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Leading Problems Confronting Our Government
Ably Discussed By the Executive
CURRENCY REFORM PLAN
The Regulation of Public Service
Corporations is Necessary, But
They Must Have Fair Treatment—
Integrity of Administration of
Public Affairs a Duty That Ap -
plies to All.
To the Senate and House of Repre¬
sentatives:
No nation has greater resources
than ours, and I think it can be
truthfully said that the citizens of no
nation possess greater energy and in¬
dustrial ability. In no nation are
tbe fundamental business condi¬
tions sounder than in ours at this
very moment; and it is foolish, when
such is the case, for people to hoard
money instead of keeping it in sound
banks; for it is such hoarding that
is the immediate occasion of money
stringency. Moreover, as a rule, the
business of our people is conducted
with honesty and probity, and this
applies alike to farms and factories,
to railroads and banks, to all our leg¬
itimate commercial enterprises.
In any large body of men, how¬
ever, there are certain to be s#ne
who are dishonest, and if the condi¬
tions are such that these ine ti pros¬
per or commit their misdeeds with
impunity, their example is a very evil
thing for the community, Where
these men are business men of great
sagacity and of temperament both
unscrupulous and reckless, and where
the conditions are such that they act
without supervision or control and at
first without effective check from
public opinion, they delude many in¬
nocent people into making invest¬
iness ments or embarking in kinds of bus¬
that are really unsound, When
the misdeeds of these successfully
dishonest men are discovered, suffer¬
ing comes not only upon them, but
upon the innocent men whom they
have misled. It is a painful awak
ening, whenever it occurs; and, nat¬
urally, when it does occur those who
suffer are apt to forget that the lon¬
ger it was deferred the more painful
it would be. In the effort to punish
the guilty it is both wise and proper
to endeavor so far as possible to min¬
imize the distress of those who have
been misled by the guilty. Yet it is
not possible to refrain because of
such distress from striving to put an
end to the misdeeds that are the ulti¬
mate causes of the suffering, and, as
a means to this end, where possible
to punish those responsible for them.
Our steady aim should be by legis¬
lation, cautiously and carefully' un¬
dertaken, but resolutely persevered
in, to assert the sovereignty of the
National Government by affirmative
action.
Interstate Commerce.
No small part of the trouble that
we have comes from carrying to ail
extreme the national virtue of self
reliance, of independence in initiative
and action. It is wise to conserve
this virtue and to provide for its
fulle'st exercise, compatible with see
ing that liberty does not become a
liberty to wrong others.
nately, this is the kind of liberty that
the lack of all effective regulation
inevitably breeds. The founders of
the Constitution provided that the
National Government should have
oomplete and sole control of inter
state commerce. There was then
practically no interstate business
save such as xvas conducted by
and this the National Government
at once proceeded to regulate in
thorougbgoing and effective fashion,
Conditions have now so xvholly
changed that the interstate commerce
by water is insignificant compared
with amount that goes by laud, and
almost all big business concerns are
now engaged in interstate commerce,
As a result, it can be partially and
imperfectly controlled or regulated
by the action of any one of the sev
eral States; such action inevitably
tending to be either too drastic or
else too lax, and in either case inef
fective for purposes of justice. Only
the .National Government can in
thoroughgoing fashion exercise the
needed control. This does not mean
that there should be any extension of
Federal authority, for such authority
already exists under the Constitution
in amplest and most far-reaching
form; but it does mean that there
should be an extension of Federal
activity. This is not advocating cen
tralization. It is merely looking facts
in the face, and realizing that cen
tralization m business has already
come and cannot be led or t
done, and that the p b c at lai
can lly protect itself fn cer
evil effects of ti bu
zation by pr< ldin tte
for the exen cor t
the iritv alres in
the Nation a G Ilf? I t l he (
stitution it The
halt in tl
cou a<Hior thi
has elected to pi
ily pursued A urine
as shown both in the legislation of
the Congress and the administration
of the law by the Department of
Justice. The most vital need is in
connection with the railroads. As to
these, in my judgment there should
now be either a national incorpora¬
tion act or a law licenitig railway
companies to engage in interstate
commerce upon certain conditions.
