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Washington, Dec. 6.—In the longest document of Its kind ever sent to congress, President Taft reviews at length the business of the year in the various departments of the national government. The settlement of the fishries dispute with England through the Hague tribunal comes in for a considerable share of the president's attention. The history of the fisheries dispute and the establishment of the tribunal are comprehensively review ed. The president gives a resume of the foreign relations of the government, which are declared to be in a satisfac tory condition. Tariff Negotiations. Resume of the Work of the Various Departments of the Goverment Is Presented to Congress. Referring to the negotiation of new tariff agreements President Taft says: "The new tariff law, in Section 2, respecting the maximum and miiii mum tariffs of the United States, which provisions came into effect on April 1, 1910, imposed upon us re sponsibility of determining prior to that date whether any undue discrim ination existed against the United States and its products in any coun try of the world with which we sus tained commercial relations. "In the case of several countries in stances of apparent undue discrimina tion against.American 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 proclama tion applying the minimum tariff should be issued by the president, one hundred and thirty-four such procla mations were issued. ."This series of proclamations em 6raced the entire commercial world and hence the minimum tariff of the United States has been given univer sal application, thus testifying to the satisfactory character of our trade relations with foreign countries. "Marked advantages to the com merce of the United States were ob tained through these tariff settle ments. "The policy of broader and closer trade relations with the Dominion of Canada which was initiated in the ad justment of the maximum and mini mum provisions of the tariff act4 of August, 1909, has proved mutually beneficial. It justifies further efforts for the readjustment of the commer cial relations of the two countries so that their commerce may follow the channels natural to contiguous coun tries and be commensurate with the steady expansion of trade and indus try on both sides of the boundary Une." Ship Subsidy. The president urges such action as he believes will increase American trade abroad, and says: "Another instrumentality indispen sable to the unhamapered and natural development of American commerce Is merchant marine. All maritime and commercial nations recognize the im portance of this factor. The greatest commercial nations, our competitors, Jealously foster their merchant ma rine. Perhaps nowhere is the need for rapid and direct mail, passenger and freight communication quite so urgent as between the United States and Latin America. We can secure In no other quarter of the world such Immediate benefits in friendship and commerce as would flow from the es "tablishment of direct lines of com munication with the countries of Latin America adequate to meet the requirements of a rapidly increasing appreciation of the reciprocal depen dence of the countries of the western hemisphere upon each other's prod ucts, sympathies and assistance. "I alluded to this most important subject in my last annual message it has often been before you and I need not recapitulate the reasons for its recommendation. Unless prompt sfc tion be taken the completion of the Panama canal will find this "the only great commercial nation unable to avail in international maritime busi ness of this great contribution to the means of the world's commercial in tercourse." Governmental Expense. To no one subject does he devote more space than to the expense of conducting the various government departments and the urgent need for economy, and in this connection he fays: "Every effort has been made by .•fli' t,, NEED OF ECOMONY POINTED OUT lias Little to Say About the Tariff—Work on Panama Canal Is Reviewed—No Change in Anti-Trust Laws—Interstate Commerce Laws Are Discussed. each department chief to reduce the estimated cost of his department for the ensuing fiscal year ending June 30, 1912. I say this In order that con gress may understand that these esti mates thus made present the smallest sum which will maintain the depart ments, bureaus and offices of the gov ernment and meet its other obliga tions under existing law, and that a cut of these estimates would result in embarrassing the executive branch of the government in the performance of its duties. This remark does not apply to the river" and harbor esti mates, except to those for expenses of maintenance and the meeting of obli gations under authorized contracts, nor does it apply to the public build ing bill nor to the navy building pro gram. Of course, as to these con gress could withhold any part or'all of the estimates for them without in terfering with the discharge of the or dinary obligations of these functions of its departments, bureaus and of fices. "The final estimates for the year ending June 30, 1912, as they have been sent to the treasury on Novem ber 29 of this year, for the ordinary expenses of the government, including those \for public buildings, rivers and harbors, and the navy building pro gram, amount to $630,494,013.12. This is $52,964,887.36 less than the ap propriations for the fiscal year end ing June 30, 19JL1. it Is $16,883,153.44 less than the total estimates, includ ing supplemental estimates submitted to congress by the treasury for the year 1911, and is $5,57.4,659.39 less than the original estimates submitted by the treasury for 1911. "These fiugres do not include the appropriations for the Panama canal, the policy in respect to which ought to be, and is, to spend as much each year as can be economically and ef fectively expended in order to com plete the canal as promptly as possi ble, and therefore, the ordinary mo tive for cutting down the expense of the