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About Omaha daily bee. (Omaha [Neb.]) 187?-1922 | View Entire Issue (Dec. 7, 1910)
The- Omaha" . Daily 'B EE WHOSE BIRTHDAY TODAY? Look at The Bee's birthday book on the editorial Base of each issue. It is sure to interest you. Women Best Buyers Ihe naper that it read by the women brings best returns to to the advertiser. VOI XL XO. Hi OMAHA, WEDNESDAY MOKXIXd, DKTKMIiKK 7, 1D10. SIXdLK COPY TWO CENTS. President Taft's Message to the Congress on Public Affairs Portions of the Document That Deal Directly With Matters of Immediate Domestic Importance Recommendations for Legislative Action in the Direction of Improved Conditions for the People RESIDENT TAFT'S annual mes- j B,iat contribution to the means of the ntiliu H rniiiiui I i ihi iniri v uui ir. KB HP J ear sivo to the congress Is mis an unusually enmprchen doeumcnt. ami much P longer t!:an ever before-.lt deals with a multiplicity of mailers, tint chief features of which are herewith presented In full. The prerliirnt reviews at the outset the work cf Ihe Hai;ue commlsl"n In the sett'e ment of tie fisheries dispute with Great Hiltain. end points out tho usefullness f tlie tribunal, lie also rcites the relations between the United States and the other power of the world, and finds that Ameri can Interests are being well looked after everywhere. The Latin American govern ments pet considerable attention, especially relating to the difficulties in Nicaragua and Honduras, where American lntere-ts were seriously Involvi d. , Taking up affairs at home, the president begins with the tariff, and tays: For many reasons I car not too strongly urge upon the congress the passage of a measure by mall tulsldy or other sub vention adequate to guarantee the estab lishment and rapid development of an American merchant marine, the restoration of the American flag to its ancient plate upon the seas. Of course such aid ought only to be given under conditions of publicity of each bene ficiary's business and accounts, which would show that the aid received was needed to maintain the trade and was prop erly used for that purpose. Protection fur Aliens. With our Increasing International Inter course It becomes lticumLent upon me to repeat more emphatically than ever the recommendation which I made In my In augural address that congress shall at onco give to the courts of the I'nited States The new tariff law. In section 2 respecting jurisdiction to punish as a crime the vlola- te maximum and minimum tarms or tne United States, which provisions came Into effect on April 1, 1910. Imposed up n the president the responsibility of determining; prior tn that date whether or not any un due discrimination existed against the United States and Its products In any country of the world with which we sus tained commercial relations. In the ras of several countries Instances of apparent undue discrimination against American commerce was found to exist. These discriminations were removed by negotiation. Trior to April, 1, 1910, when the maximum tariff w as to come Into opera tion with ."esped to Importations from all t'xise countries In w ho e favor no proclama tion applying the minimum tariff should be Issued by te president. 134 such proclama tions were Issued. This series of procla mations embraced the entire commercial world, and hence Ihe minimum tariff of the T'nlted Slates has been given universal application, thus testifying to the satisfac tory character of our trade relations with foreign countries. I nlleil States (iaine Advantage. Marked advantages to the commerce cf the 1'nlted States were obtained through these tariff settlements. Foreign nations are fully cognizant of the fact that under section 2 of the tariff act the president Is required, whenever ho Is satisfied that the treatment accorded by them to the products cf the t'nlted States Is not such as to en title them to the benefits of the minimum tariff of the United States, to withdraw those hencfits by proclamation, giving' ninety days' notice, after which the maxi mum tariff will apply to their dutiable products entering the t'nlted Ftates. In Its general operation this section of the tariff law has thus far proved a guaranty of continued commercial peace, although there are. however, unfortunately, instances where foreign governments deal arbitrarily with American Interests within their Jur--trdlctlnn In a manner Injurious and In equitable. i The policy of broader and closer trade relations with the Dominion of Canada. '.which was Initiated In the adjustment of the maximum and minimum provisions of the tariff act of August, 1909, has proved mutually beneficial. , The negotiations were conducted on both sides In a spirit of mutual accommodation. The discussion of the common commercial Interests of the two countries had for Its object a satisfactory basis for a trade ar rangement which offers the prospect of a freer Interchange for the products of the t'nlted Htates and of Canada. The confer ences were adjourned to be resumed In Washington In' January, when It Is hoped that the aspiration of both governments for a mutually advantageous measure of reciprocity will be realized. All these tariff negotiations ao vital to our commerce and Industry, and the duty of Jealously guarding the equitable and Just treatment of our products, capital, and In dustry abroad devolve upon the Department of Mate. Important tnutrarti "reared The Argentine battleship