Los Angeles herald. [microfilm reel], December 07, 1910, Page 4, Image 4

About Los Angeles herald. [microfilm reel] (Los Angeles [Calif.]) 1900-1911

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4
Enforce Present Anti-Trust Laws Before Enacting New Ones-TAFT
PRAISE HEAPED ON TARIFF; PLAN
OF COMMISSION URGED AS BEST
President Again Goes on Record in Favor of G. 0. P. Doctrine of
Protection but Declares Duties Should be Fixed in Accord
ance with Cost of Production at Home and Abroad
(Continued from Pag* On*)
of- a direct claim lor compensation; that the
proceedings thereupon to be taken should be
In the form of a trial de novo, and that Judg
ment of the court should consist of compensa
tion for the Illegal capture, irrespective of
the decision of the national court whose Judg
ment bad thus been Internationally lnvolvod.
As the result of an Informal discussion. It
■was decided to provide such procedeure by
means of a separate protocol, which should
' be ratified at the same time as the prize court
convention Itself.
Accordingly, the government of Th* Nether
lands, at the request of this government, pro
posed under date of May 24, 1910, to the pow
ers signatory to The Hague convention the
negotiation of a supplemental protocol em
bodying stipulations providing for this alter
native procedure. It Is gratifying to observe
that this additional protocol Is being signed
•Without objection by the powers signatory to
the original convention, and that there I;
•very reason to believe that the International
prize court will be soon established.
The Identical circular note also proposed that
the international prize court, when established,
should be endowed with the functions of an
arbitral court of Justice under and pursuant
to th* recommendation adopted by the last
Hague conference. The replies received from
the various powers to this proposal Inspire
the hops that this also may be accomplished
within th* reasonably near future.
It Is believed the establishment of these two
tribunals will go a long way toward securing
th* arbitration of many questions whloh have
heretofore threatened and at times destroyed
th* peace of nations.
Europe, Canada, Etc.
Several Important treaties have been nego
, tiated with Great Britain In the past twelve
months. A preliminary diplomatic agreement
has been reached regarding the arbitration of
pecuniary claims which each government has
against the other. This agreement, with the
schedules of claims annexed, will, as soon as
the schedules are arranged, be submitted to
the senate for approval.
Portugal
In October last the monarchy in Portugal
was overthrown, a provisional republic was
proclaimed, and there was set up a de facto
government which was promptly recognized by
the government of the United States for pur
poses of ordinary Intercourse, pending formal
recognition by this and other powers of the
governmental entity to be duly established by
the national sovereignty.
Liberia
The negotiations whloh have been undertaken
for the amelioration of the conditions found In
Liberia by the American commission, whose
report I transmitted to congress on March 25 |
last, are being brought to conclusion, and It Is
thought that within a short time practical
measures of relief may be put Into effect
through the good offlcos of this government
and the cordial 00-operatlon of other govern
ments Interested ln Liberia's welfare.
The Near East
Turkey: Reference Is mads by the president
to the accession of his majesty, Mehemst V,
emperor of the Ottomans, and the desire of
the United States to contribute to tho larger
economic and commercial development due to
the new regime ln Turkey.
The rapid development now beginning in that
ancient empire, and the marked progress and
Increased commercial Importance of Bulgaria,
Roumanla and Servla. make it particularly ■
opportune that the possibilities of American I
commerce ln the near east should receive due
attention.
Montenegro: The president expresses pleas
ure In having accorded recognition of the
United States to the new kingdom of Monte
negro, j
The Far East: The center of Interest ln far
eastern affairs during the rast year has been
ln China. It has been gratifying to note that
the negotiations for a loan to the Chinese
government for the construction of the trunk
railway lines from Hankow southward to Can
ton and westward through the Yangtse »;Jley,
known -•= the Hukuang loon, were concluded
by the representatives of the various financial
groups In May last and the results approved
by their respective governments. Thu agree
ment, already initiated by the Chinese govern
ment, is now awaiting ratification. The basis
of the settlement of the terms of this loan was
one of exact equality between America, Great
Britain, France and Germany, in respeot to
financing the loan and supplying materials for
the proposed railways and their future
branches.
The application of the principle underlying
the policy of the United States In regard to
the Hukuang loan, viz., that of the interna
tionalization of the foreign Interest in such
of the railways of China as may be financed
by foreign contrles, was suggested on a broad
er scale by the recretary of state In a pro
posal for internationalization and commercial
neutralization of all the railways of Man
churia. While the principle which led to the
proposal of this government was generally
admitted by the powers to whom It was ad
dressed, the governments of Russia and Japan
apprehended practical difficulties in the execu
tion of the larger plan which prevented their
ready adherence. The question of construct
ing the Chlnow-Algun railway by means of an
international loan to China Is, however, still
the subject of friendly discussion by tho In
terested parties.
China Assisted
The policy of this government In these mat
ters has beon directed by a desire to make the
use of American capital ln the development of
China an Instrument ln the promotion of
China's welfare and material prosperity with
out prejudice to her legitimate rights as an
Independent political power.
