Speech Transcript:

 To the Senate and House of Representatives:

The country is to be congratulated on the amount of substantial
achievement which has marked the past year both as regards our
foreign and as regards our domestic policy.

With a nation as with a man the most important things are those of
the household, and therefore the country is especially to be
congratulated on what has been accomplished in the direction of
providing for the exercise of supervision over the great corporations
and combinations of corporations engaged in interstate commerce. The
Congress has created the Department of Commerce and Labor, including
the Bureau of Corporations, with for the first time authority to
secure proper publicity of such proceedings of these great
corporations as the public has the right to know. It has provided for
the expediting of suits for the enforcement of the Federal anti-trust
law; and by another law it has secured equal treatment to all
producers in the transportation of their goods, thus taking a long
stride forward in making effective the work of the Interstate
Commerce Commission.

The establishment of the Department of Commerce and Labor, with the
Bureau of Corporations thereunder, marks a real advance in the
direction of doing all that is possible for the solution of the
questions vitally affecting capitalists and wage-workers. The act
creating Department was approved on February 14, 1903, and two days
later the head of the Department was nominated and confirmed by the
Senate. Since then the work of organization has been pushed as
rapidly as the initial appropriations permitted, and with due regard
to thoroughness and the broad purposes which the Department is
designed to serve. After the transfer of the various bureaus and
branches to the Department at the beginning of the current fiscal
year, as provided for in the act, the personnel comprised 1,289
employees in Washington and 8,836 in the country at large. The scope
of the Department's duty and authority embraces the commercial and
industrial interests of the Nation. It is not designed to restrict or
control the fullest liberty of legitimate business action, but to
secure exact and authentic information which will aid the Executive
in enforcing existing laws, and which will enable the Congress to
enact additional legislation, if any should be found necessary, in
order to prevent the few from obtaining privileges at the expense of
diminished opportunities for the many.

The preliminary work of the Bureau of Corporations in the Department
has shown the wisdom of its creation. Publicity in corporate affairs
will tend to do away with ignorance, and will afford facts upon which
intelligent action may be taken. Systematic, intelligent investigation
is already developing facts the knowledge of which is essential to a
right understanding of the needs and duties of the business world.
The corporation which is honestly and fairly organized, whose
managers in the conduct of its business recognize their obligation to
deal squarely with their stockholders, their competitors, and the
public, has nothing to fear from such supervision. The purpose of
this Bureau is not to embarrass or assail legitimate business, but to
aid in bringing about a better industrial condition--a condition under
which there shall be obedience to law and recognition of public
obligation by all corporations, great or small. The Department of
Commerce and Labor will be not only the clearing house for
information regarding the business transactions of the Nation, but
the executive arm of the Government to aid in strengthening our
domestic and foreign markets, in perfecting our transportation
facilities, in building up our merchant marine, in preventing the
entrance of undesirable immigrants, in improving commercial and
industrial conditions, and in bringing together on common ground
those necessary partners in industrial progress--capital and labor.
Commerce between the nations is steadily growing in volume, and the
tendency of the times is toward closer trade relations. Constant
watchfulness is needed to secure to Americans the chance to
participate to the best advantage in foreign trade; and we may
confidently expect that the new Department will justify the
expectation of its creators by the exercise of this watchfulness, as
well as by the businesslike administration of such laws relating to
our internal affairs as are intrusted to its care.

In enacting the laws above enumerated the Congress proceeded on sane
and conservative lines. Nothing revolutionary was attempted; but a
common-sense and successful effort was made in the direction of
seeing that corporations are so handled as to subserve the public
good. The legislation was moderate. It was characterized throughout
by the idea that we were not attacking corporations, but endeavoring
to provide for doing away with any evil in them; that we drew the
line against misconduct, not against wealth; gladly recognizing the
great good done by the capitalist who alone, or in conjunction with
his fellows, does his work along proper and legitimate lines. The
purpose of the legislation, which purpose will undoubtedly be
fulfilled, was to favor such a man when he does well, and to
supervise his action only to prevent him from doing ill. Publicity
can do no harm to the honest corporation. The only corporation that
has cause to dread it is the corporation which shrinks from the
light, and about the welfare of such corporations we need not be
oversensitive. The work of the Department of Commerce and Labor has
been conditioned upon this theory, of securing fair treatment alike
for labor and for capital.

The consistent policy of the National Government, so far as it has
the power, is to hold in check the unscrupulous man, whether employer
or employee; but to refuse to weaken individual initiative or to
hamper or cramp the industrial development of the country. We
recognize that this is an era of federation and combination, in which
great capitalistic corporations and labor unions have become factors
of tremendous importance in all industrial centers. Hearty
recognition is given the far-reaching, beneficent work which has been
accomplished through both corporations and unions, and the line as
between different corporations, as between different unions, is drawn
as it is between different individuals; that is, it is drawn on
conduct, the effort being to treat both organized capital and
organized labor alike; asking nothing save that the interest of each
shall be brought into harmony with the interest of the general
public, and that the conduct of each shall conform to the fundamental
rules of obedience to law, of individual freedom, and of justice and
fair dealing towards all. Whenever either corporation, labor union,
or individual disregards the law or acts in a spirit of arbitrary and
tyrannous interference with the rights of others, whether corporations
or individuals, then where the Federal Government has jurisdiction, it
will see to it that the misconduct is stopped, paying not the
slightest heed to the position or power of the corporation, the union
or the individual, but only to one vital fact--that is, the question
whether or not the conduct of the individual or aggregate of
individuals is in accordance with the law of the land. Every man 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 the rights of
others. No man is above the law and no man is below it; nor do we ask
any man's permission when we require him to obey it. Obedience to the
law is demanded as a right; not asked as a favor.

We have cause as a nation to be thankful for the steps that have been
so successfully taken to put these principles into effect. The
progress has been by evolution, not by revolution. Nothing radical
has been done; the action has been both moderate and resolute.
Therefore the work will stand. There shall be no backward step. If in
the working of the laws it proves desirable that they shall at any
point be expanded or amplified, the amendment can be made as its
desirability is shown. Meanwhile they are being administered with
judgment, but with insistence upon obedience to them, and their need
has been emphasized in signal fashion by the events of the past
year.

