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t ,.sc . PRESIDENT WI Chief Executive Details His Plans For National Preparedness Disloyalty : at Home Denounced Urgent Need of Our Own Ships. l OLLOWI ri " la-toe-mesW4fH v President WI Ison ' delivered , at ' " a joint session of the senate and bouse at the beginning of tbe ' Gentlemen of tbe Congress Since I last bad. tbe privilege of addressing you on tbe state of the Union the war of nations on the other side of the sea, which had then only begun to diselosei ita nniAnfmici nrnitAPflnnu has Avta-lrl- ' ii efl its threatening and sinister scope until it has swept within its flame ome portion of every quarter of the globe, not excepting our own hemi sphere, has altered tbe whole face of international affairs, and now presents a , prospect of reorganization . and re construction such as statesmen and peoples have never been called upon to attempt before.. . . Studiously Neutral. We nay e stood, apart, studiously . neu tral. It was our manifest duty to do m. Sot only did we" have no part "of interest in be policies which seem to have brought the Conflict on; "if" was necessary, If a universal catastrophe was to be avoided, that a limit should be set to the sweep of destructive war and that some part of tbe great fam ily of nations should keep the process es of peace alive, If only to prevent collective economic ruin and the break down throughout the world of the in dustries by which its populations are fed and sustained. It wus manifestly the duty of the self governed nations of this hemisphere to redress, if possi ble, tbe balance of economic loss and confusion in the other, if they could do nothing more. In the day' of read justment and recuperation we earnest ly bope and believe that they can be of Infinite service. In this neutrality, to which they ivere bidden not only by their sep irate life and their habitual detach ment from the politics of Europe, but also by a clear perception of interna tional duty, the states of America have "become conscious of a new and more vital community of interest syid moral partnership in affairs, more clearly conscious of the many common sympa thies and interests and duties - which ' bid them stand together. There was a time in the early days of pur own great nation and of the re publics fighting their way to independ ence In Central and South America when the government of the United States looked upon itself as in some sort the guardian of the republics to the south of her as against any en croachments or efforts at political con trol from the other side of the water; felt it its duty to play the part even without invitation from them, and I think that we can claim that the task was undertaken with a true and disin terested enthusiasm for the freedom of the Americas and the unmolested self government of her independent peoples. But it was always difficult to maintain such a role without offense to the pride of the peoples whose free dom of action we sought., to. protect and without' provoking serious mis conceptions of our motives, and , every thoughtful man of affairs must wel come the altered circumstances of the new day in whose, light we now stand, when there is no claim of guardian ship or thought of wards," but instead ft fall and honorable association as of partners between ourselves" and our neighbors in the interest of 'all Amer ica; north and south. .... Our concern for the independence and prosperity of the states of Central' and ''South '''America is not altered. We retain unabated tbe spirit that hns inspired -ns-throughout the whole life of our government and which was so- frankly put into words by President Monroe. We still mean always to make n common cause of national independence and of political liberty in America. But that purpose is now better understood so far as it concerns ourselves. It is known not to l- a sclflsli purpose. It Is known to have In it no thought of taking advan tage of any government in this hemi sphere or playing its political fortunes for our own benefit. All tbe govern ments of America stand, so far as we are concerned, upon a footing of genu ln eijuality and unquestioned inde pendence. Put to the Test In Mexico. We have been put to the test in the ase of Mexico, and we have stood the test Whether we have benefited Mex ico by the course we have pursued re mains to lie seen.. Her fortunes are in her own hands. But we have at least proved that, we will not take advan-. tage of her in her distress and under take to impose upon bar an order and government of our own choosing. ' Lib erty is often a tierce and intractable thing, to which no bounds can be set and to which no bouuds of a few men's choosing ought ever to be set. Every American who has drunk at the true fountains of principle and tra dition must subscribe without reserva tion to the high doctrine of the Vir ginia bill of rights, which in tbe great days In which our government was set op was everywhere among us accept ed as the creed of free men. That doc trine is. "That government is or ought to be instituted for the common bene fit, protection and security of the peo ple, nation or community;" that . "of all the various modes and forms of government, that is the best which is "unable of producing the greatest de- gree-of - happiness- and' safety and is most; effectually secured i against; the danger of maladministration, and-that when any government shall be found inadequate or contrary to these pur poses a majority of tbe community hath an indubitable, inalienable and indefeasible right to reform, alter or abolish it in. such manner as shall be judged most conducive to the public weal." We have unhesitatingly ap plied that heroic principle to tbe