This policy has recently found further exem
plification ln the assistance given by this gov
ernment to the negotiations between China
and a group of American bankers for a loan
of $60,000,000 to be employed chiefly In cur
rency reform. The confusion which from an
cient times existed in the monetary usages of
the Chinese has been one of the principal ob
stacles to commercial Intercourse with that
people. The United States ln its treaty of 1903
with China obtained a pledge from the latter
to Introduce a uniform national coinage, and
the following year, at the request of China,
this government sent to Peking a member of
the International exchange commission to dis
cuss with the Chinese government the best
methods of introducing the reform. In 1908
.China sent a commtsslorcr to the United
States to consult with American financiers as
to the possibility of securing a large loan
with : which to Inaugurate the new currency
system, but the death * I their majesties, the
empress-dowager and tiie emperor of China,
Interrupted the negotiations, which were not
resumed until a few months ago, when this
government was asked to communicate to th*
bankers concerned the request of China for a
loan of $50,000,000 for the purpose under re
view. A preliminary agreement between th*
American group and China has been mad*
covering the loan.
For the success of this loan and th* con
template! reforms, which are of the greatest
Importance to the commercial interests of the
United States and the civilized world at large,
It Is realized that an expert will be necessary,
«nd tbls government ha* received assurances
■Rom China that such an advisor, who shall
>c an American, will be engaged.
It Is a matter of Interest to Americans lo
tote the success which Is attending the efforts
if China to establish gradually a system of
epresentatlve government. The provincial as
icmblles were opened In October, 1909, and ln
October of the present year a consultative
wdy, the nucleus of the future national pari!
iment, held its first session In Peking.
Two Important Agreements
The year has further been marked by two
roportant International agreements relating to
'ar eastern affairs. In the Russo-Japanese
igreement relating to Manchuria, signed July
l, 1910, this government was gratified to note
in assurance of continued peaceful conditions
n that region, and the reaffrmatlon of the
policies with respect to China to which the
Jnlted States, together with all other Inter
red powers, are alike solemnly committed.
The treaty annexing Korea to the empire of
lapan, promulgated August 29, 1910, marks the
lnal step ln a process of control of the ancient
empire by her powerful neighbor that has been
n progress for several years past. In com
municating the fact of annexation the Japan
ise government gave to the government of the
United States assurances of the full protection
>f the rights of American citizens In Korea
inder the changed conditions.
Latin America
During the past year several of our south
irn sister republics celebrated the anniversary
)f their Independence. In honor of these
?vents special embassies were sent from this
:ountry to Argentina, Chile and Mexico,
where the gracious reception and splendid
hospitality extended them manifested the cor
lial relations and friendship existing between
those countries and the United States, re
lations -which I am happy to believe have
never before been upon so high a plane and
io solid a basis as at present.
Protocol Signed
There has been signed by the representatives
3f the United States and Mexico a protocol
submitting to the United States-Mexican bouu-
Jary commission (whose membership for the
purpose of this case Is to be Increased by
the addition of a citizen of Canada), the ques
tion of sovereignty over the Chamlzal tract
which lies within the present physical boun
larlee of the city of El Paso, Texas. The
letermlnatlon of this question will remove a
source of no little annoyance to the two gov
ernments.
The president in hie message says negotia
tions regarding the refunding of the bonded
lebt of Honduras have been under way for
more than a year and It is now confidently
Delleved, he says, that a short time will suf
fice to conclude an arrangement which will
m satisfactory to foreign creditors, eminently
advantageous to Honduras. Continuing, he
says:
This Is muoh to be desired since, as recog
nized by the Washington conventions, a
itrong Honduras would tend immensely to the
progress and prosperity of Central America.
Nicaragua in Rebellion
During the past year the republic of Nic
aragua has been the scene of internecine
struggle. General Zelaya, for seventeen years
the absolute ruler of Nicaragua, was through
out his career the disturber of Central Amor
lea and opposed every plan for the promotion
of peace and friendly relations between the
five republics. The president then reviews the
rebellion and "the unwarranted execution of
two American citizens who had regularly en
listed In the ranks of the revolutionists,"
which Involved the breaking off of all diplo
matic relations- with the Zelaya government.
The moderation and conciliatory spirit shown
by the various factions give ground for the
confident hope that Nicaragua will soon take
Its rightful place among the law abiding and
progressiva countries of the world.
It gratifies me exceedingly to announce that
the Argentine. Republic some months ago
placed with American manufacturers a con
tract for tho construction of two battleships
and certain' additional naval equipment. The
extent of this work and Its Importance to the
Argentine Republic make the placing of the
bid an earnest of friendly feeling toward the
United States.
Tariff Negotiations
The new tariff law. ln section 2, respecting
the maximum and minimum tariffs of the
United States, which provisions came Into ef
fect on April 1, 1910, Imposed upon the pres
ident the responsibility of determining prior
to that date whether or not any undue dis
crimination existed against the United States
and Us products in any country of the world
with which we sustained commercial relations.
In the case of several countries Instances of
apparent undue discrimination against Amer
ican commerce were found to exist. These
discriminations were removed by negotiation.
Prior to April 1, 1910, when the maximum
tariff was to come Into operation with respect
to Importations from all those countries in
whose favor no proclamation applying the
minimum tariff should be Issued by the presi
dent, one hundred and thirty-four such proc
lamations were Issued. This series of proc
lamations embraced the entire commercial
world and hence the minimum tariff of the
United States has been given universal ap
plication, thus testifying to the satisfactory
character of our trade relations with foreign
countries.
