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: V .Yf- .. ̂ -'• ' >,'• , ... ;,. i '" * V. • ;**.••: , - • HE PRESIOEHT'S ANNUAL MESSAGE work !n harmony with the several state commissions, each within its own prov­ ince, to achieve the desired end. Control of Interstate CAUSES 0^ THE PRESENT FINAN. 1 ̂ %IAI- CONDITIONS IS MADE THE CHIEF TOPIC. SUGGESTS REMEDIES FOR ILLS CONTROL OF CORPORATIONS AND RAILROADS TO PREVENT OVERCAPITALIZATION. fo£/fVy- •etieves This Would Solve the Prob­ lem Together With Provision for More Elastic Currency--Recom­ mends Postal Banks and Asks for Legislation Along Many Lines. Washington, Dee. 8. --- ^resil*®"* Roosevelt's annual message to congress fta a voluminous document of nearly *4.«00 words, bf far the longest mes- A&se he has ever submitted to congress. Tk« opening- subject of the message is <tfce financial condition of the country, 1^1 for which the president lays iuucn of the blame upon unscrupulous stock •peculators, and says: "In any large body of men, however, •tSfcere are certain to be some who are tftahonest, and if the conditions are erach that these men prosper or corn- alt their misdeeds with Impunity, their example is a very evil thing for the «i£nmunity. Where these men are busi- «S8» men of great sagacity and of tem­ perament both unscrupulous and reok- l^en. and where the conditions are such tfaiit they act without supervision or «*ntrol and at first without effective •4kecic from public opinion, they delude •guny innocent people into making in­ vestments or embarking in kinds of ^business that are really unsound. When the misdeeds of these successful­ ly dishonest men are discovered, suf- •ffcring comes not only upon them, but the innocent men whom they &ave misled. It is a painful awakening, whenever it occurs; and, naturally. -When it does occur those who suffer We apt to forget that the longer It was deferred the more painful it would be. the effort to ptmish the guilty it is lioth wise and proper to endeavor so tar as possible to minimize the dis­ tress of those who have been misled by toe-, guilty. Yet it is not possible to Mfrain because of such distress from striving to put an end to the misdeeds «fcat are the ultimate causes of the suf­ fering. and, as a means to this end. Where * possible to punish those re­ sponsible for them. There may be hon- «lt differences of opinion as to many ^governmental policies; but surely there van" be no such differences as to the «^ed of unflinching perseverance in the irar against successful dishonesty." He. quotes at length from his mes- of last year in which he advo- imrrii federal control of corporations ^nlng interstate business, and believes tfflrt in such control would be found the Vfmedy for overcapitalization and •fiock speculation which he believes fcave brought about the present finan' ^»«i conditions. He says; "Our steady aim should be by legis­ lation. cautiously and carefully under- 'taken. but resolutely persevered in, to Assert the sovereignty of the national government by affirmative action. "This is only in form an innovation. substance it is merely a restoration; "for from the earliest time such regula- •tion of industrial activities has been •eecogniaed jn the action of the law- •eiaking bodies; and all that I propose la1 to meet the changed conditions in Hiach manner as will prevent the com­ monwealth abdicating the power it has •always possessed, not only in this coun­ try, but also in England before and -ptnce this country became a separate •ation. l i , : Id :£: fe- * •Federal Control of •nilrudi Is FtTord. |; "No small part of the trouble that we ,;;lttive comes from carrying to an ex- * treme the national virtue of self-re- tiance, of independence in initiative And action. It Is wise to conserve this <s*|rtue and to provide for its fullest ex- loarcise. compatible with seeing that lib- «erty does not become a liberty to . wrong others. Unfortunately, thiB is •the-kind of liberty that the lack of all •directive regulation inevitably breeds. The founders of the constitution pro- 'Vtded that the national government ^Should have complete and sole control *i»f interstate commerce. There was Itlien practically no Interstate business OMtve such as Was conducted by water, «nd this the national government at ,»nce proceeded to regulate in thorough- *oing and effective fashion. Condi­ tions have now so wholly changed that the interstate commerce by water is In­ ert gtti Scant compared with the amount t&at goes by land, and almost all big business concerns are now engaged in interstate commerce. As a result, it can be but partially and imperfectly •ontrolled or regulated by the action of «.ny one of the several states; such ac­ tion inevitably tending to be either too ^•rastic or else too lax, and in either Mease ineffective for purposes of Justice. "liOrUy the national government can in ^'^thoroughgoing fashion exercise the "Htveedevl control. This does not mean "that there should be any extension of •federal authority, for such authority -already exists under the constitution in •amplest and most far-reaching form; t>ut it does mean that there should be •an extension of federal activity. This sis uot advocating centralization. It is •merely looking facts in the face, and •realizing that centralization in business toas already come and can not be avoid- '•<1 or undone, and that the public at ^iargij can only protect itself from cer * •tain evil effects of this business cen­ tralization by providing better methods rftor the exercise, of control through the i^aurtiority already centralized in the 'national government by the constitu­ tion itself. There must be no halt in the healthy constructive course of ac- ft> ' ^ Won which this nation has elected to rsue, and has steadily pursued, dur- S5. the last six years, as shown both in -thr legislation of the congress and the ^•administration of the law by the 'de- • s»artment of justice. The most vital Tieed Is in connection with the railroads. .*'" -As to these, in my judgment there ahould now be either a rational incor- mjf, 'juration act or a law licensing ru iiway " 1| companies to engage In interstate com- wwjrce. upon certain conditions. The law Jgjfc «hould be so framed as tr> give to the Interstate commerce commission power 'I i "to pass upon the future iseue of securl- <ttes, while ample means slould be pro- % wtded to enable the commission,-when- «ver in its judgment it is necessary, to make a physical valuation of any rall- road. As I stated in my menage to the S<' congress a year ago. railroads should !