Speech Transcript:

 To the Senate and House of Representatives:

We still continue in a period of unbounded prosperity. This
prosperity is not the creature of law, but undoubtedly the laws under
which we work have been instrumental in creating the conditions which
made it possible, and by unwise legislation it would be easy enough
to destroy it. There will undoubtedly be periods of depression. The
wave will recede; but the tide will advance. This Nation is seated on
a continent flanked by two great oceans. It is composed of men the
descendants of pioneers, or, in a sense, pioneers themselves; of men
winnowed out from among the nations of the Old World by the energy,
boldness, and love of adventure found in their own eager hearts. Such
a Nation, so placed, will surely wrest success from fortune.

As a people we have played a large part in the world, and we are bent
upon making our future even larger than the past. In particular, the
events of the last four years have definitely decided that, for woe
or for weal, our place must be great among the nations. We may either
fall greatly or succeed greatly; but we can not avoid the endeavor
from which either great failure or great success must come. Even if
we would, we can not play a small part. If we should try, all that
would follow would be that we should play a large part ignobly and
shamefully.

But our people, the sons of the men of the Civil War, the sons of the
men who had iron in their blood, rejoice in the present and face the
future high of heart and resolute of will. Ours is not the creed of
the weakling and the coward; ours is the gospel of hope and of
triumphant endeavor. We do not shrink from the struggle before us.
There are many problems for us to face at the outset of the twentieth
century--grave problems abroad and still graver at home; but we know
that we can solve them and solve them well, provided only that we
bring to the solution the qualities of head and heart which were
shown by the men who, in the days of Washington, rounded this
Government, and, in the days of Lincoln, preserved it.

No country has ever occupied a higher plane of material well-being
than ours at the present moment. This well-being is due to no sudden
or accidental causes, but to the play of the economic forces in this
country for over a century; to our laws, our sustained and continuous
policies; above all, to the high individual average of our
citizenship. Great fortunes have been won by those who have taken the
lead in this phenomenal industrial development, and most of these
fortunes have been won not by doing evil, but as an incident to
action which has benefited the community as a whole. Never before has
material well-being been so widely diffused among our people. Great
fortunes have been accumulated, and yet in the aggregate these
fortunes are small Indeed when compared to the wealth of the people
as a whole. The plain people are better off than they have ever been
before. The insurance companies, which are practically mutual benefit
societies--especially helpful to men of moderate means--represent
accumulations of capital which are among the largest in this country.
There are more deposits in the savings banks, more owners of farms,
more well-paid wage-workers in this country now than ever before in
our history. Of course, when the conditions have favored the growth
of so much that was good, they have also favored somewhat the growth
of what was evil. It is eminently necessary that we should endeavor
to cut out this evil, but let us keep a due sense of proportion; let
us not in fixing our gaze upon the lesser evil forget the greater
good. The evils are real and some of them are menacing, but they are
the outgrowth, not of misery or decadence, but of prosperity--of the
progress of our gigantic industrial development. This industrial
development must not be checked, but side by side with it should go
such progressive regulation as will diminish the evils. We should
fail in our duty if we did not try to remedy the evils, but we shall
succeed only if we proceed patiently, with practical common sense as
well as resolution, separating the good from the bad and holding on
to the former while endeavoring to get rid of the latter.

In my Message to the present Congress at its first session I
discussed at length the question of the regulation of those big
corporations commonly doing an interstate business, often with some
tendency to monopoly, which are popularly known as trusts. The
experience of the past year has emphasized, in my opinion, the
desirability of the steps I then proposed. A fundamental requisite of
social efficiency is a high standard of individual energy and
excellence; but this is in no wise inconsistent with power to act in
combination for aims which can not so well be achieved by the
individual acting alone. A fundamental base of civilization is the
inviolability of property; but this is in no wise inconsistent with
the right of society to regulate the exercise of the artificial
powers which it confers upon the owners of property, under the name
of corporate franchises, in such a way as to prevent the misuse of
these powers. Corporations, and especially combinations of
corporations, should be managed under public regulation. Experience
has shown that under our system of government the necessary
supervision can not be obtained by State action. It must therefore be
achieved by national action. Our aim is not to do away with
corporations; on the contrary, these big aggregations are an
inevitable development of modern industrialism, and the effort to
destroy them would be futile unless accomplished in ways that would
work the utmost mischief to the entire body politic. We can do
nothing of good in the way of regulating and supervising these
corporations until we fix clearly in our minds that we are not
attacking the corporations, but endeavoring to do away with any evil
in them. We are not hostile to them; we are merely determined that
they shall be so handled as to subserve the public good. We draw the
line against misconduct, not against wealth. The capitalist who,
alone or in conjunction with his fellows, performs some great
industrial feat by which he wins money is a welldoer, not a
wrongdoer, provided only he works in proper and legitimate lines. We
wish to favor such a man when he does well. We wish to supervise and
control his actions only to prevent him from doing ill. Publicity can
do no harm to the honest corporation; and we need not be over tender
about sparing the dishonest corporation. In curbing and regulating
the combinations of capital which are, or may become, injurious to
the public we must be careful not to stop the great enterprises which
have legitimately reduced the cost of production, not to abandon the
place which our country has won in the leadership of the
international industrial world, not to strike down wealth with the
result of closing factories and mines, of turning the wage-worker
idle in the streets and leaving the farmer without a market for what
he grows. Insistence upon the impossible means delay in achieving the
possible, exactly as, on the other hand, the stubborn defense alike of
what is good and what is bad in the existing system, the resolute
effort to obstruct any attempt at betterment, betrays blindness to
the historic truth that wise evolution is the sure safeguard against
revolution.