Marked advantages to the commerce of the
United States were obtained through these
tariff settlements. Foreign nations are fully
cognizant of the fact that under section 3
of the tariff act the president is required,
whenever he Ii satisfied that the treatment
accorded by them to the products of the
United States is not such as to entitle them
to the benefits of the minimum tariff ot the
United States, to withdraw those benefits by
proclamation, giving ninety days" notice, after
which the maximum tariff will apply to their
dutiable products entering the United States.
In Its general operation this section of the
tariff law has thus far proved a guaranty
of continued commercial peace, although there
are, however, unfortunately, instances where
foreign governments deal arbitrarily with
American interests within their Jurisdiction in
a manner Injurious and Inequitable.
Broader Trade Relations
The policy of broader and closer trade re
lations with the Dominion of Canada, which
was Initiated ln the adjustment of the max
imum and minimum provisions of the tariff
act of August, 1909, has proved mutually ben
eficial. It Justifies further efforts at readjust
ment of the commercial relations of the two
countries so that their commerce may fal
low the channels natural to contiguous coun
tries and be commensurate with tho steady
expansion of trade and industry on both sides
of the boundary line. The reciprocation on
the part of the dominion government of tho
sentiment which was expressed by this gov
ernment was followed in October by the tug-
Kestlon that It would be glad to have the
negotiations, which had been temporarily sus
pended during the summer, resumed. In ac
cordance with this suggestion the secretary of
state, by my direction, dispatched two repre
sentatives of the department of state as spe
cial commissioners to Ottawa to confer with
representatives of the dominion government.
Thoy were authorized to take such steps for
formulating a reciprocal trade agreement as
might bo necessary and to receive and con
sider any propositions which the dominion
government might care to submit.
Pursuant to the Instructions Issued, con
ferences were held by these commissioners
with officials of the dominion government at
Ottawa In the early part of November. The
negotiations were conducted on both sides In
a spirit of mutual accommodation. The dis
cussion of the common commercial Interests
of the two countries had for Its object a
satisfactory basis for a trade arrangement
which offers the prospect of a freer Inter
change for the products of the United States
and of Canada. The conferences were ad
journed to be resumed in Washington ln Jan- j
vary, when It is hoped that th* aspiration of
LOS ANGELES HERALD: { WEDNESDAY MORNING, DECEMBER 7, 1910.
both governments for a mutually advantageous
measure of reciprocity will be realized.
State Foreign Service
I Our lorelgn trade merits the best support of
the government and the most earnest en
deavor of our manufacturers and merchants,
who If they do not already In all cases need
a foreign market, are certain soon to become
dependent on it. Therefore, now is the time
to secure a strong position In this field.
I cannot leave this subject without empha
sising the necessity of such legislation as will
make possible and convenient the establish
ment of American banks and branches of
American banks In foreign countries. Only by
such means can our foreign trade be favor
ably financed, necessary credits be arranged
and proper avail be made of commercial op
portunities In foreign countries, and most es
pecially In Latin-America. ,
The Merchant Marine
Another instrumentality Indispensable to the
unhampered and natural development of Amer
ican commerce Is merchant marine. All mar
itime and commercial nations recognise the
Importance of this factor. The greatest com
mercial nations, our competitors. Jealously
foster their merchant marine. Perhaps no
where Is the need for rapid and direct mall,
passenger and freight communication quite
so urgent as between the United States and i
Latin-America. We can secure ln no other
quarter of the world such Immediate benefits
ln friendship and commerce as would flow
from the establishment of direct lines of com
munication with the countries of Latin-Amer
ica, adequate to meet the requirements of a
rapidly Increasing appreciation of the recip
rocal dependence of the countries of the west
ern hemisphere upon each other's products,
sympathies and assistance.
I alluded to this most Important subject In
my last annual message; It has often been be
fore you, and I need not recapitulate the
reasons for Its recommendation. Unless prompt
action be taken the completion of the Panama
canal will find this the only great commercial
nation unable to avail Itself In International
maritime business of this great contribution
to the means of the world's commercial in
tercourse.
Quite aside from the commercial aspect, un
less we create a merchant marine where can
we find the seafaring population necessary as
a natural naval reserve and where could we
find, In case of war, the transports and sub
sidiary vessels without which a naval fleet
is arms without a body? For many reasons
I cannot too strongly urge upon the congress
the passage of a measure by mall subsidy or
other subvention adequate to guarantee the es
tablishment and rapid development of an
American merchant marine, the restoration of
the American flag to It* ancient plaoe upon!
the seas.
'
Crimes of Aliens
With our increasing International Intercourse
It becomes Incumbent upon me to repeat more
emphatically than ever the recommendation
which I made in my Inaugural address that
congress shall at once give to the courts of
the United States Jurisdiction to punish as a
crime the violation of the rights of aliens
secured by treaty with the United States, In
order that the general government of the
United States shall be able when called upon
by a friendly nation to redeem its eolemn
promise by treaty to secure to the citizens
or subjects of that nation resident in the
United States freedom from violence and dv*
process of law In respect to their life, liberty
and property.
The marked Improvement in the consular
service during the four years sine* the prin
ciples of the civil service act were applied
to that service In a limited way, and the
good results already noticeable from a similar
application of civil servloe principles to the
diplomatic service a year ago, convince me
that the enactment into law of the general
principles of ths existing executive regulations
could not fall to effect further Improvement
of both branches of the foreign service, of
fering as It would by Its assurance of per
manency of tenure and promotion on merit, an
Inducement tor the entry of capable youag
men Into the service and an Incentive to those
already In to put forth their best efforts to
attain and maintain that degree of efficiency
that the Interests of our International rela
tions and commerce demand.
