arlington estate fort myer and the palisades of the potomac can be acquired by purchase and the jurisdiction of the state of virginia over this land ceded to the nation this ought to be done the construction of the lincoln memorial and of a memorial bridge from the base of the lincoln monument to arlington would be an appropriate and symbolic expression of the union of the north and the south at the capital of the nation i urge upon congress the appointment of a commission to undertake these national improvements and to submit a plan for their execution and when the plan has been submitted and approved and the work carried out washington will really become what it ought to most beautiful city in the world
foreign relations united states actually potentially affect state union degree widely realized hardly surpassed factor welfare whole nation position united states moral intellectual material relations family nations matter vital interest every patriotic citizen national prosperity power impose upon us duties shirk true ideals tremendous growth export trade united states already made trade real factor industrial commercial prosperity country development industries foreign commerce united states must rapidly become still essential factor economic welfare whether farseeing wise diplomacy recklessly plunged unnecessary wars whether foreign policies based upon intelligent grasp world conditions clear view potentialities future governed temporary timid expediency narrow views befitting infant nation questions alternative consideration must convince thoughtful citizen department national polity offers greater opportunity promoting interests whole people one hand greater chance permanent national injury deals foreign relations united states fundamental foreign policies united states raised high conflict partisanship wholly dissociated differences domestic policy foreign affairs united states present world united front intellectual financial industrial interests country publicist wage earner farmer citizen whatever occupation must cooperate spirit high patriotism promote national solidarity indispensable national efficiency attainment national ideals relations united states foreign powers remain upon sound basis peace harmony friendship greater insistence upon justice american citizens interests wherever may denied stronger emphasis need mutuality commercial relations served strengthen friendships foreign countries placing friendships upon firm foundation realities well aspirations briefly reviewing important events last year foreign relations duty charged conduct diplomatic affairs nature make appropriate secretary state make formal annual report desire touch upon essentials safe management foreign relations united states endeavor also define clearly certain concrete policies logical modern corollaries undisputed traditional fundamentals foreign policy united states beginning present administration united states fully entered upon position world power responsibilities thrust upon results war already engaged laying groundwork vast foreign trade upon one day become dependent found without machinery giving thorough attention taking effective action upon mass intricate business vital american interests every country world department state archaic inadequate machine lacking attributes foreign office great modern power appropriation made upon recommendation congress august 5 1909 department state completely reorganized created divisions latinamerican affairs far eastern near eastern western european affairs divisions called foreign service diplomatic consular officers possessing experience knowledge gained actual service different parts world thus familiar political commercial conditions regions concerned work highly specialized result previously government time time would emphasize foreign relations one another policy american interests every quarter globe cultivated equal assiduity principle division possesses also good feature making possible rotation officers departmental diplomatic consular branches foreign service thus keeps whole diplomatic consular establishments tinder department state close touch equally inspired aims policy government newly created division information foreign service kept fully informed transpires day day international relations country contemporary foreign comment affecting american interests promptly brought attention department law offices department greatly strengthened added foreigntrade advisers cooperate diplomatic consular bureaus divisions innumerable matters commercial diplomacy consular work calls special knowledge officers together rest new organization able times give american citizens accurate information conditions foreign countries business likewise cooperate effectively congress also executive departments expert knowledge professional training must evidently essence reorganization without trained foreign service would men available work reorganized department state president cleveland taken first step toward introducing merit system foreign service followed application merit principle excellent results entire consular branch almost nothing however done direction regard diplomatic service age commercial diplomacy evidently first importance train adequate personnel branch service therefore november 26 1909 executive order placed diplomatic service grade secretary embassy inclusive upon exactly strict nonpartisan basis merit system rigid examination appointment promotion efficiency maintained without exception consular service faithful merit system nonpartisan conduct diplomatic consular services last four years may judged following three ambassadors serving held present rank beginning administration ten ambassadors appointed five promotion rank minister nine ministers serving held present rank beginning administration thirty ministers appointed eleven promoted lower grades foreign service department state nineteen missions latin america relations close interest great fifteen chiefs mission service men three entered service administration secretaries embassy legation received initial appointments passing successfully required examination chosen ascertained fitness without regard political affiliations dearth candidates southern western states alone made impossible thus far completely equalize states representations foreign service effort equalize representation various states consular service 1 made sixteen new appointments consul occurred administration southern states 55 per cent every consular appointment made including promotion eleven young men consular assistant student interpreter corps promotion transfer based solely upon efficiency shown service order assure business interests united states continuance resulting benefits reform earnestly renew previous recommendations legislation making permanent along lines measure pending congress connection legislation amelioration foreign service wish invite attention advisability placing salary appropriations upon better basis believe best results would obtained moderate scale salaries adequate funds expense proper representation based case upon scale cost living post controlled system accounting general direction department state line object sought placing foreign service basis permanency various times advocated provision congress acquisition buildings residence offices diplomatic officers place nearly equality similar officers nations away discrimination otherwise must necessarily made cases favor men large private fortunes act congress approved february 17 1911 right step direction secretary state already made limited recommendations permitted act one year hope bill introduced house representatives carry recommendations favorably acted congress present session countries expense governmentowned legations less elsewhere certainly urgent countries republics central america caribbean peculiarly difficult rent suitable quarters representatives united states justly adequately provided dignified suitable official residences indeed high time dignity power great nation fittingly signalized proper buildings occupancy nation representatives everywhere abroad diplomacy present administration sought respond modern ideas commercial intercourse policy characterized substituting dollars bullets one appeals alike idealistic humanitarian sentiments dictates sound policy strategy legitimate commercial aims effort frankly directed increase american trade upon axiomatic principle government united states shall extend proper support every legitimate beneficial american enterprise abroad great results diplomacy coupled maximum minimum provision tariff law seen consideration wonder ful increase export trade united states modern diplomacy commercial disposition quarters attribute none materialistic aims strikingly erroneous impression may seen study results diplomacy united states judged field work toward ideals peace government negotiated regret unable consummate two arbitration treaties set highest mark aspiration nations toward substitution arbitration reason war settlement international disputes efforts american diplomacy several wars prevented ended refer successful tripartite mediation argentine republic brazil united states peru ecuador bringing boundary dispute panama costa rica peaceful arbitration staying warlike preparations haiti dominican republic verge hostilities stopping war nicaragua halting internecine strife honduras government united states thanked influence toward restoration amicable relations argentine republic bolivia diplomacy united states active seeking assuage remaining country republic colombia recent civil war china united states successfully joined interested powers urging early cessation hostilities agreement reached governments chile peru whereby celebrated tacnaarica dispute long embittered international relations west coast south america last adjusted simultaneously came news boundary dispute peru ecuador entered upon stage amicable settlement position united states reference dispute chile peru one nonintervention one friendly influence pacific counsel throughout period dispute question subject interchange views government two governments immediately concerned general easing international tension west coast south america tripartite mediation referred potent beneficent factor china policy encouraging financial investment enable country help result giving new life practical application policy consistent purpose present administration encourage use american capital development china promotion essential reforms china pledged treaties united states powers hypothecation foreign bankers connection certain industrial enterprises hukuang railways national revenues upon reforms depended led department state early administration demand american citizens participation enterprises order united states might equal rights equal voice questions pertaining disposition public revenues concerned policy promoting international accord among powers similar treaty rights matters reform could put practical effect without common consent likewise adopted case loan desired china reform currency principle international cooperation matters common interest upon policy already based instances admittedly great factor concert powers happily conspicuous perilous period transition great chinese nation passing central america aim help countries nicaragua honduras help immediate beneficiaries national benefit united states twofold first obvious monroe doctrine vital neighborhood panama canal zone caribbean anywhere else maintenance doctrine falls heavily upon united states therefore essential countries within sphere shall removed jeopardy involved heavy foreign debt chaotic national finances danger international complications due disorder home hence united states glad encourage support american bankers willing lend helping hand financial rehabilitation countries financial rehabilitation protection customhouses prey wouldbe dictators would remove one stroke menace foreign creditors menace revolutionary disorder second advantage united states one affecting chiefly southern gulf ports business industry south republics central america caribbean possess great natural wealth need measure stability means financial regeneration enter upon era peace prosperity bringing profit happiness time creating conditions sure lead flourishing interchange trade country wish call especial attention recent occurrences nicaragua believe terrible events recorded revolution past useless loss life devastation property bombardment defenseless cities killing wounding women children torturing noncombatants exact contributions suffering thousands human averted department state approval loan convention senate permitted carry policy encouraging extending financial aid weak central american states primary objects avoiding revolutions assisting republics rehabilitate finances establish currency stable basis remove customhouses danger revolutions arranging secure administration establish reliable banks last revolution nicaragua government republic admitted inability protect american life property acts sheer lawlessness part malcontents requested government assume office became necessary land marines bluejackets nicaragua owing presence constituted government nicaragua free devote attention wholly internal troubles thus enabled stamp rebellion short space time red cross supplies sent granada exhausted persons given food one day upon arrival american forces men supplied unfortunate needy nicaraguans haversacks wish congratulate officers men united states navy marine corps took part reestablishing order nicaragua upon splendid conduct record sorrow death seven american marines bluejackets since reestablishment peace order elections held amid conditions quiet tranquility nearly american marines withdrawn country soon road recovery apparent danger threatening nicaragua arises shortage funds although american bankers already rendered assistance may naturally loath advance loan adequate set country upon feet without support convention june 1911 upon senate yet acted general effort contribute enjoyment peace republics near neighbors united states administration enforced neutrality statutes new vigor statutes greatly strengthened restricting exportation arms munitions joint resolution last march still regrettable fact certain american ports made rendezvous professional revolutionists others engaged intrigue peace republics must admitted occasionally revolution region justified real popular movement throw shackles vicious tyrannical government nicaraguan revolution zelaya regime nation enjoying liberal institutions escape sympathy true popular movement one well justified many cases however revolutions republics question basis principle due merely machinations conscienceless ambitious men effect bring new suffering fresh burdens already oppressed people question whether use american ports foci revolutionary intrigue best dealt amendment neutrality statutes whether would safer deal special cases special laws one worthy careful consideration congress impressed particular importance relations united states republics central america caribbean region necessity must become still intimate reason mutual advantages presented opening panama canal directed secretary state last february visit republics purpose giving evidence sincere friendship good government people united states bear toward ten republics visited everywhere received cordiality welcome generosity hospitality impress deeply merit warmest thanks appreciation governments people countries visited appropriately shown various ways leaves doubt visit conduce closer union better understanding united states republics much heart promote two years revolution distraught neighboring republic mexico brigandage involved great deal depredation upon foreign interests constantly recurred questions extreme delicacy several occasions difficult situations arisen frontier throughout trying period policy united states one patient nonintervention steadfast recognition constituted authority neighboring nation exertion every effort care american interests profoundly hope mexican nation may soon resume path order prosperity progress nation sore troubles sympathetic friendship united states demonstrated high degree mexico beginning revolution thirty forty thousand american citizens engaged enterprises contributing greatly prosperity republic also benefiting important trade two countries investment american capital mexico estimated responsibility endeavoring safeguard interests dangers inseparable propinquity turbulent situation great happy able adhere policy policy hope may soon justified complete success mexican people regaining blessings peace good order important work accomplished past year american diplomatic officers europe investigation agricultural credit system european countries means afford relief consumers country thorough development agricultural resources means sufficiently maintaining agricultural population project establish credit facilities farmers concern vital importance nation evidence prosperity among farmers blind us fact lack capital preventing development nation agricultural resources adequate increase land cultivation agricultural production fast falling behind increase population fact although farmers maintained increasing prosperity natural increase population developing industry agriculture breeding proportionate numbers race independent landowners lack growth cities compensate farmers mainstay times crisis future must still largely upon stability common sense democracy must rely conserve principles need capital american farmers feel experienced farmers europe farms many years ago problem successfully solved old world evident farmers country might profit study systems therefore ordered department state investigation made diplomatic officers europe laid results investigation governors various states hope used advantage forthcoming meeting last annual message said fiscal year ended june 30 1911 noteworthy marking highest record exports american products foreign countries fiscal year 1912 shows rate advance maintained total domestic exports valuation approximately compared fraction previous year also significant manufactured partly manufactured articles continue chief commodities forming volume augmented exports demands people consumption requiring increasing proportion abundant agricultural products kept home fiscal year 1911 exports articles various stages manufacture including foodstuffs partly wholly manufactured amounted approximately fiscal year 1912 total nearly gain importance manufactures assumed commerce world competition manufactures countries draws attention duty government use utmost endeavors secure impartial treatment american products markets healthy commercial rivalry international intercourse best assured possession proper means protecting promoting foreign trade natural competitive countries view concern steady expansion commerce instance measures taken meet entirely equitable remedy found former messages described negotiations department state foreign governments adjustment maximum minimum tariff provided section 2 tariff law 1909 advantages secured adjustment trade relations law continued last year additional cases discriminatory treatment reason complain removed department state first time history country obtained substantial treatment countries world however instances apparently constituting undue discrimination sense section 2 nevertheless exceptions complete equity tariff treatment american products department state consistently sought obtain american commerce abroad developments confirm opinion conveyed annual message 1911 maximum minimum provision tariff law 1909 fully justified success achieved removing previously existing undue discriminations american products yet experience shown feature law amended way provide fully effective means meeting varying degrees discriminatory treatment american commerce foreign countries still encountered well protect injurious treatment part foreign governments either legislative administrative measures financial interests abroad american citizens whose enterprises enlarge market american commodities strongly recommend congress passage stich enabling measure bill recommended secretary state letter december 13 1911 object proposed legislation brief enable executive apply case may require commodities whether free list country discriminates united states graduated scale duties tip maximum 25 per cent ad valorem provided present law flat tariffs date nations longer accord equal tariff treatment nations irrespective treatment received stich flexible power command executive would serve moderate unfavorable tendencies part countries importations united states substantially confined articles free list well countries find lucrative market united states products existing customs rates necessary american government equipped weapons negotiation adapted modern economic conditions order may times position gain technically actually equitable treatment trade also american enterprise vested interests abroad illustrating commercial benefits nation derived new diplomacy effectiveness upon material well ideal side may remarked direct official efforts alone obtained course administration contracts foreign governments involving expenditure factories united states consideration fact reflection upon necessary effects scientific tariff system foreign service alert equipped cooperate business men america carry conviction gratifying increase export trade country substantial amount due improved governmental methods protecting stimulating germane observations remark two years elapsed since successful negotiation new treaty japan time seemed present many practical difficulties export trade country increased rate month exports japan year ended june 30 1910 year ended june 30 1912 exports net increase sale american products nearly 150 per cent special agreement entered united states great britain august 18 1910 arbitration outstanding pecuniary claims schedule claims terms submission agreed upon two governments together special agreement approved senate july 19 1911 accordance terms agreement go effect confirmed two governments exchange notes done april 26 last negotiations still progress supplemental schedule claims submitted arbitration agreement meanwhile necessary preparations arbitration claims included first schedule undertaken carried authority appropriation made purpose last session congress anticipated two governments prepared call upon arbitration tribunal established agreement meet washington early next year proceed arbitration act adopted last session congress give effect convention july 7 1911 great britain japan russia united states provided suspension land killing seals pribilof islands period five years objection presented provision parties interest raises issue whether prohibition land killing inconsistent spirit letter treaty stipulations justification establishing close season depends terms convention upon far necessary protecting preserving american herd increasing number question requiring examination present condition herd treatment needs light actual experience scientific investigation careful examination subject made government soon possession considerable amount new information american seal herd secured past season great value determining question appear uncertainty real necessity imposing close season time shall take early opportunity address special message congress subject belief government yield point rather give slightest ground charge way remiss observing treaty obligations 20th july last agreement concluded united states great britain adopting certain modifications rules method procedure recommended award rendered north atlantic coast fisheries arbitration tribunal september 7 1910 settlement hereafter accordance principles laid award questions arising reference exercise american fishing liberties article treaty october 20 1818 united states great britain agreement received approval