No more important subject can come before the Congress than this of
the regulation of interstate business. This country can not afford to
sit supine on the plea that under our peculiar system of government we
are helpless in the presence of the new conditions, and unable to
grapple with them or to cut out whatever of evil has arisen in
connection with them. The power of the Congress to regulate
interstate commerce is an absolute and unqualified grant, and without
limitations other than those prescribed by the Constitution. The
Congress has constitutional authority to make all laws necessary and
proper for executing this power, and I am satisfied that this power
has not been exhausted by any legislation now on the statute books.
It is evident, therefore, that evils restrictive of commercial
freedom and entailing restraint upon national commerce fall within
the regulative power of the Congress, and that a wise and reasonable
law would be a necessary and proper exercise of Congressional
authority to the end that such evils should be eradicated.

I believe that monopolies, unjust discriminations, which prevent or
cripple competition, fraudulent overcapitalization, and other evils
in trust organizations and practices which injuriously affect
interstate trade can be prevented under the power of the Congress to
"regulate commerce with foreign nations and among the several States"
through regulations and requirements operating directly upon such
commerce, the instrumentalities thereof, and those engaged therein.

I earnestly recommend this subject to the consideration of the
Congress with a view to the passage of a law reasonable in its
provisions and effective in its operations, upon which the questions
can be finally adjudicated that now raise doubts as to the necessity
of constitutional amendment. If it prove impossible to accomplish the
purposes above set forth by such a law, then, assuredly, we should not
shrink from amending the Constitution so as to secure beyond
peradventure the power sought.

The Congress has not heretofore made any appropriation for the better
enforcement of the antitrust law as it now stands. Very much has been
done by the Department of Justice in securing the enforcement of this
law, but much more could be done if the Congress would make a special
appropriation for this purpose, to be expended under the direction of
the Attorney-General.

One proposition advocated has been the reduction of the tariff as a
means of reaching the evils of the trusts which fall within the
category I have described. Not merely would this be wholly
ineffective, but the diversion of our efforts in such a direction
would mean the abandonment of all intelligent attempt to do away with
these evils. Many of the largest corporations, many of those which
should certainly be included in any proper scheme of regulation,
would not be affected in the slightest degree by a change in the
tariff, save as such change interfered with the general prosperity of
the country. The only relation of the tariff to big corporations as a
whole is that the tariff makes manufactures profitable, and the
tariff remedy proposed would be in effect simply to make manufactures
unprofitable. To remove the tariff as a punitive measure directed
against trusts would inevitably result in ruin to the weaker
competitors who are struggling against them. Our aim should be not by
unwise tariff changes to give foreign products the advantage over
domestic products, but by proper regulation to give domestic
competition a fair chance; and this end can not be reached by any
tariff changes which would affect unfavorably all domestic
competitors, good and bad alike. The question of regulation of the
trusts stands apart from the question of tariff revision.

Stability of economic policy must always be the prime economic need
of this country. This stability should not be fossilization. The
country has acquiesced in the wisdom of the protective-tariff
principle. It is exceedingly undesirable that this system should be
destroyed or that there should be violent and radical changes
therein. Our past experience shows that great prosperity in this
country has always come under a protective tariff; and that the
country can not prosper under fitful tariff changes at short
intervals. Moreover, if the tariff laws as a whole work well, and if
business has prospered under them and is prospering, it is better to
endure for a time slight inconveniences and inequalities in some
schedules than to upset business by too quick and too radical
changes. It is most earnestly to be wished that we could treat the
tariff from the standpoint solely of our business needs. It is,
perhaps, too much to hope that partisanship may be entirely excluded
from consideration of the subject, but at least it can be made
secondary to the business interests of the country--that is, to the
interests of our people as a whole. Unquestionably these business
interests will best be served if together with fixity of principle as
regards the tariff we combine a system which will permit us from time
to time to make the necessary reapplication of the principle to the
shifting national needs. We must take scrupulous care that the
reapplication shall be made in such a way that it will not amount to
a dislocation of our system, the mere threat of which (not to speak
of the performance) would produce paralysis in the business energies
of the community. The first consideration in making these changes
would, of course, be to preserve the principle which underlies our
whole tariff system--that is, the principle of putting American
business interests at least on a full equality with interests abroad,
and of always allowing a sufficient rate of duty to more than cover
the difference between the labor cost here and abroad. The well-being
of the wage-worker, like the well-being of the tiller of the soil,
should be treated as an essential in shaping our whole economic
policy. There must never be any change which will jeopardize the
standard of comfort, the standard of wages of the American
wage-worker.

One way in which the readjustment sought can be reached is by
reciprocity treaties. It is greatly to be desired that such treaties
may be adopted. They can be used to widen our markets and to give a
greater field for the activities of our producers on the one hand,
and on the other hand to secure in practical shape the lowering of
duties when they are no longer needed for protection among our own
people, or when the minimum of damage done may be disregarded for the
sake of the maximum of good accomplished. If it prove impossible to
ratify the pending treaties, and if there seem to be no warrant for
the endeavor to execute others, or to amend the pending treaties so
that they can be ratified, then the same end--to secure
reciprocity--should be met by direct legislation.