contracts, like the subsequent Important one for Argentine railway equipment, and those for Cuban government .vessels, were secured for our manufacturers largely through the good offices pf the Department of State. The efforts of that department to secure for citizens of the United States equal ou- port unities In the markets of the world and to expand American commerce have been moet successful. The volume of business obtained In new fields of c-irnpetltlon and upon new lines Is already very great and congress la urged to continue to support the Department of State In Its endeavors for further trade ex panslon. Our foreign trade merits the best sup ron or tne government and the most earnest endeavor of our manufacturers and merchants, who, If they do not already In all cases need a foreign market, are cer lain soon to uecome aepenaent on it. Therefore, now Is the time to secure a strong position In this field. I can not leave this subject without em phaslzlng the necess.ty of inch legislation as will make possible and convenient Ihe rstahllahment of American banks and ; branches of American banks in foreign countries. Only by such means can our tion of the rights of aliens secured by treaty with the United States, In order that the general government of the United States shall be able, when called upon by a friendly nation to redeem Its solemn promise by treaty to secure to the citizens or subjects of that nation resident In the United States freedom from violence and due process of law In respect to their life, liberty and property I also and for thj same general reasons strongly commend to the favorable action of the congress the enactment of a law applying to the diplomatic and consular service the principles embodied In section 1753 of the revised statutes of the United States, In the civil service act of January IS, 183, and tho executive ordera of June 27, 1906, and of November 26, 1909. Economy In Kxnendltores. Every effort has been made by each de partment chief to reduce the estimated cost of his department for the ensuing fiscal year ending June 30, 1912. I say this In order that congress may understand that these estimates thus made present the smallest sum which will maintain the de partments, burea is and offices of the gov ernment and meet its other obligations under existing law, and that a cut of these estimates would result In embarrass ing the executive branch of the govern ment In the performance of Its duties. This remark does not apply to the river and harbor estimates, except to those for ex penses of maintenance and meeting of ob ligations under authorized contracts, nor dees it apply to the public building bill nor to the navy building program. Of course, as to these congress could with hold any part or all of the estimates for them without Interfering with the dis charge of the ordinary obligations of the government or the performance of the functions of Ita departments, bureaus end offloes. The final estimates for the year ending June 30, 1912, as they have been sent to the treasury, on November 29 of this year, for the ordinary expenses of the govern ment, Including those for public buildings, rivers and harbors and the navy building program, amount to I630.4S4.013.12. This Is 152,864. S)(7.36 less than the appropriations for the fiscal year ending June 30, 1911. It is $10,883,153.44 less than the total estimates, Including supplemental estimates submitted to congress by the treasury for the year 1911. and la $8,574,659.39 less trail the orig inal estimates submitted by the treasury for 1911. These figures do not Include the appro priations for the Panama canal, the policy in respect to which ought to be and la to spend as much each year as can be eco romlcally and effectively expended In order to complete the canal as promptly as possible, and, therefore, the ordinary motive for cutting down the expense of the government does not apply to appro priations for this purpose. It will be noted that the estimates for the Panama canal for the ensuing year are more than $56, 000,000, an Increase of $20,000,000 over the amount appropriated for this year a dif ference due to the fact that the estimates for 1912 Include something over $19,000,0(10 for the fortification of the canal. Against the estimated expenditure, $830, 4iH.013.12, the treasury estimated receipts for next year $680,000,000, making a prob able surplus of ordinary receipts over or dinary expenditures of about $60,000,000, or, taking Into account the estimates for the Panama canal, which are $56,920,847.69, and which will ultimately be paid in bonds, it will leave a deficit for the next year of about $7,000,000, If congress shall conclude to fortify the canal. The cost of the for tifications Is about $19,000,000. Should there be no appropriations this year for forti fications then there would be. even Includ ing the Panama cana. appropriation, a sur plus of about $12,000,000. according to the treasury estimates. Chief Features of the President's Message Recommendations for Reformatory Legislation Mado by Mr. Taft to Congress. THE outstanding features of President Taft'a mes sage, sent to congress today, are these: lie deolares it Is time to stop legislating with reference, to regulation of corporations and to witness the effect of a vigorous execution of the laws already on the statute wioxj. The exact limitation upon business methods Imposed by law will doubtless be made clearer by pending decisions of