The law should be so framed as to
give to the Interstate Commerce
Commission power to pass upon the
future issue of securities, while am¬
ple means should be provided to en¬
able the Commission, whenever in
its judgment it is necessary, to make
a physical validation of any railroad.
As i stated in my Message to the
Congress a year ago, railroads should
be given power to enter into agree¬
ments, subject to these agreements
being made public in minute detail
and to the consent of the Interstate
Commerce Commission being first
obtained. Until the National Gov¬
ernment assumes proper control of
interstate commerce, in the exercise
of the authority it already possesses, j
it will be impossible either to give |
to or to get from the railroads full!
justice. The railroads and all other j i
great corporations will do well to
recognize that this control must come i
the only question is as to what gov
ernmental body can most wisely ex- j j
ercise it. The courts will determine
the limits within which the Federal j
authority can exercise it, and there
will still remain ample work within
each State for the railway commis
sion of that State; and the National [
Interstate Commerce Commission will \
xvork in harmony with the several j
State commissions, each within its j
own province, to achieve the desired!
end.
Income Tax.
Reference is here made to tbe diffi¬
culty of framing a law that will with¬
stand the test of the courts. The
argument is made by the President
that such a tax is not a tax on thrift
or industry. The German law is giv¬
en as an interesting example.
Sherman Antitrust Law.
should Moreover, be additional in my judgment legislation there look- j
ing to the proper control of the great!
business concerns engaged in
state business,, this control to be ex-;
ercised for their own benefit and
prosperity no less than for the pro
tection of investors and of the gen- ‘
eral public. As I have repeatedly j
elsewhere, -aid in Messages experience to the has Congress definitely and |
shown not merely the unwisdom but
the futility of endeavoring to put a '
stop to all business combinations. |
Modern industrial conditions are ■
such that combination is not only j
necessary but inevitable. It is so in ;
the world of business just as it is so
in the world of labor, and it is as
idle to desire to put an end to all
corporations to all big combinations
of capital, as to desire to put an ena j
to combination of labor. Corporation
and labor union alike have come to
stay. Each of good if properly and not managed evil. \\ hen- iaj
a source
ever in either there is evil, it should
he promptly held to account; but at
should receive hearty encouragement
so long as it is properly managed. It
is profoundly immoral to put or keep
on the statute books a law, nominally
In tbe interest of public morality,
that really puts a premium upon
public immorality, by undertaking tc
forbid honest men from doing
must be done under modern business
conditions, so that the law itself pro
vides that its own infraction must
be the condition precedent upon busi
ness success. To aim at the aceom- (
plishment of too mueh usually means
the accomplishment of too little, and .
often the doing of positive damage,
The antitrust law should not be re
pealed; but it should be made both
more efficient and more in harmony ■
with actual conditions. It should be
so amended as to forbid only the
kind of combination which does harm
to the general public, such amend
ment to be accompanied by, or to be
an incident of, a grant of supervi
sory power to the Government over
, engaged in inter
the- big concerns
state business. This should be ac
companied by provision for the com
pulsorv publication of accounts and
the subjection of books and papers
to the inspection of the Government
officials. A beginning has already
been made for sueh supervision by
the establishment of tbe Bureau of
Corporations.
The antitrust law should not pro
bibit combinations that do no
tire to the public, still less tno-e tbe
of on t'.e whoi
the r if
y
tltv
r
t
de
erf pt V victo
r, t ill these
corporations by lawsuits means to im¬
post upon both the Department of
Justice and the courts an impossible
burden; it is not feasible to carry on
more than a limited number of such
suit Such a law to be really e£
feci ruust of course be administer
i by an executive body, and not
merely by means of lawsuits, The
design should be to prevent the
abuses incident to the creation of uu
healthy and improper combinations,
instead of waiting until they are in
existence and then attempting to de¬
stroy I bom by civil or criminal pro¬
ceedings.
Pure-Food Law.