&$$'?• %« Kiven power to enter iuto agree- «> (merits, subject to these agreements be­ ing made public In minute rt. tail and to the consent of the interstate commerce commission being first obtained. Until the national government assumes proper control of interstate commerce, tn the exercise of the authoilty it al­ ready possesses, It will be impossible .either to give to or to get from the ^railroads full Justice. The railroads 4uid all other great corporations will «<o well to recognize that this- control snust come; the only question Is as to "Moreover, in my judgment there should be additional legislation looking to the proper control of the great business con­ cerns engaged in interstate business, this control to be exercised for their own benefit and prosperity no less than for the protection of Investors end of the general public. As I have ivrtea^edly said In messages to congress and else­ where, experience has definitely shown not merely the unwisdom but the futility of endeavoring to put a stop to all busi­ ness combinations. Modern Industrial conditions are such that combination Is not only necessary but inevitable. It Is so In the world of business Just as it Is so In the world of labor, and It is as idle to desire to put an end to all corpora­ tions, to all big combinations of capital, as to desire to put an end to combina­ tions of labor. Corporation and labor union alike have come to stay. Each if properly managed is a source of good and not evil. Whenever in either there is evil, it should be promptly held to ac­ count; but it should receive hearty en­ couragement so long as It Is properly managed. It is profoundly immoral to put or keep on the statute books a law, nominally In the interest of public moral­ ity, that really puts a premium upon public immorality, by undertaking to forbid honest men from doing ivhat must be done under modern business condi­ tions, so that the law Itself provides that Its own infraction must be the condition precedent upon business success. To aim at the accomplishment of too much usu­ ally means the accomplishment of too lit­ tle, and often the doing of positive dam­ age. "The antitrust law should Dot be re­ pealed; but it should be made both more efficient and more in harmony with act­ ual conditions. It should be so amended as to forbid only the kind of c^jr.blnation which does harm to general public, such amendment to be accompanied by, or to be an incident of, a grant of su­ pervisory power to the government over these big corporations engaged in inter­ state business. This should be accom­ panied by provision for the compulsory publication of accounts and the subjec­ tion of books and papers to the inspec­ tion of the government officials. A be­ ginning has already been made for such supervision by the establishment of the bureau of corporations. "The antitrust law should not prohibit combinations that do no injustice to the public, still less those the existence of which Is on the whole of benefit to the public. But even if this feature of the law were abolished, there would remain as an equally objectionable feature the difficulty and delay now incident to its enforcement. The government must now submit to Irksome and repeated delays before obtaining a final decision of the courts upon proceedings instituted, and even a favorable decree may mean an empty victory. Moreover, to attempt to control these corporations by lawsuits means to impose upon both the depart­ ment of justice and the courts an im­ possible burden; it is not feasible to carry on more than a limited number of such suits. Such a law to be really effective must of course be administered by an executive body, and not merely by means of lawsuits. The design should be to prevent the abuses incident to the crea­ tion of unhealthy and improper combina>- tions, instead of waiting until they are in existence and then attempting to de­ stroy them by civil or criminal proceed­ ings. Investing Poblte Should Be Amply Safeguarded. "The congress has the power to charter corporations to engage in interstate and toreign commerce, and a general law can enacted under the provisions of which existing corporations could take out fed eral charters and new federal corpora­ tions could be created. An essential pro­ vision of such a law should be a method of predetermining by some federal board or commission whether the applicant for a federal charter was an association or combination within the restrictions of the federal law. Provision should also be made for complete publicity In all matters affecting the public and complete protec­ tion to the investing public and the share­ holders in the matter of issuing corporate securities. If an incorporation law is not deemed advisable, a license act for big interstate corporations might be enacted; or a combination of the two might be tried. The supervision established might be analogous to that now exercised over national banks. At least, the antitrust act should be supplemented by specific ^prohibitions of the methods which ex­ perience has shown have been of most service In enabling monopolistic combina­ tions to crush out competition. The real owners of a corporation should be com­ pelled to do business in their own name. The right to hold stock in other corpora­ tions should heareafter be denied to inter­ state corporations, unless on approval by the proper government officials, and a prerequisite to such approval should be the listing with the government of all owners and stockholders, both by the corporation owning such stock and by the corporations in which such stock is owned. "To confer upon the national govern­ ment, In connection with the amendment I advocate in the antitrust law, power of supervision over big business concerns engaged in Interstate commerce, would benefit them as it has benefited the na­ tional banks. 