case of Mexico and now hopefully await the rebirth of the troubled republic, which had so much of which to purge itself and so little sympathy from any outside quarter in the radical but nec essary process. We will aid and be friend Mexico, but we will not coerce her, and our course with regard to her ought to be sufficient proof to all Amer ica that we seek no political suzerainty or selfish control. - ; The moral is that the statesrof Amer ica are not hostile rivals, -but co op erating friends, and that their grow ing ' sense- of community - of interest, alike in matters political and in mat ters economic, is likely to give them a new significance as factors in interna tional, affairs and in the political his tory of the world. It presents them as in a very deep and true sense a unit in world affairs, spiritual partners, standing together because thinking to gether, quick with common sympathies and common ideals.. Separated they are subject to all tbe cross currents of the confused polities of a world of hos tile rivalries; unitea in spirit and pur pose they cannot be disappointed of their peaceful destiny. , None of the Spirit of Empire. This is pan-Americanism. It has none of the spirit of empire in It. It is the embodiment, tbe effectual embodiment, of the spirit of law and independence and liberty and mutual service. A very notable body of men recently met in the city of Washington, at the invitation and as the guests of this government, whose deliberations aro likely to be looked back to as marking a memorable turning point In the his tory of America. They were - repre sentative spokesmen of the - several independent states of this hemisphere and were - assembled to discuss the financial and commercial .relations" of the republics of the two continents which nature and political fortune have' so intimately linked together. 1 earnestly recommend to your perusal the reports of their proceedings and of tbe actions of their committees. You will get from them. I think, a fresh conception of the ease and intelligence and advantage with which Americans of both continents may draw together in practical co-operation and of what the material foundations of this hope ful partnership of interest must con sistof how we should build them and of how necessary it is that we should hasten their building. There Is, I venture to point out. an especial significance just now attach ing to this whole matter of drawing the Americas together in bonds of hon orable partisanship and mutual advan tage because of the economic readjust ments which the world must inevitably witness within the next generation, when peace shall have at last resumed its healthful tasks. In the perform ance of these tasks I believe the Amer icas to be destined to play their parts together. lani. interested to fix your attention on this prospect now because unless you . take it within your view and permit, the Jfu U significance of it to command your thought I cannot find the right light in which to set forth the particular matter that lies at the very front of my whole thought as- I address you today. I mean national defense. No one who really comprehends the spirit of the great people for whom we are appointed' to speak can fall to per ceive that their passion is for peace, their genius best displayed in the prac tice of the arts of peace. Great democ racies are not belligerent. They do not seek or desire war. Their thought is of individual liberty and of tbe free labor that supports life and the un censored thought that quickens it. Conquest and dominion are not in our reckoning or agreeable to our princi ples'. But just because we demand un molested development and the undis turbed government of our own lives upon our own principles of right and liberty, .we resent, from, whatever quarter it may come, the aggression we ourselves will not, practice. . We insist upon security In prosecuting our self chosen lines of national development. We do more than that. We demand it also for others. We do not confine our enthusiasm for Individual liberty" and free national development to the inci dents and movements of affairs which affect only. ourselves. We feel it wher ever there is a people that tries to walk in these difficult paths of independence and right. From the first we have made common cause with all partisans of liberty on this side the sea and have deemed it as important that our neigh- j bors Should be free from all outside domination as that we ourselves should be; have set America aside as a whole for the uses of independent nations and political freemen. ; j ' Out of such thoughts grow all onr policies. We .regard war merely, as a means of asserting tbe rights of a peo ple against 'aggression. And we are as fiercely : jealous of coercive or, dicta torial power'' within . our ; own - nation as - of aggression frontf wttbout.' We will not maintain a standing; ariny ex cept for uses .which are as necessary in times of peace as in times, of war, and we shall always aee to it that our military peace establishment , is Ano' larger than -ia actually and : conttenous ly Deeded S oxL thejises of jjbj iya. U Jrblcji no enemies move against us. ; But we da believe fat a . body.: of , free citizens ready and sufficient ; to take care .of themselves tswd of ; their governmeirts which they have set up to, serve. them. In our constitutions themselves we have commanded that "the right of the people to keep and 'bear arms shall not be infringed," and our confidence has been that our safety ' in times og danger would lie in' the rising of the nation to take care of Itself, as the farmers rose at Lexington.; .''.' ' . . ' ...'.