government does not apply to ap propriations for this purpose. "Against the estimates of expendi tures, $640,494,013.12, we have estimat ed receipts for next year $680,000,000, making a probable surplus of ordinary receipts over ordinary expenditures of about $50,000,000, or taking into ac count the estimates for the Panama canal, which are $56,920,847.69, and which will ultimately be paid in bonds, it will leave a deficit for the next year of about $7,000,000, if congress shall conclude to fortify the canal." The Tariff. The President devotes but little space to the subject of the tariff law, and of it he says: "The schedules of the rates of duty in the Payne tariff act have been sub jected to a great deal of criticism, some of it just, more of it unfounded, and to much misrepresentation. The act was adopted in pursuance of a declaration by the party which is re sponsible for it that customs bill should be a tariff for the protection of home industries, the measure of the protection to be the difference be tween the cost of producing the Im ported article abroad and the cost of producing it at home, together with such addition to that difference as might give a reasonable profit to the home producer. Thq basis for the criticism of this tariff is that in re spect to a number of the schedules the declared measure was not follow ed, but a higher difference retained or inserted by way of undue discrimina tion in favor of certain industries and manufactures. Little, if any, of the criticism of the tariff has been direct ed against the protective principle above stated but the main body of the criticism has been based on the attempt to conform to the measure of protection was not honestly and sin cerely adhered to." The Tariff Board. The president refers to the appoint ment of aboard of experts to investi gate the cost of production of various articles included in the schedules of the tariff, and says: "The tariff board thus appointed 'and authorized has beea diligent in preparing itself for the necessary in vestigations. The hope of those who have advocated the use of this board for tariff purposes is that the question of the rate of a duty Imposed shall become more of a business question and less of a political question, to be ascertained by experts of long train ing and accurate knowledge. The halt in business and the shock to busi ness, due to the announcement that ,a new tariff bill is to. be prepared and put In operation will be avoided by treating the schedules one by one as occasion shall arise for a change In the rates of each, and only after a re port upon the schedule by the tariff board competent to make such report. It is not likely that the board will be able to make a report during the pres ent session of congress on any of the' schedules, because a proper examina tion 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 schedules in the present tariff that may prove to need amendment." Our Island Possessions. "During the last summer, at my request, the secretary of war visited the Philippine islands and has de scribed his trip in the report. He found the islands In a state of tran quillity and growing prosperity, due largely to the change in the tariff laws, which has opened the markets of America to the products of the Philippines, and has opened the Phil ippine markets to American manu factures. "The year has been one of prosper ity and progress in Porto Rico.. Panama Canal. •"At the instance of Colonel Goeth als, the army engineer officer in charge of the work on the Panama canal, I have just made a visit to the Isthmus to inspect the work done and to consult with him on the ground as to certain problems which are likely to arise in the near fu ture. The progress of the work is most satisfactory. If no unexpected obstacle presents itself, the canal will be completed well within the time fixed by Colonel Goethals, to wit, January 1, 1915, and within the estimate of cost, $375,000,000. "Among questions arising for pres ent solution is the decision whether the canal shall be fortified. I have already stated to the congress that I strongly favor fortification and I now reiterate this opinion and ask your consideration of the subject in the light of the report already be fore you made by a competent board "Another question which arises for consideration and possible legislation is the question of tolls in the canal. This question is necessarily affected by the probable tonnage which will go through the canal. "In determining what the tolls should be we certainly ought not to insist that for a good maoy years to come they should amount to enough to pay tie interest on the invest ment of $400,000,000 which the United States has made in the construction of the. canal. We ought not to do this, first, because the benefits to be derived by the United States from this expenditure is not to be meas ured solely by a return upon the in vestment. If It were then the con struction might well have been left to private enterprise. "My own impression is that the tolls ought not to exceed $1 per net ton, and I should recommend that within certain limits the president be authorized to fix the tolls of the canal and adjust them to what seems to be commercial necessity. "I cannot close this reference to the canal without suggesting as a wise amendment to the interstate commerce law a provision prohibiting interstate- commerce railroads from owning or controlling ships engaged in the trade through the Panama canal. I believe such a provision may be needed to save to the people of the United States the benefits of the competition in trade between the eastern and western seaboards which this canal was constructed to secure." Department of Justice. Discussing the affairs of the de partment of justice, the president says: "I invite especial attention to the prosecutions under the federal law of th§ so-called 'bucket shops,' and of those schemes to defraud in .which the use of the mail is an essential part of the fraudulent