From all sources, exclusive of the postal service, the receipts of
the Government for the last fiscal year aggregated $560,396,674. The
expenditures for the same period were $506,099,007, the surplus for
the fiscal year being $54,297,667. The indications are that the
surplus for the present fiscal year will be very small, if indeed
there be any surplus. From July to November the receipts from customs
were, approximately, nine million dollars less than the receipts from
the same source for a corresponding portion of last year. Should this
decrease continue at the same ratio throughout the fiscal year, the
surplus would be reduced by, approximately, thirty million dollars.
Should the revenue from customs suffer much further decrease during
the fiscal year, the surplus would vanish. A large surplus is
certainly undesirable. Two years ago the war taxes were taken off
with the express intention of equalizing the governmental receipts
and expenditures, and though the first year thereafter still showed a
surplus, it now seems likely that a substantial equality of revenue
and expenditure will be attained. Such being the case it is of great
moment both to exercise care and economy in appropriations, and to
scan sharply any change in our fiscal revenue system which may reduce
our income. The need of strict economy in our expenditures is
emphasized by the fact that we can not afford to be parsimonious in
providing for what is essential to our national well-being. Careful
economy wherever possible will alone prevent our income from falling
below the point required in order to meet our genuine needs.

The integrity of our currency is beyond question, and under present
conditions it would be unwise and unnecessary to attempt a
reconstruction of our entire monetary system. The same liberty should
be granted the Secretary of the Treasury to deposit customs receipts
as is granted him in the deposit of receipts from other sources. In
my Message of December 2, 1902, I called attention to certain needs
of the financial situation, and I again ask the consideration of the
Congress for these questions.

During the last session of the Congress at the suggestion of a joint
note from the Republic of Mexico and the Imperial Government of
China, and in harmony with an act of the Congress appropriating
$25,000 to pay the expenses thereof, a commission was appointed to
confer with the principal European countries in the hope that some
plan might be devised whereby a fixed rate of exchange could be
assured between the gold-standard countries and the silver-standard
countries. This commission has filed its preliminary report, which
has been made public. I deem it important that the commission be
continued, and that a sum of money be appropriated sufficient to pay
the expenses of its further labors.

A majority of our people desire that steps be taken in the interests
of American shipping, so that we may once more resume our former
position in the ocean carrying trade. But hitherto the differences of
opinion as to the proper method of reaching this end have been so wide
that it has proved impossible to secure the adoption of any particular
scheme. Having in view these facts, I recommend that the Congress
direct the Secretary of the Navy, the Postmaster-General, and the
Secretary of Commerce and Labor, associated with such a
representation from the Senate and House of Representatives as the
Congress in its wisdom may designate, to serve as a commission for
the purpose of investigating and reporting to the Congress at its
next session what legislation is desirable or necessary for the
development of the American merchant marine and American commerce,
and incidentally of a national ocean mail service of adequate
auxiliary naval crusiers and naval reserves. While such a measure is
desirable in any event, it is especially desirable at this time, in
view of the fact that our present governmental contract for ocean
mail with the American Line will expire in 1905. Our ocean mail act
was passed in 1891. In 1895 our 20-knot transatlantic mail line was
equal to any foreign line. Since then the Germans have put on
23-knot, steamers, and the British have contracted for 24-knot
steamers. Our service should equal the best. If it does not, the
commercial public will abandon it. If we are to stay in the business
it ought to be with a full understanding of the advantages to the
country on one hand, and on the other with exact knowledge of the
cost and proper methods of carrying it on. Moreover, lines of cargo
ships are of even more importance than fast mail lines; save so far
as the latter can be depended upon to furnish swift auxiliary
cruisers in time of war. The establishment of new lines of cargo
ships to South America, to Asia, and elsewhere would be much in the
interest of our commercial expansion.

We can not have too much immigration of the right kind, and we should
have none at all of the wrong kind. The need is to devise some system
by which undesirable immigrants shall be kept out entirely, while
desirable immigrants are properly distributed throughout the country.
At present some districts which need immigrants have none; and in
others, where the population is already congested, immigrants come in
such numbers as to depress the conditions of life for those already
there. During the last two years the immigration service at New York
has been greatly improved, and the corruption and inefficiency which
formerly obtained there have been eradicated. This service has just
been investigated by a committee of New York citizens of high
standing, Messrs. Arthur V. Briesen, Lee K. Frankel, Eugene A.
Philbin, Thomas W. Hynes, and Ralph Trautman. Their report deals with
the whole situation at length, and concludes with certain
recommendations for administrative and legislative action. It is now
receiving the attention of the Secretary of Commerce and Labor.

The special investigation of the subject of naturalization under the
direction of the Attorney-General, and the consequent prosecutions
reveal a condition of affairs calling for the immediate attention of
the Congress. Forgeries and perjuries of shameless and flagrant
character have been perpetrated, not only in the dense centers of
population, but throughout the country; and it is established beyond
doubt that very many so-called citizens of the United States have no
title whatever to that right, and are asserting and enjoying the
benefits of the same through the grossest frauds. It is never to be
forgotten that citizenship is, to quote the words recently used by
the Supreme Court of the United States, an "inestimable heritage,"
whether it proceeds from birth within the country or is obtained by
naturalization; and we poison the sources of our national character
and strength at the fountain, if the privilege is claimed and
exercised without right, and by means of fraud and corruption. The
body politic can not be sound and healthy if many of its constituent
members claim their standing through the prostitution of the high
right and calling of citizenship. It should mean something to become
a citizen of the United States; and in the process no loophole
whatever should be left open to fraud.

The methods by which these frauds--now under full investigation with
a view to meting out punishment and providing adequate remedies--are
perpetrated, include many variations of procedure by which false
certificates of citizenship are forged in their entirety; or genuine
certificates fraudulently or collusively obtained in blank are filled
in by the criminal conspirators; or certificates are obtained on
fraudulent statements as to the time of arrival and residence in this
country; or imposition and substitution of another party for the real
petitioner occur in court; or certificates are made the subject of
barter and sale and transferred from the rightful holder to those not
entitled to them; or certificates are forged by erasure of the
original names and the insertion of the names of other persons not
entitled to the same.