Wherever the tariff conditions are such that a needed change can not
with advantage be made by the application of the reciprocity idea,
then it can be made outright by a lowering of duties on a given
product. If possible, such change should be made only after the
fullest consideration by practical experts, who should approach the
subject from a business standpoint, having in view both the
particular interests affected and the commercial well-being of the
people as a whole. The machinery for providing such careful
investigation can readily be supplied. The executive department has
already at its disposal methods of collecting facts and figures; and
if the Congress desires additional consideration to that which will
be given the subject by its own committees, then a commission of
business experts can be appointed whose duty it should be to
recommend action by the Congress after a deliberate and scientific
examination of the various schedules as they are affected by the
changed and changing conditions. The unhurried and unbiased report of
this commission would show what changes should be made in the various
schedules, and how far these changes could go without also changing
the great prosperity which this country is now enjoying, or upsetting
its fixed economic policy.

The cases in which the tariff can produce a monopoly are so few as to
constitute an inconsiderable factor in the question; but of course if
in any case it be found that a given rate of duty does promote a
monopoly which works ill, no protectionist would object to such
reduction of the duty as would equalize competition.

In my judgment, the tariff on anthracite coal should be removed, and
anthracite put actually, where it now is nominally, on the free list.
This would have no effect at all save in crises; but in crises it
might be of service to the people.

Interest rates are a potent factor in business activity, and in order
that these rates may be equalized to meet the varying needs of the
seasons and of widely separated communities, and to prevent the
recurrence of financial stringencies which injuriously affect
legitimate business, it is necessary that there should be an element
of elasticity in our monetary system. Banks are the natural servants
of commerce, and upon them should be placed, as far as practicable,
the burden of furnishing and maintaining a circulation adequate to
supply the needs of our diversified industries and of our domestic
and foreign commerce; and the issue of this should be so regulated
that a sufficient supply should be always available for the business
interests of the country.

It would be both unwise and unnecessary at this time to attempt to
reconstruct our financial system, which has been the growth of a
century; but some additional legislation is, I think, desirable. The
mere outline of any plan sufficiently comprehensive to meet these
requirements would transgress the appropriate limits of this
communication. It is suggested, however, that all future legislation
on the subject should be with the view of encouraging the use of such
instrumentalities as will automatically supply every legitimate demand
of productive industries and of commerce, not only in the amount, but
in the character of circulation; and of making all kinds of money
interchangeable, and, at the will of the holder, convertible into the
established gold standard.

I again call your attention to the need of passing a proper
immigration law, covering the points outlined in my Message to you at
the first session of the present Congress; substantially such a bill
has already passed the House.

How to secure fair treatment alike for labor and for capital, how to
hold in check the unscrupulous man, whether employer or employee,
without weakening individual initiative, without hampering and
cramping the industrial development of the country, is a problem
fraught with great difficulties and one which it is of the highest
importance to solve on lines of sanity and far-sighted common sense
as well as of devotion to the right. This is an era of federation and
combination. Exactly as business men find they must often work through
corporations, and as it is a constant tendency of these corporations
to grow larger, so it is often necessary for laboring men to work in
federations, and these have become important factors of modern
industrial life. Both kinds of federation, capitalistic and labor,
can do much good, and as a necessary corollary they can both do evil.
Opposition to each kind of organization should take the form of
opposition to whatever is bad in the conduct of any given corporation
or union--not of attacks upon corporations as such nor upon unions as
such; for some of the most far-reaching beneficent work for our
people has been accomplished through both corporations and unions.
Each must refrain from arbitrary or tyrannous interference with the
rights of others. Organized capital and organized labor alike should
remember that in the long run the interest of each must be brought
into harmony with the interest of the general public; and the conduct
of each must conform to the fundamental rules of obedience to the law,
of individual freedom, and of justice and fair dealing toward all.
Each should remember that in addition to power it must strive after
the realization of healthy, lofty, and generous ideals. Every
employer, every wage-worker, must be guaranteed his liberty and his
right to do as he likes with his property or his labor so long as he
does not infringe upon the rights of others. It is of the highest
importance that employer and employee alike should endeavor to
appreciate each the viewpoint of the other and the sure disaster that
will come upon both in the long run if either grows to take as
habitual an attitude of sour hostility and distrust toward the other.
Few people deserve better of the country than those representatives
both of capital and labor--and there are many such--who work
continually to bring about a good understanding of this kind, based
upon wisdom and upon broad and kindly sympathy between employers and
employed. Above all, we need to remember that any kind of class
animosity in the political world is, if possible, even more wicked,
even more destructive to national welfare, than sectional, race, or
religious animosity. We can get good government only upon condition
that we keep true to the principles upon which this Nation was
founded, and judge each man not as a part of a class, but upon his
individual merits. All that we have a right to ask of any man, rich
or poor, whatever his creed, his occupation, his birthplace, or his
residence, is that he shall act well and honorably by his neighbor
and by, his country. We are neither for the rich man as such nor for
the poor man as such; we are for the upright man, rich or poor. So
far as the constitutional powers of the National Government touch
these matters of general and vital moment to the Nation, they should
be exercised in conformity with the principles above set forth.