--' t ; War Disciplined Might. But war has never been a mere mat ter of men and 'guns. v It is a. thing of disciplined -might. If our citizen are ever to fight effectively upon'; 4 sudden summons, they must , know bow modern fighting is done, and what to do when the - summons., comes to render themselves immediately ' avail able and immediately effective" V And the government must be their servant in this matter,- must supply- them' with the training they need, to take care of themselves ;andof-lt The ... military arm of . their: government, which the will not allow to direct them, they may properly use to serve them and make their .Independence secure, .and ' not their own independence merely, but the. rights "also of those with - whom tney nave made common cause, should they.ajso be put in jeopardy. ,2 They must be : fitted to "play . the great role in the world,' and . particularly in this j nemispnere. ror wnicn rney are quali fied by principle and by chastened am bition; to play. ' ..-..'. v j ' It is with these ideals in- mind that the plans of the department of war for more adequate national defense were conceived which will be laid before you, and which I urge you to sanction and put into effect as soon as they can be properly scrutinized and discussed. They seem to me the essential first steps, and they seem to me for the present sufficient. They contemplate, an increase of the standing force "of the regular army from its present strength of 5.023 ottl-. cers and lOU.OST enlisted men of " all services to a strength of 7,130 officers and 134,707 enlisted menf or1 vl4t,843 all told, all services, rank and, file, by the. addition of fifty -two .companies of: coast artillery, fifteen companies or en gineers, ten regiments of infantry, four regiments of field artillery and four aero squadrons, besides-730 officers re quired for a great variety of extra service, especially the all important duty of training the citizen' force 'of which I shrill presently speak. 702 non commissioned; officers for service tu drill, recruiting and the like and tbe nei-essary .quota of enlisted . men for the quartermaster "corps." the 'hospital corps, the -ordnance department and other similar auxiliary services. These are the additions ietesary to render the army adequate for its present du-. ties, duties which it has to' perform not only upon our own continental i ousts, and borders and at our interior i army posts, but also In the' Philippines, I in tliu lloivnlloi. 1.1..,... at l mus and in Porto -Itico. By way of making the country ready to assert some ;irt of its real 'power' promptly and upon J a ' larger' scale should , occasion arise the plan also contemplates supplementing the uriny by a force of. : 400.000, disciplined . citu zens, raised in increments of 133.000 a ' year throughout a period of three years. This it is proposed to do b.va process of enlistment tinder wh!cntiie serviceable. men:-.of the country would, be asked to bind jtbetnseiv'es to serve j with the colors for purpose's of train-1 ing for-xbort periods throughout three years and to come to the colors at cull' at" any time throughout an additional "furlonfrh' period of three years. : This force of 400.000 men would be pro vided with personal accouterments as fast, as enlisted and their equipment for the field made ready to be supplied at any time. Tbey would be assem bled for training at stated intervals at convenient places in association with suitable units of the regular army. Their period of annual training would not necessarily exceed two months in the year. : ' K- It would depend upon tbe patriptic feeling of the younger men of the country whether they , responded to such a call to service or. not. It would depend upon the patriotic spirit of tbe employers of the country wheth er they made it possible for the younger- men in their employ to respond un der favorable conditions or not .1 for one do not doubJt.the .patriotic devotion either of our young: men or-of those who give them employment those, for whose benefit and protection they would in ; fact; enlist. i, li would look forward to the success of such' an ex periment with entire confidence. At least, so much by way of prepara tion for defense seems to me to be ab solutely imperative now. We cannot do less, v :; . "' '.;?- The program which will be laid be fore you by the secretary of the navy is similarly conceived.. It Involves only a shortening of the time within which plans long matured shall be carried out, but. it- does make definite and ex plicit a program which has heretofore been only ' implicit, ; held in ' the' minds of the committees on naval affairs arid disclosed in '. the debates of," tbe 'two houses, but nowhere formulated or for mally adopted. f It teems to m very clear, tbat; it, wUl be ,' to the advantage of 'fie couptty foc.tbe congress to adopf a 'comprehensive' plan'- for 'putting; jt'be navy dpdn - a Vflnal 4 footing" of- strength and -efllcfency. and'- to press' that plan to' comaletjon within ! the - next . five years. We hve always lookefi to the navy of; te coqntry as 'our first, and chief'-line o defease; .we 'have always seen; lt to he'- our manifest: course of phrdence .to-' be .strong :on? the' stasl cYea byyear.we have been creating a navy whlch now. ranks" very - high 'in deed among tie navies of the 'maritime nations. We should now definitely de termine "how we shall; complete what we have begun and how soon. ' ' ' '' -' ; ' The Navy Program. . - .The program to be . laid before yu contemplates . the 'l construction ; within ifive years of ten battleships, six bat tle 'cruisers, ten' scout cruisers, fifty destroyers,' fifteen fleet submarines, eighty-five coast submarines, four gun boats, pqie hospital ship, two ammuni tion ships, two f uel .oil ship and