Speech Transcript:

 The relations of the United States with all foreign governments have
continued upon the normal basis of amity and good understanding, and
are very generally satisfactory.

EUROPE.

Pursuant to the provisions of the general treaty of arbitration
concluded between the United States and Great Britain, April 4, 1908,
a special agreement was entered into between the two countries on
January 27, 1909, for the submission of questions relating to the
fisheries on the North Atlantic Coast to a tribunal to be formed from
members of the Permanent Court of Arbitration at The Hague.

In accordance with the provisions of the special agreement the
printed case of each Government was, on October 4 last, submitted to
the other and to the Arbitral Tribunal at The Hague, and the counter
case of the United States is now in course of preparation.

The American rights under the fisheries article of the Treaty of 1818
have been a cause of difference between the United States and Great
Britain for nearly seventy years. The interests involved are of great
importance to the American fishing industry, and the final settlement
of the controversy will remove a source of constant irritation and
complaint. This is the first case involving such great international
questions which has been submitted to the Permanent Court of
Arbitration at The Hague.

The treaty between the United States and Great Britain concerning the
Canadian International boundary, concluded April 11, 1908, authorizes
the appointment of two commissioners to define and mark accurately
the international boundary line between the United States and the
Dominion of Canada in the waters of the Passamaquoddy Bay, and
provides for the exchange of briefs within the period of six months.
The briefs were duly presented within the prescribed period, but as
the commissioners failed to agree within six months after the
exchange of the printed statements, as required by the treaty, it has
now become necessary to resort to the arbitration provided for in the
article.

The International Fisheries Commission appointed pursuant to and
under the authority of the Convention of April 11, 1908, between the
United States and Great Britain, has completed a system of uniform
and common international regulations for the protection and
preservation of the food fishes in international boundary waters of
the United States and Canada.

The regulations will be duly submitted to Congress with a view to the
enactment of such legislation as will be necessary under the
convention to put them into operation.

The Convention providing for the settlement of international
differences between the United States and Canada, including the
apportionment between the two countries of certain of the boundary
waters and the appointment of commissioners to adjust certain other
questions, signed on the 11th day of January, 1909, and to the
ratification of which the Senate gave its advice and consent on March
3, 1909, has not yet been ratified on the part of Great Britain.

Commissioners have been appointed on the part of the United States to
act jointly with Commissioners on the part of Canada in examining into
the question of obstructions in the St. John River between Maine and
New Brunswick, and to make recommendations for the regulation of the
uses thereof, and are now engaged in this work.

Negotiations for an international conference to consider and reach an
arrangement providing for the preservation and protection of the fur
seals in the North Pacific are in progress with the Governments of
Great Britain, Japan, and Russia. The attitude of the Governments
interested leads me to hope for a satisfactory settlement of this
question as the ultimate outcome of the negotiations.

The Second Peace Conference recently held at The Hague adopted a
convention for the establishment of an International Prize Court upon
the joint proposal of delegations of the United States, France,
Germany and Great Britain. The law to be observed by the Tribunal in
the decision of prize cases was, however, left in an uncertain and
therefore unsatisfactory state. Article 7 of the Convention provided
that the Court was to be governed by the provisions of treaties
existing between the belligerents, but that "in the absence of such
provisions, the court shall apply the rules of international law. If
no generally recognized rule exists, the court shall give judgment in
accordance with the general principles of justice and equity." As,
however, many questions in international maritime law are understood
differently and therefore interpreted differently in various
countries, it was deemed advisable not to intrust legislative powers
to the proposed court, but to determine the rules of law properly
applicable in a Conference of the representative maritime nations.
Pursuant to an invitation of Great Britain a conference was held at
London from December 2, 1908, to February 26, 1909, in which the
following Powers participated: the United States, Austria-Hungary,
France, Germany, Great Britain, Italy, Japan, the Netherlands, Russia
and Spain. The conference resulted in the Declaration of London,
unanimously agreed to and signed by the participating Powers,
concerning among other matters, the highly important subjects of
blockade, contraband, the destruction of neutral prizes, and
continuous voyages. The declaration of London is an eminently
satisfactory codification of the international maritime law, and it
is hoped that its reasonableness and fairness will secure its general
adoption, as well as remove one of the difficulties standing in the
way of the establishment of an International Prize Court.

Under the authority given in the sundry civil appropriation act,
approved March 4, 1909, the United States was represented at the
International Conference on Maritime Law at Brussels. The Conference
met on the 28th of September last and resulted in the signature ad
referendum of a convention for the unification of certain regulations
with regard to maritime assistance and salvage and a convention for
the unification of certain rules with regard to collisions at sea.
Two new projects of conventions which have not heretofore been
considered in a diplomatic conference, namely, one concerning the
limitation of the responsibility of shipowners, and the other
concerning marine mortgages and privileges, have been submitted by
the Conference to the different governments.

The Conference adjourned to meet again on April 11, 1910.

The International Conference for the purpose of promoting uniform
legislation concerning letters of exchange, which was called by the
Government of the Netherlands to meet at The Hague in September,
1909, has been postponed to meet at that capital in June, 1910. The
United States will be appropriately represented in this Conference
under the provision therefor already made by Congress.

The cordial invitation of Belgium to be represented by a fitting
display of American progress in the useful arts and inventions at the
World's Fair to be held at Brussels in 1910 remains to be acted upon
by the Congress. Mindful of the advantages to accrue to our artisans
and producers in competition with their Continental rivals, I renew
the recommendation heretofore made that provision be made for
acceptance of the invitation and adequate representation in the
Exposition. The question arising out of the Belgian annexation of the
Independent State of the Congo, which has so long and earnestly
preoccupied the attention of this Government and enlisted the
sympathy of our best citizens, is still open, but in a more hopeful
stage. This Government was among the foremost in the great work of
uplifting the uncivilized regions of Africa and urging the extension
of the benefits of civilization, education, and fruitful open
commerce to that vast domain, and is a party to treaty engagements of
all the interested powers designed to carry out that great duty to
humanity. The way to better the original and adventitious conditions,
so burdensome to the natives and so destructive to their development,
has been pointed out, by observation and experience, not alone of
American representatives, but by cumulative evidence from all
quarters and by the investigations of Belgian Agents. The announced
programmes of reforms, striking at many of the evils known to exist,
are an augury of better things. The attitude of the United States is
one of benevolent encouragement, coupled with a hopeful trust that
the good work, responsibly undertaken and zealously perfected to the
accomplishment of the results so ardently desired, will soon justify
the wisdom that inspires them and satisfy the demands of humane
sentiment throughout the world.