the supreme court. Juki at this time, the president says, he believes tiie attlvltles of the government. In addition to enforce ment of the laws, should be directed toward economy of administration, the enlargement of opportunities for foreign trade, the building up of home Industry and the strengthening of confidence of capital in domestic Investment. He recommends strongly some form of ship sub sidy to Increase American shipping, especially to South America The tariff board is 'not ready to submit a report on any of the schedules of the Payne law, and Mr. Taft says he will not recommend any tariff legislation until the new congress convenes In December, 1911. He urges that the tariff board be made permanent and that all future revisions be made schedule by schedule. He vigorously opposes another general re vision. 1 ne Panama cnnal should be fortified. An appro priation of $19,000,000 Is recommended for this purpose. The; must be no more "pork barrel" methods In river and harbor and public building bills. The latter should be based upon the report of a commission 6f ex perts. In the past congress has appropriated too much for tulldlngs not needed and not enough for buildings badly needed. 1'erommendatlon for antl-lnjunctlon and federal In corporation laws aro renewed. It Is proposed that second-class mall rates shall be readjusted so as to charge magazines a much higher rate on their advertising sections. Strong representations are made for the establish ment of o new banking and currency system. Two new battleships and several auxiliary vessels are urged for the navy. The president recommends that coal, phosphate and oil 1 1-nd si and water power sites be disposed of in the future by leaning. Estimates for government expenditures during the next fiscal year have been cut to $630,494,013.12, which 1s $52,964,887.36 less than the actual appropriations for me current year. The estimated receipts for the next fiscal year are $680,000,000. The president urges the extension of the civil ser vice principle to the diplomatic and consular corps and the acquisition by the government of residences and of fices for its diplomatic officers. Some criticisms of the Payne tariff act are Just, say tho president, but more are unfounded. Tr.ere should be more officers for the army; engi neer corps should be increased by sixty. The fortifications at Corregldor Island, Manila bay and et Pi-nrl harbor. Hawaii, should be carried to early completion. Regarding the Panama canal the president says: "The progress of tho work Is most satisfactory. It w 11 be completed well within the time set, January 1. l.ili, and within the estimated cost ol $375,000,000. The s'iiies Ir t'ulebra cut offer no great reason for delay." Failure to fortify the cunal would leave the United Slates ptv.erless! to enforce the universal and equal use cf the waterway asalnstJt desperate and Irresponsi ble enemy and would defeat the object of the canal In Ircreaslng the military ef fectl eness of the American navy The tells should not exceed $1 per net ton. The I'l'evlilt nt should be authorized to adjust tho rates as necessity arises. The government should include In Its lmimiKrment of tho cnnal the furnishing not only to the imvv. but to the public as well, drydock and repair facilities, and the sale of coal, oil and other ship , supplies. Interstate railroads should be prevented from own ing oe controlling ships trading through the canal. Regarding the courts, the president declares the cry ing need of the United States In cheapening the cost of litigation by simplifying Judicial procedure and expe diting final Judgment. The supreme court should be relieved from unnecessary appeals. The salaries of fed eral Judge.i should be Increased. Postal savings brinks will be established In a num ber of cities January 1. A parcels post on rural delivery routes Is recommended. Postmaster (Jeneral Hitchcock !s given high praise for putting the Postofflce depart ment on a self-sustaining basis. The extension of the civil service to Include all classes of postmasters and Ihns taking these officials entirely out of politics Is urged. " The president recommends congress to give some fitting recognition of the polar discoveries of Com mander Robert E. Peary. The secretary of the now sugsests that Peary be made a rear admiral and placed on the retired list. The stupendous value of the agricultural products, amounting to $S, 926, 000,000 this year. Indicates good prospect for business throughout the country. The present census promises to be the best ever taken, but it Is not perfect. The census padders are to be vigorously prosecuted. A bureau of health should be established. The Southern Pacific railroad should be reimbursed for its expenditures in fighting the flood In the Im perial valley of California several years ao. Heavier fines should bo Imposed against steamship companies for violating the Immigration laws. The facilities at Ellis Island, N. Y., should not be so In creased as to offer an Inducement to steamship com panies to concentrate their immigrant business at one port. Immigrants are needed in the rural districts. Some provision should be made for retiring super annuated government clerks. The only amendments suggested in the Interstate commerce law are an appropriation to enable the Inter state Commerce commission to ascertain the valuation of railroads and fixing the responsibilities of public carriers in the issuance of bills of lading. Heforms In Treasury Department The Treasury department Is one of the original departments of the government With the changes In the monetary system made from time to time and with the crea tion of national banks, It was thought necessary to organize new bureaus and divisions, which were added In a somewhat , " : . . 