one repair ship. It is proposed that of this number we shall the first year provide for the construction of two battleships two, battle cruisers, three scout cruisers, fifteen destroyers, five fleet submarines, twenty-five coast submarines, two gun boats aid one hospital ship; the second year two battleships, i one scout cruiser, ten-destroyers, four fleet4 submarines, fifteeij coast submarines, .one gunboat and .ne: fuel U 8hp:; tbe third yer two battleships, one battle cruiser, two scout cruisers, -five 'destroyers, two fleet submarines, and "fifteen' coast subma rines; the fourth year two battlee hips, two battle1 cruisers, two scout cruiser., ten destroyers,-.two - fleet .'submarines, fifteen coast, submarines, one ammuni tion ship ahdfione fnejij "s.hlpi.nd the fifth. year two battleships- one rbat tie cruiser.':' two scout .cruisers ten de stroyers, two. fleet submarines, fifteen roast submarines: ope gunboat, one am muhltiofl i ship find one repair ship. The: secretary of the, navy, is asking also of the' Immediate addition to the personnel of the navy of 7.300 sailors, 2.500 Apprentice seamen and 1.500. -ma-rinesi ,; This increase would be suffi cient to carte, for the ships which are to be completed .wit-bin the fiscal, year 1917 and also for the number' of men which must -be nut In training to man the' ships which will be completed early in 1018, lt is also necessary that the n.umber.of mUlshipnien at tbe Na val academy at Annapolis should be increased by at .least 300 in order that t.he force- of officers should be more rapidly ad.ded to. and authority is asfe-' ed" to appoint, for engineering dutltS only.-'approved graduate's of engineer ing, colleges,, and for .service in tb8 avi ation corps. iC ccrtaiiutiumber, of men taken from civil, life. '" ; If,tlils" fftll program should be carried out we should have built or building In K?U1. according to the estimates of sur vival . and -standards of classification followed by.tlie-geneml Itoardt of the department nneffectlve, nayy, consist ing of 27 battleships of the first line. 6 liattle cruisers. 25-battleships of the secoml Iiite7 10 armored cruisers. 13 scout cruisers, ,3 .first class cruisers. . 3 second class cruisers, to third class cruisers, ,108 destroyers. 18. fleet sub marines. 157 coast submarines, 6 mon itors; 20 fgunboats, -4 supply ships' 15 f pel ships. 4 transports, .3 tenders to torpedo vessels, 8 vessels of special types and two ammunition ships. This would be a navy fitted to our needs and worthy of our traditions. . But, armies and Instruments of war are' only part of. what has 'to be con sidered if ,e are' o -onskler the su premo matter ot natfbnal self sufficien cy and - security . in all - Its asjtects. There a re. other.' great matters which will be thrust - upon ; our " attention whether we will or not. .There is, for example, a very., pressing .question of trade . and. .shipping involved-Jtu this great .proplem of national adequacy. It is necessary for, many weighty rea sons of national- efficiency and devel oi)ineutvtbat' wp should have a great merchant marine.. The great merchant fleet - we j nee used '.to. make us rich, that great bod of sturdy 'sailors who used t carry our flag Into every sea, and who were the pride and often the bulwark of the nation, we have almost driven out of existence by inexcusable neglect arid indffference and by a hope lessly bjind and provincial policy, of , so1 cal)d ' economic .pTptectlon. It - is high time e repaired our mistake and resumed our commercial ' independence on the seas.. . -. - Ships f Peace Needed. . For it is a question of Independence.' If other nations go' to war or seek, to hamper, each other's commerce our merchants,' it seems, are at their mer cy to' do- with' as they please. ' We must use, their: ships and use them . as. they determine: v? We have not ships enough of our ' o,rn. - W-e cannot -handle our own commerce onthe sipas. Our- inde pendence Is provincial,' and is bnly on -land and.wtbln-our own borders. ; We are4 no " MHely to . be . permitted ..to - use even 'the ships of other nations in 'ri valry of their on. trade "arid are with out means t, to efcfend 'our 'commerce even .where s the ;do- are wide open and' our goods' desired.'- Such- a situa tion is" not to "be endured. It is of capi tal Importance not. onlyj that tbe Unit ed 8tatfs. should b its p wn carrier on" tb( seas and enjoy the economic 'iade pendence which . only i an adequate medHiaBtr marine .would - give" it, i but also that' the' American hemisphere' as a; whole should -enjoy a like independence-and self 'sufficiency, if - It is not to- be drawn Into' the. tangle of Euro pean affairs .Without" such independ ence : the; whole'- qiiestiov;' of onr polit ical unity-'and . self; determination ' 'Is very aeitousfy clouded and'compllcatcd Indeed. V j''r- "' - ? . ' Moreover,' we. can develop no true or ef feetfv ' American poller "without ships, of our own not -ships of war. but ships of peeee. csrrylnm- soods and oerrytnar much more; creating friendships and -rendering Indispensable. Mrvicee to all Interests on juris side the water. They must move constantly- back- and forth between the Americas.' The)r are i the only .shuttles that can; weave the delicate, fabric of sympathy,' comprehension, confidence ' and mutual dependence m which we wish to clothe our policy, of America for Anaerl cana : - ' . . . . - The task of building up an . adequate merchant marine for America private cap ital i must ultimately undertake and achieve., as. It has undertaken and achiev ed every other like task among- ua In the past .wlth admirable enterprise, intelli gence and-vigor.", and it seems to me a manifest 'dictate of wisdom that we should promptly, remove