senate august formally ratified two governments november 15 last rules method procedure embodied award provided determining impartial tribunal reasonableness new fishery regulations treaty coasts newfoundland canada regulations could enforced american fishermen exercising treaty liberties coasts also determining delimitation bays coasts 10 miles wide accordance definition adopted tribunal meaning word bays used treaty subsequent negotiations two governments undertaken purpose giving practical effect rules methods procedure found certain modifications therein desirable point view govern ments negotiations finally resulted agreement mentioned award recommendations modified mutual consent two governments finally adopted made effective thus bringing controversy final conclusion equally beneficial satisfactory governments order make possible effective performance work necessary confinement present channel waters lower colorado river thus protect people imperial valley well order reach government mexico understanding regarding distribution waters colorado river governments much interested negotiations going forward view establishment preliminary colorado river commission shall powers necessary enable needful work authority study question equitable distribution waters every reason believe understanding upon point reached agreement signed near future interest people city el paso government assiduous efforts bring early settlement chamizal dispute mexico much complished final solution dispute diate favorable attitude lately assumed mexican government encourages hope troublesome question satisfactorily definitively settled early day pursuance convention august 23 1906 signed third pan american conference held rio de janeiro international commission jurists met capital month last june meeting 16 american republics represented including united states comprehensive plans future work commission adopted next meeting fixed june 1914 committees already appointed instructed report regarding topics assigned message foreign relations communicated two houses congress december 7 1911 1 called especial attention assembling opium conference hague fact conference review pertinent municipal laws relating opium allied evils certainly international rules regarding evils seemed essential congress take immediate action antinarcotic legislation congress previously called attention special message international convention adopted conference conforms almost entirely principles contained proposed antinarcotic legislation last two congresses unfortunate government taken initiative international action eventuated important international opium convention failed share great work neglecting pass necessary legislation correct deplorable narcotic evils united states well redeem international pledges upon entered virtue abovementioned convention congress present session enact law bills carefully drawn collaboration department state executive departments behind moral sentiment country practical support legitimate trade interests likely affected since international convention signed adherence made several european states represented conference hague also seventeen republics war italy turkey came close october last signature treaty peace subsequently ottoman empire renounced sovereignty cyrenaica tripolitania favor italy past year near east unfortunately theater constant hostilities almost simultaneously conclusion peace italy turkey arrival adjustment complex questions issue war broke turkey one hand bulgaria greece montenegro servia united states happily involved neither directly indirectly causes questions incident hostilities maintained regard attitude absolute neutrality complete political disinterestedness second war ottoman empire engaged loss life consequent distress sides appalling united states found occasion interest humanity carry charitable desires american people extend measure relief sufferers either side impartial medium red cross beyond chief care government united states make due provision protection national resident belligerent territory exercise duty matter dispatched turkish waters specialservice squadron consisting two armored cruisers order government may need bear part measures may necessary interested nations adopt safeguarding foreign lives property ottoman empire event dangerous situation develop meanwhile several interested european powers promised extend american citizens benefit precautionary protective measures might adopt manner practice government extend protection foreign residents countries western hemisphere time time task united states act interest peace good order early appearance large fleet european warships bosphorus apparently assured protection foreigners quarter presence american stationnaire scorpion sufficed tinder circumstances represent united states cruisers thus left free act need along mediterranean coasts unexpected contingency arise affecting numerous american interests neighborhood smyrna beirut great preponderance american material interests subarctic island spitzbergen always regarded politically man land impels government continued lively interest international dispositions made political governance administration region conflict certain claims american citizens others fair way adjustment settlement matters administration whether international conference interested powers otherwise continues subject exchange views governments concerned result efforts government place government liberia position pay outstanding indebtedness maintain stable efficient government negotiations loan successfully concluded anticipated payment old loan issuance bonds 1912 loan rehabilitation finances liberia follow early date new receivership go active operation new receivership consist general receiver customs designated government united states three receivers customs designated governments germany france great britain countries commercial interests republic liberia carrying understanding government liberia united states fulfilling terms agreement former government american bankers three competent exarmy officers effectively employed liberian government reorganizing police force republic keep order native tribes hinterland serve necessary police force along frontier hoped measures assure continued existence prosperity welfare republic liberia liberia possesses fertility soil natural resources insure people reasonable prosperity duty united states assist republic liberia accordance historical interest moral guardianship community founded american citizens also duty american government attempt assure permanence country much sentimental perhaps future real interest large body citizens legation tangier charge consul general acting charge well caring commercial interests country view fact many foreign powers represented charges deemed necessary appoint present time minister fill vacancy occurring post political disturbances china autumn winter resulted abdication manchu rulers february 12 followed formation provisional republican government empowered conduct affairs nation permanent government might regularly established natural sympathy american people assumption republican principles chinese people appropriately expressed concurrent resolution congress april 17 1912 constituent assembly composed representatives duly chosen people china elections held called meet january next adopt permanent constitution organize government nascent republic formative constitutional stage pending definite action assembly expressive popular establishment stable republican form government capable fulfilling international obligations united states according precedent maintaining full friendly de facto relations provisional government new condition affairs thus created presented many serious complicated problems internal rehabilitation international relations whose solution realized would necessarily require much time patience beginning upheaval last autumn felt united states common powers large interests china independent action foreign governments individual interests would add confusion situation already complicated policy international cooperation accordingly adopted understanding reached early disturbances act together protection lives property foreigners menaced maintain attitude strict impartiality contending factions abstain endeavor influence chinese organization new form government view seriousness disturbances general character american minister peking instructed discretion advise nationals affected districts concentrate centers easily accessible foreign troops men war nineteen naval vessels stationed various chinese ports measures promptly taken adequate protection american interests mutually agreed hope hastening end hostilities none interested powers would approve making loans nationals either side soon however united provisional government china assured united states joined favorable consideration government request advances needed immediate administrative necessities later loan effect permanent national reorganization interested governments already common consent adopted respect purposes expenditure security loans china made nationals certain conditions held essential secure reasonable protection foreign investors also safeguard strengthen china credit discouraging indiscriminate borrowing insuring application funds toward establishment stable effective government necessary china welfare june last representative banking groups united states france germany great britain japan russia formulated general sanction respective governments guaranties would expected relation expenditure security large reorganization loan desired china however thus far proved unacceptable provisional government august last accredited secretary state special ambassador japan charged mission bearing imperial family government people empire sympathetic message american commonwealth oil sad occasion death majesty emperor mutsuhito whose long benevolent reign greater part japan modern history kindly reception everywhere accorded secretary knox showed mission deeply appreciated japanese nation emphasized strongly friendly relations many years existed two peoples relations argentine republic friendly cordial also relations brazil whose government accepted invitation united states send two army officers study coast artillery school fort monroe alsop claim hindrance healthy growth friendly relations united states chile eliminated submission question britannic majesty king george v amiable compositeur much gratification relations chile established upon firm basis growing friendship chilean government placed officer united states coast artillery charge chilean coast artillery school shown appreciation american methods confiding american firm important work chilean coast defenses last year revolution established government ecuador broke pricipal port republic previous occurrence chief american interest ecuador represented guayaquil quito railway incorporated united states bad rendered extensive transportation services account ecuadorian government amount ran sum steadily increasing ecuadorian government made provision pay thereby threatening crush existence american enterprise tranquillity restored ecuador result triumphant progress government forces quito government interposed good offices end american interests ecuador might saved complete extinction part arrangement reached parties request government ecuador consented name arbitrator acting terms railroad contract arbitrator named ecuadorian government pass upon claims arisen since arrangement reached action similar arbitral tribunal 1908 pursuance request made time ago ecuadorian government department state given much attention problem proper sanitation guayaquil result detail officers canal zone sent guayaquil recommend measures lead complete permanent sanitation plague fever infected region republic long constituted menace health conditions canal zone hoped report mission furnish point way whereby modicum assistance united states may properly lend ecuadorian government may made effective ridding west coast south america focus contagion future commercial current passing panama canal matter claim john celestine landreau government peru claim arises certain contracts transactions connection discovery exploitation guano discussion two governments since 1874 1 glad report result prolonged negotiations characterized utmost friendliness good sides department state succeeded securing consent peru arbitration claim negotiations attending drafting signature protocol submitting claim arbitral tribunal proceeding due celerity officer american public health service american sanitary engineer way iquitos employ peruvian government take charge sanitation river port peru building number submarines country continues show every desire american capital invested republic july united states sent undergraduate delegates third international students congress held lima american students first time invited one meetings republic uruguay shown appreciation american agricultural methods sending large commission country employing many american experts assist building agricultural allied industries uruguay venezuela paying last claims settlement provided washington protocols including american citizens relations venezuela cordial trade republic united states greater country past summer revolution administration followed assassination president caceres year ago last november brought dominican republic verge administrative chaos without offering guaranties eventual stability ultimate success either party pursuance treaty relations united states dominican republic threatened necessity suspending operation american administration customhouses haitian frontier found necessary dispatch special commissioners island reestablish customhouses guard sufficient insure needed protection customs administration efforts made appear resulted restoration normal conditions throughout republic good offices commissioners able exercise instrumental bringing contending parties together furnishing basis adjustment hoped result permanent benefit dominican people mindful treaty relations owing position government united states mediator dominican republic haiti boundary dispute fact revolutionary activities frontier become active practically obliterate line demarcation heretofore recognized pending definitive settlement boundary controversy found necessary indicate two island governments provisional de facto boundary line done without prejudice rights obligations either country final settlement reached arbitration tentative line chosen one circumstances brought knowledge government seemed conform best interests disputants border patrol found necessary reestablish customs purposes two countries instructed provisionally observe line republic cuba last may throes lawless uprising time threatened destruction great deal valuable owned americans well existence government armed forces cuba inadequate guard property attack time properly operate rebels force american marines dispatched naval station guantanamo province oriente protection american foreign life property cuban government thus able use forces putting outbreak succeeded period six weeks presence two american warships harbor habana critical period disturbance contributed great measure allay fears inhabitants including large foreign colony discussion government cuba time question release government leasehold rights bahia honda northern coast cuba enlargement exchange therefor naval station established guantanamo bay south result negotiations thus carried agreement reached two governments providing suitable enlargement guantanamo bay station upon terms entirely fair equitable parties concerned request alike government political parties panama american commission undertook supervision recent presidential election republic treaty relations indeed every geographical consideration make maintenance order satisfactory conditions peculiar interest government united states elections passed without disorder new administration entered upon functions government great britain asked support united states protection interests british holders foreign bonded debt guatemala government hopeful arrangement equitable british bondholders naturally unable view question apart relation broad subject financial stability central america policy united states permit escape vital interest renewal negotiations government guatemala american bankers aim loan rehabilitation guatemalan finances way appears open government guatemala could promptly satisfy equitable british claims time improve whole financial position contribute greatly increased prosperity republic redound benefit foreign investments foreign trade country failing arrangement may become impossible government united states escape obligations connection measures may become necessary exact justice legitimate foreign claims recent revolution nicaragua generally admitted might well resulted general central american conflict intervention united states government honduras especially menaced fortunately peaceful conditions maintained within borders republic financial condition country remains unchanged means found final adjustment pressing outstanding foreign claims makes regrettable financial convention united states honduras thus far failed ratification government united states continues hold ready cooperate government honduras believed much longer delay meeting foreign obligations hoped proper time american bankers willing cooperate purpose possible make congress communication upon present foreign relations united states detailed convey adequate impression enormous increase importance activities relations government really preserve american people free opportunity foreign markets soon indispensable prosperity even greater efforts must made otherwise american merchant manufacturer exporter find many field american trade logically predominate preempted energetic efforts governments commercial nations many ways hearty cooperation legislative executive branches government much absolute essential spirit united effort singleness purpose allude specific examples action ought result america take proper place important fields commercial activity enterprise unless merchant marine american commerce enterprise effectively fostered fields unless good american banks countries referred need american newspapers countries proper means public information need assure permanency trained foreign service need legislation enabling members foreign service systematically brought direct contact industrial manufacturing exporting interests country order american business men may enter foreign field clear perception exact conditions dealt officers may prosecute work clear idea american industrial manufacturing interests require congress fully realize conditions obtain world find threshold middle age nation emerged full grown peer great concourse nations passed various formative periods struggle develop domestic resources deal domestic questions nation matured continue foreign relations temporary expedients natural people domestic affairs sole concern past diplomacy often consisted normal times mere assertion right international existence larger relation broader rights obligations others number great guiding principles laid early history government recent task diplomacy adjust principles conditions develop corollaries find practical applications old principles expanded meet new situations thus evolved bases upon rest superstructure policies must grow destined progress nation successful conduct foreign relations demands broad modern view meet new questions build future confine outworn dogmas past perspective appropriate emergence colonial times conditions opening panama canal mark new era international life create new worldwide conditions vast correlations consequences obtain hundreds years come must wait events overtake us unawares continuity purpose must deal problems external relations diplomacy modern resourceful magnanimous fittingly expressive high ideals great nation 3d december sent message congress confined foreign relations secretary state makes report president congress review history transactions state department one year must therefore included president annual message congress fully informed full discussion transactions government view informing congress important events year recommending new legislation requires space one message reasonable length affords therefore adopted course sending three four messages first ten days session include reference important matters brought attention congress condition country reference business could hardly better four years administration drawing close developed great speculative expansion wide field new investment recovery progress made depressing conditions following panic 1907 steady improvement clear easily traced statistics business country solid basis credits unduly extended every phase situation seems state preparedness period unexampled prosperity manufacturing concerns running full capacity demand labor never constant growing foreign trade country year exceed balance excess exports exceed half exports manufactures partly manufactured material exports farm products show increase domestic consumption year bumper crops total money value farm products exceed year bushel unit price agricultural products gradually fallen yet total value entire crop greater known history condition treasury satisfactory total debt constitute panama canal loan debt including greenbacks treasury gold coin reserve outstanding greenbacks addition cash balance treasury general fund increase general fund last year three years expenditures government decreased influence effort economize year presents apparent exception estimate secretary treasury ordinary receipts exclusive postal revenues year ending june 30 1914 indicates amount sum estimates expenditures year exclusive panama canal disbursements postal disbursements payable postal revenues indicating deficit year ending june 30 1913 similarly estimated receipts total corresponding estimate expenditures year submitted secretary treasury congress amounted shows increase estimates 1914 total estimates 1913 due increase estimate rivers harbors next year projects surveys authorized congress increase new pension bill increase estimates expenses navy department estimate navy department year 1913 included two battleships congress made provision one battleship therefore navy department deemed necessary proper make estimate includes first year expenditure three battleships addition amount required work uncompleted ships construction addition natural increase expenditures uncompleted ships ad ditional battleship estimated increases due pay required additional enlisted men navy must added additional cost construction imposed change law makes applicable ships built private shipyards exceptions three items estimates show reduction year total estimates 1913 estimates panama canal construction 1914 less 1913 time panics seem far removed best time us prepare financial system withstand storm crying need country proper banking currency system existing one inadequate everyone studied question admits business national government provide medium automatically contracting expanding volume meet needs trade present system lacks indispensable quality elasticity part monetary medium elasticity currency peculiar provisions law requiring national banks maintain reserves meet call depositors operates increase money stringency arises rather expand supply currency relieve operates upon bank furnishes motive withdrawal currency channels trade bank save offers inducement whatever use reserve expand supply currency meet exceptional demand panic 1907 congress realized present system adapted country needs panics possible might properly avoided legislative provision accordingly monetary commission appointed made report february 1912 system recommended involved national reserve association certain faculties functions bank given governing authorities power issuing circulating