1, . haphazard way and resulted In a duplica tor trade be favorably financed, nee of outl ,hlcn ml(fht w. now b. siary credits be arranged and proper avail I , A at all why the surveyor of ths port, who really acts for the collector, should not be a subordinate of the collector at a less salary and directly under his control, and there Is but little reason for the existence of the naval officer, who Is a kind of local auditor. His work Is mainly an examina tion of accounts which is conducted again In Washington and which results in no greater security to the government. The naval officers in the various ports are presidential appointees, many of them drawing good salaries, and those offices should be abolished or with reduced force made part of the central auditing system. There are entirely too many customs dis tricts and too many customs collectors. These districts should be consolidated and the collectors In charge of them, who draw good salaries, many of them out of pro portion to the collections made, should be abolished or treated as mere branch offices. In accordance with the plan of the Treasury department, which will be presented for the consideration of congress. As an Illus tration, the cost of collecting $1 of revenue at typical small porta like the port of York. Me., was $50.04. At the port of Annapolis, Md., It cost $309.41 to collect $1 of revenue; at Natchez, $52.76; at Alex andria. Va., $122.49. A reorganization of the special customs agents has been perfeced with a view to retaining only those who have special knowledge of the customs laws, regulations and usual methods of evasion, and with this Improvement there will be no danger to the government from the recommended Consolidation and abolition of cusoms districts. from the method of appropriation, which hos been so much criticised In connection with our rivers and harbors. .Some method should be devised for controlling the sup ply of public buildings, so that they will harmonize with the actual needs of the government. Not only are buildings appro priated for by congress which are not needed, and buildings left unappropriated for by congress which are needed, but when It comes to the actual construction there has been In the past too little study of the building plans and sites with a view to the actual needs of the government. Postofflce buildings which are In effect warehouses for the economical handling of transportation of thousands of tons of mall have been made monumental struc tures, and often located far from the con venient and economical spot. In the actual construction of the buildings a closer scru tiny of the methods employed by the gov ernment architects or by architects em ployed by the government have resulted In decided economies. It Is hoped that more time will give opportunity for a more thor ough reorganization. The last public build ing bill carried authorization for the ulti mate expenditure qjf 13,011,600 and I ap pioved It beeause of the many good fea tures It contained, Just as I approved the river and harbor bill, but it was drawn upon a principle that ought to be aban doned. It seems to me that the -wiser method of preparing a public building bill would be the preparation of a report by a commission of government experts whose duty It should be to report to congress the government's needs in the way of the con struction of public buildings In every part growing out of the frauds there discovered and are now awaiting hearing In the fed era! courts. Too Man Mints, D made or commercial opportunities In foreign countries, and most especially in l-alln America. Ship sjaltaidy Commended. Another Instrnmentallty Ind spensable to the unhampered and natural development of American commerce Is merchant marine. All maritime and commercial natlqns rec ognise the importance of this factor. The greatest commercial nations, our compel ;tors. Jealously foster their merchant ma rine. Perhaps nowhere Is the need for rapid and direct n.ail. passenger and freight communication quit so urgent as Uuwnen the United States aud I-atln America. We can secure In no other quar ter of the world such Immediate benef ts In friendship and commerce as would flow from the establishment of direct lines of coiiimun ration with the countries of Iitln America adequate to meet the requirements of a rap dly Increasing appreciation of the reciprocal dependence of the countries of the western hemisphere upon each other's products, sympathies and assistance. i alluded to this moat Important subject in my Wat annual message; It has often leen before you and 1 need not recapitulate the reasons for Its recommendation. Un ix prompt action be taken the completion of the i'snaina canal will f.nd this the only trial commercial nation unable to avail lu InUrnaLoual maritime business of this ended This lack of system and economle co ordination has attracted the attention of the head of that department -who has been giving his time for the last two years, with the aid of experts and by consulting his bureau chiefs, tn its reformation. He has abollshrd K places In the civil service without Impairing Ita efficiency. The auditing system In vogue Is as old as the government and the methods used are antiquated. A '-areful plan Is being devised and will be presented to congress with the recommendation that the force of auditors and employes under them be greatly reduced, thereby effecting sub ktantlal economy. Asin. l me collection of the revenues, especially the customs revenues, a very great Improvement has been effected and further Improvements are contemplated. By the detection of frauds In weighing sugar upwards of $3,400.00 have been re covered from the beneficiaries of the fraud, and an entirely new s stem free from the possibilities of such abuse has been devised. The department has perfected ths method of collecting duties at the port of New York so as to save the government up wards of $10,0u0,0u0 ur $11, 0m). 