A convention between the United States and Germany, under which the
nonworking provisions of the German patent law are made inapplicable
to the patents of American citizens, was concluded on February 23,
1909, and is now in force. Negotiations for similar conventions
looking to the placing of American inventors on the same footing as
nationals have recently been initiated with other European
governments whose laws require the local working of foreign patents.

Under an appropriation made at the last session of the Congress, a
commission was sent on American cruisers to Monrovia to investigate
the interests of the United States and its citizens in Liberia. Upon
its arrival at Monrovia the commission was enthusiastically received,
and during its stay in Liberia was everywhere met with the heartiest
expressions of good will for the American Government and people and
the hope was repeatedly expressed on all sides that this Government
might see its way clear to do something to relieve the critical
position of the Republic arising in a measure from external as well
as internal and financial embarrassments. The Liberian Government
afforded every facility to the Commission for ascertaining the true
state of affairs. The Commission also had conferences with
representative citizens, interested foreigners and the
representatives of foreign governments in Monrovia. Visits were made
to various parts of the Republic and to the neighboring British
colony of Sierra Leone, where the Commission was received by and
conferred with the Governor.

It will be remembered that the interest of the United States in the
Republic of Liberia springs from the historical fact of the
foundation of the Republic by the colonization of American citizens
of the African race. In an early treaty with Liberia there is a
provision under which the United States may be called upon for advice
or assistance. Pursuant to this provision and in the spirit of the
moral relationship of the United States to Liberia, that Republic
last year asked this Government to lend assistance in the solution of
certain of their national problems, and hence the Commission was
sent.

The report of our commissioners has just been completed and is now
under examination by the Department of State. It is hoped that there
may result some helpful measures, in which case it may be my duty
again to invite your attention to this subject.

The Norwegian Government, by a note addressed on January 26, 1909, to
the Department of State, conveyed an invitation to the Government of
the United States to take part in a conference which it is understood
will be held in February or March, 1910, for the purpose of devising
means to remedy existing conditions in the Spitzbergen Islands.

This invitation was conveyed under the reservation that the question
of altering the status of the islands as countries belonging to no
particular State, and as equally open to the citizens and subjects of
all States, should not be raised.

The European Powers invited to this Conference by the Government of
Norway were Belgium, Denmark, France, Germany, Great Britain, Russia,
Sweden and the Netherlands.

The Department of State, in view of proofs filed with it in 1906,
showing the American possession, occupation, and working of certain
coal-bearing lands in Spitzbergen, accepted the invitation under the
reservation above stated, and under the further reservation that all
interests in those islands already vested should be protected and
that there should be equality of opportunity for the future. It was
further pointed out that membership in the Conference on the part of
the United States was qualified by the consideration that this
Government would not become a signatory to any conventional
arrangement concluded by the European members of the Conference which
would imply contributory participation by the United States in any
obligation or responsibility for the enforcement of any scheme of
administration which might be devised by the Conference for the
islands.

THE NEAR EAST.

His Majesty Mehmed V, Sultan of Turkey, recently sent to this country
a special embassy to announce his accession. The quick transition of
the Government of the Ottoman Empire from one of retrograde
tendencies to a constitutional government with a Parliament and with
progressive modern policies of reform and public improvement is one
of the important phenomena of our times. Constitutional government
seems also to have made further advance in Persia. These events have
turned the eyes of the world upon the Near East. In that quarter the
prestige of the United States has spread widely through the peaceful
influence of American schools, universities and missionaries. There
is every reason why we should obtain a greater share of the commerce
of the Near East since the conditions are more favorable now than
ever before.

LATIN AMERICA.

One of the happiest events in recent Pan-American diplomacy was the
pacific, independent settlement by the Governments of Bolivia and
Peru of a boundary difference between them, which for some weeks
threatened to cause war and even to entrain embitterments affecting
other republics less directly concerned. From various quarters,
directly or indirectly concerned, the intermediation of the United
States was sought to assist in a solution of the controversy.
Desiring at all times to abstain from any undue mingling in the
affairs of sister republics and having faith in the ability of the
Governments of Peru and Bolivia themselves to settle their
differences in a manner satisfactory to themselves which, viewed with
magnanimity, would assuage all embitterment, this Government steadily
abstained from being drawn into the controversy and was much
gratified to find its confidence justified by events.

On the 9th of July next there will open at Buenos Aires the Fourth
Pan-American Conference. This conference will have a special meaning
to the hearts of all Americans, because around its date are clustered
the anniversaries of the independence of so many of the American
republics. It is not necessary for me to remind the Congress of the
political, social and commercial importance of these gatherings. You
are asked to make liberal appropriation for our participation. If
this be granted, it is my purpose to appoint a distinguished and
representative delegation, qualified fittingly to represent this
country and to deal with the problems of intercontinental interest
which will there be discussed.

The Argentine Republic will also hold from May to November, 1910, at
Buenos Aires, a great International Agricultural Exhibition in which
the United States has been invited to participate. Considering the
rapid growth of the trade of the United States with the Argentine
Republic and the cordial relations existing between the two nations,
together with the fact that it provides an opportunity to show
deference to a sister republic on the occasion of the celebration of
its national independence, the proper Departments of this Government
are taking steps to apprise the interests concerned of the
opportunity afforded by this Exhibition, in which appropriate
participation by this country is so desirable. The designation of an
official representative is also receiving consideration.