notes approved commercial paper fixing discounts methods transfer currency expand supply monetary medium needed prevent export hoarding gold generally exercise supervision supply money every part country prevent stringency panic stock association distributed banks whole united states state national mixed proportion bank units capital stock paid control association vested board directors elected representatives banks except certain directors three cabinet officers comptroller currency president appoint governor association three persons selected directors two deputy governors elected board directors details plan worked great care ability plan general seems furnish basis proper solution present difficulties feel government might properly given greater voice executive committee board directors without danger injecting politics management think federation system banks good one provided proper precautions taken prevent banks large capital absorbing power ownership stock banks objections central bank seems obviated ownership reserve association distributed among banks country banking free earnings reserve association limited percentage tit reasonable fixed amount profits turned government treasury quite probable still greater security control money centers may worked plan certain however objections made past history country central bank furnishing monopoly financial power private individuals would apply association whose ownership control widely distributed divided banks country state national one hand chief executive three department heads comptroller currency ancient hostility national bank branches concentrated privilege banking business carrying financial transactions government prevented establishment bank since abolished jackson administration present national banking law obviated objections growing providing free banking system set stockholders establish national bank comply conditions law seems national reserve association meets objection similar way giving bank state national accordance size certain share stock reserve association nontransferable held bank performs functions partner reserve association report commission recommends provisions imposition graduated tax expanded currency character furnish motive reducing issue notes whenever presence money market required exigencies trade words whole system worked greatest care theoretically presents plan ought command support practically may require modification various provisions order make security abuses combinations among banks impossible face crying necessity improvement present system urgently invite attention congress proposed plan report commission hope earnest consideration may suggest amendments changes within general plan lead adoption benefit country class community interested safe sane banking currency system one prevent panics automatically furnish trade center currency needed carrying business center wage earner class community whose experience better qualifies make suggestions sufficiency currency banking system bankers business men ought therefore ignore recommendations reject financial judgment proper method reforming financial system merely suspicion exists minds many fellow citizens duty congress take plan suggested examine standpoints give impartial consideration testimony whose experience ought fit give best advice subject adopt plan secure benefits desired banking currency system seems far away wage earner farmer fact vitally interested safe system currency shall graduate volume amount needed shall prevent times artificial stringency frighten capital stop employment prevent meeting pay roll destroy local markets produce penury want regarded duty former messages congress urge revision tariff upon principles protection judgment customs duties ought revised downward reduction ought rate would represent difference cost production article question home abroad reasons vetoed several bills presented last session congress new congress elected platform tariff revenue rather protective tariff revise tariff basis needless occupy time congress arguments recommendations favor protective tariff passing tariff law however known payne tariff law august 5 1909 1 desire call attention section 38 act assessing special excise tax corporations contains provision requiring levy additional 50 per cent annual tax cases neglect verify prescribed return file time required law additional charge 50 per cent operates cases harsh penalty may mere inadvertence unintentional oversight law amended mitigate severity charge instances provision also made refund additional taxes heretofore collected infractions cases penalty imposed disproportionate offense equitably demand relief estimates next fiscal year assembled secretary treasury transmitted congress purpose later day submit congress form budget prepared recommended president commission economy efficiency view suggesting useful informing character properly framed budget war department combines within jurisdiction functions countries usually occupy three departments management army coast defenses jurisdiction extends government philippines porto rico control receivership customs revenues dominican republic also includes recommendation plans improvement harbors waterways execution adopted virtue executive order supervision construction panama canal small army consists men excluding philippine scouts leaving consideration coast artillery force whose position fixed various seacoast defenses present garrisons various insular possessions within continental united states mobile army men little force must still drawn upon supply new garrisons great naval base established pearl harbor hawaiian islands protect locks rapidly approaching completion panama forces remaining united states scattered nearly 50 posts situated variety historical reasons 24 states posts contain fractions regiments averaging less 700 men time peace historical policy administer units separately geographical organization words army time peace never united organization merely scattered groups companies battalions regiments first task time war create scattered units army fit effective teamwork cooperation task meeting patent defects war department addressing past year many years officer division whose business study problems plan remedies defects establishment general staff nine years ago body created purpose necessarily required time overcome even personnel habits mind engendered century lack method late years work become systematic effective recently addressing vigorously problems comprehensive plan army reorganization prepared war college division general staff plan thoroughly discussed last summer series open conferences held secretary war attended representatives branches army congress printed form distributed members congress throughout army national guard widely institutions learning elsewhere united states first time tentative chart future progress influence study definite effective steps taken toward army reorganization far reorganization lies within executive power hitherto difference policy treatment organization foreign garrisons troops within united states difference situation vital foreign garrison prepared defend instant notice foe may command sea unlike troops united states count upon reinforcements recruitment outpost upon fall brunt first attack case war historical policy united states carrying regiments time peace half strength application foreign garrisons past year defect remedied philippines garrison former garrison 12 reduced regiments replaced garrison 6 regiments full strength giving fully number riflemen estimated economy cost maintenance per year garrison permanent regimental units instead transferred periodically back forth united states remain islands officers men composing units however serve regular tropical detail usual thus involving greater hardship upon personnel greatly increasing effectiveness garrison similar policy proposed hawaiian panama garrisons fast barracks completed strongly urge upon congress necessary appropriations purpose promptly made opinion first importance national outposts upon successful home defense primarily depend finished placed effective condition earliest possible day simultaneously foregoing steps war department proceeding reorganization army home formerly disassociated units united tactical organization three divisions consisting two three brigades infantry far practicable proper proportion divisional cavalry artillery course extent reform carried executive practically limited paper organization scattered units brought proper organization remain physically scattered congress supplies necessary funds grouping concentrated posts done present difficulty drilling scattered groups together thus training proper team play removed shall least army know organization inspected proper commanders unit emergency orders issued time war emergency moreover organization many respects necessarily skeleton furnish guide future development separate regiments companies know brigades divisions belong maneuvered together whenever maneuvers established congress gaps organization show pattern filled new troops nation grows larger army provided one important reforms accomplished past year legislation enacted army appropriation bill last summer providing regular army reserve hitherto national policy assumed outbreak war regiments would immediately raised full strength laws provided means could accomplished losses regiments sent front could repaired respect neglected lessons learned nations new law provides soldier serving four years colors shall pass reserve three years option may go reserve end three years remaining four years reserve called active duty case war national emergency called case receive stated amount pay period member reserve legislation imperfect opinion certain particulars important step right direction earnestly hope carefully studied perfected congress existing law national guard constitutes regular army first line national defense organization discipline training equipment recent legislation assimilated far possible regular army practical efficiency effect training greatly increased citizen soldiers present conditions reached stage development beyond reasonably asked go without direct assistance form pay federal government hand pay national treasury would justified unless produced proper equivalent additional efficiency part national guard organized militia ordered outside limits united states thus lawfully used general military purposes officers men ambitious eager make thus available become efficient national reserve citizen soldiery force trained men regular army upon rely militia pay bill form agreed authorities war department representatives national guard opinion adequately meets conditions offers proper return pay proposed give national guard believe enactment law would long step toward providing nation first line citizen soldiery upon main reliance must depend case national emergency plans organization national guard tactical divisions lines adopted regular army formulated war college division general staff national guard consists men serious war past always necessary war future doubtless necessary nation depend addition regular army national guard upon large force volunteers present adequate provision law raising force pending congress however bill makes provision believe admirably adapted meet exigencies would presented case war passage bill would entail dollar expense upon government time future war comes war comes methods therein directed accordance best military judgment ought act would prevent necessity discussion legislation delays incident consideration adoption earnestly urge passage army appropriation act also carried legislation consolidation quartermaster department subsistence department pay corps single supply department known quartermaster corps also provided organization special force enlisted men known service corps gradually replace many civilian employees engaged manual labor necessary every army believe enactments improve administration military establishment consolidation supply corps already effected organization service corps put effect foregoing reforms direction economy efficiency except slight increase necessary garrison outposts hawaii panama call larger army tend produce much efficient one substantial new appropriations required pointed necessary complete fortifications barracks naval bases outposts beyond sea porto rico continues show notable progress commercially spread education external commerce increased 17 per cent preceding year bringing total value five times value commerce island 1901 year pupils enrolled public schools preceding year compared first year american administration special efforts way promotion vocational industrial training need particularly pressing island bubonic plague broke last june quick efficient response people porto rico demands modern sanitation strikingly shown thorough campaign instituted plague hearty public opinion supported government efforts check progress prevent recurrence failure thus far grant american citizenship continues ground dissatisfaction bill conferring citizenship passed house representatives awaiting action senate heartily favor passage bill believe demand citizenship amply earned sustained loyalty part inhabitants island remembered demand must minds porto ricans entirely disassociated thought statehood believe substantial approved public opinion united states porto rico contemplates statehood island ultimate form relations us believe aim striven fullest possible allowance legal fiscal american citizenship bond us words relation analogous present relation great britain colonies canada australia would conduce fullest development porto rico time would grant economic political benefits american flag bill pending congress revolutionizes carefully worked scheme government philippine islands governed proposes render virtually autonomous absolutely independent eight years stich proposal founded assumption discharged trusteeship filipino people responsibility world prepared selfgovernment well national sovereignty thorough unbiased knowledge facts clearly shows assumptions absolutely without justification believe substantial difference opinion among responsibility facing philippine problems administration islands believe one future people responsible concern countenance policy fraught direst consequences whose behalf ostensibly urged philippine islands embarked upon experiment unprecedented dealing dependent people developing conditions exclusively welfare found archipelago containing 24 tribes races speaking great variety languages population 80 per cent could neither read write unifying forces common education commercial economic development gradual participation local endeavoring evolve homogeneous people fit determine time arrives destiny seeking arouse national spirit older colonial theory suppress spirit character work keenly recognized orient success thus far followed little envy initiating policy find hampered conditions grown earlier days different theories administration work far done duty filipinos far discharged half million filipino students philippine schools helping mold men future homogeneous people still remain million filipino children school age yet reached freed american control integrating forces common education common language cease educational system well started slip back inefficiency disorder enormous increase commercial development islands made since virtually granted full access markets three years ago every prospect increasing development diversified industries freed american control development bound decline every observer speaks great progress public works benefit filipinos harbor improvements roads railways irrigation artesian wells public buildings better means communication large parts islands still unreached still even unexplored roads railways needed many parts irrigation systems still installed wells driven whole villages towns still without means communication almost impassable roads trails even great progress sanitation successfully suppressed smallpox bubonic plague asiatic cholera found cure beriberi segregated lepers helped make manila healthful city orient free life throughout whole archipelago former dread diseases nevertheless incomplete many essentials permanence sanitary policy even remains accomplished freed american control sanitary progress bound arrested achieved likely lost concurrent economic social industrial development islands development political capacity people progressive participation government filipinos steadily hopefully trained spanish control shared way government american control shared largely increasingly within last dozen years gradually given complete autonomy municipalities right elect provincial governing boards lower house insular legislature four native members nine members commission upper house chief justice two justices supreme court higher judicial positions justices peach natives classified civil service proportion filipinos increased 51 per cent 1904 67 per cent 1911 thus municipal employees go per cent provincial employees 60 per cent officials employees central government filipinos ideal kept mind political guidance islands real popular mere paper independence happy say filipinos done well enough places filled discharge political power intrusted warrant belief educated trained complete present satisfactory results due constant support supervision every step americans task undertaken higher assumed nations accomplishment must demand even patience must forget found filipinos wholly untrained government advent experience sought repress rather encourage political power takes long time much experience ingrain political habits steadiness efficiency popular ultimately must rest upon common habits thought upon reasonably developed public opinion foundations selfgovernment let alone independence present philippine islands disregarding even racial heterogeneity lack ability think nation sufficient point liberal franchise privileges 3 per cent filipinos vote 5 per cent people said read public press confer independence upon filipinos therefore subject great mass people dominance oligarchical probably exploiting minority course cruel people would shameful us true course pursue steadily courageously path thus far followed guide filipinos pursuits continue cultivation sound political habits education political practice encourage diversification industries realize advantages industrial education conservatively approved cooperative methods checking dangers concentrated wealth building sturdy independent citizenship disinterested endeavor secure filipinos economic independence fit complete power decide eventually according largest good whether shall accompanied independence present declaration even future independence would retard progress dissension disorder would arouse part would disingenuous attempt guise conferring benefit relieve heavy difficult burden thus far bravely consistently sustaining would disguised policy scuttle would make helpless filipino football oriental politics tinder protection guaranty independence would powerless enforce pending congress large number bills proposing grant privileges erecting dams purpose creating water power navigable rivers pendency bills brought important defect existing general dam act act opinion grant sufficient power federal government dealing construction dams exact protective conditions interest navigation permit federal government condition permit require part value thus created shall applied general improvement protection stream believe one important matters internal improvement confronting government navigable rivers country comparatively long shallow order may made fully useful navigation come vogue method improvement known canalization method consists building series dams locks create long pool deep navigable water dams usually created also water power commercial value water power thus created made available improvement navigation stream manifest improvement much quickly effected one hand burden general taxpayers country much reduced private interests seeking permits build dams navigable streams usually urge thus improve navigation impair navigation allowed take entire profits development whatever may way relieving government expense improving navigation given due consideration must apparent may profit beyond reasonably liberal return upon private investment potential asset government carrying comprehensive policy waterway development objection retention use asset government comprehensive waterway policy include protection development public uses water ignored making executing plans protection development navigation also equally clear inasmuch water power thus created may incident general scheme waterway improvement within constitutional jurisdiction federal government regulation water power lies also within jurisdiction opinion constructive statesmanship requires legislation enacted permit development navigation great rivers go hand hand utilization water power created course improvement general dam act amended make possible deem highly important nation adopt consistent harmonious treatment projects preserve purpose value government whose right grant permit policy equivalent throwing away valuable national asset past year work construction upon canal progressed satisfactorily 87 per cent excavation work completed 93 per cent concrete locks place view great interest manifested slides culebra cut glad say report goethals allay apprehension point gratifying note none slides occurred year would interfered passage ships canal fact operation slope pressures finally adjusted growth vegetation minimize erosion banks cut slide problem practically solved ample stability assured culebra cut although official date opening set january 1 1915 canal fact present indications opened shipping latter half 1913 fixed date yet set shipping interests advised soon assurances given vessels pass without unnecessary delay recognizing administrative problem management canal congress act august 24 1912 made admirable provisions executive responsibility control canal government canal zone problem efficient organization receiving careful consideration scheme organization control best adapted conditions canal may formulated put operation expeditiously possible acting tinder authority conferred congress executive proclamation promulgated following schedule tolls ships passing canal based upon thorough report emory johnson special commissioner traffic tolls merchant vessels carrying passengers cargo per net vessel 100 cubic actual earning capacity 2 vessels ballast without passengers cargo 40 per cent less rate tolls vessels passengers cargo 3 upon naval vessels transports colliers hospital ships supply ships 50 cents per displacement ton 4 upon army navy transports colliers hospital ships supply ships per net ton vessels measured rules employed determining net tonnage merchant vessels rules determination tonnage upon toll charges based course preparation promulgated due season proclamation issued respect panama canal tolls accord panama canal act passed congress august 24 1912 advised british government prepared protest act enforcement far relieves payment tolls american ships engaged american coastwise trade ground violates british rights tinder treaty concerning panama canal protest presented promptly considered effort made reach satisfactory adjustment differ ences may two governments promulgation efficient workmen compensation act adapted particular conditions zone awaiting adequate appropriation congress payment claims arising thereunder urge speedy provision made order may install upon zone system settling claims injuries best accord modern humane social industrial theories completion canal grows nearer wonderful executive work goethals becomes conspicuous eyes country world seems wise proper make provision law reward may commensurate service rendered country suggest reward take form appointment goethals major general