conspiracy, prosecutions which have saved ig norant and weak members of the pub lic and are saving them hundreds of millions of dollars. The violations of the anti-trust law present perhaps the most important litigation before the department, and the number of cases filed shows the activity of the govern ment in enforcing that statute. "In a special message last year I brought to the attention of congress the propriety and wisdom of enacting a general law providing for the in corporation of industrial and other companies engaged in interstate com merce, and I renew my recommen dation in that behalf." The crying need in the United States of cheapening the cost of liti gation by simplifying judicial proced ure and expediting final judgment is pointed out and action looking to cor rection of these evils is urged. The president recommends an in crease in the salaries of federal judges. Postal Savings Banks. "At Its last session congress made rovislon for the establishment of savings banks by the postofflce de partment of this government bywhlch under general control of trustees, con sisting of the postmaster general, the secretary of the treasury and the at torney general, the system could be begun in a few cities and towns, and enlarged to cover within Its opera tions as many cities and towns and as large a part of the country as seemed wise. The Initiation and establish ment of such a system has required a great deal of study on the part of the experts In the postofflce and treas ury departments, but a system has now been devised which Is believed to be more economical and simpler In Its operation than any similar system abroad. Arrangements have been per fected so that savings banks will be opened in some cities and towns on the 1st of January, and there will be a gradual extension of the benefits of the plan to the rest of the country." "It is gratifying," says the president, that the reduction in the postal deficit has been accomplished without any curtailment of postal facilities. On the contrary, the service has been greatly extended during the year in all its branches." Second-Class Mail. "In my last annual message I in vited the attention of congress to the inadequacy of the postal rate imposed upon second-class mall matter in so far as that Includes magazines, and showed by figures prepared by experts of the postofflce department that the government was rendering a service to the magazines, costing many mil lions in excess of the compensation paid. An answer was attempted to this by the representatives of the magazines, and a reply was filed to this answer by the postofflce depart ment. The utter inadequacy of the answer, considered in the light of the reply of the postofflce department, I think must must appeal to any fair minded person. Whether the answer was all that could be said in behalf of the magazines is another question. I agree that the question is one of fact but I insist that if the fact is as the experts of the postofflce department show, that we are furnishing to the owners of magazines a service worth millions more than they pay for it, then justice requires that the rate should be increased. The increase in the receipts of the department result ing from this change may be devoted to increasing the usefulness of the de partment in establishing a parcels post and in reducing the cost of first class postage to one cent. It has been said by the postmaster general that a fair adjustment might be made under which the advertising part of the magazine should be charged for at a different and higher rate from that of the reading matter. This would re lieve many useful magazines that are not circulated at a profit, and would not shut them out from the use of the mails by a prohibitory rate. "With respect to the parcels post, I respectfully recommend its adoption on all rural delivery routes, and that 11 pounds—the International limit—be made the limit of carriage in such ppst." Abolish Navy Yards. The president calls attention to cer tain reforms urged by the secretary of the navy which he recommends for adoption, and continues: "The estimates of the navy depart ment are $5,000,000 less than the ap propriations for the same purpose last year, and Included in this is the build ing program of the same amount as that submitted for your consideration last year. It is merely carrying out the plan of building two battleships a year, with a few needed auxiliary ves sels. I earnestly hope that this pro gram will be adopted. "The secretary of the navy has given personal examination to every navy yard, and has studied the uses of the navy yards with reference to the necessities of our fleet. With a fleet considerably less than half the size of that of the British navy, we have shipyards more than double the number, and there are several of these shipyards expensively equipped with modern machinery, which, after inves tigation the secretary of the navy be lieves to be entirely useless for naval purposes. He asks authority to aban don certain of them and to move their machinery to other places, where it can be made of use." "The complete success of our coun try in arctic exploration should not re main unnoticed. The unparalleled achievement of Peary in reaching the north pole, April 6, 1909, approved by critical examination of the most ex pert scientists, has added to the dis tinction of our navy, to which he be longs, and reflects credit upon his country. I recommend fitting recognl tion by congress of the great achieve ment of Robert Edwin Peary." Conservation. "The subject of the conservation of the public domain has commanded the attention of the people within the last two or three years. "There is no need for radical re form in the methods of disposing of what are really agricultural lands. The present laws have worked well. The enlarged homestead law has encour aged the successful farming of lands in the semi-arid regions. "frothing can be more important in the matter of conservation than the treatment of our forest