To-day, more than ever before, American capital is seeking investment
in foreign countries, and American products are more and more
generally seeking foreign markets. As a consequence, in all countries
there are American citizens and American interests to be protected, on
occasion, by their Government. These movements of men, of capital, and
of commodities bring peoples and governments closer together and so
form bonds of peace and mutual dependency, as they must also
naturally sometimes make passing points of friction. The resultant
situation inevitably imposes upon this Government vastly increased
responsibilities. This Administration, through the Department of
State and the foreign service, is lending all proper support to
legitimate and beneficial American enterprises in foreign countries,
the degree of such support being measured by the national advantages
to be expected. A citizen himself can not by contract or otherwise
divest himself of the right, nor can this Government escape the
obligation, of his protection in his personal and property rights
when these are unjustly infringed in a foreign country. To avoid
ceaseless vexations it is proper that in considering whether American
enterprise should be encouraged or supported in a particular country,
the Government should give full weight not only to the national, as
opposed to the individual benefits to accrue, but also to the fact
whether or not the Government of the country in question is in its
administration and in its diplomacy faithful to the principles of
moderation, equity and justice upon which alone depend international
credit, in diplomacy as well as in finance.

The Pan-American policy of this Government has long been fixed in its
principles and remains unchanged. With the changed circumstances of
the United States and of the Republics to the south of us, most of
which have great natural resources, stable government and progressive
ideals, the apprehension which gave rise to the Monroe Doctrine may be
said to have nearly disappeared, and neither the doctrine as it exists
nor any other doctrine of American policy should be permitted to
operate for the perpetuation of irresponsible government, the escape
of just obligations, or the insidious allegation of dominating
ambitions on the part of the United States.

Beside the fundamental doctrines of our Pan-American policy there
have grown up a realization of political interests, community of
institutions and ideals, and a flourishing commerce. All these bonds
will be greatly strengthened as time goes on and increased
facilities, such as the great bank soon to be established in Latin
America, supply the means for building up the colossal
intercontinental commerce of the future.

My meeting with President Diaz and the greeting exchanged on both
American and Mexican soil served, I hope, to signalize the close and
cordial relations which so well bind together this Republic and the
great Republic immediately to the south, between which there is so
vast a network of material interests.

I am happy to say that all but one of the cases which for so long
vexed our relations with Venezuela have been settled within the past
few months and that, under the enlightened regime now directing the
Government of Venezuela, provision has been made for arbitration of
the remaining case before The Hague Tribunal. On July 30, 1909, the
Government of Panama agreed, after considerable negotiation, to
indemnify the relatives of the American officers and sailors who were
brutally treated, one of them having, indeed, been killed by the
Panaman police this year.

The sincere desire of the Government of Panama to do away with a
situation where such an accident could occur is manifest in the
recent request in compliance with which this Government has lent the
services of an officer of the Army to be employed by the Government
of Panama as Instructor of Police.

The sanitary improvements and public works undertaken in Cuba prior
to the present administration of that Government, in the success of
which the United States is interested under the treaty, are reported
to be making good progress and since the Congress provided for the
continuance of the reciprocal commercial arrangement between Cuba and
the United States assurance has been received that no negotiations
injuriously affecting the situation will be undertaken without
consultation. The collection of the customs of the Dominican Republic
through the general receiver of customs appointed by the President of
the United States in accordance with the convention of February 8,
1907, has proceeded in an uneventful and satisfactory manner. The
customs receipts have decreased owing to disturbed political and
economic conditions and to a very natural curtailment of imports in
view of the anticipated revision of the Dominican tariff schedule.
The payments to the fiscal agency fund for the service of the bonded
debt of the Republic, as provided by the convention, have been
regularly and promptly made, and satisfactory progress has been made
in carrying out the provisions of the convention looking towards the
completion of the adjustment of the debt and the acquirement by the
Dominican Government of certain concessions and monopolies which have
been a burden to the commerce of the country. In short, the
receivership has demonstrated its ability, even under unfavorable
economic and political conditions, to do the work for which it was
intended.

This Government was obliged to intervene diplomatically to bring
about arbitration or settlement of the claim of the Emery Company
against Nicaragua, which it had long before been agreed should be
arbitrated. A settlement of this troublesome case was reached by the
signature of a protocol on September 18, 1909.

Many years ago diplomatic intervention became necessary to the
protection of the interests in the American claim of Alsop and
Company against the Government of Chile. The Government of Chile had
frequently admitted obligation in the case and had promised this
Government to settle. There had been two abortive attempts to do so
through arbitral commissions, which failed through lack of
jurisdiction. Now, happily, as the result of the recent diplomatic
negotiations, the Governments of the United States and of Chile,
actuated by the sincere desire to free from any strain those cordial
and friendly relations upon which both set such store, have agreed by
a protocol to submit the controversy to definitive settlement by His
Britannic Majesty, Edward VII.

Since the Washington Conventions of 1907 were communicated to the
Government of the United States as a consulting and advising party,
this Government has been almost continuously called upon by one or
another, and in turn by all the five Central American Republics, to
exert itself for the maintenance of the Conventions. Nearly every
complaint has been against the Zelaya Government of Nicaragua, which
has kept Central America in constant tension or turmoil. The
responses made to the representations of Central American Republics,
as due from the United States on account of its relation to the
Washington Conventions, have been at all times conservative and have
avoided, so far as possible, any semblance of interference, although
it is very apparent that the considerations of geographic proximity
to the Canal Zone and of the very substantial American interests in
Central America give to the United States a special position in the
zone of these Republics and the Caribbean Sea.

I need not rehearse here the patient efforts of this Government to
promote peace and welfare among these Republics, efforts which are
fully appreciated by the majority of them who are loyal to their true
interests. It would be no less unnecessary to rehearse here the sad
tale of unspeakable barbarities and oppression alleged to have been
committed by the Zelaya Government. Recently two Americans were put
to death by order of President Zelaya himself. They were reported to
have been regularly commissioned officers in the organized forces of
a revolution which had continued many weeks and was in control of
about half of the Republic, and as such, according to the modern
enlightened practice of civilized nations, they were entitled to be
dealt with as prisoners of war.

At the date when this message is printed this Government has
terminated diplomatic relations with the Zelaya Government, for
reasons made public in a communication to the former Nicaraguan
charge d'affaires, and is intending to take such future steps as may
be found most consistent with its dignity, its duty to American
interests, and its moral obligations to Central America and to
civilization. It may later be necessary for me to bring this subject
to the attention of the Congress in a special message.