army united states law authorizing appointment accompanied provision permitting designation chief engineers upon retirement present incumbent office navy united states greater state efficiency powerful ever emulation exists different countries respect increase naval military armaments condition permanent one view many improvements increases foreign governments slightest halt part respect new construction throws us back reduces us naval power first rank places us among nations second rank past 15 years navy expanded rapidly yet far less rapidly country reduced expenditures navy means reduced military strength world history shown importance sea power adequate defense support important definite policies pleasure attending autumn mobilization atlantic fleet glad observe note preparedness fleet instant action review brought president secretary navy greater powerful collection vessels ever gathered american waters condition fleet officers enlisted men equipment vessels entitled authority greatest credit commend congress giving legislative sanction appointment naval aids secretary navy aids council aids appointed secretary navy assist conduct department proven highest utility furnished executive com mittee skilled naval experts coordinated action various bureaus navy advice enabled secretary give administration time economical efficient never united states navy compared efficiency present one never requirements respect naval warfare higher exacting year ago congress refused appropriate one battleship think great mistake policy made urgently recommend congress make tip mistake last session appropriations authorizing construction three battleships addition destroyers fuel ships auxiliary vessels shown building program general board confronted condition respect navies world requires us would maintain navy insurance peace augment naval force least two battleships year battle cruisers gunboats torpedo destroyers submarine boats proper proportion desire war would go far nation world avoid war world power population wealth definite policies responsibilities pacific atlantic defense panama canal together enormous world trade missionary outposts frontiers civilization require us recognize position one foremost family nations clothe sufficient naval power give force reasonable demands give weight influence directions progress powerful christian nation advocate observe secretary navy devotes space change disciplinary system vogue branch service think nothing quite unsatisfactory either army navy severe punishments necessarily inflicted desertions purely military offenses glad hear british solved important difficult matter satisfactory way commend consideration congress details new disciplinary system recommend laws passed putting force army navy invite attention congress part report secretary navy recommends formation naval reserve organization navy repeat recommendation made last year proper provision made rank commander chief squadrons fleets navy inconvenience attending necessary precedence foreign admirals whenever meet official functions ought avoided impairs prestige navy defect easily removed department active enforcement law better organized larger force ever history government prosecutions successfully concluded pending testify effectiveness departmental work prosecution trusts sherman antitrust law gone without restraint diminution decrees similar entered standard oil tobacco cases entered suits like suits powder trust bathtub trust strongly convinced steady consistent course regard continuing supreme court decisions upon new phases trust question already finally decided going offer solution troublesome issue quiet calm judicial way without radical legislation changing governmental policy regard combinations denounced sherman antitrust law already recommended aid matter legislation would declare unlawful certain phases unfair competition interstate trade also advocated voluntary national incorporation larger industrial enterprises provision closer supervision bureau corporations board appointed purpose make certain compliance antitrust law one hand give greater security stockholders possible prosecutions believe however orderly course litigation courts regular prosecution trusts charged violation antitrust law producing among business men clearer clearer perception line distinction business encouraged business condemned quiet way question trusts settled competition retained economic force secure reasonableness prices freedom independence trade glad bring attention congress fact supreme court radically altered equity rules governing procedure equity side federal courts though changes yet put practice enable us state actual results reform accomplish character reasonably prophesy greatly reduce time cost litigation courts court adopted many shorter methods present english procedure may take little profession accustom methods certain greatly facilitate litigation action supreme court drastic full appreciation necessity great reform court procedure hesitation following tip action recommendation foreshadowed message three years ago sections statute governing procedure federal courts side amended give supreme court right make rules procedure common law since beginning court exercised equity doubt full consideration subject enable court giving effect substantial differences right remedy system common law system equity unite two procedures form one civil action shorten procedure civil action furnish model state courts exercising concurrent jurisdiction federal courts first instance statute force procedure federal court made conform procedure state court held days making progress court procedure conformity statute makes federal method dependent upon action state legislatures think great opportunity congress intrust highest tribunal country evidently imbued strong spirit favor reform procedure power frame model code procedure preserving valuable necessary rights remedies common law equity shall lessen burden poor litigant minimum expedition cheapness fought defended federal courts final judgment workman compensation act reported special commission appointed congress executive passed senate pending house passage previous messages urged upon congress venture call attention opposition developed senate overcome majority body seemed grow rather misapprehension effect opposition principle say think act better effect directly upon relations employer employee act applying railroads common carriers interstate character sure passage act would greatly relieve courts heaviest burden litigation would enable dispatch business speed never attained courts justice country third series messages brought attention congress important transactions government departments last year discussed needed reforms recommend adoption legislation shall make duty heads members president cabinet convenient times attend session house senate shall provide seats house give opportunity take part discussions answer questions due notice rigid holding apart executive legislative branches government worked great advantage either much lost motion machinery due lack cooperation interchange views face face representatives executive members two legislative branches government never intended separated sense constant effective touch relationship legislative executive performs appropriate function functions must coordinated time time debates arisen house upon issues information particular department head would enabled present end simple explanation statement time time forceful earnest presentation facts arguments representative executive whose duty enforce law would brought useful reform amendment absence statement failed passage think mistaken saying presence members cabinet floor house would greatly contribute enactment beneficial legislation would degree deprive either legislative executive independence separation two branches intended promote would facilitate cooperation public interest hand sure necessity duty imposed upon department heads appearing ilouse answer searching questions rendering upon feet account done done administration spur member cabinet closer attention details department greater familiarity needs greater care avoid criticism answers brought questions put discussions arising members either house members cabinet may properly evoke objection made members administration vote could exercise power floor house could assume attitude authority control english parliamentary government enables meet responsibilities english system thrusts upon agree certain respects would satisfactory members cabinet could time members houses voting power impossible system lack feature may detract influence department chiefs prevent good results described matter legislation matter administration enactment law would quite within power congress without constitutional amendment possibilities usefulness might well make experiment disappointed misstep easily retraced repeal enabling legislation new proposition house representatives congress proposition referred select committee seven members committee made extensive report urged adoption reform report showed history without illustration necessity examples practice pointing early days secretaries repeatedly called presence either rouse consultation advice information also referred remarks justice story commentaries constitution urgently presented wisdom change report found volume reports committees first session congress april 6 1864 february 4 1881 select committee senate recommended passage similar bill made report approving separation three branches executive legislative judicial point reason proposed change although separate existence branches cooperate different members human body must cooperate order form figure perform duties perfect man report concluded follows system require selection strongest men heads departments require well equipped knowledge offices also require strongest men leaders congress participate debate bring strong men contact perhaps conflict advance public weal thus stimulate abilities efforts thus assuredly result good country appear actual experience heads departments fact time perform additional duty imposed bill force offices increased duties devolving personally diminished undersecretary appointed could confided routine administration requires order accuracy principal officers could confine attention duties require wise discretion intellectual activity thus would abundance time duties bill indeed committee believes public interest would subserved secretaries relieved harassing cares distributing clerkships closely supervising mere machinery departments committee believes adoption bill effective execution provisions first step toward sound reform secure larger wisdom adoption policies better system execution would difficult mention names higher authority practical knowledge government appended report postal savings bank system extended includes post offices well 645 branch offices stations larger cities depositories patrons system may open accounts number depositors amount deposits approximately including drawn depositors purpose buying postal savings bonds experience demonstrates value dispensing introducing place certificate deposit gross income postal savings system fiscal year ending june 30 1913 amount interest payable depositors cost supplies equipment salaries thus appears system lacks year paying interest expenses estimated however deposits reached sum present rate soon system law postal savings funds deposited post office required redeposited local banks state national banks number qualified depositories funds deposits secured bonds aggregating amount represent municipal bonds several messages favored recommended adoption system parcel post postal appropriation act last year general system provided installation directed 1st january entailed upon post office department great deal heavy labor postmaster general informs date selected wit 1st january near hand department readiness meet successfully requirements public trial past three years system classifying postmasters part country lying mississippi river west canada north atlantic ocean east mason dixon line south sufficiently satisfactory justify postal authorities recommending extension order include postmasters country september 1912 upon suggestion postmaster general directed prepare order put system effect except alaska guam hawaii porto rico samoa date october 15 1 issued order affected postmasters order post offices divided groups b group includes postmasters whose compensation 500 group b whose compensation less sum different methods pursued selection postmasters group group b criticism made order ground motive political nothing could truth order made election interest efficient public service several times requested congress give authority put postmasters local officers including officers customs officers united states marshals local agents departments classification law taking away necessity confirming appointments senate deeply regret failure congress follow recommendations change would taken politics practically every local officer would entirely cured evils growing present law must always remain remnant spoils system expected establishment parcel post january 1st largely increase amount mail matter transported railways congress prompt provide way may receive additional compensation entitled postmaster general urges department plan complete readjustment system paying railways carrying mails adopted substituting space weight principal factor fixing compensation plan possible determine without delay additional payment made account parcel post postmaster general recommendation based results investigation begun early administration object determining costs railways carry mails statistics obtained course inquiry show many railways particularly large systems making profits mail transportations certain lines actually carrying mails loss result investigation department giving subject careful consideration decided urge abandonment present plan fixing compensation basis weight mails carried plan proved exceedingly expensive respects unsatisfactory method proposed railway companies annually submit department reports showing costs carry mails cost apportioned basis car space engaged payment allowed rate thus determined amounts cover cost reasonable profit railway satisfied manner department apportions cost fixing compensation right tinder new plan appealing interstate commerce commission feature proposed law would seem insure fair treatment railways hoped congress give matter immediate attention method compensation recommended department suitable plan promptly authorized interior department problems administration included within jurisdiction presents difficult questions due perhaps temporary causes political character especially inherent difficulty performance functions assigned chief duty guardianship public domain disposition domain private ownership homestead mining laws patents government individual authorized certain conditions last decade public seemed become suddenly aware large part domain passed control private ownership laws well adapted modern conditions also provisions existing law regulations adopted accordance law strictly observed transfer title much fraud intervened pecuniary benefit dishonest persons arose thereupon demand conservation public domain protection fraudulent diminution preservation part private acquisition seemed necessary keep future public use movement excellent intention prompted useful results nevertheless bad effects western country recently feeling respect danger reaction toward older abuses unless attain golden mean consists prevention mere expioitation public domain private purposes time facilitating development benefit local public land laws need complete revision secure proper conservation one hand land ought kept public use hand prompt disposition lands ought disposed private ownership turned private use properly guarded leases addition enough officials land department legal knowledge sufficient promptly make decisions called whole system reorganized reorganized decisions made promptly ought men earned title public land statute receive patents within reasonably short period present administration done could regard necessity reform change revision laws increase reorganization force remains submit congress wisdom full examination subject order large important part people west may relieved irritation invite attention discussion secretary interior need legislation respect mining claims leases coal lands country alaska similar disposition oil phosphate potash lands also discussion proper use made sites held government many lands withheld use public general withdrawal act passed last congress act purpose disposing question purpose preserving lands question could solved earnestly urge matter highest importance western fellow citizens ought command immediate attention legislative branch government another function interior department perform guardianship indians spite everything said criticism policy government toward indians amount wealth held wards per capita shows government generous management large estate great variety circumstances surround tribe case calls exercise highest business discretion machinery provided indian bureau discharge function entirely inadequate position indian commissioner demands exercise business ability first order difficult secure talent salary provided condition health indian prevalence tribes curable diseases exploited recently press message congress last session brought subject attention invited special appropriation order facilities overcoming diseases among indians might properlv increased action taken congress subject appropriation made since commission appointed authority congress report proper method securing railroad development alaska formulating report expect opportunity end session submit recommendations utility educational system carried department agriculture benefit farmers country calls elaboration year growth variety facts brings benefit farmer year confirms wisdom expenditure appropriations made department department agriculture charged execution law passage encountered much opposition manufacturers others feared effect upon business enforcement provisions opposition aroused indignation public led intense sympathy severe rigid enforcement provisions new law deal many instances question whether products large business enterprises form food preparations deleterious public health great majority instances issue easily determinable cases hard draw line useful harmful food preparation cases like decision involved destruction great business enterprises representing investment large capital expenditure great energy ability danger serious injustice considerable enforcement new law spur great public indignation public officials charged executing law might injustice heated controversy unconscious pride opinion obstinacy conclusion reason president roosevelt felt justified creating board experts known remsen board cases much importance appeal might taken review decision bureau chemistry agricultural department heartily agree wise create board order injustice might done questions arise generally involving palpable injury health upon narrow doubtful line respect better error dangerous radically destructive think time come congress recognize necessity tribunal appeal make specific statutory provision struggling suppress evil great proportions like impure food must provide machinery law prevent becoming instrument oppression ought enable whose business threatened annihilation tribunal form appeal complete day court referred first message question improving system agricultural credits secretary agriculture made investigation matter credits country commend consideration information agents able collect way minimize importance proposal gives accurate information upon phases question heretofore commend congress examination report secretary commerce labor especially part discusses office bureau corporations value commerce proposed trade commission steps taken secure organization national chamber commerce heartily commend view plan trade commission looks fixing prices altogether impractical ought moment considered possible solution trust question trust question enforcement sherman antitrust law gradually solving maintaining principle restoring practice competition law quietly firmly enforced business adjust statutory requirements unrest commercial circles provoked trust discussion disappear conformity joint resolution congress executive proclamation issued last february inviting nations world participate international exposition held san francisco celebrate construction panama canal sympathetic response immediately forthcoming several nations already selected sites buildings furtherance invitation special commission visited european countries past summer received assurance hearty cooperation task bringing together universal industrial military naval display unprecedented scale evident exposition accurate mirror world activities appear 400 years date discovery pacific ocean duty united states make nations welcome san francisco facilitate acquaintance promote expansion commerce familiarize world new trade route panama canal action state governments individuals assures comprehensive exhibit resources country progress people participation state individuals supplemented adequate showing varied unique activities national government united states good grace invite foreign governments erect buildings make expensive exhibits refusing participate would wise forego opportunity join nations inspiring interchange ideas tending promote intercourse friendship commerce duty government foster build commerce canal duty government construct earnestly recommend appropriation session sum enable united states construct suitable building install governmental exhibit otherwise participate international exposition manner commensurate dignity nation whose guests people world recommend also legislation facilitate entry material intended exhibition protect foreign exhibitors infringement patents unauthorized copying patterns designs aliens sent san francisco construct care foreign buildings exhibits admitted without restraint embarrassment city washington beautiful city population colored annual municipal budget 14 ooo ooo presence national capital governmental structures constitutes chief beauty interest city public grounds extensive opportunities improving city making still attractive great plan adopted years ago one half cost running city paid taxation upon property real personal citizens residents half borne general government city expanding remarkable rate accounted coming parts country people finished business careers elsewhere build make permanent place residence whole city municipality well governed well lighted water supply good streets well paved police force well disciplined crime flagrant purlieus centers vice like large cities exploited exercise influence control government city suppressed far found practicable municipal graft inconsiderable interior courts city noisome centers disease refuge criminals congress begun clean progress made case notorious known willow tree alley movement continue mortality past year rate per races among whites per thousand among blacks per thousand lowest mortality rates ever recorded district one crying needs government district tribunal public authority purpose supervising corporations engaged operation public utilities bill pending congress ought pass washington show direction congress city model form government long authority public utilities withheld municipal government must always fective without undue criticism present street railway accommodations truly said spur public utilities commission might substantially improved school system washington perhaps might bettered economy management distribution buildings usefulness nevertheless greatly increased recent years offers excellent facilities primary secondary education time time considerable agitation washington favor granting citizens city franchise constituting elective government strongly opposed change history washington discloses number experiments kind always abandoned unsatisfactory truth city governed popular body wit congress united states selected people united states washington people come live knowledge origin city restrictions therefore voluntarily give privilege living municipality governed popular vote washington unique origin use housing localizing sovereignty nation people live must regard peculiar character must content subject control body selected people nation agree certain inconveniences growing government city national legislature like congress would perhaps possible lessen delegation congress district commissioners greater legislative power enactment local laws possess especially police character every loyal american personal pride beauty washington development growth one proper appreciation capital city would favor niggardly policy respect expenditures national treasury add attractiveness city belongs every citizen entire country citizen visits without sense pride ownership restored commission fine arts instance committee senate original plan french engineer city washington know great certainty course improvement washington take delay making improvement far involves extension parking system construction greatly needed public buildings appropriate buildings state department department justice department commerce labor projected plans approved nothing wanting appropriations beginning completion structures hall archives also badly needed nothing done toward construction although land long bought paid plans made union potomac park valley rock creek rock creek park necessity connection soldiers home rock creek park calls comment ask delay carrying plans money treasury plans national scope improvement treated national project plan find hearty approval throughout country quite sure information comparatively small expense part district columbia retroceded virginia portion including arlington estate fort myer palisades potomac acquired purchase jurisdiction state virginia land ceded nation ought done construction lincoln memorial memorial bridge base lincoln monument arlington would appropriate symbolic expression union north south capital nation urge upon congress appointment commission undertake national improvements submit plan execution plan submitted approved work carried washington really become ought beautiful city world