The president urges the gradual and annual
acquisition of premises for diplomatic use,
especially in the capitals of Latin-American
states and Europe.
Treasury Department
Estimates for next year's expenses:
Every effort has been made by each de
partment chief to reduce the estimated cost
of his department for the ensuing fiscal year
ending June 30, 1912. I Bay this In order that
congress may understand that these estimates
thus made present the smallest sum which
will maintain the departments, bureaus and
offices of the government and meet its other
obligations under existing law, and that a
cut of these estimates would result in em
barrassing the executive branch of the gov
ernment In the performance of its duties.
This remark does not apply to the river and
harbor estimates, except to those for expenses
of maintenance and with those meeting obliga
tions under authorized contracts, nor does It
apply to the public building bill, nor to the
navy building program. Of course, as to
these congress could withhold any part or all
of the estimates for them without interfering
with the discharge of the ordinary obligations
of the government or the performance of the
functions of Its departments, bureaus and
offices.
The final estimates for the year ending
June 30, 1912, as they have been sent to the
treasury, on November 29 of this year, for the
ordinary expenses of the government, Including
those for public buildings, river* and har
bors and the navy building program, amount
to $630,494,013. This Is $52,964,887 less than the
appropriations for the fiscal year ending June
30, 1911. It Is $16,883,153 less than the total
estimates. Including supplemental estimates
submitted to congress by the treasury for
the year 1911, and is $5,674,659 less than the
original cellmates submitted by the treasury
for 1911.
Panama Canal Estimate
These figures do not Include the appropria
tions for the Panama canal, the policy ln re
spect to which ought to be, and Is, to spend
as much each year as can be economically and
effectively expended ln order to complete the
canal as promptly as possible, and therefor*
the ordinary motive for cutting down the ex
penso of the government doe* not apply to
appropriations for this purpose. The estimate*
for the Panama canal for the ensuing year
are more than $66,000,000, an increase of $20,
--000,000 over the amount appropriated for this
year—a difference due to the fact that the
estimate* for 1912 includo something over
$19,000,000 for the fortification of the canal.
Against the estimated expenditures of $630,
--494,013 the treasury has estimated receipts for
next year $680,000,000, making a probable sur
plus of ordinary receipts over ordinary ex
penditures of $60,000,000, or taking Into account
| the estimates for the Panama canal, which are
$56,920,817, and which ultimately will be paid
in bonds, it will leave a deficit for the next
year of about $7,000,000 If congress shall con
clude to fortify the canal. The cost of th*
fortifications is about $19,000,000. Should there
be no appropriations this year for fortifica
tions, then there would be, even Including
the Panama canal appropriation, a surplus of
about $12,000,000, according to th* treasury
estimates.
The treasury department Is one of the orig
inal departments of tho government. With th*
changes In the monetary system made from
time to time, and with the creation of na
tional banks, It was thought necessary to or
ganize new bureaus and divisions, which wore
added in a somewhat haphazard way and re
sulted In a duplication of duties which might
well now be ended.
System Has Been Bettered
Tills lack of system and economic co-ordina
tion has attracted the attention of the head of
that department, who has been giving his
time for the last two years, with the aid of
experts and by consulting his bureau chiefs,
to it* reformation; he baa abolished 400 places
Here's Taft—He 'Stands Pat' on
G.O.P. Policies in His Message
ft / isir* "^ -^l^iipliM \\^
WILLIAM HOWARD TAFT
In the civil service without at all Injuring
its efficiency.
There are entirely too many custom* dis
tricts and too many customs collectors. These
districts should be consolidated and th* col
lectors ln charge of them, who draw good
salaries, should be abolished or treated as
mere branch offices, ln accordance with the
plan of the treasury department which will
be presented for the consideration of con-
gress.
It Is not essential to the preventing of
smuggling that customs districts should be
Increased ln number. The violation of the
customs laws can be quite as easily pre
vented, and much more economically, by the
revenue cutter service and by th* us* of th*
special agent traveling force of the treasury
department.
Very great Improvement* have been made
In respect to th* mints and assay offices, and
this year's estimate of expenses is $386,000
less than two years ago. There Is an op
portunity for further saving in the abolition
of several mints and assay offices that have
now become unnecessary. During the past
year 100 unnecessary employes have been
dropped from the Philadelphia mint.
The office of the comptroller of the cur
rency Is one most Important ln the preserva
tion of proper banking methods ln the na
tional banking system of the United States,
and the present comptroller has Impressed his
subordinates with the necessity of so con
ducting their Investigations as to establish
the principle that every bank failure is un
necessary because proper Inspection and notice
of threatening conditions to the responsible
directors and officers can prevent It.