every legal obstacle that may stand In the way of thla much to be desired revival of our old independence and . should i facilitate in every possible way. the buildins. purchase and American feert'tration ' of ships. . But capital cannot accomplish thla great task' of a. sudden. It ' must embark upon It, by decrees, as the opportunities of trade develop. Some thing must be done at once, done to open routes and develop opportunities . where they' are as yet undeveloped, done to open the arteries of trade, where the currents have not yet learned : to run, especially between the two American continents, where they are. singularly enough, yet to be created and quickened, and It ia evi dent that only the government can un dertake such beginnings and' assume the Initial financial risks. . When the risk has passed and private capital begins to find Its way In sufficient abundance Into these hew channels the government may with draw. But it cannot omit to begin. It should take the first steps, and ahould take them at once. Our goods must not 1e piled up at our ports and stored upon :ide tracks' in freight cars which are dat jy needed on the roads, must not be left without means of transport to any foreign Quarter. . We must not await the permis sion'" .of foreign shipowners and foreign governments to send them where we will. ' Government Owned Ships. With a view, to meeting these pressing necessities .Of our commerce and availing ourselves at the earliest possible moment of the present unparalleled opportunity of linking, the two Americas together in bonds of mutual interest and service, an opportunity T Which ; may never return again if we' miss it now; proposals will be made to. the present congress for. the purchase or, construction., of ships to be owned and directed by the government similar to those ' made to the Inst con gress, but modified in some essential par ticulars. 1 recommend these proposals to you for your prompt acceptance with the more confidence because every month that has elapsed since the former propo sals were -made has made the necessity for such action more and more manifest ly imperative. That need was then fore seen: .It is now. acutely felt and every where realized by those for whom trade Is Waiting, but: who can' And no convey ance for their goods.'. I am not so much Interested in- the particulars of the pro gram us I anv In taking Immediate ad vantage of the great opportunity which awaits us if we will but act in this emer gency. In this matter,' as in all others, a spirit of common counsel should prevail, and out of it. should jme an early solu tion cf this pressing problem. There Is: another matter which seems to me to be very Intimately associated with-the question of national safety and preparation tor defense; "That Is our-policy, toward, the Philippines end the people qf Porto Rico.- Our treatment of them and their attitude toward us are mani festly f- the first consequence in' the de velopment of our duties In the world and fltv getting a .free hand to perform " those duties. We must be free from every un necessary burden or embarrassment, and there Is -no better way to be clear of em barrassment 'than -to fulfill our promises and promote the interests of those de pendent on us to the utmost. Bills for the alteration 'and reform of the govern ment of the Philippines and for rendering fuller political justice to the people of Porto Rico - were submitted to the Sixty third ' congress: " They ' will be submitted also to you. I need not particularize their details.. You are most of you already fa miliar with, them. But I do recommend them to your early adoption with the sin cere conviction that there are few meas ures you ' could adopt which Would more servleeably clear . the, way for the great policies By Which we wish to make good, how and always, our rljtht to lead in en terprises of peace and. good will and eco- nomlc and political . freedom. Counting the Cost. .'The plans for the armed forces of the nation. which I have outlined and for the general policy 'of adequate preparation for mobilization - and ' defense involve." of. course, very large additional expenditures of money, expenditures which will consid erably exceed, the-estimated revenues, of the, government.. It, is made. my. duty by rlaw whenever -the estimates of expendi ture exceed the estimates of revenue to -call ; the 'attention of the congress to the fact and suggest any means of meeting -rhe-dettciencjrthat lt 'may be' wise br pos sible for: me to suggest. I am ready to believe that it would be my duty- to do so In-any case. and. I feel particularly bound to speak of the matter when it ap pears that the - deficiency, will arise di rectly, out of the adoption by the con gress of measures which I myself - urge ft to adopt. ' Allow- me therefore to speak briefly of the present' state of the treas ury and of the fiscal problems which the next year will probably disclose. . On the 30th of June last there was an available balance In the general fund of the treasury of $104,170,105.78. The total es timated receipts for the year 1916. on the assumption - that the emergency revenue measure passed by. the last congress will not be extended beyond its present limit, the 31st of December, 1915. and that the present duty of 1 cent per pound on sugar will be discontinued after the 1st of May, 19ft. will - be S67O.365.600. The balance of June -last and' these estimated revenues come therefore to a grand total of $774. 636.60S.78. The total estimated disburse ments for the present, fiscal year. Includ ing twenty-five millions for the Panama canal, . twelve millions for probable defi ciency appropriations and $50,000- for mis cellaneous debt redemptions, will be $753. 