foreign relation united state actually potentially affect state union degree widely realize hardly surpassed factor welfare whole nation position unite state moral intellectual material relation family nation matter vital interest every patriotic citizen national prosperity power impose upon u duty shirk true ideal tremendous growth export trade united state already make trade real factor industrial commercial prosperity country development industry foreign commerce united state must rapidly become still essential factor economic welfare whether farseeing wise diplomacy recklessly plunge unnecessary war whether foreign policy base upon intelligent grasp world condition clear view potentiality future govern temporary timid expediency narrow view befit infant nation question alternative consideration must convince thoughtful citizen department national polity offer great opportunity promote interest whole people one hand great chance permanent national injury deal foreign relation united state fundamental foreign policy unite state raise high conflict partisanship wholly dissociate difference domestic policy foreign affair united state present world unite front intellectual financial industrial interest country publicist wage earner farmer citizen whatever occupation must cooperate spirit high patriotism promote national solidarity indispensable national efficiency attainment national ideal relation united state foreign power remain upon sound basis peace harmony friendship great insistence upon justice american citizen interest wherever may deny strong emphasis need mutuality commercial relation serve strengthen friendship foreign country place friendship upon firm foundation reality well aspiration briefly review important event last year foreign relation duty charge conduct diplomatic affair nature make appropriate secretary state make formal annual report desire touch upon essential safe management foreign relation united state endeavor also define clearly certain concrete policy logical modern corollary undisputed traditional fundamental foreign policy united state begin present administration unite state fully enter upon position world power responsibility thrust upon result war already engage lay groundwork vast foreign trade upon one day become dependent find without machinery give thorough attention take effective action upon mass intricate business vital american interest every country world department state archaic inadequate machine lack attribute foreign office great modern power appropriation make upon recommendation congress august 5 1909 department state completely reorganize create division latinamerican affair far eastern near eastern western european affair division call foreign service diplomatic consular officer possess experience knowledge gain actual service different part world thus familiar political commercial condition region concerned work highly specialized result previously government time time would emphasize foreign relation one another policy american interest every quarter globe cultivate equal assiduity principle division possesses also good feature make possible rotation officer departmental diplomatic consular branch foreign service thus keep whole diplomatic consular establishment tinder department state close touch equally inspired aim policy government newly create division information foreign service keep fully informed transpires day day international relation country contemporary foreign comment affect american interest promptly bring attention department law office department greatly strengthen added foreigntrade adviser cooperate diplomatic consular bureau division innumerable matter commercial diplomacy consular work call special knowledge officer together rest new organization able time give american citizen accurate information condition foreign country business likewise cooperate effectively congress also executive department expert knowledge professional training must evidently essence reorganization without trained foreign service would men available work reorganize department state president cleveland take first step toward introduce merit system foreign service follow application merit principle excellent result entire consular branch almost nothing however do direction regard diplomatic service age commercial diplomacy evidently first importance train adequate personnel branch service therefore november 26 1909 executive order place diplomatic service grade secretary embassy inclusive upon exactly strict nonpartisan basis merit system rigid examination appointment promotion efficiency maintain without exception consular service faithful merit system nonpartisan conduct diplomatic consular service last four year may judge follow three ambassador serve hold present rank begin administration ten ambassador appoint five promotion rank minister nine minister serve hold present rank begin administration thirty minister appoint eleven promote low grade foreign service department state nineteen mission latin america relation close interest great fifteen chief mission service men three enter service administration secretaries embassy legation receive initial appointment pass successfully require examination chosen ascertain fitness without regard political affiliation dearth candidate southern western state alone make impossible thus far completely equalize state representation foreign service effort equalize representation various state consular service 1 make sixteen new appointment consul occur administration southern state 55 per cent every consular appointment make include promotion eleven young men consular assistant student interpreter corp promotion transfer base solely upon efficiency show service order assure business interest unite state continuance result benefit reform earnestly renew previous recommendation legislation make permanent along line measure pending congress connection legislation amelioration foreign service wish invite attention advisability place salary appropriation upon good basis believe best result would obtain moderate scale salary adequate fund expense proper representation base case upon scale cost living post control system accounting general direction department state line object seek place foreign service basis permanency various time advocate provision congress acquisition building residence office diplomatic officer place nearly equality similar officer nation away discrimination otherwise must necessarily make case favor men large private fortune act congress approve february 17 1911 right step direction secretary state already make limited recommendation permit act one year hope bill introduce house representative carry recommendation favorably act congress present session country expense governmentowned legation less elsewhere certainly urgent country republic central america caribbean peculiarly difficult rent suitable quarter representative united state justly adequately provide dignify suitable official residence indeed high time dignity power great nation fittingly signalize proper building occupancy nation representative everywhere abroad diplomacy present administration seek respond modern idea commercial intercourse policy characterize substitute dollar bullets one appeal alike idealistic humanitarian sentiment dictate sound policy strategy legitimate commercial aim effort frankly direct increase american trade upon axiomatic principle government unite state shall extend proper support every legitimate beneficial american enterprise abroad great result diplomacy couple maximum minimum provision tariff law see consideration wonder ful increase export trade united state modern diplomacy commercial disposition quarter attribute none materialistic aim strikingly erroneous impression may see study result diplomacy united state judge field work toward ideal peace government negotiate regret unable consummate two arbitration treaty set high mark aspiration nation toward substitution arbitration reason war settlement international dispute effort american diplomacy several war prevent end refer successful tripartite mediation argentine republic brazil united state peru ecuador bringing boundary dispute panama costa rica peaceful arbitration stay warlike preparation haiti dominican republic verge hostility stop war nicaragua halt internecine strife honduras government unite state thank influence toward restoration amicable relation argentine republic bolivia diplomacy united state active seek assuage remain country republic colombia recent civil war china united state successfully join interested power urge early cessation hostility agreement reach government chile peru whereby celebrate tacnaarica dispute long embitter international relation west coast south america last adjusted simultaneously come news boundary dispute peru ecuador enter upon stage amicable settlement position united state reference dispute chile peru one nonintervention one friendly influence pacific counsel throughout period dispute question subject interchange view government two government immediately concerned general ease international tension west coast south america tripartite mediation refer potent beneficent factor china policy encourage financial investment enable country help result give new life practical application policy consistent purpose present administration encourage use american capital development china promotion essential reform china pledged treaty unite state power hypothecation foreign banker connection certain industrial enterprise hukuang railway national revenue upon reform depend lead department state early administration demand american citizen participation enterprises order united state might equal right equal voice question pertain disposition public revenue concerned policy promote international accord among power similar treaty right matter reform could put practical effect without common consent likewise adopt case loan desire china reform currency principle international cooperation matter common interest upon policy already base instance admittedly great factor concert power happily conspicuous perilous period transition great chinese nation pass central america aim help country nicaragua honduras help immediate beneficiary national benefit united state twofold first obvious monroe doctrine vital neighborhood panama canal zone caribbean anywhere else maintenance doctrine fall heavily upon united state therefore essential country within sphere shall remove jeopardy involve heavy foreign debt chaotic national finance danger international complication due disorder home hence united state glad encourage support american banker willing lend help hand financial rehabilitation country financial rehabilitation protection customhouses prey wouldbe dictator would remove one stroke menace foreign creditor menace revolutionary disorder second advantage unite state one affect chiefly southern gulf port business industry south republic central america caribbean possess great natural wealth need measure stability mean financial regeneration enter upon era peace prosperity bring profit happiness time create condition sure lead flourish interchange trade country wish call especial attention recent occurrence nicaragua believe terrible event record revolution past useless loss life devastation property bombardment defenseless city kill wound woman child torture noncombatant exact contribution suffer thousand human avert department state approval loan convention senate permit carry policy encourage extend financial aid weak central american state primary object avoid revolution assist republic rehabilitate finance establish currency stable basis remove customhouse danger revolution arrange secure administration establish reliable bank last revolution nicaragua government republic admit inability protect american life property act sheer lawlessness part malcontent requested government assume office become necessary land marine bluejacket nicaragua owe presence constitute government nicaragua free devote attention wholly internal trouble thus enable stamp rebellion short space time red cross supply send granada exhaust person give food one day upon arrival american force men supply unfortunate needy nicaraguan haversack wish congratulate officer men united state navy marine corp take part reestablish order nicaragua upon splendid conduct record sorrow death seven american marine bluejacket since reestablishment peace order election hold amid condition quiet tranquility nearly american marine withdraw country soon road recovery apparent danger threaten nicaragua arises shortage fund although american banker already render assistance may naturally loath advance loan adequate set country upon foot without support convention june 1911 upon senate yet act general effort contribute enjoyment peace republic near neighbor united state administration enforce neutrality statute new vigor statute greatly strengthen restrict exportation arm munition joint resolution last march still regrettable fact certain american port make rendezvous professional revolutionist others engage intrigue peace republic must admit occasionally revolution region justify real popular movement throw shackle vicious tyrannical government nicaraguan revolution zelaya regime nation enjoy liberal institution escape sympathy true popular movement one well justified many case however revolution republic question basis principle due merely machination conscienceless ambitious men effect bring new suffer fresh burden already oppressed people question whether use american port foci revolutionary intrigue best dealt amendment neutrality statutes whether would safer deal special case special law one worthy careful consideration congress impress particular importance relation united state republic central america caribbean region necessity must become still intimate reason mutual advantage present open panama canal direct secretary state last february visit republic purpose give evidence sincere friendship good government people united state bear toward ten republic visit everywhere receive cordiality welcome generosity hospitality impress deeply merit warm thanks appreciation government people country visit appropriately show various way leave doubt visit conduce close union well understand united state republic much heart promote two year revolution distraught neighbor republic mexico brigandage involve great deal depredation upon foreign interest constantly recur question extreme delicacy several occasion difficult situation arise frontier throughout try period policy united state one patient nonintervention steadfast recognition constitute authority neighbor nation exertion every effort care american interest profoundly hope mexican nation may soon resume path order prosperity progress nation sore trouble sympathetic friendship united state demonstrate high degree mexico begin revolution thirty forty thousand american citizen engage enterprise contribute greatly prosperity republic also benefit important trade two country investment american capital mexico estimate responsibility endeavor safeguard interest danger inseparable propinquity turbulent situation great happy able adhere policy policy hope may soon justify complete success mexican people regain blessing peace good order important work accomplish past year american diplomatic officer europe investigation agricultural credit system european country mean afford relief consumer country thorough development agricultural resource mean sufficiently maintain agricultural population project establish credit facility farmer concern vital importance nation evidence prosperity among farmer blind u fact lack capital preventing development nation agricultural resource adequate increase land cultivation agricultural production fast fall behind increase population fact although farmer maintain increase prosperity natural increase population develop industry agriculture breed proportionate number race independent landowner lack growth city compensate farmer mainstay time crisis future must still largely upon stability common sense democracy must rely conserve principle need capital american farmer feel experienced farmer europe farm many year ago problem successfully solve old world evident farmer country might profit study system therefore order department state investigation make diplomatic officer europe lay result investigation governor various state hope use advantage forthcoming meeting last annual message say fiscal year end june 30 1911 noteworthy mark high record export american product foreign country fiscal year 1912 show rate advance maintain total domestic export valuation approximately compare fraction previous year also significant manufacture partly manufacture article continue chief commodity form volume augment export demand people consumption require increase proportion abundant agricultural product keep home fiscal year 1911 export article various stage manufacture include foodstuff partly wholly manufacture amount approximately fiscal year 1912 total nearly gain importance manufacture assume commerce world competition manufacture country draw attention duty government use utmost endeavor secure impartial treatment american product market healthy commercial rivalry international intercourse best assure possession proper mean protect promote foreign trade natural competitive country view concern steady expansion commerce instance measure take meet entirely equitable remedy find former message describe negotiation department state foreign government adjustment maximum minimum tariff provide section 2 tariff law 1909 advantage secure adjustment trade relation law continue last year additional case discriminatory treatment reason complain remove department state first time history country obtain substantial treatment country world however instance apparently constitute undue discrimination sense section 2 nevertheless exception complete equity tariff treatment american product department state consistently seek obtain american commerce abroad development confirm opinion convey annual message 1911 maximum minimum provision tariff law 1909 fully justified success achieve remove previously exist undue discrimination american product yet experience show feature law amend way provide fully effective mean meet vary degree discriminatory treatment american commerce foreign country still encounter well protect injurious treatment part foreign government either legislative administrative measure financial interest abroad american citizen whose enterprise enlarge market american commodity strongly recommend congress passage stich enable measure bill recommend secretary state letter december 13 1911 object propose legislation brief enable executive apply case may require commodity whether free list country discriminate united state graduate scale duty tip maximum 25 per cent ad valorem provide present law flat tariff date nation longer accord equal tariff treatment nation irrespective treatment receive stich flexible power command executive would serve moderate unfavorable tendency part country importation united state substantially confine article free list well country find lucrative market united state product exist custom rate necessary american government equip weapon negotiation adapt modern economic condition order may time position gain technically actually equitable treatment trade also american enterprise vested interest abroad illustrate commercial benefit nation derive new diplomacy effectiveness upon material well ideal side may remark direct official effort alone obtain course administration contract foreign government involve expenditure factory united state consideration fact reflection upon necessary effect scientific tariff system foreign service alert equip cooperate business men america carry conviction gratify increase export trade country substantial amount due improve governmental method protect stimulate germane observation remark two year elapse since successful negotiation new treaty japan time seem present many practical difficulty export trade country increase rate month export japan year end june 30 1910 year end june 30 1912 export net increase sale american product nearly 150 per cent special agreement enter united state great britain august 18 1910 arbitration outstanding pecuniary claim schedule claim term submission agree upon two government together special agreement approve senate july 19 1911 accordance term agreement go effect confirm two government exchange note do april 26 last negotiation still progress supplemental schedule claim submit arbitration agreement meanwhile necessary preparation arbitration claim include first schedule undertaken carry authority appropriation make purpose last session congress anticipate two government prepare call upon arbitration tribunal establish agreement meet washington early next year proceed arbitration act adopt last session congress give effect convention july 7 1911 great britain japan russia united state provide suspension land kill seal pribilof island period five year objection present provision party interest raise issue whether prohibition land kill inconsistent spirit letter treaty stipulation justification establish close season depend term convention upon far necessary protect preserve american herd increase number question require examination present condition herd treatment need light actual experience scientific investigation careful examination subject make government soon possession considerable amount