Public Buildings
In our public buildings we still suffsr from
the method of appropriation which has been
M much criticised in connection with our j
rivers and harbors. Some method should be
devised for controlling the supply of publlo
buildings, so that they will harmonize with
the actual needs of the government. Not
only are buildings appropriated for by con
gress which are not needed, and buildings
left unappropriated for by congress which
are needed, but when It comes to the actual
construction there has been ln th* past too j
little study of the building plans and sites
with a view to the actual needs of the gov
ernment. Postoffice buildings which are in
effect warehouses for the economical handling (
of transportation of thousands of tons of mall
have been made monumental structures, and
often located far from the convenient and
economical spot. In the actual construction
of the buildings a closer scrutiny of the meth
ods employed ay the government architects or
by architects employed by the government
have resulted ln decided economies. It Is
hoped that more time will give opportunity
for a more thorough reorganization. The last
public building bill carried authorization for
the ultimate expenditure of 233,011,610, and I
approved It because of the many good features
It contained, Just as I approved the river
and harbor bills, but It was drawn upon a
principle that ought to be abandoned. It
seems to me that the wiser method of pre
paring a public building bill would be the
preparation of a report by a commission of
government experts whose duty It should be
to report to congress the government's need
in the way of construction of buildings in
every part of tho country Just as the army
engineers make report with reference to the
utility of proposed improvements In rivers and
harbors, with the added function which I have
recommended for the army engineers of in
cluding ln thoir recommendation the relative
importance of the various projects found to
be worthy of approval and execution.
Revenue
As the treasury department Is the one
through which the Income of the government
is collected and Its expenditures are disbursed,
this seems a proper place to consider the
operation of the existing tariff bill, which be
came a law August 6, 1909. As an income pro
ducing measure the existing tariff bill has
never been exceeded by any customs bill in
the history of the country.
The corporation excise tax, proportioned to
the net Income of every -business corporation
in the oountry, has worked well. The tax
has been easily collected. Its prompt pay
ment Indicates that the Incidence of the tax
has not been heavy. It offers, moreover, an
opportunity for knowledge by the government
of the general condition and business of all
corporations and that means by far the most
important part of the business of the country.
In original aot, provision was made for pub
lication of th* returns.
This provision was subsequently amended by
congress and the matter left to the regulation
of the president. I have directed the issue of
the needed regulations and have made It pos
sible for the publlo generally to know from
an examination of the record, the returns of
all corporations, the stock of which is listed
on any public stock exchange or Is offered,for
Bale to the general public by advertisement
or otherwise. The return* of those corpora
tions whose stock Is not so listed or offered
for sale are directed to be open to the Inspec
tion and examination of creditors and stock-
holders of th* corporation whose record Is
sought. The returns of all corporations are
subject to th* inspection of any government
officer or to the examination of any court In
which the return mad* by the corporation Is
relevant and competent evidence.
The Payne Tariff Act
The schedules of the rates of duty In the
Payne tariff act have been subjected to a (Teat
deal of crltloism, some of It Just, more of it
unfounded, and to much misrepresentation.
The act was adopted ln pursuance of a dec
laration by (ho party which Is responsible
for It that a customs bill should be a tariff
for the protection of home Industrie*, th*
measure of the protection to bo the difference
between the cost of producing the Imported
article abroad and th* cost of producing it at
home, together with such addition to that dif
ference aa might give a reasonable profit t*
the home producer. Th* basis for th* crit
icism of this tariff Is that ln respect to a
number of the schedules the deolared measure
was not followed, but a higher difference re
tained or Inserted by way of undue discrim
ination In favor of ceitain Industries and
manufactures. Little If any of the criticism
of the tariff ha* been directed' against the
protective principle above stated; but the
main body of the criticism has been based
on the charge that the attempt to conform
to the measure of protection was not hon
estly and elncerely adhered to.
Tariff Board .'
The time in which the tariff was prepared
was undoubtedly so short as to make It Impos
sible for the congress and its experts to ac
quire the Information necessary strictly to
conform to the declared measure. In order to
avoid criticism of this kind in the future and
for the purpose of more nearly conforming
to the party premise, congress at Its last ses
sion made a provision at my request for the
continuance of a board created under the
authority of the maximum and minimum
clause of the tariff bill and authorised this,
board to .expend the money appropriated under
my direction for the ascertainment of th*
cost of production at home and abroad of the
various articles included In the schedules of
the tariff. The tariff board thus appointed
and authorized has been diligent In preparing
Itself for the Investigations. The hope of those
who advocated the use of this board for tariff
purposes Is that the question of the rat* of a
duty Imposed shall become more of a business
question and less of a political question, to
be ascertained by expert* of long training and
accurate knowledge. The halt ln business and
the shock to business due to the announcement
that a new tariff bill Is to be prepared and
put Into operation will be avoided by ere
; ating th* schedules one by one as occasion
shall arise for a change ln the rates of each
and only after a report upon the schedule by
I the tariff board competent to make such re
port. It Is not likely the board will be able
to make a report during the present session
of congress on any of the schedules, because
a proper examination Involves an enormous
amount of detail and a great deal of care;
[ but I hope to be able at the opening of the
new congress, or at least during the session
of that congress, to bring to Its attention the
facts In regard to those schedule* ln the
present tariff that may prove to need amend
i ment
i
Congress Must Co-operate
The carrying out of this plan, of course, in
volves the full co-operation of congress In
limiting the consideration In tariff matters to
one schedule at a time, because If a pro
posed amendment to a tariff bill is to involve
a complete consideration of all the schedules
and another revision, then wo shall only re
peat the evil from whloh the • business of
this country has ln times past suffered most
grievously from stagnation and uncertainty,
pending a settlement of a law affecting all
business directly or Indirectly and the effect
of which no wise business man would Ignore
in new projects and new investments. I can
not too much emphasize the Importance and
benefit of the plan above proposed for th*
treatment of tho tariff. It facilitate* the re
moval of noteworthy defects In an important
law without a disturbance of business pros
perity, which Is even more Important to th*
happiness and the comfort of th* people than
the elimination of Instances of Injustice In
the tariff.