000; and the same spirit of change and reform has been Infused Into the other customs offices of ths country. The methods used at many places are archaic. There would seem to be no reason An Investigation of the appraising system,"' " ' l"" """y "' . . . - , . . make report with reference to the utility now in vogue in New York C ty has shown' , . . . , V ull"lJ' . , l of proposed Improvements in rivers and under-appralsement and a sacrifice of the h.K,.r .i,v, ,T . . I!, V . ....... , harbors, with the added function which I interests of the government, which is to , have wtnmenanl for tne a erig,neera the course of being remedied by reorganlza- 0f including In their recommendation the tlon and the employment of competent ex- relative Importance of the various projects pert. Prosecutions have been Instituted found to be worthy of approval and execu tion. Collections of Revenue. As the Treasury department Is the one Very great Improvements have been made ' nt coi1((Cled. pnd ... Mn(.nrtltrM In respect to the mints and assay offices. I disbursed, this seems a proper place to l'"m""" oe., ca, consider the operation of the existing tariff bill, which became a law August 6, lima. As an Income-producing measure, the existing tariff bill has never been exceeded by any customs bill In the history of the country. The corporation excise tax, proportioned to the net income of every business corpora tion In the country, has worked well. The tax has been easily collected. Its prompt payment Indicates that the Incidence of the tax has not been heavy. It offers, moreover, an opportunity for knowledge by the government of the general condition and business of all corporations, and that means by far the most Important part of the business of the country. In the original act provision was made for the publication of returns. This provlflon was subsequently amended by congress, and the matter left to the regulation t.f the president. I have directed the !sue of the needed regulations, and have made It possible for the public generally to know from an examination of the record, tho returns cf all corporations, the stock of w hich Is listed .n any public stock exchange or l. offered for rale to the general public by advertisement or other wise. The returns of these corH, rations whose sunk Is not so listed or offered for sale are directed to be own to the inspec tion and examination of creditors and stockholders whose record Is sought. The returns of all corporatims are subject to the inspei lion of any government officer, or to the examination of any ccuit in which the return made by the corporation Is rele vant and competent evidence. for those whose continuance la unneces sary, and this year's estimate of expenses is $.36,000 less than two years ago. There la an opportunity for further saving In the abolition of several mints and assay offlcea that have now become unnecessary. Dur ing the last year 100 unnecessary employes have been dropped from the Philadelphia mint. Modern machinery has been In stalled there, mors and better work has been done, and tho appropriations have been consequently diminished. In the bureau of engraving and printing great economies have been effected. Use Ices divisions have been abolished with the result of saving $440,000 this year In the total expenses of the bureau despite in creased business. The treasurer a office and that of the dl- j vision of public moneys in purt cover the same functions and this Is also true of the office of the register and the division ot loans and currency. Plans for tho elimi nation of the duplication In these offices will be presented to congress. The office of the comptroller of the cur rency Is one mort Important In the preser. vallon of proper banking methods In the national banking system of the l ulled Stales, and the present comptroller has Im pressed his subordinates with the necessity of so conducting their Investigations as to establish the principle that every bank fall ure Is unnecessary because proper Inspec tion and notice of threatening conditions to the responsible directors and officers can prevent It. la our public ' buildings we still suffer great deal of criticism, some of It Just, more of It unfounded, and to much mis representation. The act was adopted In pursuance of a declaration by the party which is responsible for it that a customs bill Bhould be a tariff for the protection of home Industries, the measure of the pro tection to be the difference between the cost of producing the Imported article abroad and the cost of producing It at home, to gether with such addition to that difference as might give a reasonable profit to the