It is not necessary for me to refer here at large to the causes
leading to this state of affairs. The desire for naturalization is
heartily to be commended where it springs from a sincere and
permanent intention to become citizens, and a real appreciation of
the privilege. But it is a source of untold evil and trouble where it
is traceable to selfish and dishonest motives, such as the effort by
artificial and improper means, in wholesale fashion to create voters
who are ready-made tools of corrupt politicians, or the desire to
evade certain labor laws creating discriminations against alien
labor. All good citizens, whether naturalized or native born, are
equally interested in protecting our citizenship against fraud in any
form, and, on the other hand, in affording every facility for
naturalization to those who in good faith desire to share alike our
privileges and our responsibilities.

The Federal grand jury lately in session in New York City dealt with
this subject and made a presentment which states the situation
briefly and forcibly and contains important suggestions for the
consideration of the Congress. This presentment is included as an
appendix to the report of the Attorney-General.

In my last annual Message, in connection with the subject of the due
regulation of combinations of capital which are or may become
injurious to the public, I recommend a special appropriation for the
better enforcement of the antitrust law as it now stands, to be
extended under the direction of the Attorney-General. Accordingly (by
the legislative, executive, and judicial appropriation act of February
25, 1903, 32 Stat., 854, 904), the Congress appropriated, for the
purpose of enforcing the various Federal trust and
interstate-commerce laws, the sum of five hundred thousand dollars,
to be expended under the direction of the Attorney-General in the
employment of special counsel and agents in the Department of Justice
to conduct proceedings and prosecutions under said laws in the courts
of the United States. I now recommend, as a matter of the utmost
importance and urgency, the extension of the purposes of this
appropriation, so that it may be available, under the direction of
the Attorney-General, and until used, for the due enforcement of the
laws of the United States in general and especially of the civil and
criminal laws relating to public lands and the laws relating to
postal crimes and offenses and the subject of naturalization. Recent
investigations have shown a deplorable state of affairs in these
three matters of vital concern. By various frauds and by forgeries
and perjuries, thousands of acres of the public domain, embracing
lands of different character and extending through various sections
of the country, have been dishonestly acquired. It is hardly
necessary to urge the importance of recovering these dishonest
acquisitions, stolen from the people, and of promptly and duly
punishing the offenders. I speak in another part of this Message of
the widespread crimes by which the sacred right of citizenship is
falsely asserted and that "inestimable heritage" perverted to base
ends. By similar means--that is, through frauds, forgeries, and
perjuries, and by shameless briberies--the laws relating to the
proper conduct of the public service in general and to the due
administration of the Post-Office Department have been notoriously
violated, and many indictments have been found, and the consequent
prosecutions are in course of hearing or on the eve thereof. For the
reasons thus indicated, and so that the Government may be prepared to
enforce promptly and with the greatest effect the due penalties for
such violations of law, and to this end may be furnished with
sufficient instrumentalities and competent legal assistance for the
investigations and trials which will be necessary at many different
points of the country, I urge upon the Congress the necessity of
making the said appropriation available for immediate use for all
such purposes, to be expended under the direction of the
Attorney-General.

Steps have been taken by the State Department looking to the making
of bribery an extraditable offense with foreign powers. The need of
more effective treaties covering this crime is manifest. The
exposures and prosecutions of official corruption in St. Louis, Mo.,
and other cities and States have resulted in a number of givers and
takers of bribes becoming fugitives in foreign lands. Bribery has not
been included in extradition treaties heretofore, as the necessity for
it has not arisen. While there may have been as much official
corruption in former years, there has been more developed and brought
to light in the immediate past than in the preceding century of our
country's history. It should be the policy of the United States to
leave no place on earth where a corrupt man fleeing from this country
can rest in peace. There is no reason why bribery should not be
included in all treaties as extraditable. The recent amended treaty
with Mexico, whereby this crime was put in the list of extraditable
offenses, has established a salutary precedent in this regard. Under
this treaty the State Department has asked, and Mexico has granted,
the extradition of one of the St. Louis bribe givers.

There can be no crime more serious than bribery. Other offenses
violate one law while corruption strikes at the foundation of all
law. Under our form of Government all authority is vested in the
people and by them delegated to those who represent them in official
capacity. There can be no offense heavier than that of him in whom
such a sacred trust has been reposed, who sells it for his own gain
and enrichment; and no less heavy is the offense of the bribe giver.
He is worse than the thief, for the thief robs the individual, while
the corrupt official plunders an entire city or State. He is as
wicked as the murderer, for the murderer may only take one life
against the law, while the corrupt official and the man who corrupts
the official alike aim at the assassination of the commonwealth
itself. Government of the people, by the people, for the people will
perish from the face of the earth if bribery is tolerated. The givers
and takers of bribes stand on an evil pre-eminence of infamy. The
exposure and punishment of public corruption is an honor to a nation,
not a disgrace. The shame lies in toleration, not in correction. No
city or State, still less the Nation, can be injured by the
enforcement of law. As long as public plunderers when detected can
find a haven of refuge in any foreign land and avoid punishment, just
so long encouragement is given them to continue their practices. If we
fail to do all that in us lies to stamp out corruption we can not
escape our share of responsibility for the guilt. The first requisite
of successful self-government is unflinching enforcement of the law
and the cutting out of corruption.

For several years past the rapid development of Alaska and the
establishment of growing American interests in regions theretofore
unsurveyed and imperfectly known brought into prominence the urgent
necessity of a practical demarcation of the boundaries between the
jurisdictions of the United States and Great Britain. Although the
treaty of 1825 between Great Britain and Russia, the provisions of
which were copied in the treaty of 1867, whereby Russia conveyed
Alaska to the United States, was positive as to the control, first by
Russia and later by the United States, of a strip of territory along
the continental mainland from the western shore of Portland Canal to
Mount St. Elias, following and surrounding the indentations of the
coast and including the islands to the westward, its description of
the landward margin of the strip was indefinite, resting on the
supposed existence of a continuous ridge or range of mountains
skirting the coast, as figured in the charts of the early navigators.
It had at no time been possible for either party in interest to lay
down, under the authority of the treaty, a line so obviously exact
according to its provisions as to command the assent of the other.
For nearly three-fourths of a century the absence of tangible local
interests demanding the exercise of positive jurisdiction on either
side of the border left the question dormant. In 1878 questions of
revenue administration on the Stikine River led to the establishment
of a provisional demarcation, crossing the channel between two high
peaks on either side about twenty-four miles above the river mouth.
In 1899 similar questions growing out of the extraordinary
development of mining interests in the region about the head of Lynn
Canal brought about a temporary modus vivendi, by which a convenient
separation was made at the watershed divides of the White and
Chilkoot passes and to the north of Klukwan, on the Klehini River.
These partial and tentative adjustments could not, in the very nature
of things, be satisfactory or lasting. A permanent disposition of the
matter became imperative.