lands. It was probably the ruthless destruction of forests In the older states that first called attention to the necessity for'a halt in the waste of our resources. "In the present forest reserves there are lands which are not properly for est, and which ought to be subject to homestead entry. This has 'caused some local irritation. We are care fully eliminating such lands from for est reserves or where their elimina tion is not practical listing them for entry under the forest homestead act. "Congress ought to trust the execu tive to use the power of reservation only with respect to land most valu able for forest purposes. During the present administration, 62,250,000 acres of land largely non-timbered, have been excluded from forest re serves, and 3,500,000 acres of land principally valued for forest purposes have been included in forest reserves, making a reduction In forest reserves of non-timbered land amounting to 2,750,000 acres." Coal Lands. "The next subject, and one most Im portant for your consideration, Is the disposition of the coal lands in the United States and Alaska. At the be ginning ol this administration there were withdrawn from ontry for pur poses of classification 17,867,000 acres. Since that time there have been with drawn by my order from entry for classification 78,977,745 acres, making a total withdrawal of 96,844,745 acres. Meantime of the acres thus with drawn 1,061,889 have been classified and found not to contain coal and have been restored to agricultural en try, and 4,726,091 acres have been classified as coal lands while 7,993,239 acres remain withdrawn from entry and await classification. In addition 337,000 acres have been classified as coal lands without prior withdrawal, thus increasing the classified coal lands to 10,429,372 acres. 'Under the laws providing for the disposal of coal lands In the United States, the minimum price at which lands are permitted to be sold is $10 an acre but the secretary of the in terior has the power to fix a maximum price and to sell at that price. "As one-third of all the coal supply is held by the government, it seems wise that it should retain such con trol over the mining and the sale as the relation of lessor to lessee fur nishes. 'The secretary of the interior thinks there are difficulties in the way of leasing public coal lands, which ob jections he has set forth in his re port, the force of which I freely con cede. I entirely approve his stating at length in his report of the objec tions in order that the whole subject may be presented to congress, but after a full consideration, for the rea sons I have given above, I favor a leasing system and recommead it" Water Power Sites. "Prior to March 4, 1909, there had been, on the recommendation of the reclamation service, withdrawn from agricultural entry, because they were regarded as useful for power sites which ought not to be disposed of as agricultural lands, tracts amounting to about 4,000,000 acres. The with drawals were hastily made and in cluded a great deal of land that was not useful for power sites. They were intended to include the power sites on 29 rivers in 9 states. Since that time 3,475,442 acres have been re stored for settlement of the original 4,000,000 because they do not con tain power sites and meantime, new withdrawals have been made which, with other restorations based upon field examination, result in withdraw als at present effective of 1,218,356 acres on vacant public land and 202, 197 acres on entered public land, or a total of 1,420,553 acres. These with drawals made fi om time to time cover all the power sites included In the first withdrawals and many more, on 151 rivers and in 12 states. The dis position of these power sites involves one of the most difficult questions pre sented in carrying out practical con servation. "The subject is one that calls for new legislation. It has been thought that there was danger of combination to obtain possession of all the power sites and to unite them under one control. Whatever the evidence of this, or lack of it, at present we have had enough experience to know that combination would be profitable, and the control of a great number of pow er at will within certain sections. "However this may be, it is the plain duty of the government to see to it that in the utilization and devel opment of all this immense amount of water power, conditions shall be imposed that will prevent extortion ate charges, which are the usual ac companiment of monopoly. "The question of conservation is not a partisan one, and I sincerely hope that even In the short time of the present session consideration may be given to those questions which have now been much discussed, and that action may be taken upon them." Alaska. "With reference to the government of Alaska, I have nothing to add to the recommendations I made in my last message on the subject I am convinced that the migratory charac ter of the population, its unequal dis tribution, and its smallness of num ber, which the new census shows to be about 50,000, in relation to the enormous expanse of the territory, make it altogether Impracticable to give to those people who are in Alaska today and may not be there 'a year hence, the power to elect a leg islature to govern an Immense ter ritory to which they have relation so little permanent" Bureau of Corporations. Referring to the report of the com missioner of corporations, the presi dent says: "The commissioner finds a condi tion in the ownership of the standing timber of the United States other than the government timber that calls for serious attention. The direct in vestigation made by the commissioner covered an area which contains 80 per cent of the privately-owned tim ber of the country. "His report shows that one half of the timber in this area is owned by 200 Individuals and corporations that 14 per cent, is owned by these corporations, and that there is very extensive inter-ownership of stock, as well as other circumstances, all pointing to