It is earnestly hoped that a secretary of commerce may be created,
with a seat in the Cabinet. The rapid multiplication of questions
affecting labor and capital, the growth and complexity of the
organizations through which both labor and capital now find
expression, the steady tendency toward the employment of capital in
huge corporations, and the wonderful strides of this country toward
leadership in the international business world justify an urgent
demand for the creation of such a position. Substantially all the
leading commercial bodies in this country have united in requesting
its creation. It is desirable that some such measure as that which
has already passed the Senate be enacted into law. The creation of
such a department would in itself be an advance toward dealing with
and exercising supervision over the whole subject of the great
corporations doing an interstate business; and with this end in view,
the Congress should endow the department with large powers, which
could be increased as experience might show the need.

I hope soon to submit to the Senate a reciprocity treaty with Cuba.
On May 20 last the United States kept its promise to the island by
formally vacating Cuban soil and turning Cuba over to those whom her
own people had chosen as the first officials of the new Republic.

Cuba lies at our doors, and whatever affects her for good or for ill
affects us also. So much have our people felt this that in the Platt
amendment we definitely took the ground that Cuba must hereafter have
closer political relations with us than with any other power. Thus in
a sense Cuba has become a part of our international political system.
This makes it necessary that in return she should be given some of the
benefits of becoming part of our economic system. It is, from our own
standpoint, a short-sighted and mischievous policy to fail to
recognize this need. Moreover, it is unworthy of a mighty and
generous nation, itself the greatest and most successful republic in
history, to refuse to stretch out a helping hand to a young and weak
sister republic just entering upon its career of independence. We
should always fearlessly insist upon our rights in the face of the
strong, and we should with ungrudging hand do our generous duty by
the weak. I urge the adoption of reciprocity with Cuba not only
because it is eminently for our own interests to control the Cuban
market and by every means to foster our supremacy in the tropical
lands and waters south of us, but also because we, of the giant
republic of the north, should make all our sister nations of the
American Continent feel that whenever they will permit it we desire
to show ourselves disinterestedly and effectively their friend.

A convention with Great Britain has been concluded, which will be at
once laid before the Senate for ratification, providing for
reciprocal trade arrangements between the United States and
Newfoundland on substantially the lines of the convention formerly
negotiated by the Secretary of State, Mr. Blaine. I believe
reciprocal trade relations will be greatly to the advantage of both
countries.

As civilization grows warfare becomes less and less the normal
condition of foreign relations. The last century has seen a marked
diminution of wars between civilized powers; wars with uncivilized
powers are largely mere matters of international police duty,
essential for the welfare of the world. Wherever possible,
arbitration or some similar method should be employed in lieu of war
to settle difficulties between civilized nations, although as yet the
world has not progressed sufficiently to render it possible, or
necessarily desirable, to invoke arbitration in every case. The
formation of the international tribunal which sits at The Hague is an
event of good omen from which great consequences for the welfare of
all mankind may flow. It is far better, where possible, to invoke
such a permanent tribunal than to create special arbitrators for a
given purpose.

It is a matter of sincere congratulation to our country that the
United States and Mexico should have been the first to use the good
offices of The Hague Court. This was done last summer with most
satisfactory results in the case of a claim at issue between us and
our sister Republic. It is earnestly to be hoped that this first case
will serve as a precedent for others, in which not only the United
States but foreign nations may take advantage of the machinery
already in existence at The Hague.

I commend to the favorable consideration of the Congress the Hawaiian
fire claims, which were the subject of careful investigation during
the last session.

The Congress has wisely provided that we shall build at once an
isthmian canal, if possible at Panama. The Attorney-General reports
that we can undoubtedly acquire good title from the French Panama
Canal Company. Negotiations are now pending with Colombia to secure
her assent to our building the canal. This canal will be one of the
greatest engineering feats of the twentieth century; a greater
engineering feat than has yet been accomplished during the history of
mankind. The work should be carried out as a continuing policy without
regard to change of Administration; and it should be begun under
circumstances which will make it a matter of pride for all
Administrations to continue the policy.

The canal will be of great benefit to America, and of importance to
all the world. It will be of advantage to us industrially and also as
improving our military position. It will be of advantage to the
countries of tropical America. It is earnestly to be hoped that all
of these countries will do as some of them have already done with
signal success, and will invite to their shores commerce and improve
their material conditions by recognizing that stability and order are
the prerequisites of successful development. No independent nation in
America need have the slightest fear of aggression from the United
States. It behoves each one to maintain order within its own borders
and to discharge its just obligations to foreigners. When this is
done, they can rest assured that, be they strong or weak, they have
nothing to dread from outside interference. More and more the
increasing interdependence and complexity of international political
and economic relations render it incumbent on all civilized and
orderly powers to insist on the proper policing of the world.

During the fall of 1901 a communication was addressed to the
Secretary of State, asking whether permission would be granted by the
President to a corporation to lay a cable from a point on the
California coast to the Philippine Islands by way of Hawaii. A
statement of conditions or terms upon which such corporation would
undertake to lay and operate a cable was volunteered.

Inasmuch as the Congress was shortly to convene, and Pacific-cable
legislation had been the subject of consideration by the Congress for
several years, it seemed to me wise to defer action upon the
application until the Congress had first an opportunity to act. The
Congress adjourned without taking any action, leaving the matter in
exactly the same condition in which it stood when the Congress
convened.

Meanwhile it appears that the Commercial Pacific Cable Company had
promptly proceeded with preparations for laying its cable. It also
made application to the President for access to and use of soundings
taken by the U. S. S. Nero, for the purpose of discovering a
practicable route for a trans-Pacific cable, the company urging that
with access to these soundings it could complete its cable much
sooner than if it were required to take soundings upon its own
account. Pending consideration of this subject, it appeared important
and desirable to attach certain conditions to the permission to
examine and use the soundings, if it should be granted.