After unavailing attempts to reach an understanding through a Joint
High Commission, followed by prolonged negotiations, conducted in an
amicable spirit, a convention between the United States and Great
Britain was signed, January 24, 1903, providing for an examination of
the subject by a mixed tribunal of six members, three on a side, with
a view to its final disposition. Ratifications were exchanged on
March 3 last, whereupon the two Governments appointed their
respective members. Those on behalf of the United States were Elihu
Root, Secretary of War, Henry Cabot Lodge, a Senator of the United
States, and George Turner, an ex-Senator of the United States, while
Great Britain named the Right Honourable Lord Alverstone, Lord Chief
Justice of England, Sir Louis Amable Jette, K. C. M. G., retired
judge of the Supreme Court of Quebec, and A. B. Aylesworth, K. C., of
Toronto. This Tribunal met in London on September 3, under the
Presidency of Lord Alverstone. The proceedings were expeditious, and
marked by a friendly and conscientious spirit. The respective cases,
counter cases, and arguments presented the issues clearly and fully.
On the 20th of October a majority of the Tribunal reached and signed
an agreement on all the questions submitted by the terms of the
Convention. By this award the right of the United States to the
control of a continuous strip or border of the mainland shore,
skirting all the tide-water inlets and sinuosities of the coast, is
confirmed; the entrance to Portland Canal (concerning which
legitimate doubt appeared) is defined as passing by Tongass Inlet and
to the northwestward of Wales and Pearse islands; a line is drawn from
the head of Portland Canal to the fifty-sixth degree of north
latitude; and the interior border line of the strip is fixed by lines
connecting certain mountain summits lying between Portland Canal and
Mount St. Elias, and running along the crest of the divide separating
the coast slope from the inland watershed at the only part of the
frontier where the drainage ridge approaches the coast within the
distance of ten marine leagues stipulated by the treaty as the
extreme width of the strip around the heads of Lynn Canal and its
branches.

While the line so traced follows the provisional demarcation of 1878
at the crossing of the Stikine River, and that of 1899 at the summits
of the White and Chilkoot passes, it runs much farther inland from the
Klehini than the temporary line of the later modus vivendi, and leaves
the entire mining district of the Porcupine River and Glacier Creek
within the jurisdiction of the United States.

The result is satisfactory in every way. It is of great material
advantage to our people in the Far Northwest. It has removed from the
field of discussion and possible danger a question liable to become
more acutely accentuated with each passing year. Finally, it has
furnished a signal proof of the fairness and good will with which two
friendly nations can approach and determine issues involving national
sovereignty and by their nature incapable of submission to a third
power for adjudication.

The award is self-executing on the vital points. To make it effective
as regards the others it only remains for the two Governments to
appoint, each on its own behalf, one or more scientific experts, who
shall, with all convenient speed, proceed together to lay down the
boundary line in accordance with the decision of the majority of the
Tribunal. I recommend that the Congress make adequate provision for
the appointment, compensation, and expenses of the members to serve
on this joint boundary commission on the part of the United States.

It will be remembered that during the second session of the last
Congress Great Britain, Germany, and Italy formed an alliance for the
purpose of blockading the ports of Venezuela and using such other
means of pressure as would secure a settlement of claims due, as they
alleged, to certain of their subjects. Their employment of force for
the collection of these claims was terminated by an agreement brought
about through the offices of the diplomatic representatives of the
United States at Caracas and the Government at Washington, thereby
ending a situation which was bound to cause increasing friction, and
which jeoparded the peace of the continent. Under this agreement
Venezuela agreed to set apart a certain percentage of the customs
receipts of two of her ports to be applied to the payment of whatever
obligations might be ascertained by mixed commissions appointed for
that purpose to be due from her, not only to the three powers already
mentioned, whose proceedings against her had resulted in a state of
war, but also to the United States, France, Spain, Belgium, the
Netherland Sweden and Norway, and Mexico, who had not employed force
for the collection of the claims alleged to be due to certain of
their citizens.

A demand was then made by the so-called blockading powers that the
sums ascertained to be due to their citizens by such mixed
commissions should be accorded payment in full before anything was
paid upon the claims of any of the so-called peace powers. Venezuela,
on the other hand, insisted that all her creditors should be paid upon
a basis of exact equality. During the efforts to adjust this dispute
it was suggested by the powers in interest that it should be referred
to me for decision, but I was clearly of the opinion that a far wiser
course would be to submit the question to the Permanent Court of
Arbitration at The Hague. It seemed to me to offer an admirable
opportunity to advance the practice of the peaceful settlement of
disputes between nations and to secure for the Hague Tribunal a
memorable increase of its practical importance. The nations
interested in the controversy were so numerous and in many instances
so powerful as to make it evident that beneficent results would
follow from their appearance at the same time before the bar of that
august tribunal of peace.

Our hopes in that regard have been realized. Russia and Austria are
represented in the persons of the learned and distinguished jurists
who compose the Tribunal, while Great Britain, Germany, France,
Spain, Italy, Belgium, the Netherlands, Sweden and Norway, Mexico,
the United States, and Venezuela are represented by their respective
agents and counsel. Such an imposing concourse of nations presenting
their arguments to and invoking the decision of that high court of
international justice and international peace can hardly fail to
secure a like submission of many future controversies. The nations
now appearing there will find it far easier to appear there a second
time, while no nation can imagine its just pride will be lessened by
following the example now presented. This triumph of the principle of
international arbitration is a subject of warm congratulation and
offers a happy augury for the peace of the world.