home producer. The basds for the criti cism of this ta,riff Is that In respect to a number of schedules, the declared measure was not followed, but a higher difference retained or Inserted by way of undue dis crimination in favor of certain Industries and manufactures. Little, If any, of the criticism of the tariff has been directed against the protective principle above stated; but the main body of the criticism has been based on the charge that the at tempt to conform to the measure of protec tion was not honestly and sincerely ad hered to. The tlma in which the tariff was pre pared undoubtedly was so short as to make It Impossible for the congress and lis experts to acquire the Information nec essary strictly to conform to the declared measure. In ord-jr to avoid criticism of this kind tn the future and for the purpose of more nearly conforming to the party promise, congress at Its last session made provision at my request for the continu ance of a, board created under the author ity of the maximum and minimum clause of the tariff bill, ai... authorised this board to expend the money appropriated under my direction for the ascertainment of the cost of production at home and abroad of the various articles Included In the sched ules of the tariff. The tariff board thus appointed and authorized has been diligent In preparing itself for the necessary In vestigations. The hope of those who have advocated the use of the board for tariff purposes is that the question of the rate of a duty Imposed shall become more of a business question and lees of a political question, to be ascertained by experts of long training and accurate knowledge. The halt In business and the shock to business due to the announceinmt that a new tariff bill Is to be prepared and put In operation will be avoided by treating the schedules one by one as oc.-aslon shall arise for a change in the rates of each, and only after areport upon the schedule by -the tariff board competent : make such a report. It Is not likely that the board will be able to make a report during the present ses sion of congress on any of the schedules, because a proper examination Involves an enormous amount of detail and a great dfal of care; but I hope to be able at the opening of the new congress, or at least during the session of that congress, to bring to Its alUntion the facts In regard to those schedules In the present tariff that may prove to need amendment. The carry ing out of, this plan, of cjume. Involves tho full co-upc-ratlon of congress In limiting the consideration in tariff matter to one schtdulo at a time, because If a proposed amtndmeiit to a tariff bill Is to involve u complete consideration of all the sched ules and another revision, u.en we shall only repiac tho evil from which the buU ness of this country hai In ilm. - for t of the people than the elimination of Instances of Injustice in the tariff. Permanent Tariff Commission. The Inquiries which the members of the tariff board made during the last summer into the methods pursued by oilier gov ernments with reference to the fixing of tariffs and the determination of their effect upon trade, show that each government maintains an office or bureau, the officers, and employes of which have made their life work the study of tariff matters, of foreign and home prices and cost of tariff, and the effect of the tariff upon trade, so that whenever a change Is thought to be necessary In the tariff law this office is the source of the most reliable infor mation as to the propriety of the change and Its effect. , I am strongly convince 1 that we need In this government Just such an office, and that It can be secured by making the tariff board already appointed a permanent tariff commission, with sucn duties, powers, and emoluments as It nuy seem wise to congress to give, it has been proposed to enlarge the board from :h eo to five. The present number Is convenient, but I do not know that an Increase of two members would be objectionable. Whether or not the protective policy is to be continued, and the degroe o! pro tection to be accorded to our Home In dustries, are questions which the peop'n must decide through their chosen represen tatives; but whatever policy is adopted, it Is clear that the necessary legislation i-hoald be based on an Impartial, thorough nnJ continuous study of the facts. Ranklns; and t orrency ncform. The method of Impartial scientific study by exports as a preliminary to legislation which 'I hope to see ultimately adopted ns our fixed national policy with respect to the tariff, rivers and harbors, waterways and pubi c buildings, also Is being pursued by the nonpartisan monetary commission of congress. An exhaustive and most val uable study of the banking and currency systems of foreign countries has been com pleted. A comparison of the business methods and institutions of our powerful and suc cessful commercial rivals with our own, is sure to be of Immense value. I urgo upon congress the importance of a nonpartisan and disinterested study and consideration of our banking and currency system. It Is idle to dream of commercial ex pansion, and of the development of our national trade on a scale that measures up to our matchless opponents, unless we can lay a solid foundation In a sound and en during banking and currency system. The problem Is not partisan. Is not sectional- it Is national. Wnr Drpsrtmrnt. The War department has within its Ju'ls diction the management