new information american seal herd secure past season great value determine question appear uncertainty real necessity impose close season time shall take early opportunity address special message congress subject belief government yield point rather give slight ground charge way remiss observe treaty obligation 20th july last agreement conclude united state great britain adopt certain modification rule method procedure recommend award rendered north atlantic coast fishery arbitration tribunal september 7 1910 settlement hereafter accordance principle lay award question arise reference exercise american fishing liberty article treaty october 20 1818 united state great britain agreement receive approval senate august formally ratify two government november 15 last rule method procedure embody award provide determine impartial tribunal reasonableness new fishery regulation treaty coast newfoundland canada regulation could enforce american fisherman exercise treaty liberty coast also determine delimitation bay coast 10 mile wide accordance definition adopt tribunal meaning word bay use treaty subsequent negotiation two government undertaken purpose give practical effect rule method procedure find certain modification therein desirable point view govern ments negotiation finally result agreement mention award recommendation modify mutual consent two government finally adopt make effective thus bring controversy final conclusion equally beneficial satisfactory government order make possible effective performance work necessary confinement present channel water low colorado river thus protect people imperial valley well order reach government mexico understand regard distribution water colorado river government much interested negotiation go forward view establishment preliminary colorado river commission shall power necessary enable needful work authority study question equitable distribution water every reason believe understand upon point reach agreement sign near future interest people city el paso government assiduous effort bring early settlement chamizal dispute mexico much complished final solution dispute diate favorable attitude lately assume mexican government encourages hope troublesome question satisfactorily definitively settle early day pursuance convention august 23 1906 sign third pan american conference hold rio de janeiro international commission jurist meet capital month last june meet 16 american republic represent include united state comprehensive plan future work commission adopt next meeting fix june 1914 committee already appoint instructed report regard topic assigned message foreign relation communicate two house congress december 7 1911 1 call especial attention assemble opium conference hague fact conference review pertinent municipal law relate opium ally evils certainly international rule regard evil seem essential congress take immediate action antinarcotic legislation congress previously call attention special message international convention adopt conference conforms almost entirely principle contain propose antinarcotic legislation last two congress unfortunate government take initiative international action eventuate important international opium convention fail share great work neglect pas necessary legislation correct deplorable narcotic evil united state well redeem international pledge upon enter virtue abovementioned convention congress present session enact law bill carefully draw collaboration department state executive department behind moral sentiment country practical support legitimate trade interest likely affect since international convention sign adherence make several european state represent conference hague also seventeen republic war italy turkey come close october last signature treaty peace subsequently ottoman empire renounce sovereignty cyrenaica tripolitania favor italy past year near east unfortunately theater constant hostility almost simultaneously conclusion peace italy turkey arrival adjustment complex question issue war break turkey one hand bulgaria greece montenegro servia united state happily involve neither directly indirectly cause question incident hostility maintain regard attitude absolute neutrality complete political disinterestedness second war ottoman empire engage loss life consequent distress side appal united state find occasion interest humanity carry charitable desire american people extend measure relief sufferer either side impartial medium red cross beyond chief care government unite state make due provision protection national resident belligerent territory exercise duty matter dispatch turkish water specialservice squadron consist two armored cruiser order government may need bear part measure may necessary interested nation adopt safeguard foreign life property ottoman empire event dangerous situation develop meanwhile several interested european power promise extend american citizen benefit precautionary protective measure might adopt manner practice government extend protection foreign resident country western hemisphere time time task united state act interest peace good order early appearance large fleet european warship bosphorus apparently assure protection foreigner quarter presence american stationnaire scorpion suffice tinder circumstance represent united state cruiser thus leave free act need along mediterranean coast unexpected contingency arise affect numerous american interest neighborhood smyrna beirut great preponderance american material interest subarctic island spitzbergen always regard politically man land impels government continue lively interest international disposition make political governance administration region conflict certain claim american citizen others fair way adjustment settlement matter administration whether international conference interested power otherwise continue subject exchange view government concerned result effort government place government liberia position pay outstanding indebtedness maintain stable efficient government negotiation loan successfully conclude anticipated payment old loan issuance bond 1912 loan rehabilitation finance liberia follow early date new receivership go active operation new receivership consist general receiver custom designated government unite state three receiver custom designate government germany france great britain country commercial interest republic liberia carry understanding government liberia united state fulfil term agreement former government american banker three competent exarmy officer effectively employ liberian government reorganize police force republic keep order native tribe hinterland serve necessary police force along frontier hop measure assure continue existence prosperity welfare republic liberia liberia possess fertility soil natural resource insure people reasonable prosperity duty united state assist republic liberia accordance historical interest moral guardianship community found american citizen also duty american government attempt assure permanence country much sentimental perhaps future real interest large body citizen legation tangy charge consul general act charge well care commercial interest country view fact many foreign power represent charge deem necessary appoint present time minister fill vacancy occur post political disturbance china autumn winter result abdication manchu ruler february 12 follow formation provisional republican government empower conduct affair nation permanent government might regularly establish natural sympathy american people assumption republican principle chinese people appropriately express concurrent resolution congress april 17 1912 constituent assembly compose representative duly chosen people china election hold call meet january next adopt permanent constitution organize government nascent republic formative constitutional stage pending definite action assembly expressive popular establishment stable republican form government capable fulfil international obligation united state accord precedent maintain full friendly de facto relation provisional government new condition affair thus create present many serious complicate problem internal rehabilitation international relation whose solution realize would necessarily require much time patience begin upheaval last autumn felt united state common power large interest china independent action foreign government individual interest would add confusion situation already complicate policy international cooperation accordingly adopt understand reach early disturbance act together protection live property foreigner menace maintain attitude strict impartiality contend faction abstain endeavor influence chinese organization new form government view seriousness disturbances general character american minister peking instruct discretion advise national affect district concentrate center easily accessible foreign troop men war nineteen naval vessel station various chinese port measure promptly take adequate protection american interest mutually agree hope hasten end hostility none interested power would approve make loan national either side soon however united provisional government china assure united state join favorable consideration government request advance need immediate administrative necessity later loan effect permanent national reorganization interested government already common consent adopt respect purpose expenditure security loan china make national certain condition hold essential secure reasonable protection foreign investor also safeguard strengthen china credit discourage indiscriminate borrowing insure application fund toward establishment stable effective government necessary china welfare june last representative banking group united state france germany great britain japan russia formulate general sanction respective government guaranty would expect relation expenditure security large reorganization loan desire china however thus far proved unacceptable provisional government august last accredit secretary state special ambassador japan charge mission bear imperial family government people empire sympathetic message american commonwealth oil sad occasion death majesty emperor mutsuhito whose long benevolent reign great part japan modern history kindly reception everywhere accord secretary knox show mission deeply appreciated japanese nation emphasize strongly friendly relation many year exist two people relation argentine republic friendly cordial also relation brazil whose government accept invitation united state send two army officer study coast artillery school fort monroe alsop claim hindrance healthy growth friendly relation united state chile eliminate submission question britannic majesty king george v amiable compositeur much gratification relation chile establish upon firm basis grow friendship chilean government place officer united state coast artillery charge chilean coast artillery school show appreciation american method confide american firm important work chilean coast defense last year revolution establish government ecuador break pricipal port republic previous occurrence chief american interest ecuador represent guayaquil quito railway incorporate united state bad render extensive transportation service account ecuadorian government amount run sum steadily increase ecuadorian government make provision pay thereby threaten crush existence american enterprise tranquillity restore ecuador result triumphant progress government force quito government interpose good office end american interest ecuador might save complete extinction part arrangement reach party request government ecuador consent name arbitrator act term railroad contract arbitrator name ecuadorian government pas upon claim arise since arrangement reach action similar arbitral tribunal 1908 pursuance request make time ago ecuadorian government department state give much attention problem proper sanitation guayaquil result detail officer canal zone send guayaquil recommend measure lead complete permanent sanitation plague fever infect region republic long constitute menace health condition canal zone hop report mission furnish point way whereby modicum assistance united state may properly lend ecuadorian government may make effective rid west coast south america focus contagion future commercial current pass panama canal matter claim john celestine landreau government peru claim arise certain contract transaction connection discovery exploitation guano discussion two government since 1874 1 glad report result prolong negotiation characterize utmost friendliness good side department state succeed secure consent peru arbitration claim negotiation attend draft signature protocol submit claim arbitral tribunal proceeding due celerity officer american public health service american sanitary engineer way iquitos employ peruvian government take charge sanitation river port peru build number submarine country continue show every desire american capital invest republic july united state send undergraduate delegate third international student congress hold lima american student first time invite one meeting republic uruguay show appreciation american agricultural method send large commission country employ many american expert assist build agricultural allied industry uruguay venezuela pay last claim settlement provide washington protocol include american citizen relation venezuela cordial trade republic unite state great country past summer revolution administration follow assassination president caceres year ago last november bring dominican republic verge administrative chaos without offer guaranty eventual stability ultimate success either party pursuance treaty relation united state dominican republic threaten necessity suspending operation american administration customhouse haitian frontier find necessary dispatch special commissioner island reestablish customhouse guard sufficient insure need protection custom administration effort make appear resulted restoration normal condition throughout republic good office commissioner able exercise instrumental bringing contend party together furnish basis adjustment hop result permanent benefit dominican people mindful treaty relation owe position government united state mediator dominican republic haiti boundary dispute fact revolutionary activity frontier become active practically obliterate line demarcation heretofore recognize pending definitive settlement boundary controversy find necessary indicate two island government provisional de facto boundary line do without prejudice right obligation either country final settlement reach arbitration tentative line choose one circumstance bring knowledge government seem conform best interest disputant border patrol find necessary reestablish custom purpose two country instruct provisionally observe line republic cuba last may throes lawless uprising time threaten destruction great deal valuable own american well existence government arm force cuba inadequate guard property attack time properly operate rebel force american marine dispatch naval station guantanamo province oriente protection american foreign life property cuban government thus able use force put outbreak succeed period six week presence two american warship harbor habana critical period disturbance contribute great measure allay fear inhabitants include large foreign colony discussion government cuba time question release government leasehold right bahia honda northern coast cuba enlargement exchange therefor naval station establish guantanamo bay south result negotiation thus carry agreement reach two government provide suitable enlargement guantanamo bay station upon term entirely fair equitable party concern request alike government political party panama american commission undertook supervision recent presidential election republic treaty relation indeed every geographical consideration make maintenance order satisfactory condition peculiar interest government unite state election pass without disorder new administration enter upon function government great britain ask support united state protection interest british holder foreign bonded debt guatemala government hopeful arrangement equitable british bondholder naturally unable view question apart relation broad subject financial stability central america policy united state permit escape vital interest renewal negotiation government guatemala american banker aim loan rehabilitation guatemalan finance way appear open government guatemala could promptly satisfy equitable british claim time improve whole financial position contribute greatly increase prosperity republic redound benefit foreign investment foreign trade country fail arrangement may become impossible government unite state escape obligation connection measure may become necessary exact justice legitimate foreign claim recent revolution nicaragua generally admit might well result general central american conflict intervention united state government honduras especially menace fortunately peaceful condition maintain within border republic financial condition country remain unchanged mean find final adjustment press outstanding foreign claim make regrettable financial convention unite state honduras thus far failed ratification government unite state continue hold ready cooperate government honduras believe much longer delay meet foreign obligation hop proper time american banker willing cooperate purpose possible make congress communication upon present foreign relation united state detail convey adequate impression enormous increase importance activity relation government really preserve american people free opportunity foreign market soon indispensable prosperity even great effort must make otherwise american merchant manufacturer exporter find many field american trade logically predominate preempt energetic effort government commercial nation many way hearty cooperation legislative executive branch government much absolute essential spirit united effort singleness purpose allude specific examples action ought result america take proper place important field commercial activity enterprise unless merchant marine american commerce enterprise effectively foster field unless good american bank country refer need american newspaper country proper mean public information need assure permanency train foreign service need legislation enable member foreign service systematically bring direct contact industrial manufacturing export interest country order american business men may enter foreign field clear perception exact condition deal officer may prosecute work clear idea american industrial manufacturing interest require congress fully realize condition obtain world find threshold middle age nation emerge full grown peer great concourse nation pass various formative period struggle develop domestic resource deal domestic question nation mature continue foreign relation temporary expedient natural people domestic affair sole concern past diplomacy often consist normal time mere assertion right international existence large relation broad right obligation others number great guiding principle lay early history government recent task diplomacy adjust principle condition develop corollary find practical application old principle expand meet new situation thus evolve base upon rest superstructure policy must grow destined progress nation successful conduct foreign relation demand broad modern view meet new question build future confine outwear dogma past perspective appropriate emergence colonial time condition open panama canal mark new era international life create new worldwide condition vast correlation consequence obtain hundred year come must wait event overtake u unawares continuity purpose must deal problem external relation diplomacy modern resourceful magnanimous fittingly expressive high ideal great nation 3d december send message congress confine foreign relation secretary state make report president congress review history transaction state department one year must therefore included president annual message congress fully inform full discussion transaction government view inform congress important event year recommend new legislation require space one message reasonable length affords therefore adopt course send three four message first ten day session include reference important matter bring attention congress condition country reference business could hardly better four year administration draw close developed great speculative expansion wide field new investment recovery progress make depressing condition follow panic 1907 steady improvement clear easily trace statistic business country solid basis credit unduly extend every phase situation seem state preparedness period unexampled prosperity manufacturing concern run full capacity demand labor never constant grow foreign trade country year exceed balance excess export exceed half export manufacture partly manufacture material export farm product show increase domestic consumption year bumper crop total money value farm product exceed year bushel unit price agricultural product gradually fall yet total value entire crop great know history condition treasury satisfactory total debt constitute panama canal loan debt include greenback treasury gold coin reserve outstanding greenback addition cash balance treasury general fund increase general fund last year three year expenditures government decrease influence effort economize year present apparent exception estimate secretary treasury ordinary receipt exclusive postal revenue year end june 30 1914 indicates amount sum estimate expenditure year exclusive panama canal disbursement postal disbursement payable postal revenue indicate deficit year end june 30 1913 similarly estimate receipt total corresponding estimate expenditure year submit secretary treasury congress amount show increase estimate 1914 total estimate 1913 due increase estimate river harbor next year project survey authorized congress increase new pension bill increase estimate expense navy department estimate navy department year 1913 include two battleship congress make provision one battleship therefore navy department deem necessary proper make estimate include first year expenditure three battleship addition amount require work uncompleted ship construction addition natural increase expenditure uncompleted ship ad ditional battleship estimate increase due pay require additional enlist men navy must add additional cost construction impose change law make applicable ship build private shipyard exception three item estimate show reduction year total estimate 1913 estimate panama canal construction 1914 less 1913 time panic seem far remove best time u prepare financial system withstand storm cry need country proper bank currency system exist one inadequate everyone study question admits business national government provide medium automatically contract expand volume meet need trade present system lack indispensable quality elasticity part monetary medium elasticity currency peculiar provision law require national bank maintain reserve meet call depositor operate increase money stringency arise rather expand supply currency relieve operate upon bank furnishes motive withdrawal currency channel trade bank save offer inducement whatever use reserve expand supply currency meet exceptional demand panic 1907 congress realize present system adapt country need panic possible might properly avoid legislative provision accordingly monetary commission appoint make report february 1912 system recommend involved national reserve association certain faculty function bank give govern authority power issue circulate note approve commercial paper fix discount method transfer currency expand supply monetary medium need prevent export hoard gold generally exercise supervision supply money every part country prevent stringency panic stock association distribute bank whole united state state national mixed proportion