There seems good ground for the belief that there has been a real
growth among the civilized nations of a sentiment which will permit a
gradual substitution of other methods than the method of war in the
settlement of disputes. It is not pretended that as yet we are near a
position in which it will be possible wholly to prevent war, or that a
just regard for national interest and honor will in all cases permit
of the settlement of international disputes by arbitration; but by a
mixture of prudence and firmness with wisdom we think it is possible
to do away with much of the provocation and excuse for war, and at
least in many cases to substitute some other and more rational method
for the settlement of disputes. The Hague Court offers so good an
example of what can be done in the direction of such settlement that
it should be encouraged in every way.

Further steps should be taken. In President McKinley's annual Message
of December 5, 1898, he made the following recommendation:

"The experiences of the last year bring forcibly home to us a sense
of the burdens and the waste of war. We desire in common with most
civilized nations, to reduce to the lowest possible point the damage
sustained in time of war by peaceable trade and commerce. It is true
we may suffer in such cases less than other communities, but all
nations are damaged more or less by the state of uneasiness and
apprehension into which an outbreak of hostilities throws the entire
commercial world. It should be our object, therefore, to minimize, so
far as practicable, this inevitable loss and disturbance. This purpose
can probably best be accomplished by an international agreement to
regard all private property at sea as exempt from capture or
destruction by the forces of belligerent powers. The United States
Government has for many years advocated this humane and beneficent
principle, and is now in a position to recommend it to other powers
without the imputation of selfish motives. I therefore suggest for
your consideration that the Executive be authorized to correspond
with the governments of the principal maritime powers with a view of
incorporating into the permanent law of civilized nations the
principle of the exemption of all private property at sea, not
contraband of war, from capture or destruction by belligerent
powers."

I cordially renew this recommendation.

The Supreme Court, speaking on December 11. 1899, through Peckham,
J., said:

"It is, we think, historically accurate to say that this Government
has always been, in its views, among the most advanced of the
governments of the world in favor of mitigating, as to all
non-combatants, the hardships and horrors of war. To accomplish that
object it has always advocated those rules which would in most cases
do away with the right to capture the private property of an enemy on
the high seas."

I advocate this as a matter of humanity and morals. It is
anachronistic when private property is respected on land that it
should not be respected at sea. Moreover, it should be borne in mind
that shipping represents, internationally speaking, a much more
generalized species of private property than is the case with
ordinary property on land--that is, property found at sea is much
less apt than is the case with property found on land really to
belong to any one nation. Under the modern system of corporate
ownership the flag of a vessel often differs from the flag which
would mark the nationality of the real ownership and money control of
the vessel; and the cargo may belong to individuals of yet a different
nationality. Much American capital is now invested in foreign ships;
and among foreign nations it often happens that the capital of one is
largely invested in the shipping of another. Furthermore, as a
practical matter, it may be mentioned that while commerce destroying
may cause serious loss and great annoyance, it can never be more than
a subsidiary factor in bringing to terms a resolute foe. This is now
well recognized by all of our naval experts. The fighting ship, not
the commerce destroyer, is the vessel whose feats add renown to a
nation's history, and establish her place among the great powers of
the world.

Last year the Interparliamentary Union for International Arbitration
met at Vienna, six hundred members of the different legislatures of
civilized countries attending. It was provided that the next meeting
should be in 1904 at St. Louis, subject to our Congress extending an
invitation. Like the Hague Tribunal, this Interparliamentary Union is
one of the forces tending towards peace among the nations of the
earth, and it is entitled to our support. I trust the invitation can
be extended.

Early in July, having received intelligence, which happily turned out
to be erroneous, of the assassination of our vice-consul at Beirut, I
dispatched a small squadron to that port for such service as might be
found necessary on arrival. Although the attempt on the life of our
vice-consul had not been successful, yet the outrage was symptomatic
of a state of excitement and disorder which demanded immediate
attention. The arrival of the vessels had the happiest result. A
feeling of security at once took the place of the former alarm and
disquiet; our officers were cordially welcomed by the consular body
and the leading merchants, and ordinary business resumed its
activity. The Government of the Sultan gave a considerate hearing to
the representations of our minister; the official who was regarded as
responsible for the disturbed condition of affairs was removed. Our
relations with the Turkish Government remain friendly; our claims
rounded on inequitable treatment of some of our schools and missions
appear to be in process of amicable adjustment.

The signing of a new commercial treaty with China, which took place
at Shanghai on the 8th of October, is a cause for satisfaction. This
act, the result of long discussion and negotiation, places our
commercial relations with the great Oriental Empire on a more
satisfactory footing than they have ever heretofore enjoyed. It
provides not only for the ordinary rights and privileges of
diplomatic and consular officers, but also for an important extension
of our commerce by increased facility of access to Chinese ports, and
for the relief of trade by the removal of some of the obstacles which
have embarrassed it in the past. The Chinese Government engages, on
fair and equitable conditions, which will probably be accepted by the
principal commercial nations, to abandon the levy of "liken" and other
transit dues throughout the Empire, and to introduce other desirable
administrative reforms. Larger facilities are to be given to our
citizens who desire to carry on mining enterprises in China. We have
secured for our missionaries a valuable privilege, the recognition of
their right to rent and lease in perpetuity such property as their
religious societies may need in all parts of the Empire. And, what
was an indispensable condition for the advance and development of our
commerce in Manchuria, China, by treaty with us, has opened to foreign
commerce the cities of Mukden, the capital of the province of
Manchuria, and An-tung, an important port on the Yalu River, on the
road to Korea. The full measure of development which our commerce may
rightfully expect can hardly be looked for until the settlement of the
present abnormal state of things in the Empire; but the foundation for
such development has at last been laid.

I call your attention to the reduced cost in maintaining the consular
service for the fiscal year ending June 30, 1903, as shown in the
annual report of the Auditor for the State and other Departments, as
compared with the year previous. For the year under consideration the
excess of expenditures over receipts on account of the consular
service amounted to $26,125.12, as against $96,972.50 for the year
ending June 30, 1902, and $147,040.16 for the year ending June 30,
1901. This is the best showing in this respect for the consular
service for the past fourteen years, and the reduction in the cost of
the service to the Government has been made in spite of the fact that
the expenditures for the year in question were more than $20,000
greater than for the previous year.