The International Bureau of American Republics has carried on an
important and increasing work during the last year. In the exercise
of its peculiar functions as an international agency, maintained by
all the American Republics for the development of Pan-American
commerce and friendship, it has accomplished a great practical good
which could be done in the same way by no individual department or
bureau of one government, and is therefore deserving of your liberal
support. The fact that it is about to enter a new building, erected
through the munificence of an American philanthropist and the
contributions of all the American nations, where both its efficiency
of administration and expense of maintenance will naturally be much
augmented, further entitles it to special consideration.

THE FAR EAST.

In the Far East this Government preserves unchanged its policy of
supporting the principle of equality of opportunity and scrupulous
respect for the integrity of the Chinese Empire, to which policy are
pledged the interested Powers of both East and West.

By the Treaty of 1903 China has undertaken the abolition of likin
with a moderate and proportionate raising of the customs tariff along
with currency reform. These reforms being of manifest advantage to
foreign commerce as well as to the interests of China, this
Government is endeavoring to facilitate these measures and the
needful acquiescence of the treaty Powers. When it appeared that
Chinese likin revenues were to be hypothecated to foreign bankers in
connection with a great railway project, it was obvious that the
Governments whose nationals held this loan would have a certain
direct interest in the question of the carrying out by China of the
reforms in question. Because this railroad loan represented a
practical and real application of the open door policy through
cooperation with China by interested Powers as well as because of its
relations to the reforms referred to above, the Administration deemed
American participation to be of great national interest. Happily,
when it was as a matter of broad policy urgent that this opportunity
should not be lost, the indispensable instrumentality presented
itself when a group of American bankers, of international reputation
and great resources, agreed at once to share in the loan upon
precisely such terms as this Government should approve. The chief of
those terms was that American railway material should be upon an
exact equality with that of the other nationals joining in the loan
in the placing of orders for this whole railroad system. After months
of negotiation the equal participation of Americans seems at last
assured. It is gratifying that Americans will thus take their share
in this extension of these great highways of trade, and to believe
that such activities will give a real impetus to our commerce and
will prove a practical corollary to our historic policy in the Far
East.

The Imperial Chinese Government in pursuance of its decision to
devote funds from the portion of the indemnity remitted by the United
States to the sending of students to this country has already
completed arrangements for carrying out this purpose, and a
considerable body of students have arrived to take up their work in
our schools and universities. No one can doubt the happy effect that
the associations formed by these representative young men will have
when they return to take up their work in the progressive development
of their country.

The results of the Opium Conference held at Shanghai last spring at
the invitation of the United States have been laid before the
Government. The report shows that China is making remarkable progress
and admirable efforts toward the eradication of the opium evil and
that the Governments concerned have not allowed their commercial
interests to interfere with a helpful cooperation in this reform.
Collateral investigations of the opium question in this country lead
me to recommend that the manufacture, sale and use of opium and its
derivatives in the United States should be so far as possible more
rigorously controlled by legislation.

In one of the Chinese-Japanese Conventions of September 4 of this
year there was a provision which caused considerable public
apprehension in that upon its face it was believed in some quarters
to seek to establish a monopoly of mining privileges along the South
Manchurian and Antung-Mukden Railroads, and thus to exclude Americans
from a wide field of enterprise, to take part in which they were by
treaty with China entitled. After a thorough examination of the
Conventions and of the several contextual documents, the Secretary of
State reached the conclusion that no such monopoly was intended or
accomplished. However, in view of the widespread discussion of this
question, to confirm the view it had reached, this Government made
inquiry of the Imperial Chinese and Japanese Governments and received
from each official assurance that the provision had no purpose
inconsistent with the policy of equality of opportunity to which the
signatories, in common with the United States, are pledged.

Our traditional relations with the Japanese Empire continue cordial
as usual. As the representative of Japan, His Imperial Highness
Prince Kuni visited the Hudson-Fulton Celebration. The recent visit
of a delegation of prominent business men as guests of the chambers
of commerce of the Pacific slope, whose representatives had been so
agreeably received in Japan, will doubtless contribute to the growing
trade across the Pacific, as well as to that mutual understanding
which leads to mutual appreciation. The arrangement of 1908 for a
cooperative control of the coming of laborers to the United States
has proved to work satisfactorily. The matter of a revision of the
existing treaty between the United States and Japan which is
terminable in 1912 is already receiving the study of both countries.

The Department of State is considering the revision in whole or in
part, of the existing treaty with Siam, which was concluded in 1856,
and is now, in respect to many of its provisions, out of date.

THE DEPARTMENT OF STATE.

I earnestly recommend to the favorable action of the Congress the
estimates submitted by the Department of State and most especially
the legislation suggested in the Secretary of State's letter of this
date whereby it will be possible to develop and make permanent the
reorganization of the Department upon modern lines in a manner to
make it a thoroughly efficient instrument in the furtherance of our
foreign trade and of American interests abroad. The plan to have
Divisions of Latin-American and Far Eastern Affairs and to institute
a certain specialization in business with Europe and the Near East
will at once commend itself. These politico-geographical divisions
and the detail from the diplomatic or consular service to the
Department of a number of men, who bring to the study of complicated
problems in different parts of the world practical knowledge recently
gained on the spot, clearly is of the greatest advantage to the
Secretary of State in foreseeing conditions likely to arise and in
conducting the great variety of correspondence and negotiation. It
should be remembered that such facilities exist in the foreign
offices of all the leading commercial nations and that to deny them
to the Secretary of State would be to place this Government at a
great disadvantage in the rivalry of commercial competition.

The consular service has been greatly improved under the law of April
5, 1906, and the Executive Order of June 27, 1906, and I commend to
your consideration the question of embodying in a statute the
principles of the present Executive Order upon which the efficiency
of our consular service is wholly dependent.