891,000, and the balance in the general fund of the treasury. will he reduced to $20,(44.-06.78.- The 'emergency revenue act if con tinued 'beyond Its present time limitation .would. produce during -the half year then remaining about forty-one millions. - Tbe duty jof I - cent " per pound on sugar If continued1 would" produce during the two months., of .the -fiscal year remaining after the . .1st of May - about fifteen millions. These two sums,", amounting - together to fifty-six millions, if added to the revenues of the second' half of the fiscal year would yield the-treasury at the end of the year an available -balance, of- $76.644,806.78.." -i, The additional revenuea required to carry-out the program of military and naval preparation of - which1 I have' spoken would, ' aa at ' present ' estimated, be for the' fiscal year 191? $98,800,000. Those fig ures, taken, with the figures for -the pres ent fiscal year which I have already giv en, 'disclose our financial problem for the' year- Assuming- - that the taxes Im posed by. the emergency revenue act and the present duty on-sugar-are to be dis continued '. and that, thev balance at the cjoee . of the- present ; fiscal year . will . be only, m$4tS.?8, that the disbursements for the Panama canal will again be about VS.W000 and .that the additional expen ditures 'for- the .army and .navy are au pjortsed by the congress, the deficit in the general fund of the. treasury on the 30th of -June, 1917,. will be nearly $235,000,000. To this sum at least ts0.008.00O should Toe added to represent a safe working bal ance for the treasury and $12,000,000 to In clude the usual deficiency estimates In 1917, and these additions would make a total deficit of some $27.000,000. - If the present- - - taxes ' . shoujd . be continued throughout this year and the next, how ever, there would be a balance in the treasury, of. some $7S,SOO,000 at the end of the present, fiscal year and a deficit 'at the end of the next year of only some $50.000.000. " or. reckoning- In tsz.000.000 for deficiency appropriations and a safe treasury-balance at the end of the year, a total deficit of some SlU.000.OOu. The ob vious moral of the figures Is that it is a plain counsel of prudence to continue all of - the present taxes or their equivalents and confine ourselves to the problem of providing $112,000,000 of new revenue rath er than $37,000,000. ' . Millions of Bonds. How shall we obtain the new revenue? We are frequently reminded that there are many millions of bonds which the treasury la authorised under existing law to sell to reimburse the sums paid out of current revenues for the construction of the Panama canal, and It ia true that bonds for the amount of $232,432,000 are now available for that purpose. Prior to 1913 $138,000,000 of these bonds had actually been sold to recoup the expenditures at the isthmus, and now constitute a con siderable Item of the public debt But I for one do not believe that the people of this country ' approve of postponing the payment of theinj bills. . Borrowing money Is shortsighted finance. It can be Justi fied only when permanent things are to be accomplished which many generations will certainly benefit by and which It seems hardly fair that a single generation-should psy for. The objects we are now proposing to spend money for cannot be so classified, except in the sense that everything wisely done may be said to be done In the interest of posterity as well as in our own. It seems to me a clear dictate of pYudent statesmanship and frank finance that In what we are now. I hope, about to undertake we should pay as we go. The people of the country are entitled to know Just what burdens of taxation they are to carry and Jto know from the outset now. The new bills should be paid by Internal taxation. To what sources, then, shall we turn? This Is so peculiarly a question which the gentlemen of the house of representatives are expected under the ' constitution to propose an- answer to that you will hard ly expect me to do more than discuss It In very general terms. We should be fol lowing an almost universal example of modern governments If we were to draw the greater part or even the whole of the revenues we need from the Income taxes. By somewhat lowering the present limits of exemption 'and the figure at which the surtax shall begin to be Imposed and by Increasing step by step throughout the present graduation the surtax itself, the Income taxes as at present apportioned would yield sums sufficient to balance the books of the treasury at the end of the fiscal year 1917 without anywhere making the burden unreasonably or oppressively heavy. The precise reckonings are fully and accurately set out In the report of the secretary of the treasury which will be immediately laid before you. Tax on Gasoline. And there are many additional sources of revenue which can justly be resorted to without hampering the industries of the country or . putting any too great charge upon individual expenditure. A 1 per cent tax per gallon on gaaoXie en-1 naphtha would yield, at the prcssuv esti mated production. $10,000,000, a tax of SO cents per horsepower on automobiles and internal explosion engines $15,000,000. a stamp tax on bank checks probably $18, 000,000, a tax of 25 cents per ton on pig Iron $10,000,000. a tax of 60 cents per ton on fabricated iron and steel probably $10,000. 