The rural free-delivery service has been steadily extended. The
attention of the Congress is asked to the question of the
compensation of the letter carriers and clerks engaged in the postal
service, especially on the new rural free-delivery routes. More
routes have been installed since the first of July last than in any
like period in the Department's history. While a due regard to
economy must be kept in mind in the establishment of new routes, yet
the extension of the rural free-delivery system must be continued,
for reasons of sound public policy. No governmental movement of
recent years has resulted in greater immediate benefit to the people
of the country districts. Rural free delivery, taken in connection
with the telephone, the bicycle, and the trolley, accomplishes much
toward lessening the isolation of farm life and making it brighter
and more attractive. In the immediate past the lack of just such
facilities as these has driven many of the more active and restless
young men and women from the farms to the cities; for they rebelled
at loneliness and lack of mental companionship. It is unhealthy and
undesirable for the cities to grow at the expense of the country; and
rural free delivery is not only a good thing in itself, but is good
because it is one of the causes which check this unwholesome tendency
towards the urban concentration of our population at the expense of
the country districts. It is for the same reason that we sympathize
with and approve of the policy of building good roads. The movement
for good roads is one fraught with the greatest benefit to the
country districts.

I trust that the Congress will continue to favor in all proper ways
the Louisiana Purchase Exposition. This Exposition commemorates the
Louisiana purchase, which was the first great step in the expansion
which made us a continental nation. The expedition of Lewis and Clark
across the continent followed thereon, and marked the beginning of the
process of exploration and colonization which thrust our national
boundaries to the Pacific. The acquisition of the Oregon country,
including the present States of Oregon and Washington, was a fact of
immense importance in our history; first giving us our place on the
Pacific seaboard, and making ready the way for our ascendency in the
commerce of the greatest of the oceans. The centennial of our
establishment upon the western coast by the expedition of Lewis and
Clark is to be celebrated at Portland, Oregon, by an exposition in
the summer of 1905, and this event should receive recognition and
support from the National Government.

I call your special attention to the Territory of Alaska. The country
is developing rapidly, and it has an assured future. The mineral
wealth is great and has as yet hardly been tapped. The fisheries, if
wisely handled and kept under national control, will be a business as
permanent as any other, and of the utmost importance to the people.
The forests if properly guarded will form another great source of
wealth. Portions of Alaska are fitted for farming and stock raising,
although the methods must be adapted to the peculiar conditions of
the country. Alaska is situated in the far north; but so are Norway
and Sweden and Finland; and Alaska can prosper and play its part in
the New World just as those nations have prospered and played their
parts in the Old World. Proper land laws should be enacted; and the
survey of the public lands immediately begun. Coal-land laws should
be provided whereby the coal-land entryman may make his location and
secure patent under methods kindred to those now prescribed for
homestead and mineral entrymen. Salmon hatcheries, exclusively under
Government control, should be established. The cable should be
extended from Sitka westward. Wagon roads and trails should be built,
and the building of railroads promoted in all legitimate ways.
Light-houses should be built along the coast. Attention should be
paid to the needs of the Alaska Indians; provision should be made for
an officer, with deputies, to study their needs, relieve their
immediate wants, and help them adapt themselves to the new
conditions.

The commission appointed to investigate, during the season of 1903,
the condition and needs of the Alaskan salmon fisheries, has finished
its work in the field, and is preparing a detailed report thereon. A
preliminary report reciting the measures immediately required for the
protection and preservation of the salmon industry has already been
submitted to the Secretary of Commerce and Labor for his attention
and for the needed action.

I recommend that an appropriation be made for building light-houses
in Hawaii, and taking possession of those already built. The
Territory should be reimbursed for whatever amounts it has already
expended for light-houses. The governor should be empowered to
suspend or remove any official appointed by him, without submitting
the matter to the legislature.

Of our insular possessions the Philippines and Porto Rico it is
gratifying to say that their steady progress has been such as to make
it unnecessary to spend much time in discussing them. Yet the Congress
should ever keep in mind that a peculiar obligation rests upon us to
further in every way the welfare of these communities. The
Philippines should be knit closer to us by tariff arrangements. It
would, of course, be impossible suddenly to raise the people of the
islands to the high pitch of industrial prosperity and of
governmental efficiency to which they will in the end by degrees
attain; and the caution and moderation shown in developing them have
been among the main reasons why this development has hitherto gone on
so smoothly. Scrupulous care has been taken in the choice of
governmental agents, and the entire elimination of partisan politics
from the public service. The condition of the islanders is in
material things far better than ever before, while their
governmental, intellectual, and moral advance has kept pace with
their material advance. No one people ever benefited another people
more than we have benefited the Filipinos by taking possession of the
islands.

The cash receipts of the General Land Office for the last fiscal year
were $11,024,743.65, an increase of $4,762,816.47 over the preceding
year. Of this sum, approximately, $8,461,493 will go to the credit of
the fund for the reclamation of arid land, making the total of this
fund, up to the 30th of June, 1903, approximately, $16,191,836.

A gratifying disposition has been evinced by those having unlawful
inclosures of public land to remove their fences. Nearly two million
acres so inclosed have been thrown open on demand. In but
comparatively few cases has it been necessary to go into court to
accomplish this purpose. This work will be vigorously prosecuted
until all unlawful inclosures have been removed.