In consequence of this solicitation of the cable company, certain
conditions were formulated, upon which the President was willing to
allow access to these soundings and to consent to the landing and
laying of the cable, subject to any alterations or additions thereto
imposed by the Congress. This was deemed proper, especially as it was
clear that a cable connection of some kind with China, a foreign
country, was a part of the company's plan. This course was, moreover,
in accordance with a line of precedents, including President Grant's
action in the case of the first French cable, explained to the
Congress in his Annual Message of December, 1875, and the instance
occurring in 1879 of the second French cable from Brest to St.
Pierre, with a branch to Cape Cod.

These conditions prescribed, among other things, a maximum rate for
commercial messages and that the company should construct a line from
the Philippine Islands to China, there being at present, as is well
known, a British line from Manila to Hongkong.

The representatives of the cable company kept these conditions long
under consideration, continuing, in the meantime, to prepare for
laying the cable. They have, however, at length acceded to them, and
an all-American line between our Pacific coast and the Chinese
Empire, by way of Honolulu and the Philippine Islands, is thus
provided for, and is expected within a few months to be ready for
business.

Among the conditions is one reserving the power of the Congress to
modify or repeal any or all of them. A copy of the conditions is
herewith transmitted.

Of Porto Rico it is only necessary to say that the prosperity of the
island and the wisdom with which it has been governed have been such
as to make it serve as an example of all that is best in insular
administration.

On July 4 last, on the one hundred and twenty-sixth anniversary of
the declaration of our independence, peace and amnesty were
promulgated in the Philippine Islands. Some trouble has since from
time to time threatened with the Mohammedan Moros, but with the late
insurrectionary Filipinos the war has entirely ceased. Civil
government has now been introduced. Not only does each Filipino enjoy
such rights to life, liberty, and the pursuit of happiness as he has
never before known during the recorded history of the islands, but
the people taken as a whole now enjoy a measure of self-government
greater than that granted to any other Orientals by any foreign power
and greater than that enjoyed by any other Orientals under their own
governments, save the Japanese alone. We have not gone too far in
granting these rights of liberty and self-government; but we have
certainly gone to the limit that in the interests of the Philippine
people themselves it was wise or just to go. To hurry matters, to go
faster than we are now going, would entail calamity on the people of
the islands. No policy ever entered into by the American people has
vindicated itself in more signal manner than the policy of holding
the Philippines. The triumph of our arms, above all the triumph of
our laws and principles, has come sooner than we had any right to
expect. Too much praise can not be given to the Army for what it has
done in the Philippines both in warfare and from an administrative
standpoint in preparing the way for civil government; and similar
credit belongs to the civil authorities for the way in which they
have planted the seeds of self-government in the ground thus made
ready for them. The courage, the unflinching endurance, the high
soldierly efficiency; and the general kind-heartedness and humanity
of our troops have been strikingly manifested. There now remain only
some fifteen thousand troops in the islands. All told, over one
hundred thousand have been sent there. Of course, there have been
individual instances of wrongdoing among them. They warred under
fearful difficulties of climate and surroundings; and under the
strain of the terrible provocations which they continually received
from their foes, occasional instances of cruel retaliation occurred.
Every effort has been made to prevent such cruelties, and finally
these efforts have been completely successful. Every effort has also
been made to detect and punish the wrongdoers. After making all
allowance for these misdeeds, it remains true that few indeed have
been the instances in which war has been waged by a civilized power
against semicivilized or barbarous forces where there has been so
little wrongdoing by the victors as in the Philippine Islands. On the
other hand, the amount of difficult, important, and beneficent work
which has been done is well-nigh incalculable.

Taking the work of the Army and the civil authorities together, it
may be questioned whether anywhere else in modern times the world has
seen a better example of real constructive statesmanship than our
people have given in the Philippine Islands. High praise should also
be given those Filipinos, in the aggregate very numerous, who have
accepted the new conditions and joined with our representatives to
work with hearty good will for the welfare of the islands.

The Army has been reduced to the minimum allowed by law. It is very
small for the size of the Nation, and most certainly should be kept
at the highest point of efficiency. The senior officers are given
scant chance under ordinary conditions to exercise commands
commensurate with their rank, under circumstances which would fit
them to do their duty in time of actual war. A system of maneuvering
our Army in bodies of some little size has been begun and should be
steadily continued. Without such maneuvers it is folly to expect that
in the event of hostilities with any serious foe even a small army
corps could be handled to advantage. Both our officers and enlisted
men are such that we can take hearty pride in them. No better
material can be found. But they must be thoroughly trained, both as
individuals and in the mass. The marksmanship of the men must receive
special attention. In the circumstances of modern warfare the man must
act far more on his own individual responsibility than ever before,
and the high individual efficiency of the unit is of the utmost
importance. Formerly this unit was the regiment; it is now not the
regiment, not even the troop or company; it is the individual
soldier. Every effort must be made to develop every workmanlike and
soldierly quality in both the officer and the enlisted man.

I urgently call your attention to the need of passing a bill
providing for a general staff and for the reorganization of the
supply departments on the lines of the bill proposed by the Secretary
of War last year. When the young officers enter the Army from West
Point they probably stand above their compeers in any other military
service. Every effort should be made, by training, by reward of
merit, by scrutiny into their careers and capacity, to keep them of
the same high relative excellence throughout their careers.