The Inquiries which the members of the
tariff board made during the last summer Into
the methods pursued by other governments
with reference to the fixing of tariffs and
the determination of their effect upon trade
show that each government maintains an of
fice or bureau, the officers and employes of
which make their life work the study of the
tariff, matters of foreign and home prices and
cost of articles Imported and the cost of the
tariff upon trade, so that whenever a change
la thought to be necessary In the tariff law
this office Is the source of the most reliable
Information na to the propriety of the change
and Its effect. I am strongly oonvlnoed that
we need tn this government Just such an of
fice, and that It can be secured by making
the tariff board" already appointed a per
manent tariff ' commission with suoh duties,
powers and emoluments a* it may seem wise
to congress to give. It has been proposed to
enlarge the board from three to five. The
present number Is jjonvenlent, but I do not
know that an lncrel** of two members would
be objectionable.
Whether or not the protective policy is to
be continued and the degree of protection
to be accorded to our homo Industries are
questions which the people must decide
through their chosen representatives; but
whatever policy 1* adopted It Is clear that the
necessary legislation should be based on an
Impartial, thorough and continuous study of
facts.
Banking and Currency Reform
The method of Impartial and scientific study
by experts as a preliminary to legislation,
which I hope to see ultimately adopted as our
fixed national policy with respect to the tariff,
rivers and harbors, waterways and Publlo
buildings, also Is being pursued by the non
partisan monetary commission of congress. An
exhaustive and most valuable study of the
banking and ourrency system* of foreign coun
tries has been completed. ■
A comparison of the business methods and
Institutions of our powerful and successful
commercial rival* with our own Is sure to be
of Immense value. I urge upon congress the
Importance of a non-partisan and disinter
ested study and consideration of our banking
and currency system. It 1* Ml* to dream of
commercial expansion and of the development
of our national trade on a scale that measures
up to our matchless opportunities, unless we
can lay a solid foundation In a sound ana
enduring banking and currency system. The
problem Is not partisan, 1* not sectional—lt Is
national.
Th* war department haa within It* Jurlcdlc-
tlon th* management of the army, and In
connection therewith th* coast defenses; the
government of the dependencies ot the Phil
ippine* and of Porto Rico; th* recommenda
tion of plans for the improvement of har
bors and waterways and the execution when
adopted, and by virtu* of an executive order,
th* supervision of . the construction of the
Panama canal.
The general plan ft** an army of the United
States at peace should be that of a skeleton
organization with an excess of trained officers
and thus capable of rapid enlargement by en
listments, to bo supplemented In emergency by
the national mllltla and a volunteer force.
In some measure this plan ha* been adopted by
a very large proportion of cavalry and field
artillery a* oompared with Infantry In the
present army and on a peace basis. An In
fantry force can be trained In six months; a
cavalry or a light artillery force not under
one and one-half or two years; hence the
Importance of having ready a larger number
of the more skilled soldiers.
Militia System
The mllltla system, for whloh congress by
th* constitution Is authorized to provide, was
developed by the so-called Dick law, under
which th* discipline, the tactics, the rank, the
uniform and, the various branches of the
militia are assimilated as far as possible to
those of the regular army. Under the mllltla
law, as th* constitution provide*, th* gov
ernor* of the states appoint the mllltla • offi
cers, but by appropriations from congress
states have been compelled -to comply with
rules of assimilation between th* regular army
and the mllltla, so that now there Is a force
the efficiency of which differ* In different
states, could be Incorporated under a single
command with the regular army and which
for some time each year receives the benefit
of drill and maneuver* under conditions ap
proximating actual military, service, under
the supervision of regular army officers.
I further recommend that congress establish
a commission to determine as early as prac
ticable a comprehensive policy for the organ
ization, mobilisation and administration of the
regular army, the organized mllltla and the
volunteer forces In th* event of war.
Additional Officers
On* of the great difficulties In th* prompt
organization and mobilisation of mllltla and
volunteer forces Is th* absence of competent
officers of the rank of captain to teach the
army, by the unit of the company, the busi
ness of, training soldiers and taking care of
themselves, so as to render effective service.
This need of army officers can only be sup
plied by provisions of law authorizing the
appointment of a, greater number of army of
ficers than are needed to supply the com
mand* with regular officers. There are enough
regular officer* to command the troops now
enlisted, but congress has authorized and the
department has followed the example of con
gress and exercised the authority conferred by
detailing these army officers to duty other
than that of the command of troops.
For Instance, there are a large number of
army officers ssslgned to duty with military
colleges or In colleges ln which military train
ing Is given. Then a large number of offi
cers are assigned to general staff duty and
there are various other places to which army
officers can be and are legally assigned, whloh
take them away from their regiments and
companies. In order that the mllltla of each
state should be , properly drilled and mad*
mora like the regular army, regular army of
ficers should be detailed to assist the ad
jutant general of eaoh state in tbe supervision
of the state mllltla; but this is impossible
unless provision Is made by oongreßs tor a
very considerable Increase ln the number of
company and field officers of the army. A
bill was pending In th* last session of con
gress for this purpose, and 1 earnestly hop*
that In the Interest of th* proper develop
ment of a republican army, an army small ln
the time of peace but passible of prompt and
adequate enlargement ln time of war, shall
become possible under th* laws of th* United
States.