Incidentally, in the passage of the
pure-food law the action of the var¬
ious State food and dairy commis¬
sioners showed in striking fashion
how much good for the whole peo¬
ple results from the hearty coopera¬
tion of the Federal and State offi¬
cials in securing a given reform. It
is primarily to the action of these
State commissioners that we owe the
enactment of this law; for they
aroused the people, first to demand
the enactment and enforcement of
State laws on the subject, and then
the enactment of the Federal law,
without which the State laws were
largely ineffective. There must be
the closest cooperation between the
National and State governments in
administering these laws.
Currency.
In my message to Congress a year
ago I spoke as follows of the cur
rency:
i i I especially call your attention to
the condition of our currency laws,
The national-bank act has ably serv
ed a great purpose in aiding the
enormous business development of
the country, and within ten' years
there has been an increase in circu
per capita from $21.41 to
$33.08. For several years evidence
been accumulating that addition
al legislation is needed. The recur
of eacli crop season emphasizes
defects of the present laws. There
must soon be a revision of them, be
cause to leave them as they are means
incur liability of business disaster,
Since your body adjourned there has
been a fluctuation in the interest on
call money from 2 per cent to 30
per cent, and the fluetation was even
during the preceding six
months. The Secretary of the Treas¬
ury had to step in and by wise action
put a stop to the most violent period
of oscillation. Even worse than such
fluctuation is the advance in commer¬
cial rates and the uncertainty felt in
the sufficiency of eredit even at high
rates. All commercial interests suf
fer during each crop period. Exees
rates for call money in New
York attract money from the interior
banks into the speculative field. This
depletes the fund that would other
wise be available for commercial uses
and commercial borrowers are forced
to pay abnormal rates, so that each
fall a tax, in the shape of increased
interest charges, is placed on the
whole commerce of the country,
“The mere statement of these facts
show that our present system is ser
ioiisly defective. There is need of
a change. Unfortunately, however,
many of the proposed changes must
be ruled from consideration because
they are complicated, are not easy of
comprehension, and tend to disturb;
existing rights and interests. which! We!
must also rule out any plan
would materially impair the value of
the United States 2 per cent bonds,
now pledged to secure circulation,'
the conditions issue of peculairly which xvas creditable made under j
Treasury. I do not to the j
press any espec- !
ial plan. Various plans have recent
lv been proposed by expert committees
of bankers. Among the which
are possibly feasible and which eer
tainly should receive your considera
tion is that repeatedly brought to
your attendtion by the present Seere
tary of the Treasury, the essential
features of which have been appro
ved by prominent bankers j
many and •
business men. According to this plan I
national banks should be permitted
to issue a specified proportion of
their capital in notes of a given kind,
the issue to be taxed at so high a
rate as to drive the notes hack when
not wanted in legitimate trade. This
plan would not permit the issue of
currency to give banks additional
profits, but to meet the emergency
presented by times of stringency. 1
“I do not say that this is the right
system. I only advance it to emp’na
size my belief that there is need for
the adoption of some system which
shall be automatic and open to all
sound banks, so as to avoid all pos
sibility of discrimination and favor
itism. Such a plan would tend to
prevent the spasms of high money
and speculation which now obtain in
New York market; for at present
there is too much currency at cer
tain seasons of tbe year, and its ac
at New York tempts
bankers to lend it at low rates for
speculative purposes; whereas at
other times when the crops are being
moved there is urgent need for a
in but temporary increase in the
irr )1 v It must never be
t f th his question .neerns
hn en general Quite ’ much
h ; especially is ti true of
rs J I mess men
tbe at at eer
In the year 1 lie differ
rate- between the
t is to 0 per
w as in ( r ne con
pond jnjf is but p« cent,
Any plan must, of course, guaifl the
interests of western and southern
bankers as carefully as it guards the
interests of New York or Chicago
Hankers, and must be drawn from the
standpoints of the farmer ami the
merchant no less than from the
standpoints of the city hanker and
!he country banker. ft
I again urge on the Congress the
need of immediate attention to this
matter. We need a greater elactic
itv in our currency; provided, of
course, that we recognize the even
greater need of a safe and secure
currency. There must always be tlie
most rigid examination by the Nat¬
ional authorities. Provision should
be made for an emergency currency.