000. In a country of great Industries like this it ought to be easy to distribute the burdens of taxation without making them anywhere bear too heavily or too exclu sively upon any one set of persons or un dertakings. What is clear is that the In dustry of this generation should pay the bills of this generation. I have spoken to you today, gentlemen, upon a single theme, the thorough prepa ration of the nation to care for its own security and to make sure of entire free dom to play the Impartial role in this hemisphere and in the world which we all bf ; vc to have been providentially assign ed to it. I have had in my mind no thought of any immediate or particular danger arising out of our relations with other nations. We are at peace with all the nations of the world, and there is rea son to hope that no question In controver sy between this and other governments will lead to any serious breach of amica ble relations, grave as some differences of attitude and policy have . been and may yet turn out to be. I am sorry to say that the gravest threats against our national peace and safety have been uttered with in our own. borders. There are citizena of the United States, I blush to admit, born under other flags, but welcomed under our generous naturalization laws to the full freedom and opportunity of America, who have poured the poison of disloyalty Into the very arteries of our national life, who have sought to bring the authority and good name of our government into con tempt, to destroy our industries wherever they thought it effective for their vindic tive purposes to strike at them and to de base our politics to the uses of foreign in trigue. Their number is not great as com pared with the whole number of those sturdy hosts by which our nation has been enriched In recent generations out of virile foreign stocks, but It Is great enough to have brought deep disgrace upon us and to have made it necessary that we should promptly make use of processes of law by which we may be purged of their corrupt distempers. Disloyalty Denounced. America never witnessed anything like this before. It never dreamed It possible that men sworn Into Its own citisenship. men drawn out of greet free stocks such as supplied some of the best and strong est elements of that little, but how he roic, nation that in a high day of old staked its very life to free Itself from ev ery entanglement that had darkened the fortunes of the older nations and set up a new standard here that men of such origins and such free choices of allegiance would ever turn in malign reaction against the government and people who had wel comed and nurtured them and seek to make this proud country once more a hot bed of European passion. A little while ago such a thing would have seemed In credible. Because it was Incredible we made no preparation for It. . We would have been almost ashamed to prepare for it. as If we were suspicious of ourselves, our own comrades and neighbors! But the ugly and Incredible thing has actually come about, and we are without adequate federal laws to deal with It I urge you to enact such laws at the earliest possi ble moment and feel that In doing so I am urging you to do nothing less than save the honor and self respect of the nation. Such creatures of passion, disloy alty and anarchy must be crushed out. They are not many, but they are infinite ly malignant, and the hand of our power should close over them at once. They have formed plots to destroy property, they have entered into conspiracies against the neutrality of the government, they have sought to pry Into every confidential transaction of the government In order to serve Interests alien to our own. It Is possible to deal with these things very effectually. I need not suggest the terms In which they may be dealt with. ' I wish that It could be said that only a few men, misled by mistaken sentiments of allegiance to tbe governments under which they were born, had been guaty at disturbing the self . possession and mis representing; the temper and principles of the country during these days of terrible war. when It would seem that every man who was truly an American would In stinctively make It bla.duty and his prtde to keep the scales of Judgment even and prove himself a partisan of no nation but his own. But It cannot. ' There are some men among us and many resident abroad who. though born and bred In the United States and calling themselves Amertcanev have so forgotten themselves and thelr" henor as citizens as to put their passion ate sympathy with one or the ether side In the great European conflict above their', regard for the peace and dignity of tho' United States. They also preach and practice disloyalty. Xo laws, t suppose, can reach corruptions of the mind and; heart, but I should not speak of others without also speaking of these and ex pressing the even deeper humiliation and -scorn which every self po taa and . thoughtfully patriotic American must feel when he thinks of them and of the dis credit they are daily bringing upon us. To Mobilise Reeouroee. -' -' , While we speak of the preparation of ' the nation to make sure of her security" and her effective power we must not fall Into the patent error of supposing that ber real strength comes from armaments -and mere safeguards of written law. It ' comes, of course, from her people, their energy, their success In their undertak ings, their free opportunity to use the -natural resources of our great home land ' and of the lands outside our continental borders which look to us for protectlosv for encouragement and for assistance la their development; from the organisation and freedom and vitality of our economls life. The domestic questions which en gaged the attention of the nut congress are more vital to the nation In this Its time of test than at any other time. We cannot adequately make ready for any trial of our strength unless . we 'wisely and promptly direct the force of our Jaws into these all important fields of demestle ' action. A matter which It seems to me