friendly relations among those who own a majority of this tim ber, a relationship which might lead to a combination for the maintenance of a price that would be very detri mental to the public interest and would create the necessity of remov ing all tariff obstacles to the free im portations of lumber from other coun tries." Bureau of Labor. "The commissioner of labor has been actively engaged In composing the dif ferences between employers and em ployees engaged in Interstate trans •y mww portation, under the Erdman act, Joints ly with the chairman of the Interstate commerce commission. "I cannot speak In too high terms of the success of the two officers In con ciliation and settlement of controver sies which, but' for their Interposition, would have resulted disastrously to all interests. Civil Service Commission. "The civil service commission ha* continued its useful duties during the year. The necessity for the mainte nance of the provisions of the civil service law was never greater than to day. Officers responsible for the pol icy of the administration, and their immediate personal assistants or depu ties, should not be included within the classified service, but in my judg ment, public opinion has advanced to the point where it would support a bill providing a secure tenure during effi ciency for all purely administrative officials. I entertain the profound con. victlon that it would greatly aid the. cause of efficient and economical gov* eminent and. of better politics if1 con gress could enact a bill providing that the executive shall have the power to include In the classified service all local offices under the treasury depart ment, the department of justice, the postofflce department, the interior de partment and the department of com merce and labor, appointments to which now require the confirmation of the senate, and that upon such classification the advice and consent of the senate shall cease to be re quired in such appointments. By their certainty of tenure, dependent on good, service, and by their freedom from the necessity for political activ ity, these local officers would be In duced to become more efficient publio servants. Economy and Efficiency. "The increase In the activities and In the annual expenditures of the fed eral government has been so rapid and so great that the time has come to check the expansion of government activities in new directions until we have tested the economy and efficiency with which the government of today Is being carried on. The responsibility rests upon the head of the adminlstrar tion. He is held accountable by the public, and properly so. Despite the unselfish and patriotic efforts of the heads of departments and others charged with responsibility of govern ment, there has grown up in this coun try a conviction that the expenses of government are too great. The fun damental reason for the existence un detected of waste, duplication, and bad management is the lack of prompt, ac curate Information. "I have requested the head of each department to appoint committees on economy and efficiency in order to se cure full co-operation In the movement by the employees of the government themselves. "I urge the continuance of the ap propriation of $100,000 requested tot the fiscal year 1912. "My experience leads me to belleva that while government methods are much criticized, the bad results—if we do have bad results—are not due to a lack of zeal or willingness on the part of the civil servants." Interstate Commerce. "There has not been time to test the benefit and utility of the amendments to the Interstate commerce law con tained In the act approved June 18,. 1910. The law as enacted did not con tain all the features which I recom~ mended. It did not specifically de nounce as unlawful the purchase one of two parallel and competing roads of the stock of the other. Nor did it subject to the restraining influ ence of the Interstate Commerce com mission the power of corporations en gaged In operating interstate railroads to issue new stock and bonds nor did It authorize the making of temporary agreements between railroads limited to 30 days, fixing the same rates for traffic between the same places. "I do not press the consideration ot any of these objects upon congress at this session. "The interstate commerce commis sion has recommended appropriations for the purpose of enabling it to enter upon a valuation of all railroads. This has always been within the jurisdic tion of the commission, but the requi site funds have been wanting. Statis tics to the value of each railroad would be valuable for many purposes, espe cially if we ultimately enact any lim itations upon the power of the inter state railroads to issue stocks and bonds, as I hope we may. "For the protection of our own people and the preservation of our credit In foreign trade, I urge upon congress the immediate enactment of a law under which one who, In good faith, advances money or credit upon a bill of lading issued by a common carrier upon an interstate or foreign shipment can hold the carrier liable for the value of the goods described in the bill at the valuation specified in the bill, at least to the extent of the advances made In reliance upon It. "I further recommend that a punish ment of fine and imprisonment be im posed upon railroad agents and ship pers for fraud or misrepresentation In connection, with the issue of bills of lading Issued upon Interstate and for elgn shipments. "Except as above, I do not recom mend any amendment to the interstate commerce law as It stands. I do not now recommend any amendment to the anti-trust law. In other words, It seems to me that the existing legisla tion with reference to the regulation of corporations and the restraint of their business has reached a point where we can stop for a while and wit ness the effect of the vigorous execu tion of the laws of the statute books in restraining the abuses which eei* talnly did exist and which roused the public to demand reform."