The emergency issue should, of course
be made with an effective guaranty,
and upon conditions carefully pre¬
scribed by the Government. Such
emergency issue must be based on
adequate securities approved by the
Government, and must be issued un¬
der a heavy tax. This would permit
currency being issued when the de¬
mand for it was urgent, while secur¬
ing its retirement as the demand fell
off. It is worth investigating to de¬
termine whether officers and direc¬
tors of national banks should ever
be allowed to loan to themselves
Trust companies should be subject to
the same supervision as banks; legis¬
lation to this effect should be enacted
for the District of Columbia and the
Territories.
Enforcement of the Law.
A few years ago there was loud
complaint that the law could not be
invoked against wealthy offenders.
There is no such Complaint now. The j
course of the Department of Justice j
during the last fexv years has been *
such as to make-it evident that no :
man stands above the law, that no |
corporation is so wealthy that it can j
not be held of Justice to account. been The De- I J
partment has as
prompt to proceed against the j
wealthiest malefactor whose crime
was one of greed and cunning as to
proceed against the agitator who in¬
cites to brutal violence. Everything
that can be done under the existing!
law. and with the existing state of
public opinion, which so profoundly
iulluences both the courts and juries,
has been done. But the laws them
selves need strengthening in more
than one important point; they
should be made more definite, so that
no honest man can be led unwittingly
to lueak them, and so that the real
wiongdoer can be readily punished.
Injunctions.
Instances of abuse in the granting
of injunctions in labor disputes con
tinue to occur and the resentment in
i lie minds of those who feel that
their rights are being invaded and
their liberty of action and of speech
unwarrantably restrained continues
likewise to grow. Much of the at
tack on the use of the process of in
junction is wholly without warrant; the!
but I am constrained to express
belief that for some of it there is
warrant. This question is becoming
more and more one of prime import- \
a-nee, and unless the courts will them- j
selves deal with it in effective man
ner, it is certain ultimately to de
uiand some form of legislative ac
Lon. It would be most unfortunate
for our social welfare if we should
permit many honest and lawabiding
citizens to feel that they had just
,; «use for regarding our courts with
hostility. I earnestly commend to :
Lie attention of the Congress this,
matter, so that some way may be de
y Led which will limit the abuse of
injunctions and protect those rights
which from time to time it unwar-!
rantably invades. Moreover, discon-j
tent is often expressed with the use
°f Lie process of injunction by the 1
courts, not only in labor disputes, but
w here State laws are concerned. I
refrain from discussion of this ques- j
Lon as I am informed that it will
soon receive the consideration of the (
Supreme Court. Accidents. j
;
The loss of life and limb from rail
road accidents in this country has
become appalling. It is a subject
°f which the National Government
shouid take supervision. It might be
well to begin by providing for a Fed
er al inspection of interstate railroads
somewhat along the lines of Federal
inspection of steamboats, although j
not going so far.
The National Government should ,
be a model employer. It should de -1
mand the highest quality of service j
from each of its employees and it
should care for all of them properly
in return. Congress should adopt
leeislation providing limited but defL
nite compensation for accidents to
all workmen within the scope of the j i
Federal power, including employees
of the navy yards and arsenals.
Eight-Hour Law.
The Congress should consider the'
extension of tbe eight-hour law. The
constitutionality of the present law
has recently been called into question
and the Supreme Court has decided
that the existing legislation is un
questionably within the powers of
Congress. hour day should The principle as rapidly of the and eight-j as 1
tar as practicable be extended to the
entire work farried on by the Gov
ernment; and the present law should
lie amended to embrace contracts ou
those public w-orks which the present
rding of the act has been con-t
strued to exclude. The general intro
duction of the eight-hour day sho
be the goa u a i d which we should ,
steadily tend, and the Government
should set the example in this re¬
spect. Investigation
Compulsory of Indus¬
trial Disputes.
Strikes and lockouts, with their at¬
tendant loss and suffering, continue
to increase. For the live years end¬
ing December 31, 1905, the number of
strikes was greater than those in any
previous ten years and was double
the number in the preceding five
years. These figures indicate the in¬
creasing need of providing some ma¬
chinery to deal with this class of dis¬
turbances in the interest alike of the
employer, the employee, and the gen¬
eral public.