A bill, th* strong argument for whloh can
be based upon the ground similar to that of
the Increased officers' bill. Is the bill for the
Increase of sixty in the army engineers. The
shortness of supply ln such officers delay* Im
portant river and harbor work and Important
fortification work. I earnestly recommend the
passage of this bill, which passed the house
at the last session and is now pending tn
the senate.
Fortifications
I have directed that the estimate* for ap
propriation for th* Improvement of ooant de
fenses ln the United States should lb* re
duced to a minimum, while those for the com
pletion of the needed fortification* at Cor
regldor ln the Philippine Islands and at Pearl
harbor in the Hawaiian Islands should be ex
pedited as much as pobslble. The proposi
tion to make Olongapo and Sublg bay th*
naval base for the Paolfio was given up and
It Is to be treated merely as a supply sta
tion, while the fortifications In the Philippines
are to be largely confined to Corregldor island
and the adjacent islands which command en
trance to Manila bay and which are being
rendered impregnable from land and sea at.
tack. The Pacific naval base has been trans
ferred to Pearl harbor. In the Hawaiian
Islands. This necessitates the heavy fortifi
cation of the harbor and the establishment
of an Important military station near Hono
lulu. I urge that all the estimate* mad* by
the war department for these purpose* be
approved by congressional appropriation.
Philippine Islands
During th* last summer at my request the
secretary of war visited the Philippine Islands
and has described hi* trip ln his report. He
found the islands in a state of tranquillity and
growing prosperity, owing largely to the
change In the tariff laws, whloh ha* opened
the market* of America to the product* of
the Philippines and has opened the Philippine
marketß to American manufactures. The rapid
Increase ln the trade between the two coun
tries is shown ln the following table:
Philippine exports, fiscal years 1908-1910, ex
clusive of gold and silvers
Fiscal Year. U. S. Other*. Total.
1908 $10,324,233 $22,493,834 832,818,667
1909 10,216,331 20.778,232 30,993,803
IMO 18,741,771 21,122,398 39,864,169
(Koto — Latest monthly returns show ex
ports for the year ending August, 1910, to the
United States, {20,035,902, or 49 per cent of
the $41,076,738 total, against $11,081,276 to the
United States, or 34 per cent of the $32,183,871
total for the year ending August, 130 J.)
Philippine lmp6rts fiscal years 1808-1910, ex
clusive of gold and silver and government
supplies: .
Fiscal Year. U. S. Others. Total.
1908 $5,079,487 125,838,870 $80,918,857
1909 4,691,770 28,100,627 , 17,792,897
1910 10,776,301 26,292,829 37,087,630
(Note— monthly returns show import*
for the year ending August, 1910, from the
United States, (11,616,982, or 80 per cent of
the 139,025,667 total, against $6,193,419 from the
United States, or 18 per cent of the $28,948,011
total for th* year ending August, 1908.)
t .
Porto Rico
The year has been one of prosperity and
progress ln Porto Rico. Certain political
changes are embodied In the bill ■'To pro
vide a civil government for Porto Kloo and
for other purposes," which passed the house
of representatives on June 15, 1910, at the
last session of congress and 1* now awaiting
the action of th* senate.
The importance of those feature* of this
bill relating to public health and sanitation
cannot be over-estimated. The removal from
politic* of the Judiciary by providing for th*
appointment of the municipal Judge* is ex
cellent, and I recommend that a step further
be taken by providing therein for the appoint
ment of secretaries and marshal* of th*»*
courts.
I believe that th* provision In the bill for
a partially elective senate, the number of
eleven members being progressively Increased
la unwise and that the composition *of the
senate a* provided in tb* bill as Introduced In
th* house far better meat* condition* •list
ing in Porto Rico. This la an important meaa-
ur* and I r*oommend It* early consideration
and passage.
Rivers and Harbors
I have already expressed my opinion to con
gress In respect to the character of the rlv*r
and harbor bills whloh should be enacted into
law. and I have exercised as much power
a* I hay* under the law In directing the chief
of engineers to make his reports to congress
conform to the need* of the committee fram
ing such a bill in determining which of th*
proposed Improvements Is the more Important
and ought to be completed first and promptly.
Canal Panama
At the Instance of Colonel Ooetnals, the army
engineer officer ln charge of the work on
the Panama canal, I have Ju»t mad* a visit
to the Isthmus to inspect the work done and
to consult with him on the ground a* to
certain problems which are likely to arts* in
the near future. Th* progress of th* work
Is most satisfactory. If no unexpected ob
stacle present* Itself the canal will be com
pleted well within the time fixed by Colonel
Uoethalß, to wit, January 1. 1916, and within
the estimate of cost, $375,000,000.
Among questions arising for present solu
tion Is the decision whether th* oanal shall be
fortified. I have already stated to the congress
that I strongly favor fortification and I now
reiterate this opinion and ask your consider
ation of the subject In the light of the report
already before you made by a competent board.
If, ln our discretion, we believe modern for
tifications to be necessary to . the adequate
protection and policing of the canal, then It
1* our duty to construct them.