of the army, nnd, in connection therewith, the coast defenses, the government of the dependencies 'if the Philippines and of Porto Rico; the recom mendation of plans for the Improvement of harbors and waterways, and their execution when adopted; and, by virtue of an exocv tlve order, the supervision of the construc tion of the Panama canal. In the army of tho United States, in ad dition to the regular forces and the mllttla forces which may be summoned to the de fense of the nation by the, president, there Is also the volunteer force, which made up a very large part of the army In the civil war, and which In any war of long contin uance would become its most important constituent. There is an act which dates from the civil war, known aa the volun teer act, which makes provision for the en listment of volunteers tn the army of the United States In time of war. This was found to be so defective In the Philippine war that a special act for the organiza tion of volunteer regiments to take part in that war was adopted, and It was much better adapted to the necessities of the case. There is now pending in congress a bill repealing the present volunteer act and making provision for the organization ot volunteer forces In time of war, which is admirably adapted to meet the exigencies which would be then presented. Tho pas sage of the bill would not entail a dollar's expenseiupon the government at this time, or In the future, until war comes, but when War does come the methods therein directed are in accordance with tho best military Judgment as to what they ought to be, and the act would prevent the ne cessity for the discussion of new legislation and the delays Incident to Its considera tion and adoption. I earnestly urge the passage of this volunteer bill. Reforms for the Army. I further recommend that congress estab lish a commission to determine as early as practicable a comprehensive policy for Che organization, mobilization and administra tion of the regular army, the organized mi litia and the volunteer forces in the event of war. In order that the militia of eacii state should bo properly drilled and made more like tho regular army officers should be detailed to assist the adjutant general of each state in the supervision of the state militia, but this Is Impossible unless pro vision Is made by congress for a very con siderable Increase in tho number of com pany und field officers of the army. A bill was pending in the last session of congress for this purpose and I earnestly hope that. In the interest of the proicr development of a republcan army, an ui rny, small in the time of peace but possible of prompt and adequate enlargement in time of war, shall becomu possil le under Ihj laws of the United State. A bill, the strong argument for which can le based on the ground quite similar to that of the Increased offlcirs bill, the bill for the increase of six y In the trmy engineers The army engineers arc largely tpiployed In the exper ulime of the nioneyn apiropriated for the Improvement of rivers and harbors. This In addition to their military duties, which Includes the construction of fortification both of our rum and In our dependencies, together with the iumlr used In the Panama cinal work, requires many more engineers than ihe aimy has; und this shortness of supply in sucli officers delays Impoitunt rivr and risiDor uf ana important fortification at rear! Harbor In the Hawaiian Islands should be expedited as much as possible. The proposition to make Olongapo and Publg liny the naval base for the Pnclfio was given up and It Is to be treated merely as a supply station, while the fortification In the Philippines are to he largely con fined to Corregldor Island and the adja cent Islands which command entrance to Manila Pay and which are being rendered Impregnable from land and sea attack. Ths Pacific naval base hr.s been transferred to Pearl Harbor In the Hawaiian islands. This necessitates the heavy fortification of the harbor and the establishment of an Important mllltnry station near Honolulu, lurge that all the estimates made by ths W ar department for these purposes be ap proved by congressional appropriation. Philippine Islands. Inning the last summer, at my request, the secretary of wnr visited the Philippine . Islands and has described his trip In his report. He found the Islands In a state of tranquillity and growing prosperity, due largely to the change in the tariff laws, which has opened tho markets of America to tho products of the Philippines, and has opened Ihe Philippine, markets to American manufactures. The rapid Increase In the trade between the two countries is shown In the following table of Philippine export for the fiscal years 190S-1910 (exclusive ot gold and silver): 1WN l'.'oi 1H1 Untied States. .$lt'.;-U.l,233 1.I5.M1 1H.741.77I Other Countries. $2,.'.493.:i34 iUiis.zX: 21,1-'J.S'S Total. $iV.'.SHi.57 ;.;n3u 3t.St4.15 show ex- Note Latest monthly returns ports for the year ending Amrust. 1H10. to the United States lio.Oiio.we. or 49 per cent or me 4i.u.o.,;a total, against $11,0,11,275 li the United States, or 34 ner cent of the $:-'. 183,871 total for the year ending August I'JUl. Philippine Imports for fiscal years 190S l'Jlfl (exclusive of gold and silver and gov ernment supplies): 1TOS lHOil li'lfl Untied States. $ 6.07!.4n7 4,il,7;o 1U.7i5.301 Other Countries. $25.tlS.S70 23. 100.627 2ti.2K2.329 Total. ,30. 