bank unit capital stock pay control association vest board director elect representative bank except certain director three cabinet officer comptroller currency president appoint governor association three person select director two deputy governor elect board director detail plan work great care ability plan general seem furnish basis proper solution present difficulty feel government might properly give great voice executive committee board director without danger inject politics management think federation system bank good one provide proper precaution take prevent bank large capital absorb power ownership stock bank objection central bank seem obviated ownership reserve association distribute among bank country bank free earnings reserve association limit percentage tit reasonable fixed amount profit turn government treasury quite probable still great security control money center may work plan certain however objection make past history country central bank furnish monopoly financial power private individual would apply association whose ownership control widely distribute divided bank country state national one hand chief executive three department head comptroller currency ancient hostility national bank branch concentrate privilege banking business carry financial transaction government prevent establishment bank since abolish jackson administration present national banking law obviate objection grow provide free banking system set stockholder establish national bank comply condition law seem national reserve association meet objection similar way give bank state national accordance size certain share stock reserve association nontransferable hold bank performs function partner reserve association report commission recommend provision imposition graduate tax expanded currency character furnish motive reduce issue note whenever presence money market require exigency trade word whole system work great care theoretically present plan ought command support practically may require modification various provision order make security abuse combination among bank impossible face cry necessity improvement present system urgently invite attention congress propose plan report commission hope earnest consideration may suggest amendment change within general plan lead adoption benefit country class community interested safe sane banking currency system one prevent panic automatically furnish trade center currency need carry business center wage earner class community whose experience good qualifies make suggestion sufficiency currency bank system banker business men ought therefore ignore recommendation reject financial judgment proper method reform financial system merely suspicion exists mind many fellow citizen duty congress take plan suggest examine standpoint give impartial consideration testimony whose experience ought fit give best advice subject adopt plan secure benefit desire banking currency system seem far away wage earner farmer fact vitally interested safe system currency shall graduate volume amount need shall prevent time artificial stringency frighten capital stop employment prevent meeting pay roll destroy local market produce penury want regard duty former message congress urge revision tariff upon principle protection judgment custom duty ought revise downward reduction ought rate would represent difference cost production article question home abroad reason veto several bill present last session congress new congress elect platform tariff revenue rather protective tariff revise tariff basis needless occupy time congress argument recommendation favor protective tariff pass tariff law however know payne tariff law august 5 1909 1 desire call attention section 38 act assess special excise tax corporation contain provision require levy additional 50 per cent annual tax case neglect verify prescribed return file time require law additional charge 50 per cent operate case harsh penalty may mere inadvertence unintentional oversight law amend mitigate severity charge instance provision also make refund additional tax heretofore collect infraction case penalty impose disproportionate offense equitably demand relief estimate next fiscal year assemble secretary treasury transmit congress purpose later day submit congress form budget prepared recommend president commission economy efficiency view suggest useful informing character properly frame budget war department combine within jurisdiction function country usually occupy three department management army coast defense jurisdiction extend government philippine porto rico control receivership custom revenue dominican republic also include recommendation plan improvement harbor waterways execution adopt virtue executive order supervision construction panama canal small army consist men exclude philippine scout leave consideration coast artillery force whose position fix various seacoast defense present garrison various insular possession within continental united state mobile army men little force must still draw upon supply new garrison great naval base establish pearl harbor hawaiian island protect lock rapidly approach completion panama force remain united state scatter nearly 50 post situate variety historical reason 24 state post contain fraction regiment average less 700 men time peace historical policy administer unit separately geographical organization word army time peace never united organization merely scatter group company battalion regiment first task time war create scatter unit army fit effective teamwork cooperation task meeting patent defect war department address past year many year officer division whose business study problem plan remedy defect establishment general staff nine year ago body create purpose necessarily required time overcome even personnel habit mind engendered century lack method late year work become systematic effective recently address vigorously problem comprehensive plan army reorganization prepared war college division general staff plan thoroughly discuss last summer series open conference hold secretary war attend representative branch army congress printed form distribute member congress throughout army national guard widely institution learn elsewhere united state first time tentative chart future progress influence study definite effective step take toward army reorganization far reorganization lie within executive power hitherto difference policy treatment organization foreign garrison troop within united state difference situation vital foreign garrison prepare defend instant notice foe may command sea unlike troop united state count upon reinforcement recruitment outpost upon fall brunt first attack case war historical policy unite state carry regiment time peace half strength application foreign garrison past year defect remedied philippine garrison former garrison 12 reduce regiment replace garrison 6 regiment full strength give fully number rifleman estimate economy cost maintenance per year garrison permanent regimental unit instead transfer periodically back forth united state remain islands officer men compose unit however serve regular tropical detail usual thus involve great hardship upon personnel greatly increase effectiveness garrison similar policy propose hawaiian panama garrison fast barrack complete strongly urge upon congress necessary appropriation purpose promptly make opinion first importance national outposts upon successful home defense primarily depend finish place effective condition early possible day simultaneously foregoing step war department proceed reorganization army home formerly disassociate unit united tactical organization three division consist two three brigade infantry far practicable proper proportion divisional cavalry artillery course extent reform carry executive practically limited paper organization scatter unit bring proper organization remain physically scattered congress supply necessary fund group concentrated post do present difficulty drilling scatter group together thus train proper team play remove shall least army know organization inspect proper commander unit emergency order issue time war emergency moreover organization many respect necessarily skeleton furnish guide future development separate regiment company know brigade division belong maneuver together whenever maneuver establish congress gap organization show pattern fill new troop nation grow large army provide one important reform accomplish past year legislation enact army appropriation bill last summer provide regular army reserve hitherto national policy assume outbreak war regiment would immediately raise full strength law provide mean could accomplish loss regiment send front could repair respect neglect lesson learn nation new law provide soldier serve four year color shall pass reserve three year option may go reserve end three year remain four year reserve call active duty case war national emergency call case receive state amount pay period member reserve legislation imperfect opinion certain particular important step right direction earnestly hope carefully study perfected congress exist law national guard constitute regular army first line national defense organization discipline training equipment recent legislation assimilate far possible regular army practical efficiency effect train greatly increase citizen soldier present condition reach stage development beyond reasonably ask go without direct assistance form pay federal government hand pay national treasury would justify unless produce proper equivalent additional efficiency part national guard organize militia order outside limit united state thus lawfully use general military purpose officer men ambitious eager make thus available become efficient national reserve citizen soldiery force train men regular army upon rely militia pay bill form agreed authority war department representative national guard opinion adequately meet condition offer proper return pay propose give national guard believe enactment law would long step toward provide nation first line citizen soldiery upon main reliance must depend case national emergency plan organization national guard tactical division line adopt regular army formulate war college division general staff national guard consist men serious war past always necessary war future doubtless necessary nation depend addition regular army national guard upon large force volunteer present adequate provision law raise force pending congress however bill make provision believe admirably adapt meet exigency would present case war passage bill would entail dollar expense upon government time future war come war come method therein direct accordance best military judgment ought act would prevent necessity discussion legislation delay incident consideration adoption earnestly urge passage army appropriation act also carry legislation consolidation quartermaster department subsistence department pay corps single supply department know quartermaster corp also provide organization special force enlist men know service corp gradually replace many civilian employee engage manual labor necessary every army believe enactment improve administration military establishment consolidation supply corp already effect organization service corp put effect foregoing reform direction economy efficiency except slight increase necessary garrison outpost hawaii panama call large army tend produce much efficient one substantial new appropriation require point necessary complete fortification barrack naval base outposts beyond sea porto rico continue show notable progress commercially spread education external commerce increase 17 per cent precede year bring total value five time value commerce island 1901 year pupil enrol public school precede year compare first year american administration special effort way promotion vocational industrial train need particularly press island bubonic plague break last june quick efficient response people porto rico demand modern sanitation strikingly show thorough campaign institute plague hearty public opinion support government effort check progress prevent recurrence failure thus far grant american citizenship continue ground dissatisfaction bill confer citizenship pass house representative await action senate heartily favor passage bill believe demand citizenship amply earn sustain loyalty part inhabitant island remember demand must mind porto ricans entirely disassociate thought statehood believe substantial approve public opinion united state porto rico contemplates statehood island ultimate form relation u believe aim striven full possible allowance legal fiscal american citizenship bond u word relation analogous present relation great britain colony canada australia would conduce full development porto rico time would grant economic political benefit american flag bill pending congress revolutionize carefully work scheme government philippine island govern proposes render virtually autonomous absolutely independent eight year stich proposal found assumption discharge trusteeship filipino people responsibility world prepare selfgovernment well national sovereignty thorough unbiased knowledge facts clearly shows assumption absolutely without justification believe substantial difference opinion among responsibility face philippine problem administration islands believe one future people responsible concern countenance policy fraught dire consequence whose behalf ostensibly urge philippine island embark upon experiment unprecedented deal dependent people develop condition exclusively welfare find archipelago contain 24 tribes race speak great variety languages population 80 per cent could neither read write unifying force common education commercial economic development gradual participation local endeavor evolve homogeneous people fit determine time arrive destiny seek arouse national spirit older colonial theory suppress spirit character work keenly recognize orient success thus far followed little envy initiating policy find hampered condition grow earlier day different theory administration work far do duty filipino far discharge half million filipino student philippine school help mold men future homogeneous people still remain million filipino child school age yet reach freed american control integrate force common education common language cease educational system well start slip back inefficiency disorder enormous increase commercial development island make since virtually grant full access market three year ago every prospect increase development diversify industry free american control development bound decline every observer speak great progress public work benefit filipinos harbor improvement roads railway irrigation artesian well public building well mean communication large part island still unreached still even unexplored road railway need many part irrigation system still instal well driven whole village town still without mean communication almost impassable road trail even great progress sanitation successfully suppress smallpox bubonic plague asiatic cholera find cure beriberi segregate leper help make manila healthful city orient free life throughout whole archipelago former dread disease nevertheless incomplete many essential permanence sanitary policy even remain accomplished freed american control sanitary progress bound arrest achieve likely lose concurrent economic social industrial development island development political capacity people progressive participation government filipinos steadily hopefully trained spanish control share way government american control share largely increasingly within last dozen year gradually give complete autonomy municipality right elect provincial governing board low house insular legislature four native member nine member commission upper house chief justice two justice supreme court higher judicial position justice peach native classify civil service proportion filipino increase 51 per cent 1904 67 per cent 1911 thus municipal employee go per cent provincial employee 60 per cent official employee central government filipino ideal kept mind political guidance island real popular mere paper independence happy say filipino do well enough place fill discharge political power intrust warrant belief educate train complete present satisfactory result due constant support supervision every step americans task undertaken high assume nation accomplishment must demand even patience must forget found filipino wholly untrained government advent experience seek repress rather encourage political power take long time much experience ingrain political habit steadiness efficiency popular ultimately must rest upon common habit think upon reasonably develop public opinion foundation selfgovernment let alone independence present philippine island disregard even racial heterogeneity lack ability think nation sufficient point liberal franchise privilege 3 per cent filipino vote 5 per cent people say read public press confer independence upon filipino therefore subject great mass people dominance oligarchical probably exploit minority course cruel people would shameful u true course pursue steadily courageously path thus far follow guide filipinos pursuit continue cultivation sound political habit education political practice encourage diversification industry realize advantage industrial education conservatively approve cooperative method check danger concentrate wealth building sturdy independent citizenship disinterested endeavor secure filipinos economic independence fit complete power decide eventually accord large good whether shall accompany independence present declaration even future independence would retard progress dissension disorder would arouse part would disingenuous attempt guise confer benefit relieve heavy difficult burden thus far bravely consistently sustain would disguise policy scuttle would make helpless filipino football oriental politics tinder protection guaranty independence would powerless enforce pending congress large number bill propose grant privilege erect dam purpose create water power navigable river pendency bill bring important defect exist general dam act act opinion grant sufficient power federal government deal construction dam exact protective condition interest navigation permit federal government condition permit require part value thus create shall apply general improvement protection stream believe one important matter internal improvement confront government navigable river country comparatively long shallow order may make fully useful navigation come vogue method improvement know canalization method consist build series dam lock create long pool deep navigable water dam usually create also water power commercial value water power thus create make available improvement navigation stream manifest improvement much quickly effect one hand burden general taxpayer country much reduced private interest seek permit build dam navigable stream usually urge thus improve navigation impair navigation allow take entire profit development whatever may way relieve government expense improve navigation give due consideration must apparent may profit beyond reasonably liberal return upon private investment potential asset government carry comprehensive policy waterway development objection retention use asset government comprehensive waterway policy include protection development public use water ignore make execute plan protection development navigation also equally clear inasmuch water power thus create may incident general scheme waterway improvement within constitutional jurisdiction federal government regulation water power lie also within jurisdiction opinion constructive statesmanship require legislation enact permit development navigation great river go hand hand utilization water power create course improvement general dam act amend make possible deem highly important nation adopt consistent harmonious treatment project preserve purpose value government whose right grant permit policy equivalent throw away valuable national asset past year work construction upon canal progress satisfactorily 87 per cent excavation work complete 93 per cent concrete lock place view great interest manifest slide culebra cut glad say report goethals allay apprehension point gratify note none slide occur year would interfere passage ship canal fact operation slope pressure finally adjust growth vegetation minimize erosion bank cut slide problem practically solve ample stability assure culebra cut although official date opening set january 1 1915 canal fact present indication open ship latter half 1913 fixed date yet set shipping interest advise soon assurance give vessel pass without unnecessary delay recognize administrative problem management canal congress act august 24 1912 make admirable provision executive responsibility control canal government canal zone problem efficient organization receive careful consideration scheme organization control best adapt condition canal may formulate put operation expeditiously possible act tinder authority confer congress executive proclamation promulgate follow schedule toll ship pass canal base upon thorough report emory johnson special commissioner traffic toll merchant vessel carry passenger cargo per net vessel 100 cubic actual earning capacity 2 vessel ballast without passenger cargo 40 per cent less rate toll vessel passenger cargo 3 upon naval vessel transport collier hospital ship supply ship 50 cent per displacement ton 4 upon army navy transport collier hospital ship supply ship per net ton vessel measure rule employed determine net tonnage merchant vessel rule determination tonnage upon toll charge base course preparation promulgate due season proclamation issue respect panama canal toll accord panama canal act pass congress august 24 1912 advise british government prepare protest act enforcement far relieve payment toll american ship engage american coastwise trade ground violate british right tinder treaty concern panama canal protest present promptly consider effort make reach satisfactory adjustment differ ences may two government promulgation efficient workman compensation act adapt particular condition zone await adequate appropriation congress payment claim arise thereunder urge speedy provision make order may install upon zone system settle claim injury best accord modern humane social industrial theory completion canal grows nearer wonderful executive work goethals become conspicuous eye country world seem wise proper make provision law reward may commensurate service rendered country suggest reward take form appointment goethals major general army unite state law authorize appointment accompany provision permit designation chief engineer upon retirement present incumbent office navy united state great state efficiency powerful ever emulation exists different country respect increase naval military armament condition permanent one view many improvement increase foreign government slight halt part respect new construction throw u back reduces u naval power first rank place u among nation second rank past 15 year navy expand rapidly yet far less rapidly country reduce expenditure navy mean reduce military strength world history show importance sea power adequate defense support important definite policy pleasure attend autumn mobilization atlantic fleet glad observe note preparedness fleet instant action review bring president secretary navy great powerful collection vessel ever gather american water condition fleet officer enlist men equipment vessel entitle authority great credit commend congress give legislative sanction appointment naval aid secretary navy aid council aid appoint secretary navy assist conduct department proven high utility furnish executive com mittee skilled naval expert coordinate action various bureau navy advice enable secretary give administration time economical efficient never unite state navy compare efficiency present one never