In modern times political and commercial interests are interrelated,
and in the negotiation of commercial treaties, conventions and tariff
agreements, the keeping open of opportunities and the proper support
of American enterprises, our diplomatic service is quite as important
as the consular service to the business interests of the country.
Impressed with this idea and convinced that selection after rigorous
examination, promotion for merit solely and the experience only to be
gained through the continuity of an organized service are
indispensable to a high degree of efficiency in the diplomatic
service, I have signed an Executive Order as the first step toward
this very desirable result. Its effect should be to place all
secretaries in the diplomatic service in much the same position as
consular officers are now placed and to tend to the promotion of the
most efficient to the grade of minister, generally leaving for
outside appointments such posts of the grade of ambassador or
minister as it may be expedient to fill from without the service. It
is proposed also to continue the practice instituted last summer of
giving to all newly appointed secretaries at least one month's
thorough training in the Department of State before they proceed to
their posts. This has been done for some time in regard to the
consular service with excellent results.

Under a provision of the Act of August 5, 1909, I have appointed
three officials to assist the officers of the Government in
collecting information necessary to a wise administration of the
tariff act of August 5, 1909. As to questions of customs
administration they are cooperating with the officials of the
Treasury Department and as to matters of the needs and the exigencies
of our manufacturers and exporters, with the Department of Commerce
and Labor, in its relation to the domestic aspect of the subject of
foreign commerce. In the study of foreign tariff treatment they will
assist the Bureau of Trade Relations of the Department of State. It
is hoped thus to coordinate and bring to bear upon this most
important subject all the agencies of the Government which can
contribute anything to its efficient handling.

As a consequence of Section 2 of the tariff act of August 5, 1909, it
becomes the duty of the Secretary of State to conduct as diplomatic
business all the negotiations necessary to place him in a position to
advise me as to whether or not a particular country unduly
discriminates against the United States in the sense of the statute
referred to. The great scope and complexity of this work, as well as
the obligation to lend all proper aid to our expanding commerce, is
met by the expansion of the Bureau of Trade Relations as set forth in
the estimates for the Department of State.

OTHER DEPARTMENTS.

I have thus in some detail described the important transactions of
the State Department since the beginning of this Administration for
the reason that there is no provision either by statute or custom for
a formal report by the Secretary of State to the President or to
Congress, and a Presidential message is the only means by which the
condition of our foreign relations is brought to the attention of
Congress and the public.

In dealing with the affairs of the other Departments, the heads of
which all submit annual reports, I shall touch only those matters
that seem to me to call for special mention on my part without
minimizing in any way the recommendations made by them for
legislation affecting their respective Departments, in all of which I
wish to express my general concurrence.

GOVERNMENT EXPENDITURES AND REVENUES.

Perhaps the most important question presented to this Administration
is that of economy in expenditures and sufficiency of revenue. The
deficit of the last fiscal year, and the certain deficit of the
current year, prompted Congress to throw a greater responsibility on
the Executive and the Secretary of the Treasury than had heretofore
been declared by statute. This declaration imposes upon the Secretary
of the Treasury the duty of assembling all the estimates of the
Executive Departments, bureaus, and offices, of the expenditures
necessary in the ensuing fiscal year, and of making an estimate of
the revenues of the Government for the same period; and if a probable
deficit is thus shown, it is made the duty of the President to
recommend the method by which such deficit can be met.

The report of the Secretary shows that the ordinary expenditures for
the current fiscal year ending June 30, 1910, will exceed the
estimated receipts by $34,075,620. If to this deficit is added the
sum to be disbursed for the Panama Canal, amounting to $38,000,000,
and $1,000,000 to be paid on the public debt, the deficit of ordinary
receipts and expenditures will be increased to a total deficit of
$73,075,620. This deficit the Secretary proposes to meet by the
proceeds of bonds issued to pay the cost of constructing the Panama
Canal. I approve this proposal.

The policy of paying for the construction of the Panama Canal, not
out of current revenue, but by bond issues, was adopted in the
Spooner Act of 1902, and there seems to be no good reason for
departing from the principle by which a part at least of the burden
of the cost of the canal shall fall upon our posterity who are to
enjoy it; and there is all the more reason for this view because the
actual cost to date of the canal, which is now half done and which
will be completed January 1, 1915, shows that the cost of engineering
and construction will be $297,766,000, instead of $139,705,200, as
originally estimated. In addition to engineering and construction,
the other expenses, including sanitation and government, and the
amount paid for the properties, the franchise, and the privilege of
building the canal, increase the cost by $75,435,000, to a total of
$375,201,000. The increase in the cost of engineering and
construction is due to a substantial enlargement of the plan of
construction by widening the canal 100 feet in the Culebra cut and by
increasing the dimensions of the locks, to the underestimate of the
quantity of the work to be done under the original plan, and to an
underestimate of the cost of labor and materials both of which have
greatly enhanced in price since the original estimate was made.

In order to avoid a deficit for the ensuing fiscal year, I directed
the heads of Departments in the preparation of their estimates to
make them as low as possible consistent with imperative governmental
necessity. The result has been, as I am advised by the Secretary of
the Treasury, that the estimates for the expenses of the Government
for the next fiscal year ending June 30, 1911, are less than the
appropriations for this current fiscal year by $42,818,000. So far as
the Secretary of the Treasury is able to form a judgment as to future
income, and compare it with the expenditures for the next fiscal year
ending June 30, 1911, and excluding payments on account of the Panama
Canal, which will doubtless be taken up by bonds, there will be a
surplus of $35,931,000.

In the present estimates the needs of the Departments and of the
Government have been cut to the quick, so to speak, and any
assumption on the part of Congress, so often made in times past, that
the estimates have been prepared with the expectation that they may be
reduced, will result in seriously hampering proper administration.

The Secretary of the Treasury points out what should be carefully
noted in respect to this reduction in governmental expenses for the
next fiscal year, that the economies are of two kinds--first, there
is a saving in the permanent administration of the Departments,
bureaus, and offices of the Government; and, second, there is a
present reduction in expenses by a postponement of projects and
improvements that ultimately will have to be carried out but which
are now delayed with the hope that additional revenue in the future
will permit their execution without producing a deficit.