The measure providing for the reorganization of the militia system
and for securing the highest efficiency in the National Guard, which
has already passed the House, should receive prompt attention and
action. It is of great importance that the relation of the National
Guard to the militia and volunteer forces of the United States should
be defined, and that in place of our present obsolete laws a practical
and efficient system should be adopted.

Provision should be made to enable the Secretary of War to keep
cavalry and artillery horses, worn-out in long performance of duty.
Such horses fetch but a trifle when sold; and rather than turn them
out to the misery awaiting them when thus disposed of, it would be
better to employ them at light work around the posts, and when
necessary to put them painlessly to death.

For the first time in our history naval maneuvers on a large scale
are being held under the immediate command of the Admiral of the
Navy. Constantly increasing attention is being paid to the gunnery of
the Navy, but it is yet far from what it should be. I earnestly urge
that the increase asked for by the Secretary of the Navy in the
appropriation for improving the markmanship be granted. In battle the
only shots that count are the shots that hit. It is necessary to
provide ample funds for practice with the great guns in time of
peace. These funds must provide not only for the purchase of
projectiles, but for allowances for prizes to encourage the gun
crews, and especially the gun pointers, and for perfecting an
intelligent system under which alone it is possible to get good
practice.

There should be no halt in the work of building up the Navy,
providing every year additional fighting craft. We are a very rich
country, vast in extent of territory and great in population; a
country, moreover, which has an Army diminutive indeed when compared
with that of any other first-class power. We have deliberately made
our own certain foreign policies which demand the possession of a
first-class navy. The isthmian canal will greatly increase the
efficiency of our Navy if the Navy is of sufficient size; but if we
have an inadequate navy, then the building of the canal would be
merely giving a hostage to any power of superior strength. The Monroe
Doctrine should be treated as the cardinal feature of American foreign
policy; but it would be worse than idle to assert it unless we
intended to back it up, and it can be backed up only by a thoroughly
good navy. A good navy is not a provocative of war. It is the surest
guaranty of peace.

Each individual unit of our Navy should be the most efficient of its
kind as regards both material and personnel that is to be found in
the world. I call your special attention to the need of providing for
the manning of the ships. Serious trouble threatens us if we can not
do better than we are now doing as regards securing the services of a
sufficient number of the highest type of sailormen, of sea mechanics.
The veteran seamen of our war ships are of as high a type as can be
found in any navy which rides the waters of the world; they are
unsurpassed in daring, in resolution, in readiness, in thorough
knowledge of their profession. They deserve every consideration that
can be shown them. But there are not enough of them. It is no more
possible to improvise a crew than it is possible to improvise a war
ship. To build the finest ship, with the deadliest battery, and to
send it afloat with a raw crew, no matter how brave they were
individually, would be to insure disaster if a foe of average
capacity were encountered. Neither ships nor men can be improvised
when war has begun.

We need a thousand additional officers in order to properly man the
ships now provided for and under construction. The classes at the
Naval School at Annapolis should be greatly enlarged. At the same
time that we thus add the officers where we need them, we should
facilitate the retirement of those at the head of the list whose
usefulness has become impaired. Promotion must be fostered if the
service is to be kept efficient.

The lamentable scarcity of officers, and the large number of recruits
and of unskilled men necessarily put aboard the new vessels as they
have been commissioned, has thrown upon our officers, and especially
on the lieutenants and junior grades, unusual labor and fatigue and
has gravely strained their powers of endurance. Nor is there sign of
any immediate let-up in this strain. It must continue for some time
longer, until more officers are graduated from Annapolis, and until
the recruits become trained and skillful in their duties. In these
difficulties incident upon the development of our war fleet the
conduct of all our officers has been creditable to the service, and
the lieutenants and junior grades in particular have displayed an
ability and a steadfast cheerfulness which entitles them to the
ungrudging thanks of all who realize the disheartening trials and
fatigues to which they are of necessity subjected.

There is not a cloud on the horizon at present. There seems not the
slightest chance of trouble with a foreign power. We most earnestly
hope that this state of things may continue; and the way to insure
its continuance is to provide for a thoroughly efficient navy. The
refusal to maintain such a navy would invite trouble, and if trouble
came would insure disaster. Fatuous self-complacency or vanity, or
short-sightedness in refusing to prepare for danger, is both foolish
and wicked in such a nation as ours; and past experience has shown
that such fatuity in refusing to recognize or prepare for any crisis
in advance is usually succeeded by a mad panic of hysterical fear
once the crisis has actually arrived.

The striking increase in the revenues of the Post-Office Department
shows clearly the prosperity of our people and the increasing
activity of the business of the country.

The receipts of the Post-Office Department for the fiscal year ending
June 30 last amounted to $121,848,047.26, an increase of
$10,216,853.87 over the preceding year, the largest increase known in
the history of the postal service. The magnitude of this increase will
best appear from the fact that the entire postal receipts for the year
1860 amounted to but $8,518,067.

Rural free-delivery service is no longer in the experimental stage;
it has become a fixed policy. The results following its introduction
have fully justified the Congress in the large appropriations made
for its establishment and extension. The average yearly increase in
post-office receipts in the rural districts of the country is about
two per cent. We are now able, by actual results, to show that where
rural free-delivery service has been established to such an extent as
to enable us to make comparisons the yearly increase has been upward
of ten per cent.