The need for some provision for
sueh investigation was forcibly il¬
lustrated in the recent strike
of telegraph operators which serious¬
ly interfered with telegraphic com¬
munication, causing great damage to
business interests and serious incon¬
venience to the general public.
Inland Waterways.
The conservation of our natural re¬
sources and their proper use consti¬
tute the fundamental problem which
underlies almost every other problem
of our National life. We must main¬
tain for our civilization the adequate
material basis without which that
civilization can not exist. We must
show foresight, we must look ahead.
As a nation we not only enjoy a won¬
derful measure of present prosperity
but if this prosperity is used aright
it is an earnest of future succeso
such as no other nation will have.
The reward of foresight for this Na¬
tion is.great and easily foretold. But
there must be tlip look ahead, there
must be a realization of the fact thai
to waste, to destroy, our natural re¬
sources, to skin and exhaust the land
instead of using it so as to increase
its usefulness, will result in under
mining in the days of our children
tlie very prosperity which we ought
by right to hand down to them arn
plified and developed,
Tariff on Wood Pulp.
There should be no tariff on any
forest product grown in tliis coun¬
try; and, in especial, there should
he no tariff on wood pulp; due no¬
tice of the change being of course
given to those engaged in the busi
ness so as to enable them to adjust
themselves to the new conditions,
The repeal of the duty on wood pulp
should if possible be accompanied
by an agreement with Canada that
there shall be no export duty on Ca¬
nadian pulp wood,
The Panama Canal.
Work in now progressing at a
satisfactory rate. The private bids
for the construction of the canal
were all unsatisfactory, and in con
sequence were all rejected,
Postal Affairs,
I commend to the favorable con
srderation of the Congress a postal
savings hank system, as recommend
ed by the Postmaster General. The
primary object is to eneourage among
our people economy and thrift and
bv the use of postal savings banks to
give them an opportunity to husband
their resouces, particularly those who
have not the facilities at hand for
depositing; their money in savings
banks. Viewed, however, from the
experience of the past few weeks, ' it
is evident that the advantages of
such an institution are still more far
reaching. Timid depositors have
withdrawn their savings for the time
being from national banks, trust
companies, and savings banks; indi
victuals have hoarded their ^ash and
the workingmen their earnings; all of
which money has been withdrawn
and kept in hiding or in the safe de¬
posit box to the detriment of pros
perity. Through the agency of the
postal savings banks such money
would be restored to the channels of
trade, to the mutual benefit of capr
tal and labor.
I further commend to the Congress
the consideration of the parcel post,
especially on the rural routes. There
are now 38,215 rural routes, serving
nearly 15,000,000 people who do not
have the advantages of the inhabi
tants of cities in obtaining their sup
plies. These recommendations have
been drawn up to benefit tbe farmer
wise, and the I should country not storekeeper; favor other-j j
believe that them, for I
it is good policy for our
Govetnment to do everything possi- ^
ble to aid the small town and tbe
country districts. It is desirable that I
the country merchant should not be
crushed out.
Reports show that during the past ;
year xve made a clear profit on our
foreign postal business of more than
three and a half million dollars. The
President recommends that profit, be :
expended in improving the service
Oklahoma.
Oklahoma has become a State
standing- on a full equality with her
elder sisters, and her future is assur
ed bv her great natural resources 1
The duty of the National Govern
ment to guard the personal and
property rights of the Indians with
in her borders remains of course un
changed. j
German Tariff Agreement. |
Are-adjustment of the German
tariffs made it necessary to appoint
a eomission composed of experts to
investigate conditions and secure the
fullest, measure of rights to shippe rs,
both exporters and importer s. ;
Porto Rico.
l again recommend that the rights
of citizenship be conferred upon the
people of Porto Rico. A bureau of
mines should be created under the
control and direction of the Seere-
tary 0 f the Interior; the b
have power to collect statics ur (, au to
make investigations i n \\ and
pertaining to mining a matters
to the accidents and Particularly
industry. and dangers of
UM
Vicksburg National P ark
1 further reeommend that
monument be established a naval
Vicksburg National Park in the
mnal L tv nat
park commemorating^be gives a unique u°f „ , "
ity for Un '
those gallant (
men
water, no less than of those on
iought on land, Thirtcenth'S,"' in the y*reat o\v\\ who
The 11
Legislation should be enacted
the present session of the at a
for the Thirteenth Cens „' *"«"* r T)i
tabiisbraent of the e eg.