9 IK. $57 27.792.:i!7 37,067.610 Ths Par us Tariff Act. Ths schedules of the rates of duty In ths Payne tariff act have been subjected to a suffered mort fcrlevously by stagnation aud I work. I earnestly recommend the pasaatre litirrtulnl V iM,nilnu n .. . . . I . .. ... . . . , .-.inriuriu or a law affecting all business directly or in directly, and the effect of which no wiso business man would Ignore In new projects and new investments. I cannot too much emphasize ths Importance and benefit of the plan above proposed fur the defects In an Important law without a disturbance of buwnes prosperity, which is even more Important to the happiness and th com- of this bill, which passed the house at ths lat session and Is now pending )n the senate. Korllf IcatlunJ. I have directed that the rs'lmates for appropriation for the Improvement of roast defenses In the United States should be reduced to a nilmlmutn. while those for the completion of ths needed fortifications at Corral Jor in the Philippine Islands and Note Latest monthly returns show im ports for thu rar ending August. 1H10, from the United States $ll,615,N!i2, or 30 per cint of the $;!,026,titi7 total, against $5.1H3.4I9 from the United States, or 18 per cent of the. $2.!'4H,011 total for the year ending Au gust, 1909. Porto Rico, The year has been one of prosperity and progress In Porto Rico. Certain political changes are embodied In the bill "To pro vide a civil government for Porto Rico and for other purposes," which passed the house of representatives on June 13, 1910, at the last session of congress, and Is now awaiting the action of tho senate. The Importance of those features of this bill relating to public health and sanita tion can not be overestimated. Tho removal from politics of the Ju diciary by providing for the appointment of the municipal Judges Is excellent, and I recommend that a utep further be taken by providing therein for the appointment of secretaries and marshals of these courts. I believe that the provision In the bill for a partially elective senate, the number of elective members being progressively Increased, Is unwise, and that the com position of the senate as provided in the bill as Introduced In the house far better meets conditions existing In Porto Rico. This Is an Important measure and I reo ommend its early consideration and pas sage. Rivers and Harbors. I have already expressed my opinion to congress in respect to the character of the river and harbor Mils which should be en acted Into law; and I have exercised as much power as I have under the law in directing the chief of engineers to make his reports to congress conform to the needs of the committee framing such a bill In determining which of the proposed Improvements Is the more Important and ought to be completed first and promptly. Panama Canal. At the Instance of Colonel Ooethals, tha army engineer officer In charge of tha work on the Panama canal, I have Just made a visit to the iHthmus to Inspect the work done and to consult with him on tho ground as to certain problems which are likely to arise in the near future. The progress of the work Is most satisfactory. If no unexpected obstacle presents Itself, the canal will bo completed well within the time fixed by Colonel Goethals, to wlt. January 1, 1915, and within the esti mate of cost, $375,000,000. Among questions arising for present so lution is the decision whether the canal shall be fortified. I have already stated to the congress that I strongly favor forti fication and I now reiterate this opinion and ask your consideration of the subject in the light of the report already before you made by a competent board. Canal Tolls. Another question which arises for con sideration and possible legislation Is ths question of tolls In the canal. Thi ques tion Is necessarily affected by the probable) tonnage which will sTO through the canal, it Is all a matter of estimate, but one of tho government commission In 1900 Investi gated the question and made a report. He concluded that the total tonnage of the vessels employed In commerce that could use the isthmian canal in l'jl4 would amount to i;,M3.WC tons net register, and that this truffle would Increase 25.1 per cent per decade; that It was not probable that alt commerce Included In the totals would at once abandon the routes at present followed and make use of the new canal, and that It mlyht tke some time, perhaps two years, to readlrvit trade with reference to the new conditions which the canal would establish. H dl"1 not Include, moreover, the tonnage of war vessels, although It Is to bo Inferred that such vessels would make, considerable use of the canal. In the matter of tolls he reached the conclu sion that a d.dlar a net ton would not drive business away from the canal, but that a higher rate would do so. In determining what the tolls should be we certain! ought not to Insist that for a grod many years to com they should amount to enough to pay the Interest on the investment of $4nO.MO,(K, which the United Slatrs has made In the construction of the canal. We ought not to do thi. first, because the benefits to be derived by the United States from this expendi ture U not to be measured solely by a re turn upon the Investment. If it were, then the construction might well have been left to private enterprise. It was because an adequate leturn upon the money Invested could not be expected Immediately, or In the near future, and because there re peculiar advautatge to be derived from the