Experience has shown that in the western States themselves, as well
as in the rest of the country, there is widespread conviction that
certain of the public-land laws and the resulting administrative
practice no longer meet the present needs. The character and uses of
the remaining public lands differ widely from those of the public
lands which Congress had especially in view when these laws were
passed. The rapidly increasing rate of disposal of the public lands
is not followed by a corresponding increase in home building. There
is a tendency to mass in large holdings public lands, especially
timber and grazing lands, and thereby to retard settlement. I renew
and emphasize my recommendation of last year that so far as they are
available for agriculture in its broadest sense, 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 attention of the Congress is especially directed to the timber
and stone law, the desert-land law, and the commutation clause of the
homestead law, which in their operation have in many respects
conflicted with wise public-land policy. The discussions in the
Congress and elsewhere have made it evident that there is a wide
divergence of opinions between those holding opposite views on these
subjects; and that the opposing sides have strong and convinced
representatives of weight both within and without the Congress; the
differences being not only as to matters of opinion but as to matters
of fact. In order that definite information may be available for the
use of the Congress, I have appointed a commission composed of W. A.
Richards, Commissioner of the General Land Office; Gifford Pinchot,
Chief of the Bureau of Forestry of the Department of Agriculture, and
F. H. Newell, Chief Hydrographer of the Geological Survey, to report
at the earliest practicable moment upon the condition, operation, and
effect of the present land laws and on the use, condition, disposal,
and settlement of the public lands. The commission will report
especially what changes in organization, laws, regulations, and
practice affecting the public lands are needed to effect the largest
practicable disposition of the public lands to actual settlers who
will build permanent homes upon them, and to secure in permanence the
fullest and most effective use of the resources of the public lands;
and it will make such other reports and recommendations as its study
of these questions may suggest. The commission is to report
immediately upon those points concerning which its judgment is clear;
on any point upon which it has doubt it will take the time necessary
to make investigation and reach a final judgment.

The work of reclamation of the arid lands of the West is progressing
steadily and satisfactorily under the terms of the law setting aside
the proceeds from the disposal of public lands. The corps of
engineers known as the Reclamation Service, which is conducting the
surveys and examinations, has been thoroughly organized, especial
pains being taken to secure under the civil-service rules a body of
skilled, experienced, and efficient men. Surveys and examinations are
progressing throughout the arid States and Territories, plans for
reclaiming works being prepared and passed upon by boards of
engineers before approval by the Secretary of the Interior. In
Arizona and Nevada, in localities where such work is pre-eminently
needed, construction has already been begun. In other parts of the
arid West various projects are well advanced towards the drawing up
of contracts, these being delayed in part by necessities of reaching
agreements or understanding as regards rights of way or acquisition
of real estate. Most of the works contemplated for construction are
of national importance, involving interstate questions or the
securing of stable, self-supporting communities in the midst of vast
tracts of vacant land. The Nation as a whole is of course the gainer
by the creation of these homes, adding as they do to the wealth and
stability of the country, and furnishing a home market for the
products of the East and South. The reclamation law, while perhaps
not ideal, appears at present to answer the larger needs for which it
is designed. Further legislation is not recommended until the
necessities of change are more apparent.

The study of the opportunities of reclamation of the vast extent of
arid land shows that whether this reclamation is done by individuals,
corporations, or the State, the sources of water supply must be
effectively protected and the reservoirs guarded by the preservation
of the forests at the headwaters of the streams. The engineers making
the preliminary examinations continually emphasize this need and urge
that the remaining public lands at the headwaters of the important
streams of the West be reserved to insure permanency of water supply
for irrigation. Much progress in forestry has been made during the
past year. The necessity for perpetuating our forest resources,
whether in public or private hands, is recognized now as never
before. The demand for forest reserves has become insistent in the
West, because the West must use the water, wood, and summer range
which only such reserves can supply. Progressive lumbermen are
striving, through forestry, to give their business permanence. Other
great business interests are awakening to the need of forest
preservation as a business matter. The Government's forest work
should receive from the Congress hearty support, and especially
support adequate for the protection of the forest reserves against
fire. The forest-reserve policy of the Government has passed beyond
the experimental stage and has reached a condition where scientific
methods are essential to its successful prosecution. The
administrative features of forest reserves are at present
unsatisfactory, being divided between three Bureaus of two
Departments. It is therefore recommended that all matters pertaining
to forest reserves, except those involving or pertaining to land
titles, be consolidated in the Bureau of Forestry of the Department
of Agriculture.

The cotton-growing States have recently been invaded by a weevil that
has done much damage and threatens the entire cotton industry. I
suggest to the Congress the prompt enactment of such remedial
legislation as its judgment may approve.

In granting patents to foreigners the proper course for this country
to follow is to give the same advantages to foreigners here that the
countries in which these foreigners dwell extend in return to our
citizens; that is, to extend the benefits of our patent laws on
inventions and the like where in return the articles would be
patentable in the foreign countries concerned--where an American
could get a corresponding patent in such countries.

The Indian agents should not be dependent for their appointment or
tenure of office upon considerations of partisan politics; the
practice of appointing, when possible, ex-army officers or bonded
superintendents to the vacancies that occur is working well.
Attention is invited to the widespread illiteracy due to lack of
public schools in the Indian Territory. Prompt heed should be paid to
the need of education for the children in this Territory.

In my last annual Message the attention of the Congress was called to
the necessity of enlarging the safety-appliance law, and it is
gratifying to note that this law was amended in important respects.
With the increasing railway mileage of the country, the greater
number of men employed, and the use of larger and heavier equipment,
the urgency for renewed effort to prevent the loss of life and limb
upon the railroads of the country, particularly to employees, is
apparent. For the inspection of water craft and the Life-Saving
Service upon the water the Congress has built up an elaborate body of
protective legislation and a thorough method of inspection and is
annually spending large sums of money. It is encouraging to observe
that the Congress is alive to the interests of those who are employed
upon our wonderful arteries of commerce--the railroads--who so safely
transport millions of passengers and billions of tons of freight. The
Federal inspection, of safety appliances, for which the Congress is
now making appropriations, is a service analogous to that which the
Government has upheld for generations in regard to vessels, and it is
believed will prove of great practical benefit, both to railroad
employees and the traveling public. As the greater part of commerce
is interstate and exclusively under the control of the Congress the
needed safety and uniformity must be secured by national
legislation.

No other class of our citizens deserves so well of the Nation as
those to whom the Nation owes its very being, the veterans of the
civil war. Special attention is asked to the excellent work of the
Pension Bureau in expediting and disposing of pension claims. During
the fiscal year ending July 1, 1903, the Bureau settled 251,982
claims, an average of 825 claims for each working day of the year.
The number of settlements since July 1, 1903, has been in excess of
last year's average, approaching 1,000 claims for each working day,
and it is believed that the work of the Bureau will be current at the
close of the present fiscal year.