Bureau affords the permanent Cense, “
a better census than opportunity h«v.
had, we .
but in order to realize the M
advantage ation, ample of time the permanent or Si Z
preparation. must be given for r
Presidential Campaign Expenses
under our form of government vot.
mg is not merely a right but a duty,
and, moreover, a fundamental and
necessary duty if a man is to be a
good citizen. It is well to provide
that corporations shall not contrib¬
-
ute , to . t> Presidential -j • , National
or cam
paigns, and furthermore to provide
for the publication of both contri
butions and expenditures.
J he need of collecting iage cam
paign funds by the parties would
vanish if Congrqss should provide
an appropriation ample enough to
meet the ligitimate expenses of each
of the great parties. Then the stipu¬
lation should be made that no party
receiving campaign funds from the
Government should accept more than
a fixed sum from a ny individual,
subscriber or donor, and the neccs
sary publicity for receipts and dis¬
bursements could easily be provided.
The Amy.
Never in our entire history has the
nation suffered in the least particu¬
lar because too much care has beeu
given to the Army, too mueh prorn
inenee been give it, too much moncy
spent upon it, or because it has been
too large. As a nation we have al¬
ways been shortsighted in providing
for the efficiency of the army in
time of peace, I think it is onlv
lack of hostility foresight that troubles us*;
not any to the Army.
In the matter of efficiency it is
urged that officers and enlisted men
should be paid sufficient compensa¬
tion to warrant them in making the
army a life occupation. Among offi¬
cers there should be examinations
rigid enough to weed out the ineffi¬
cient, The practice marches and field
maneuvers of the past two or three
years have been valuable, and these
should be continued perhaps the most
important legislation needed for the
benefit of the army is a law to equa¬
lize and increase the pay of officers
and enlisted men in the army, navy,
marine corps and revenue-cutter ser¬
vice.
The Public Health.
There is a constantly growing in¬
terest in this country in the question
of the public health, At last thi
public mind is awake to the fact that
many dieases, notably tuberculosis,
are National scourges. The work of
the State and city boards of health
should be supplemented by a con¬ the
stantly increasing interest Government. on
part of the National
The Navy.
It is recommended that this year
provision be made for four new bat¬
tleships, and that docks, coaling sU‘
tions, colliers and supply ships h®
provided to meet the needs thus cres
ted. Our coast line is on the Pacific
as well as the Atlantic and ° c ® a *’
ionally the fleet should be dispatch
to the waters of the Pacific. Oaf
duty to California, Washington ana
Oregon is the same as to Maine, New
York, Lousiana and Texas, I sin
cerely hope that the fleet will
shifted from the Atlantic to the a
cific evorv year or two unul ou
navy is of sufficient strength to a
mil of division.
Foreign Affairs,
should In dealing be with policy other to be nation^ neign® 0 i
our help o! e
ly and do all we can to _
without meddling; and at the s»
time to give them to understand u> 3
way that we do not mean
be imposed upon, Philippines
The has ne to
The Secretary of War g« 11
the Philippines. On his re!,!rn fill
his report ° a tii
shall submit to you II
isiamL. of Amelia*
International Bureau
Republics the Pa«' A “;
One of the results of »
erican Conference at Rio • , Janeiro great tn
the summer of 190G has been a !h<
increase in the activity and use j 6t
ness of the International Burea IPi
American Republics. That hi
tiqn which includes all the j
Republics in its membership ^ lot
brink's all their represent*!"* really ^ Doi
gether, is doing a the peop lt
wor k in informing the other a. :o
United States about b'ute ate*
lies and in making the ; no*
Its action i- !
known to them. 10
limited by appropriations^ wor -k on » inu^
when it was doing a niu n less ■a
smaller scale and ren den ng i 0
valuable service, I re< rt rn»en< r>
irov :’ “5
the contribution >f th -
to the expenses of th If
ith > ts 1D
made commensurate <;£VS$ ict
ed work, 100?
THEODORE Dec. 3. tf*
The White House,