On November 1, 1902, 11,650 rural free-delivery routes had been
established and were in operation, covering about one-third of the
territory of the United States available for rural free-delivery
service. There are now awaiting the action of the Department
petitions and applications for the establishment of 10,748 additional
routes. This shows conclusively the want which the establishment of
the service has met and the need of further extending it as rapidly
as possible. It is justified both by the financial results and by the
practical benefits to our rural population; it brings the men who live
on the soil into close relations with the active business world; it
keeps the farmer in daily touch with the markets; it is a potential
educational force; it enhances the value of farm property, makes farm
life far pleasanter and less isolated, and will do much to check the
undesirable current from country to city.

It is to be hoped that the Congress will make liberal appropriations
for the continuance of the service already established and for its
further extension.

Few subjects of more importance have been taken up by the Congress in
recent years than the inauguration of the system of nationally-aided
irrigation for the arid regions of the far West. A good beginning
therein has been made. Now that this policy of national irrigation
has been adopted, the need of thorough and scientific forest
protection will grow more rapidly than ever throughout the
public-land States.

Legislation should be provided for the protection of the game, and
the wild creatures generally, on the forest reserves. The senseless
slaughter of game, which can by judicious protection be permanently
preserved on our national reserves for the people as a whole, should
be stopped at once. It is, for instance, a serious count against our
national good sense to permit the present practice of butchering off
such a stately and beautiful creature as the elk for its antlers or
tusks.

So far as they are available for agriculture, and to whatever extent
they may be reclaimed under the national irrigation law, the
remaining public lands should be held rigidly for the home builder,
the settler who lives on his land, and for no one else. In their
actual use the desert-land law, the timber and stone law, and the
commutation clause of the homestead law have been so perverted from
the intention with which they were enacted as to permit the
acquisition of large areas of the public domain for other than actual
settlers and the consequent prevention of settlement. Moreover, the
approaching exhaustion of the public ranges has of late led to much
discussion as to the best manner of using these public lands in the
West which are suitable chiefly or only for grazing. The sound and
steady development of the West depends upon the building up of homes
therein. Much of our prosperity as a nation has been due to the
operation of the homestead law. On the other hand, we should
recognize the fact that in the grazing region the man who corresponds
to the homesteader may be unable to settle permanently if only allowed
to use the same amount of pasture land that his brother, the
homesteader, is allowed to use of arable land. One hundred and sixty
acres of fairly rich and well-watered soil, or a much smaller amount
of irrigated land, may keep a family in plenty, whereas no one could
get a living from one hundred and sixty acres of dry pasture land
capable of supporting at the outside only one head of cattle to every
ten acres. In the past great tracts of the public domain have been
fenced in by persons having no title thereto, in direct defiance of
the law forbidding the maintenance or construction of any such
unlawful inclosure of public land. For various reasons there has been
little interference with such inclosures in the past, but ample notice
has now been given the trespassers, and all the resources at the
command of the Government will hereafter be used to put a stop to
such trespassing.

In view of the capital importance of these matters, I commend them to
the earnest consideration of the Congress, and if the Congress finds
difficulty in dealing with them from lack of thorough knowledge of
the subject, I recommend that provision be made for a commission of
experts specially to investigate and report upon the complicated
questions involved.

I especially urge upon the Congress the need of wise legislation for
Alaska. It is not to our credit as a nation that Alaska, which has
been ours for thirty-five years, should still have as poor a system
Of laws as is the case. No country has a more valuable possession--in
mineral wealth, in fisheries, furs, forests, and also in land
available for certain kinds of farming and stockgrowing. It is a
territory of great size and varied resources, well fitted to support
a large permanent population. Alaska needs a good land law and such
provisions for homesteads and pre-emptions as will encourage
permanent settlement. We should shape legislation with a view not to
the exploiting and abandoning of the territory, but to the building
up of homes therein. The land laws should be liberal in type, so as
to hold out inducements to the actual settler whom we most desire to
see take possession of the country. The forests of Alaska should be
protected, and, as a secondary but still important matter, the game
also, and at the same time it is imperative that the settlers should
be allowed to cut timber, under proper regulations, for their own
use. Laws should be enacted to protect the Alaskan salmon fisheries
against the greed which would destroy them. They should be preserved
as a permanent industry and food supply. Their management and control
should be turned over to the Commission of Fish and Fisheries. Alaska
should have a Delegate in the Congress. It would be well if a
Congressional committee could visit Alaska and investigate its needs
on the ground.

In dealing with the Indians our aim should be their ultimate
absorption into the body of our people. But in many cases this
absorption must and should be very slow. In portions of the Indian
Territory the mixture of blood has gone on at the same time with
progress in wealth and education, so that there are plenty of men
with varying degrees of purity of Indian blood who are absolutely
indistinguishable in point of social, political, and economic ability
from their white associates. There are other tribes which have as yet
made no perceptible advance toward such equality. To try to force
such tribes too fast is to prevent their going forward at all.
Moreover, the tribes live under widely different conditions. Where a
tribe has made considerable advance and lives on fertile farming soil
it is possible to allot the members lands in severalty much as is the
case with white settlers. There are other tribes where such a course
is not desirable. On the arid prairie lands the effort should be to
induce the Indians to lead pastoral rather than agricultural lives,
and to permit them to settle in villages rather than to force them
into isolation.