It has been impossible in the preparation of estimates greatly to
reduce the cost of permanent administration. This can not be done
without a thorough reorganization of bureaus, offices, and
departments. For the purpose of securing information which may enable
the executive and the legislative branches to unite in a plan for the
permanent reduction of the cost of governmental administration, the
Treasury Department has instituted an investigation by one of the
most skilled expert accountants in the United States. The result of
his work in two or three bureaus, which, if extended to the entire
Government, must occupy two or more years, has been to show much room
for improvement and opportunity for substantial reductions in the cost
and increased efficiency of administration. The object of the
investigation is to devise means to increase the average efficiency
of each employee. There is great room for improvement toward this
end, not only by the reorganization of bureaus and departments and in
the avoidance of duplication, but also in the treatment of the
individual employee.

Under the present system it constantly happens that two employees
receive the same salary when the work of one is far more difficult
and important and exacting than that of the other. Superior ability
is not rewarded or encouraged. As the classification is now entirely
by salary, an employee often rises to the highest class while doing
the easiest work, for which alone he may be fitted. An investigation
ordered by my predecessor resulted in the recommendation that the
civil service he reclassified according to the kind of work, so that
the work requiring most application and knowledge and ability shall
receive most compensation. I believe such a change would be fairer to
the whole force and would permanently improve the personnel of the
service.

More than this, every reform directed toward the improvement in the
average efficiency of government employees must depend on the ability
of the Executive to eliminate from the government service those who
are inefficient from any cause, and as the degree of efficiency in
all the Departments is much lessened by the retention of old
employees who have outlived their energy and usefulness, it is
indispensable to any proper system of economy that provision be made
so that their separation from the service shall be easy and
inevitable. It is impossible to make such provision unless there is
adopted a plan of civil pensions. Most of the great industrial
organizations, and many of the well-conducted railways of this
country, are coming to the conclusion that a system of pensions for
old employees, and the substitution therefor of younger and more
energetic servants, promotes both economy and efficiency of
administration.

I am aware that there is a strong feeling in both Houses of Congress,
and possibly in the country, against the establishment of civil
pensions, and that this has naturally grown out of the heavy burden
of military pensions, which it has always been the policy of our
Government to assume; but I am strongly convinced that no other
practical solution of the difficulties presented by the
superannuation of civil servants can be found than that of a system
of civil pensions.

The business and expenditures of the Government have expanded
enormously since the Spanish war, but as the revenues have increased
in nearly the same proportion as the expenditures until recently, the
attention of the public, and of those responsible for the Government,
has not been fastened upon the question of reducing the cost of
administration. We can not, in view of the advancing prices of
living, hope to save money by a reduction in the standard of salaries
paid. Indeed, if any change is made in that regard, an increase rather
than a decrease will be necessary; and the only means of economy will
be in reducing the number of employees and in obtaining a greater
average of efficiency from those retained in the service.

Close investigation and study needed to make definite recommendations
in this regard will consume at least two years. I note with much
satisfaction the organization in the Senate of a Committee on Public
Expenditures, charged with the duty of conducting such an
investigation, and I tender to that committee all the assistance
which the executive branch of the Government can possibly render.

FRAUDS IN THE COLLECTION OF CUSTOMS.

I regret to refer to the fact of the discovery of extensive frauds in
the collections of the customs revenue at New York City, in which a
number of the subordinate employees in the weighing and other
departments were directly concerned, and in which the beneficiaries
were the American Sugar Refining Company and others. The frauds
consisted in the payment of duty on underweights of sugar. The
Government has recovered from the American Sugar Refining Company all
that it is shown to have been defrauded of. The sum was received in
full of the amount due, which might have been recovered by civil suit
against the beneficiary of the fraud, but there was an express
reservation in the contract of settlement by which the settlement
should not interfere with, or prevent the criminal prosecution of
everyone who was found to be subject to the same.

Criminal prosecutions are now proceeding against a number of the
Government officers. The Treasury Department and the Department of
Justice are exerting every effort to discover all the wrongdoers,
including the officers and employees of the companies who may have
been privy to the fraud. It would seem to me that an investigation of
the frauds by Congress at present, pending the probing by the Treasury
Department and the Department of Justice, as proposed, might by giving
immunity and otherwise prove an embarrassment in securing conviction
of the guilty parties.

MAXIMUM AND MINIMUM CLAUSE IN TARIFF ACT.

Two features of the new tariff act call for special reference. By
virtue of the clause known as the "Maximum and Minimum" clause, it is
the duty of the Executive to consider the laws and practices of other
countries with reference to the importation into those countries of
the products and merchandise of the United States, and if the
Executive finds such laws and practices not to be unduly
discriminatory against the United States, the minimum duties provided
in the bill are to go into force.

Unless the President makes such a finding, then the maximum duties
provided in the bill, that is, an increase of twenty-five per cent.
ad valorem over the minimum duties, are to be in force. Fear has been
expressed that this power conferred and duty imposed on the Executive
is likely to lead to a tariff war. I beg to express the hope and
belief that no such result need be anticipated.

The discretion granted to the Executive by the terms "unduly
discriminatory" is wide. In order that the maximum duty shall be
charged against the imports from a country, it is necessary that he
shall find on the part of that country not only discriminations in
its laws or the practice under them against the trade of the United
States, but that the discriminations found shall be undue; that is,
without good and fair reason. I conceive that this power was reposed
in the President with the hope that the maximum duties might never be
applied in any case, but that the power to apply them would enable the
President and the State Department through friendly negotiation to
secure the elimination from the laws and the practice under them of
any foreign country of that which is unduly discriminatory. No one is
seeking a tariff war or a condition in which the spirit of retaliation
shall be aroused.

USES OF THE NEW TARIFF BOARD.