we should have very much. at heart to the creation of the right instrumentalities by which to mobilise our economic re-, sources in any time of national neoes-" sity. X take It for granted that I do no need your authority to can into syste matic consultation with the directing offi cers of the army and navy men of recog- . nlsed leadership and ability from among our citizens who are thoroughly familiar, for example, with the transportation fa-, clllties of the country and therefore com- " potent to advise how they may- be co ordinated when the need .arises, those who can suggest tbe beat way In which to bring about prompt co-operation among the manufacturers of the country, should it be necessary, and those who could as sist to bring the technical skill of the country to the aid of the government la the solution of particular problems of de fense. I only hope that If I should find ; it feasible to constitute such an advisory body the congress would be willing to vote the small sum of money that would be needed to defray the expenses that would probably be necessary to give It the clerical and administrative machinery -with which to do serviceable work. For Rural Credita. - What is more Important Is that the In dustries and resources of tbe country should be available and ready for mobiU-. cation. It Is the more imperatively nec essary, therefore, that we should promptly devise means for doing what we have not yet done that we should give IntelUgrnt federal aid and stimulation to ladnstriai' and vocational education, as we have long done In the large field of oar agricultural . Industry; that at the same time that we . safeguard and conserve the natural., re- j sources of the country we should put them at the disposal of those who will use them promptly and intelligently , as was sought to be done In the admirable. . bills submitted to the last congress from its commltitees on the public lands, bills which I earnestly recommend In principle to your consideration;. that we should put into early operation some provision- for rural credits which will add to the exten sive borrowing facilities already afforded the farmer by the reserve bank act ade quate . Instrumentalities by which long credits" may be obtained on land mort gages and that we should study more -carefully than they have hitherto been studied the right adaptation of our eco nomic arrangements to changing condi tions. Many conditions about which we have repeatedly legislated are being altered ' from decade to decade. It Is evident, un der our very eyes and are likely to change even more rapidly and more radically In the days Immediately ahead of us when peace has returned to the world and the nations of Europe once more take up their tasks of commerce and Industry with the energy of those who must bestir them selves to build anew; Just what these changes will be no one can certainly fore see, or confidently predict There -are, no calculable, because so stable, elements In the problem. The r pit we can do lr to make certain that we have the necessary instrumentalities of Information constant ly at our service so that we may be sure that we know exactly what we are deal ing with when we come to act, if It ahould be necessary to act at alL We must first certainly know what it Is that we are seeking to adapt ourselves to. I may ask the privilege of addressing you mora at length on this Important matter a little later in your session. Efficiency and Security. In the meantime may I make this sug- gestlon? The transportation problem is an exceedingly serious and pressing on in this country. There has from time to time of late been reason to fear that our railroads would not much longer be able to cope with it successfully, as at present equipped and co-ordinated. I suggest that it would be wise to provide for a commis sion of Inquiry to ascertain by a tbor- . ough canvass of the whole question wbeth- -er our laws as at pre5ent framed and ad ministered are as serviceable aa tbey might be In the solution of the problem. It is obviously a problem that lies at the , very foundation of our efficiency as a peo ple. Such an Inquiry ought to draw. out every circumstance and opinion worth considering, and we need to know all skfrs of the matter if we mean to do any---thing In the field of fed-ral legislation. No one. I am sure, would wish to tJre any backward step. The regulation of the railways of the country by federal com mlsFion has had admirable results and . has fully Justified the hop and expecta tions of those by whom the policy of res ulation was originally proposed. The ouestion Is not what should we undo? It is. whether there is anything else we can do that would supply us " with effective means. In the very process of 'regulation, for battering the conditions under which tbe railroads are operated and for mak ing them more useful servants of the country as a whole. It seems to me that it might be the part of wisdom, therefore, before further legislation In this, field Is attempted, to look at the whole problem of co-ordination and efficiency-In the-full light of a fresh assessment of .circum stance and opinion, as a guide to dealing with the several parts of It For what we are seeking nwr whet: tn my mind Is the single thought of this' message, is national efficiency and secur ity. We serve a great nation. We should serve it In the spirit of Its peculiar gen ius. It Is the genius of common men for self government. Industry. Justice, liberty and peace. We should see to it that It lacks no instrument, no facility or vigor of law. to make It-sufficient to ptey Its part with energy, safety and assured sue-, cess. In this we are no partisans, bat heralds and prophets of a new aga. -r t r i x