During the year ended June 30 last 25,566 persons were appointed
through competitive examinations under the civil-service rules. This
was 12,672 more than during the preceding year, and 40 per cent of
those who passed the examinations. This abnormal growth was largely
occasioned by the extension of classification to the rural
free-delivery service and the appointment last year of over 9,000
rural carriers. A revision of the civil-service rules took effect on
April 15 last, which has greatly improved their operation. The
completion of the reform of the civil service is recognized by good
citizens everywhere as a matter of the highest public importance, and
the success of the merit system largely depends upon the effectiveness
of the rules and the machinery provided for their enforcement. A very
gratifying spirit of friendly co-operation exists in all the
Departments of the Government in the enforcement and uniform
observance of both the letter and spirit of the civil-service act.
Executive orders of July 3, 1902; March 26, 1903, and July 8, 1903,
require that appointments of all unclassified laborers, both in the
Departments at Washington and in the field service, shall be made
with the assistance of the United States Civil Service Commission,
under a system of registration to test the relative fitness of
applicants for appointment or employment. This system is competitive,
and is open to all citizens of the United States qualified in respect
to age, physical ability, moral character, industry, and adaptability
for manual labor; except that in case of veterans of the Civil War the
element of age is omitted. This system of appointment is distinct from
the classified service and does not classify positions of mere laborer
under the civil-service act and rules. Regulations in aid thereof have
been put in operation in several of the Departments and are being
gradually extended in other parts of the service. The results have
been very satisfactory, as extravagance has been checked by
decreasing the number of unnecessary positions and by increasing the
efficiency of the employees remaining.

The Congress, as the result of a thorough investigation of the
charities and reformatory institutions in the District of Columbia,
by a joint select committee of the two Houses which made its report
in March, 1898, created in the act approved June 6, 1900, a board of
charities for the District of Columbia, to consist of five residents
of the District, appointed by the President of the United States, by
and with the advice and consent of the Senate, each for a term of
three years, to serve without compensation. President McKinley
appointed five men who had been active and prominent in the public
charities in Washington, all of whom upon taking office July 1, 1900,
resigned from the different charities with which they had been
connected. The members of the board have been reappointed in
successive years. The board serves under the Commissioners of the
District of Columbia. The board gave its first year to a careful and
impartial study of the special problems before it, and has continued
that study every year in the light of the best practice in public
charities elsewhere. Its recommendations in its annual reports to the
Congress through the Commissioners of the District of Columbia "for
the economical and efficient administration of the charities and
reformatories of the District of Columbia," as required by the act
creating it, have been based upon the principles commended by the
joint select committee of the Congress in its report of March, 1898,
and approved by the best administrators of public charities, and make
for the desired systematization and improvement of the affairs under
its supervision. They are worthy of favorable consideration by the
Congress.

The effect of the laws providing a General Staff for the Army and for
the more effective use of the National Guard has been excellent. Great
improvement has been made in the efficiency of our Army in recent
years. Such schools as those erected at Fort Leavenworth and Fort
Riley and the institution of fall maneuver work accomplish
satisfactory results. The good effect of these maneuvers upon the
National Guard is marked, and ample appropriation should be made to
enable the guardsmen of the several States to share in the benefit.
The Government should as soon as possible secure suitable permanent
camp sites for military maneuvers in the various sections of the
country. The service thereby rendered not only to the Regular Army,
but to the National Guard of the several States, will be so great as
to repay many times over the relatively small expense. We should not
rest satisfied with what has been done, however. The only people who
are contented with a system of promotion by mere seniority are those
who are contented with the triumph of mediocrity over excellence. On
the other hand, a system which encouraged the exercise of social or
political favoritism in promotions would be even worse. But it would
surely be easy to devise a method of promotion from grade to grade in
which the opinion of the higher officers of the service upon the
candidates should be decisive upon the standing and promotion of the
latter. Just such a system now obtains at West Point. The quality of
each year's work determines the standing of that year's class, the
man being dropped or graduated into the next class in the relative
position which his military superiors decide to be warranted by his
merit. In other words, ability, energy, fidelity, and all other
similar qualities determine the rank of a man year after year in West
Point, and his standing in the Army when he graduates from West Point;
but from that time on, all effort to find which man is best or worst,
and reward or punish him accordingly, is abandoned; no brilliancy, no
amount of hard work, no eagerness in the performance of duty, can
advance him, and no slackness or indifference that falls short of a
court-martial offense can retard him. Until this system is changed we
can not hope that our officers will be of as high grade as we have a
right to expect, considering the material upon which we draw.
Moreover, when a man renders such service as Captain Pershing
rendered last spring in the Moro campaign, it ought to be possible to
reward him without at once jumping him to the grade of
brigadier-general.

Shortly after the enunciation of that famous principle of American
foreign policy now known as the "Monroe Doctrine," President Monroe,
in a special Message to Congress on January 30, 1824, spoke as
follows: "The Navy is the arm from which our Government will always
derive most aid in support of our rights. Every power engaged in war
will know the strength of our naval power, the number of our ships of
each class, their condition, and the promptitude with which we may
bring them into service, and will pay due consideration to that
argument."

I heartily congratulate the Congress upon the steady progress in
building up the American Navy. We can not afford a let-up in this
great work. To stand still means to go back. There should be no
cessation in adding to the effective units of the fighting strength
of the fleet. Meanwhile the Navy Department and the officers of the
Navy are doing well their part by providing constant service at sea
under conditions akin to those of actual warfare. Our officers and
enlisted men are learning to handle the battleships, cruisers, and
torpedo boats with high efficiency in fleet and squadron formations,
and the standard of marksmanship is being steadily raised. The best
work ashore is indispensable, but the highest duty of a naval officer
is to exercise command at sea.

The establishment of a naval base in the Philippines ought not to be
longer postponed. Such a base is desirable in time of peace; in time
of war it would be indispensable, and its lack would be ruinous.
Without it our fleet would be helpless. Our naval experts are agreed
that Subig Bay is the proper place for the purpose. The national
interests require that the work of fortification and development of a
naval station at Subig Bay be begun at an early date; for under the
best conditions it is a work which will consume much time.

It is eminently desirable, however, that there should be provided a
naval general staff on lines similar to those of the General Staff
lately created for the Army. Within the Navy Department itself the
needs of the service have brought about a system under which the
duties of a general staff are partially perf