The new tariff law enables me to appoint a tariff board to assist me
in connection with the Department of State in the administration of
the minimum and maximum clause of the act and also to assist officers
of the Government in the administration of the entire law. An
examination of the law and an understanding of the nature of the
facts which should be considered in discharging the functions imposed
upon the Executive show that I have the power to direct the tariff
board to make a comprehensive glossary and encyclopedia of the terms
used and articles embraced in the tariff law, and to secure
information as to the cost of production of such goods in this
country and the cost of their production in foreign countries. I have
therefore appointed a tariff board consisting of three members and
have directed them to perform all the duties above described. This
work will perhaps take two or three years, and I ask from Congress a
continuing annual appropriation equal to that already made for its
prosecution. I believe that the work of this board will be of prime
utility and importance whenever Congress shall deem it wise again to
readjust the customs duties. If the facts secured by the tariff board
are of such a character as to show generally that the rates of duties
imposed by the present tariff law are excessive under the principles
of protection as described in the platform of the successful party at
the late election, I shall not hesitate to invite the attention of
Congress to this fact and to the necessity for action predicated
thereon. Nothing, however, halts business and interferes with the
course of prosperity so much as the threatened revision of the
tariff, and until the facts are at hand, after careful and deliberate
investigation, upon which such revision can properly be undertaken, it
seems to me unwise to attempt it. The amount of misinformation that
creeps into arguments pro and con in respect to tariff rates is such
as to require the kind of investigation that I have directed the
tariff board to make, an investigation undertaken by it wholly
without respect to the effect which the facts may have in calling for
a readjustment of the rates of duty.

WAR DEPARTMENT.

In the interest of immediate economy and because of the prospect of a
deficit, I have required a reduction in the estimates of the War
Department for the coming fiscal year, which brings the total
estimates down to an amount forty-five millions less than the
corresponding estimates for last year. This could only be
accomplished by cutting off new projects and suspending for the
period of one year all progress in military matters. For the same
reason I have directed that the Army shall not be recruited up to its
present authorized strength. These measures can hardly be more than
temporary--to last until our revenues are in better condition and
until the whole question of the expediency of adopting a definite
military policy can be submitted to Congress, for I am sure that the
interests of the military establishment are seriously in need of
careful consideration by Congress. The laws regulating the
organization of our armed forces in the event of war need to be
revised in order that the organization can be modified so as to
produce a force which would be more consistently apportioned
throughout its numerous branches. To explain the circumstances upon
which this opinion is based would necessitate a lengthy discussion,
and I postpone it until the first convenient opportunity shall arise
to send to Congress a special message upon this subject.

The Secretary of War calls attention to a number of needed changes in
the Army in all of which I concur, but the point upon which I place
most emphasis is the need for an elimination bill providing a method
by which the merits of officers shall have some effect upon their
advancement and by which the advancement of all may be accelerated by
the effective elimination of a definite proportion of the least
efficient. There are in every army, and certainly in ours, a number
of officers who do not violate their duty in any such way as to give
reason for a court-martial or dismissal, but who do not show such
aptitude and skill and character for high command as to justify their
remaining in the active service to be Promoted. Provision should be
made by which they may be retired on a certain proportion of their
pay, increasing with their length of service at the time of
retirement. There is now a personnel law for the Navy which itself
needs amendment and to which I shall make further reference. Such a
law is needed quite as much for the Army.

The coast defenses of the United States proper are generally all that
could be desired, and in some respects they are rather more elaborate
than under present conditions are needed to stop an enemy's fleet
from entering the harbors defended. There is, however, one place
where additional defense is badly needed, and that is at the mouth of
Chesapeake Bay, where it is proposed to make an artificial island for
a fort which shall prevent an enemy's fleet from entering this most
important strategical base of operations on the whole Atlantic and
Gulf coasts. I hope that appropriate legislation will be adopted to
secure the construction of this defense.

The military and naval joint board have unanimously agreed that it
would be unwise to make the large expenditures which at one time were
contemplated in the establishment of a naval base and station in the
Philippine Islands, and have expressed their judgment, in which I
fully concur, in favor of making an extensive naval base at Pearl
Harbor, near Honolulu, and not in the Philippines. This does not
dispense with the necessity for the comparatively small
appropriations required to finish the proper coast defenses in the
Philippines now under construction on the island of Corregidor and
elsewhere or to complete a suitable repair station and coaling supply
station at Olongapo, where is the floating dock "Dewey." I hope that
this recommendation of the joint board will end the discussion as to
the comparative merits of Manila Bay and Olongapo as naval stations,
and will lead to prompt measures for the proper equipment and defense
of Pearl Harbor.

THE NAVY.

The return of the battle-ship fleet from its voyage around the world,
in more efficient condition than when it started, was a noteworthy
event of interest alike to our citizens and the naval authorities of
the world. Besides the beneficial and far-reaching effect on our
personal and diplomatic relations in the countries which the fleet
visited, the marked success of the ships in steaming around the world
in all weathers on schedule time has increased respect for our Navy
and has added to our national prestige.

Our enlisted personnel recruited from all sections of the country is
young and energetic and representative of the national spirit. It is,
moreover, owing to its intelligence, capable of quick training into
the modern man-of-warsman. Our officers are earnest and zealous in
their profession, but it is a regrettable fact that the higher
officers are old for the responsibilities of the modern navy, and the
admirals do not arrive at flag rank young enough to obtain adequate
training in their duties as flag officers. This need for reform in
the Navy has been ably and earnestly presented to Congress by my
predecessor, and I also urgently recommend the subject for
consideration.

Early in the coming session a comprehensive plan for the
reorganization of the officers of all corps of the Navy will be
presented to Congress, and I hope it will meet with action suited to
its urgency.

Owing to the necessity for economy in expenditures, I have directed
the curtailment of recommendations for naval appropriations so that
they are thirty-eight millions less than the corresponding estimates
of last year, and the request for new naval construction is limited
to two first-class battle ships and one repair vessel.

The use of a navy is for military purposes, and there has been found
need in the Department of a military branch dealing directly with the
military use of the fleet. The Secretary of the Navy has also felt the
lack of responsible advisers to aid him in reaching conclusions and
deciding important matters between coordinate branches of the
Department. To secure these results he has inaugurated a tentative
plan involving certain changes in the organization of the Navy
Department, including the navy-yards, all of which have been found by
the Attorney-General to be in accordance with law. I have approved the
execution of the plan proposed because of the greater efficiency and
economy it promises.