The large Indian schools situated remote from any Indian reservation
do a special and peculiar work of great importance. But, excellent
though these are, an immense amount of additional work must be done
on the reservations themselves among the old, and above all among the
young, Indians.

The first and most important step toward the absorption of the Indian
is to teach him to earn his living; yet it is not necessarily to be
assumed that in each community all Indians must become either tillers
of the soil or stock raisers. Their industries may properly be
diversified, and those who show special desire or adaptability for
industrial or even commercial pursuits should be encouraged so far as
practicable to follow out each his own bent.

Every effort should be made to develop the Indian along the lines of
natural aptitude, and to encourage the existing native industries
peculiar to certain tribes, such as the various kinds of basket
weaving, canoe building, smith work, and blanket work. Above all, the
Indian boys and girls should be given confident command of colloquial
English, and should ordinarily be prepared for a vigorous struggle
with the conditions under which their people live, rather than for
immediate absorption into some more highly developed community.

The officials who represent the Government in dealing with the
Indians work under hard conditions, and also under conditions which
render it easy to do wrong and very difficult to detect wrong.
Consequently they should be amply paid on the one hand, and on the
other hand a particularly high standard of conduct should be demanded
from them, and where misconduct can be proved the punishment should be
exemplary.

In no department of governmental work in recent years has there been
greater success than in that of giving scientific aid to the farming
population, thereby showing them how most efficiently to help
themselves. There is no need of insisting upon its importance, for
the welfare of the farmer is fundamentally necessary to the welfare
of the Republic as a whole. In addition to such work as quarantine
against animal and vegetable plagues, and warring against them when
here introduced, much efficient help has been rendered to the farmer
by the introduction of new plants specially fitted for cultivation
under the peculiar conditions existing in different portions of the
country. New cereals have been established in the semi-arid West. For
instance, the practicability of producing the best types of macaroni
wheats in regions of an annual rainfall of only ten inches or
thereabouts has been conclusively demonstrated. Through the
introduction of new rices in Louisiana and Texas the production of
rice in this country has been made to about equal the home demand. In
the South-west the possibility of regrassing overstocked range lands
has been demonstrated; in the North many new forage crops have been
introduced, while in the East it has been shown that some of our
choicest fruits can be stored and shipped in such a way as to find a
profitable market abroad.

I again recommend to the favorable consideration of the Congress the
plans of the Smithsonian Institution for making the Museum under its
charge worthy of the Nation, and for preserving at the National
Capital not only records of the vanishing races of men but of the
animals of this continent which, like the buffalo, will soon become
extinct unless specimens from which their representatives may be
renewed are sought in their native regions and maintained there in
safety.

The District of Columbia is the only part of our territory in which
the National Government exercises local or municipal functions, and
where in consequence the Government has a free hand in reference to
certain types of social and economic legislation which must be
essentially local or municipal in their character. The Government
should see to it, for instance, that the hygienic and sanitary
legislation affecting Washington is of a high character. The evils of
slum dwellings, whether in the shape of crowded and congested
tenement-house districts or of the back-alley type, should never be
permitted to grow up in Washington. The city should be a model in
every respect for all the cities of the country. The charitable and
correctional systems of the District should receive consideration at
the hands of the Congress to the end that they may embody the results
of the most advanced thought in these fields. Moreover, while
Washington is not a great industrial city, there is some
industrialism here, and our labor legislation, while it would not be
important in itself, might be made a model for the rest of the
Nation. We should pass, for instance, a wise employer's-liability act
for the District of Columbia, and we need such an act in our
navy-yards. Railroad companies in the District ought to be required
by law to block their frogs.

The safety-appliance law, for the better protection of the lives and
limbs of railway employees, which was passed in 1893, went into full
effect on August 1, 1901. It has resulted in averting thousands of
casualties. Experience shows, however, the necessity of additional
legislation to perfect this law. A bill to provide for this passed
the Senate at the last session. It is to be hoped that some such
measure may now be enacted into law.

There is a growing tendency to provide for the publication of masses
of documents for which there is no public demand and for the printing
of which there is no real necessity. Large numbers of volumes are
turned out by the Government printing presses for which there is no
justification. Nothing should be printed by any of the Departments
unless it contains something of permanent value, and the Congress
could with advantage cut down very materially on all the printing
which it has now become customary to provide. The excessive cost of
Government printing is a strong argument against the position of
those who are inclined on abstract grounds to advocate the
Government's doing any work which can with propriety be left in
private hands.

Gratifying progress has been made during the year in the extension of
the merit system of making appointments in the Government service. It
should be extended by law to the District of Columbia. It is much to
be desired that our consular system be established by law on a basis
providing for appointment and promotion only in consequence of proved
fitness.

Through a wise provision of the Congress at its last session the
White House, which had become disfigured by incongruous additions and
changes, has now been restored to what it was planned to be by
Washington. In making the restorations the utmost care has been
exercised to come as near as possible to the early plans and to
supplement these plans by a careful study of such buildings as that
of the University of Virginia, which was built by Jefferson. The
White House is the property of the Nation, and so far as is
compatible with living therein it should be kept as it originally
was, for the same reasons that we keep Mount Vernon as it originally
was. The stately simplicity of its architecture is an expression of
the character of the period in which it was built, and is in accord
with the purposes it was designed to serve. It is a good thing to
preserve such buildings as historic monuments which keep alive our
sense of continuity with the Nation's past.

The reports of the several Executive Departments are submitted to the
Congress with this communication.