requirement respect naval warfare higher exact year ago congress refuse appropriate one battleship think great mistake policy make urgently recommend congress make tip mistake last session appropriation authorize construction three battleship addition destroyer fuel ship auxiliary vessel show build program general board confront condition respect navy world require u would maintain navy insurance peace augment naval force least two battleship year battle cruiser gunboat torpedo destroyer submarine boat proper proportion desire war would go far nation world avoid war world power population wealth definite policy responsibility pacific atlantic defense panama canal together enormous world trade missionary outpost frontier civilization require u recognize position one foremost family nation clothe sufficient naval power give force reasonable demand give weight influence direction progress powerful christian nation advocate observe secretary navy devotes space change disciplinary system vogue branch service think nothing quite unsatisfactory either army navy severe punishment necessarily inflict desertion purely military offense glad hear british solve important difficult matter satisfactory way commend consideration congress detail new disciplinary system recommend law pass put force army navy invite attention congress part report secretary navy recommend formation naval reserve organization navy repeat recommendation make last year proper provision make rank commander chief squadron fleet navy inconvenience attend necessary precedence foreign admiral whenever meet official function ought avoid impairs prestige navy defect easily remove department active enforcement law well organize large force ever history government prosecution successfully conclude pending testify effectiveness departmental work prosecution trust sherman antitrust law go without restraint diminution decree similar entered standard oil tobacco case enter suit like suit powder trust bathtub trust strongly convince steady consistent course regard continue supreme court decision upon new phase trust question already finally decide go offer solution troublesome issue quiet calm judicial way without radical legislation change governmental policy regard combination denounce sherman antitrust law already recommend aid matter legislation would declare unlawful certain phase unfair competition interstate trade also advocate voluntary national incorporation large industrial enterprise provision close supervision bureau corporation board appoint purpose make certain compliance antitrust law one hand give great security stockholder possible prosecution believe however orderly course litigation court regular prosecution trust charge violation antitrust law produce among business men clearer clear perception line distinction business encourage business condemn quiet way question trust settle competition retain economic force secure reasonableness price freedom independence trade glad bring attention congress fact supreme court radically alter equity rule govern procedure equity side federal court though change yet put practice enable u state actual result reform accomplish character reasonably prophesy greatly reduce time cost litigation court court adopt many short method present english procedure may take little profession accustom method certain greatly facilitate litigation action supreme court drastic full appreciation necessity great reform court procedure hesitation follow tip action recommendation foreshadow message three year ago section statute govern procedure federal court side amend give supreme court right make rule procedure common law since begin court exercise equity doubt full consideration subject enable court give effect substantial difference right remedy system common law system equity unite two procedure form one civil action shorten procedure civil action furnish model state court exercise concurrent jurisdiction federal court first instance statute force procedure federal court make conform procedure state court hold day make progress court procedure conformity statute make federal method dependent upon action state legislature think great opportunity congress intrust high tribunal country evidently imbue strong spirit favor reform procedure power frame model code procedure preserve valuable necessary right remedy common law equity shall lessen burden poor litigant minimum expedition cheapness fought defend federal court final judgment workman compensation act report special commission appoint congress executive pass senate pending house passage previous message urge upon congress venture call attention opposition develop senate overcome majority body seem grow rather misapprehension effect opposition principle say think act well effect directly upon relation employer employee act apply railroad common carrier interstate character sure passage act would greatly relieve court heavy burden litigation would enable dispatch business speed never attain court justice country third series message bring attention congress important transaction government department last year discuss need reform recommend adoption legislation shall make duty head member president cabinet convenient time attend session house senate shall provide seat house give opportunity take part discussion answer question due notice rigid hold apart executive legislative branch government work great advantage either much lose motion machinery due lack cooperation interchange view face face representative executive member two legislative branch government never intend separated sense constant effective touch relationship legislative executive performs appropriate function function must coordinate time time debate arise house upon issue information particular department head would enable present end simple explanation statement time time forceful earnest presentation facts argument representative executive whose duty enforce law would bring useful reform amendment absence statement fail passage think mistaken say presence member cabinet floor house would greatly contribute enactment beneficial legislation would degree deprive either legislative executive independence separation two branch intend promote would facilitate cooperation public interest hand sure necessity duty impose upon department head appear ilouse answer search question render upon foot account do do administration spur member cabinet close attention detail department great familiarity need great care avoid criticism answer bring question put discussion arise member either house member cabinet may properly evoke objection make member administration vote could exercise power floor house could assume attitude authority control english parliamentary government enable meet responsibility english system thrust upon agree certain respect would satisfactory member cabinet could time member house vote power impossible system lack feature may detract influence department chief prevent good result describe matter legislation matter administration enactment law would quite within power congress without constitutional amendment possibility usefulness might well make experiment disappointed misstep easily retrace repeal enable legislation new proposition house representative congress proposition refer select committee seven member committee make extensive report urge adoption reform report show history without illustration necessity examples practice point early day secretary repeatedly call presence either rouse consultation advice information also refer remark justice story commentary constitution urgently present wisdom change report find volume report committee first session congress april 6 1864 february 4 1881 select committee senate recommend passage similar bill make report approve separation three branch executive legislative judicial point reason propose change although separate existence branch cooperate different member human body must cooperate order form figure perform duty perfect man report conclude follow system require selection strong men head department require well equip knowledge office also require strong men leader congress participate debate bring strong men contact perhaps conflict advance public weal thus stimulate ability effort thus assuredly result good country appear actual experience head department fact time perform additional duty impose bill force office increase duty devolve personally diminish undersecretary appoint could confide routine administration require order accuracy principal officer could confine attention duty require wise discretion intellectual activity thus would abundance time duty bill indeed committee believe public interest would subserve secretary relieve harass care distribute clerkship closely supervise mere machinery department committee believe adoption bill effective execution provision first step toward sound reform secure large wisdom adoption policy well system execution would difficult mention name higher authority practical knowledge government append report postal saving bank system extend include post office well 645 branch office station large city depository patron system may open account number depositor amount deposit approximately include draw depositor purpose buy postal savings bond experience demonstrate value dispense introduce place certificate deposit gross income postal saving system fiscal year end june 30 1913 amount interest payable depositor cost supply equipment salary thus appear system lack year pay interest expense estimate however deposit reach sum present rate soon system law postal saving fund deposit post office require redeposit local bank state national bank number qualify depository fund deposit secure bond aggregate amount represent municipal bond several message favor recommend adoption system parcel post postal appropriation act last year general system provide installation direct 1st january entail upon post office department great deal heavy labor postmaster general informs date select wit 1st january near hand department readiness meet successfully requirement public trial past three year system classify postmaster part country lie mississippi river west canada north atlantic ocean east mason dixon line south sufficiently satisfactory justify postal authority recommend extension order include postmaster country september 1912 upon suggestion postmaster general direct prepare order put system effect except alaska guam hawaii porto rico samoa date october 15 1 issue order affect postmaster order post office divide group b group include postmaster whose compensation 500 group b whose compensation less sum different method pursue selection postmaster group group b criticism make order ground motive political nothing could truth order make election interest efficient public service several time request congress give authority put postmaster local officer include officer custom officer united state marshal local agent departments classification law take away necessity confirm appointment senate deeply regret failure congress follow recommendation change would take politics practically every local officer would entirely cure evil grow present law must always remain remnant spoil system expect establishment parcel post january 1st largely increase amount mail matter transport railway congress prompt provide way may receive additional compensation entitle postmaster general urge department plan complete readjustment system pay railway carry mail adopt substitute space weight principal factor fix compensation plan possible determine without delay additional payment make account parcel post postmaster general recommendation base result investigation begin early administration object determine cost railway carry mail statistic obtain course inquiry show many railway particularly large system make profit mail transportation certain line actually carry mail loss result investigation department give subject careful consideration decide urge abandonment present plan fix compensation basis weight mail carry plan prove exceedingly expensive respect unsatisfactory method propose railway company annually submit department report show cost carry mail cost apportion basis car space engage payment allow rate thus determine amount cover cost reasonable profit railway satisfy manner department apportions cost fix compensation right tinder new plan appeal interstate commerce commission feature propose law would seem insure fair treatment railway hop congress give matter immediate attention method compensation recommend department suitable plan promptly authorize interior department problem administration include within jurisdiction present difficult question due perhaps temporary cause political character especially inherent difficulty performance function assign chief duty guardianship public domain disposition domain private ownership homestead mining law patent government individual authorize certain condition last decade public seem become suddenly aware large part domain pass control private ownership law well adapt modern condition also provision exist law regulation adopt accordance law strictly observe transfer title much fraud intervene pecuniary benefit dishonest person arise thereupon demand conservation public domain protection fraudulent diminution preservation part private acquisition seem necessary keep future public use movement excellent intention prompt useful result nevertheless bad effect western country recently feel respect danger reaction toward old abuse unless attain golden mean consist prevention mere expioitation public domain private purpose time facilitate development benefit local public land law need complete revision secure proper conservation one hand land ought keep public use hand prompt disposition land ought disposed private ownership turn private use properly guard lease addition enough official land department legal knowledge sufficient promptly make decision call whole system reorganize reorganize decision make promptly ought men earn title public land statute receive patent within reasonably short period present administration do could regard necessity reform change revision law increase reorganization force remain submit congress wisdom full examination subject order large important part people west may relieve irritation invite attention discussion secretary interior need legislation respect mining claim lease coal land country alaska similar disposition oil phosphate potash land also discussion proper use make site held government many land withhold use public general withdrawal act pass last congress act purpose dispose question purpose preserve land question could solve earnestly urge matter high importance western fellow citizen ought command immediate attention legislative branch government another function interior department perform guardianship indians spite everything say criticism policy government toward indian amount wealth hold ward per caput show government generous management large estate great variety circumstance surround tribe case call exercise high business discretion machinery provide indian bureau discharge function entirely inadequate position indian commissioner demand exercise business ability first order difficult secure talent salary provide condition health indian prevalence tribe curable disease exploit recently press message congress last session bring subject attention invite special appropriation order facility overcome disease among indian might properlv increase action take congress subject appropriation make since commission appoint authority congress report proper method secure railroad development alaska formulate report expect opportunity end session submit recommendation utility educational system carry department agriculture benefit farmer country call elaboration year growth variety facts bring benefit farmer year confirm wisdom expenditure appropriation make department department agriculture charge execution law passage encounter much opposition manufacturer others fear effect upon business enforcement provision opposition arouse indignation public lead intense sympathy severe rigid enforcement provision new law deal many instance question whether product large business enterprise form food preparation deleterious public health great majority instance issue easily determinable case hard draw line useful harmful food preparation case like decision involve destruction great business enterprise represent investment large capital expenditure great energy ability danger serious injustice considerable enforcement new law spur great public indignation public official charge execute law might injustice heat controversy unconscious pride opinion obstinacy conclusion reason president roosevelt felt justified create board expert know remsen board case much importance appeal might take review decision bureau chemistry agricultural department heartily agree wise create board order injustice might do question arise generally involve palpable injury health upon narrow doubtful line respect well error dangerous radically destructive think time come congress recognize necessity tribunal appeal make specific statutory provision struggle suppress evil great proportion like impure food must provide machinery law prevent become instrument oppression ought enable whose business threaten annihilation tribunal form appeal complete day court refer first message question improve system agricultural credit secretary agriculture make investigation matter credit country commend consideration information agent able collect way minimize importance proposal give accurate information upon phase question heretofore commend congress examination report secretary commerce labor especially part discuss office bureau corporation value commerce propose trade commission step take secure organization national chamber commerce heartily commend view plan trade commission look fix price altogether impractical ought moment consider possible solution trust question trust question enforcement sherman antitrust law gradually solve maintain principle restore practice competition law quietly firmly enforced business adjust statutory requirement unrest commercial circle provoke trust discussion disappear conformity joint resolution congress executive proclamation issue last february inviting nation world participate international exposition hold san francisco celebrate construction panama canal sympathetic response immediately forthcoming several nation already select site building furtherance invitation special commission visit european country past summer receive assurance hearty cooperation task bring together universal industrial military naval display unprecedented scale evident exposition accurate mirror world activity appear 400 year date discovery pacific ocean duty united state make nation welcome san francisco facilitate acquaintance promote expansion commerce familiarize world new trade route panama canal action state government individual assures comprehensive exhibit resource country progress people participation state individual supplement adequate showing varied unique activity national government united state good grace invite foreign government erect building make expensive exhibit refuse participate would wise forego opportunity join nation inspire interchange idea tend promote intercourse friendship commerce duty government foster build commerce canal duty government construct earnestly recommend appropriation session sum enable united state construct suitable building install governmental exhibit otherwise participate international exposition manner commensurate dignity nation whose guest people world recommend also legislation facilitate entry material intend exhibition protect foreign exhibitor infringement patent unauthorized copying pattern design alien send san francisco construct care foreign building exhibit admit without restraint embarrassment city washington beautiful city population color annual municipal budget 14 ooo ooo presence national capital governmental structure constitute chief beauty interest city public ground extensive opportunity improve city making still attractive great plan adopt year ago one half cost run city pay taxation upon property real personal citizen resident half borne general government city expand remarkable rate account come part country people finish business career elsewhere build make permanent place residence whole city municipality well govern well lighted water supply good street well paved police force well discipline crime flagrant purlieu center vice like large city exploit exercise influence control government city suppress far find practicable municipal graft inconsiderable interior court city noisome center disease refuge criminal congress begin clean progress make case notorious know willow tree alley movement continue mortality past year rate per race among white per thousand among black per thousand low mortality rate ever record district one cry needs government district tribunal public authority purpose supervise corporation engage operation public utility bill pending congress ought pass washington show direction congress city model form government long authority public utility withhold municipal government must always fective without undue criticism present street railway accommodation truly say spur public utility commission might substantially improve school system washington perhaps might better economy management distribution building usefulness nevertheless greatly increased recent year offer excellent facility primary secondary education time time considerable agitation washington favor grant citizen city franchise constitute elective government strongly oppose change history washington disclose number experiment kind always abandon unsatisfactory truth city govern popular body wit congress united state select people united state washington people come live knowledge origin city restriction therefore voluntarily give privilege living municipality govern popular vote washington unique origin use housing localize sovereignty nation people live must regard peculiar character must content subject control body select people nation agree certain inconvenience grow government city national legislature like congress would perhaps possible lessen delegation congress district commissioner great legislative power enactment local law possess especially police character every loyal american personal pride beauty washington development growth one proper appreciation capital city would favor niggardly policy respect expenditures national treasury add attractiveness city belongs every citizen entire country citizen visit without sense pride ownership restore commission fine art instance committee senate original plan french engineer city washington know great certainty course improvement washington take delay make improvement far involve extension park system construction greatly need public building appropriate building state department department justice department commerce labor project plan approve nothing want appropriation begin completion structure hall archive also badly need nothing do toward construction although land long buy pay plan make union potomac park valley rock creek rock creek park necessity connection soldier home rock creek park call comment ask delay carry plan money treasury plan national scope improvement treat national project plan find hearty approval throughout country quite sure information comparatively small expense part district columbia retroceded virginia portion include arlington estate fort myer palisade potomac acquire purchase jurisdiction state virginia land cede nation ought do construction lincoln memorial memorial bridge base lincoln monument arlington would appropriate symbolic expression union north south capital nation urge upon congress appointment commission undertake national improvement submit plan execution plan submit approved work carry washington really become ought beautiful city world