Vila have built th* canal. It I* our prop
erty. By convention we have Indloated our
desire for, and Indeed undertaken, its uni
versal and equal use. It Is also well known
that <ne of the chief objects ln the construc
tion of the canal has been to increase th*
military effectiveness of our navy. Failure to
fortify th* canal would leave the attainment of
both these alms In the position of right* and
obligations which I should be powerless to
enforce and which could never In any other
way bo absolutely safeguarded against a des
perate and Irresponsible enemy.
Trade Will Increase
In addition to the benefit to our naval
strength, the canal greatly Increases the trade
facilities of th* United States. It will, un
doubtedly cheapen the rates of transporta
tion In all freight between the eastern and
western seaboard, and It will greatly increase
that trad* by reason of the reduction in It*
cost. Then, If we are to have a world canal,
and If we are anxious that th* routes of th*
world* trad* shall be through the Panama
canal, we must recognize that we have an
active competitor in the Sues canal. Then,
too, there are other means of crossing th*
Isthmus— the Tchuantepec railroad and by
other railroads and freight route* ln Central
America to the Atlantic side.
In all these case* th* question whether th*
Panama canal is to be used and Its tonnage
Increased would be determined later by the
charge for It* use. My own Impression la
that the tolls ought not to exceed 31 per net
ton. On January 1, 1911, the tolls ln the Sues
canal are to be seven francs and twenty-five
centimes for one net ton by Sues canal meas
urement, which Is a modification Of Danube
measurement. A dollar a ton will secure
under the figures above a gross Income from
the Panama canal of nearly $7,000,000. Th*
cost of maintenance and operation is esti
mated to exceed $3,000,000. Ultimately, of
course, with the normal Increase In trade,
th* Income will approximate th* Interest
charge* upon th* Investment. On the whole
1 should recommend that within certain limits
the president be authorised to fix the tolls ot
th* canal and adjust them to what seems to
be commercial necessity. The Inquiries al
ready made of the chief engineer of the canal
show that the present consideration of this
question la necessary In order that the com
merce of the world may have time to adjust
itself to the new conditions resulting from
the opening ot this new highway.
Control of Canal
The next question that arises 1* that to the
, maintenance, management and general control
of the oanal after It* completion. It should
be premised that It Is an essential part of
our navy establishment to have the coal, oil
and other ship supplies, a drydock and repair
shops, conveniently located with reference
to naval vessels passing through the canal.
Now If th* government, for naval purposes,
Is to undertake to furnish these convenience*
to the navy, and they are conveniences equally
required by commercial vessels, there would
teem to be strong reasons why the govern
ment should take over and include In It*
management the furnishing not only to th*
navy but to the public, drydook and repair
■hop facilities and the sal* of coal, oil and
other ship supplies.
The maintenance of a lock canal of this
enormous size In a sparsely populated country
and In the tropics where the danger from
disease is always present and require* a large
and complete and well trained organization
with full police power* exercising the utmost
care. . The visitor to th* canal who I* Im
pressed with th* wonderful freedom from
tropical diseases on the Isthmus must cot be
misled as to the constant vigilance that Is
needed to preserve this condition. The vast
machinery of the locks, the necessary amount
of dredging, the preservation of the bank*
of the canal from slides, the operation and
maintenance of the equipment of the railway—
will all require a fore* not, of count*, to he
likened In any way to the present organiza
tion for construction, but a skilled body of
men who can keep in a state of usefulness
this great Instrument of commerce. Such an
organization makes it easy to include within
It* function* the furnishing of drydocks, fuel,
repairs and supply facilities to the trade of
the world. These will be more essential at
the Isthmus of Panama than they are at
Port Bald or Suez, because there are no depots
for coal, supplies and other commercial ne
cessities within thousands of miles of th*
Isthmus. ,
•• ■<
Discrimination of Patrols
Another Important reason why these Insular
duties may be undertaken by th* government
Is the opportunity for discrimination between
patrols of the canal that Is offered wher*
private concession* are granted for the fur
nishing of these facilities. Nothing would
create greater prejudice- against the canal
than the suspicion that certain lines of traf
fic were favored tn the furnishing of supplies
or that the supplies were controlled by any
large Interest that might have a motive for
Increasing th* cost of the use of the canal.
It may be added that the termini are not
ample enough to permit th* fullest competition
ln respect to the furnishing of these facilities
and necessities to the world's trad* even If
it were wise to invite such competition, and
the granting of tb* concession would neces
sarily, under these circumstances, take on tha
appearance of privilege or monopoly.
I cannot close this reference to the canal
without suggesting as a wise amendment to
th* interstate commerce law a provision pro
hibiting Interstate commerce railroad* from
owning or controlling ships engaged ln th*
trad* through the Panama canal. I believe
•uob a provision may be needed to save to the
people of the United States the benefits of th*
competition In trade between the eastern and
western seaboards which this canal will be .
constructed to secure. .
Department of Justice
The duties of th* department of Justice
have been greatly Increased by legislation of
congress enacted ln the interest ot the general
welfare of the people and extending its activ
ities Into avenues plainly within the const!
tutional Jurisdiction, but which It has not been
thought wise or necessary for | the general
government heretofore to occupy.
I am glad to say that under the appropria
tion made for the department the attorney
general ha* so Improved It* organization that
a vast amount of litigation of a civil and
criminal character has been disposed of during I
the current year. I invite especial attention
to th* prosecutions under the federal law of
th* so-called ."bucket shops," and of tbos*
schemes to defraud In which th* us* of the)
mall la an essential part of tha fraudulent