The generosity of Congress has provided in the present Naval
Observatory the most magnificent and expensive astronomical
establishment in the world. It is being used for certain naval
purposes which might easily and adequately be subserved by a small
division connected with the Naval Department at only a fraction of
the cost of the present Naval Observatory. The official Board of
Visitors established by Congress and appointed in 1901 expressed its
conclusion that the official head of the observatory should be an
eminent astronomer appointed by the President by and with the advice
and consent of the Senate, holding his place by a tenure at least as
permanent as that of the Superintendent of the Coast Survey or the
head of the Geological Survey, and not merely by a detail of two or
three years' duration. I fully concur in this judgment, and urge a
provision by law for the appointment of such a director.

It may not be necessary to take the observatory out of the Navy
Department and put it into another department in which opportunity
for scientific research afforded by the observatory would seem to be
more appropriate, though I believe such a transfer in the long run is
the best policy. I am sure, however, I express the desire of the
astronomers and those learned in the kindred sciences when I urge
upon Congress that the Naval Observatory be now dedicated to science
under control of a man of science who can, if need be, render all the
service to the Navy Department which this observatory now renders, and
still furnish to the world the discoveries in astronomy that a great
astronomer using such a plant would be likely to make.

DEPARTMENT OF JUSTICE EXPEDITION IN LEGAL PROCEDURE

The deplorable delays in the administration of civil and criminal law
have received the attention of committees of the American Bar
Association and of many State Bar Associations, as well as the
considered thought of judges and jurists. In my judgment, a change in
judicial procedure, with a view to reducing its expense to private
litigants in civil cases and facilitating the dispatch of business
and final decision in both civil and criminal cases, constitutes the
greatest need in our American institutions. I do not doubt for one
moment that much of the lawless violence and cruelty exhibited in
lynchings is directly due to the uncertainties and injustice growing
out of the delays in trials, judgments, and the executions thereof by
our courts. Of course these remarks apply quite as well to the
administration of justice in State courts as to that in Federal
courts, and without making invidious distinction it is perhaps not
too much to say that, speaking generally, the defects are less in the
Federal courts than in the State courts. But they are very great in
the Federal courts. The expedition with which business is disposed of
both on the civil and the criminal side of English courts under modern
rules of procedure makes the delays in our courts seem archaic and
barbarous. The procedure in the Federal courts should furnish an
example for the State courts. I presume it is impossible, without an
amendment to the Constitution, to unite under one form of action the
proceedings at common law and proceedings in equity in the Federal
courts, but it is certainly not impossible by a statute to simplify
and make short and direct the procedure both at law and in equity in
those courts. It is not impossible to cut down still more than it is
cut down, the jurisdiction of the Supreme Court so as to confine it
almost wholly to statutory and constitutional questions. Under the
present statutes the equity and admiralty procedure in the Federal
courts is under the control of the Supreme Court, but in the pressure
of business to which that court is subjected, it is impossible to hope
that a radical and proper reform of the Federal equity procedure can
be brought about. I therefore recommend legislation providing for the
appointment by the President of a commission with authority to examine
the law and equity procedure of the Federal courts of first instance,
the law of appeals from those courts to the courts of appeals and to
the Supreme Court, and the costs imposed in such procedure upon the
private litigants and upon the public treasury and make
recommendation with a view to simplifying and expediting the
procedure as far as possible and making it as inexpensive as may be
to the litigant of little means.

INJUNCTIONS WITHOUT NOTICE.

The platform of the successful party in the last election contained
the following: "The Republican party will uphold at all times the
authority and integrity of the courts, State and Federal, and will
ever insist that their powers to enforce their process and to protect
life, liberty, and property shall be preserved inviolate. We believe,
however, that the rules of procedure in the Federal courts with
respect to the issuance of the writ of injunction should be more
accurately defined by statute, and that no injunction or temporary
restraining order should be issued without notice, except where
irreparable injury would result from delay, in which case a speedy
hearing thereafter should be granted." I recommend that in compliance
with the promise thus made, appropriate legislation be adopted. The
ends of justice will best be met and the chief cause of complaint
against ill-considered injunctions without notice will be removed by
the enactment of a statute forbidding hereafter the issuing of any
injunction or restraining order, whether temporary or permanent, by
any Federal court, without previous notice and a reasonable
opportunity to be heard on behalf of the parties to be enjoined;
unless it shall appear to the satisfaction of the court that the
delay necessary to give such notice and hearing would result in
irreparable injury to the complainant and unless also the court shall
from the evidence make a written finding, which shall be spread upon
the court minutes, that immediate and irreparable injury is likely to
ensue to the complainant, and shall define the injury, state why it is
irreparable, and shall also endorse on the order issued the date and
the hour of the issuance of the order. Moreover, every such
injunction or restraining order issued without previous notice and
opportunity by the defendant to be heard should by force of the
statute expire and be of no effect after seven days from the issuance
thereof or within any time less than that period which the court may
fix, unless within such seven days or such less period, the
injunction or order is extended or renewed after previous notice and
opportunity to be heard.

My judgment is that the passage of such an act which really embodies
the best practice in equity and is very like the rule now in force in
some courts will prevent the issuing of ill-advised orders of
injunction without notice and will render such orders when issued
much less objectionable by the short time in which they may remain
effective.

ANTI-TRUST AND INTERSTATE COMMERCE LAWS.

The jurisdiction of the General Government over interstate commerce
has led to the passage of the so-called "Sherman Anti-trust Law" and
the "Interstate Commerce Law" and its amendments. The developments in
the operation of those laws, as shown by indictments, trials, judicial
decisions, and other sources of information, call for a discussion and
some suggestions as to amendments. These I prefer to embody in a
special message instead of including them in the present
communication, and I shall avail myself of the first convenient
opportunity to bring these subjects to the attention of Congress.

JAIL OF THE DISTRICT OF COLUMBIA.

My predecessor transmitted to the Congress a special message on
January 11, 1909, accompanying the report of Commissioners
theretofore appointed to investigate the jail, workhouse, etc., in
the District of Columbia, in which he directed attention to the
report as setting forth vividly, "the really outrageous conditions in
the workhouse and jail."

The Congress has taken action in pursuance of the recommendations of
that report and of the President, to the extent of appropriating
funds and enacting the necessary legislation for the establishment of
a workhouse and reformatory. No action, however, has been taken by the
Congress wi