1 In the recent business crisis it is noteworthy that the institu­ tions which failed were institutions which were not under the supervision and control of the national government. Those which were under national con­ trol stood the test. "National control of the kind above ad­ vocated would be to the benefit- of every well-managed railway. From the stand­ point of the public there is need for ad­ ditional tracks, aditional terminals, and improvements in the actual handling of the railroads, and all this as rapidly as possible. Ample, safe, and speedy trans­ portation facilities are even more neces­ sary than cheap transportation. There­ fore, there is need for the investment of money which will provide for all these things while at the same time securing as fas as is possible better wages and shorter hours for their employes. There­ fore, while there must be just and rea­ sonable regulation of rates, we should be the first to protest against any arbitrary and unthinking movement to cut them down without the fullest and most care­ ful consideration of all Interests con­ cerned and of the actual needs of the situation. Only a special body of men acting for the national government un­ der authority conferred upon It by the congress is competent to pass Judgment on such a matter. wealthy men, or men who pose as such, or are unscrupulously or foolishly eager to become such, indulge in reckless Spec­ ulation--especially if it is accompanied by -dishonesty--they Jeopardise not only their own future but the future of all their in­ nocent fellow-citisens, for they expose the whole business community to panic He advises against any general tariff ition 4his session of congress, and Greater ElMlleltr la Currency la Urged. The president quotes extensively from his last message in dealing with the di­ rect subject of currency legislation, and says: "I again urge on the congress the need of immediate attention to this matter. We need a greater elasticity in our cur­ rency ; provided, of course, that we recog­ nize the even greater need of a safe and secure currency. There must always be the most rigid examination by the na­ tional authorities. Provision should be made for an emergency currency. The emergency issue should, of course, be made with an effective guaranty, aftd up­ on conditions carefully prescribed by the government. Such emergency Issue must be based on adequate securities approved by the government, and must be issued under a heavy tax. This would permit currency being issued when the demand for It was urgent, while securing its re­ tirement as the demand fell off. It is worth investigating to determine whether officers and directors of national banks should ever be allowed to loan to them­ selves, Trust companies should be sub­ ject to the same supervision as banks; legislation to this effect should be en­ acted for the District of Columbia and the territories. "Yet we must also remember that even the wisest legislation on the subject can hat governmental body can most --only accomplish a certain amount. No e*ercise It. The ctourts will de ^ermine the litnits within wl ich the ' CilSt'iftll authority can exercise it, and tl ^ rt* v. ill still remain tamp*e work wiiitfn cac'.i state for the railway com- *R:i-*lun of that state; and the national ttau«;taU< ccMXitnerce commission will iL-S legislation can by any possibility guar­ antee the business community against the results of speculative folly any more than, it can guarantee an individual against the results of his extravagance. When an in­ dividual mortgages his house to buy an automobile he Invites disaster; and when legislation says: "In a country of growth as ours it is probably well that years or so the tariff'laws should be carefully scrutinized so as to see that no excessive or Improper bene­ fits are conferred thereby, that proper revenue Is provided, and that our foreign trade is encouraged. There must always be as a minimum tariff which will not only al­ low for the collection of an ample rev­ enue but which will at least make good the difference In cost of production here and abroad; that is, the difference in the labor cost here and abroad, for the well-being of the wage-worker must ever be a cardinal point of American policy. The question should be approached pure­ ly from a business standpoint; both the time and the manner of the change being such as to arouse the minimum of agi­ tation and disturbance in the business world, and to give the least play for selfish and factional motives. The sole consideration should be to see that the sum total of changes represent the pub­ lic good. This means that the subject cannot with wisdom be dealt with in the year preceding a presidential election, be­ cause as a matter of fact experience has conclusively shown that at such a time It Is impossible to get men to treat it from the standpoint of the public good. In my judgment the wise time to deal with the matter Is immediately alter such elec­ tion." He asks tor the regxail of tine tariff on papvr and wood pulp. He reviews and enlarges upon hla pre­ vious recommendations for the enact­ ment of federal inheritance and income tax laws. 1 Attention is called to the prosecution of wealthy offenders against the national laws, and in this connection he asks that the laws under which these prosecutions are brought be strengthened and made more definite. A few years ago there was loud com­ plaint that the law could not be Invoked against wealthy offenders. There is no such complaint now. The course of the department of justice during the last few years has been such as to make It evident that no man stands above the law, that no corporation is. so wealthy that it cannot be held to account. The department of justice has been as prompt to proceed against the wealthiest malefactor whose crime was one of greed and cunning as to proceed against the agitator who Incites to brutal violence. Everything that can be done under the existing law, and with the existing state of public opinion, wJhich so profoundly influences both the courts and juries, has been done. I?ut the laws themselves need strengthening In more than one Impor­ tant point; they should be made more definite, so that no honest man can be led unwittingly to break them, and so that the real wrongdoer can be readily punished. Moreover, there must be the public opinion back of the laws or the laws themselves will be of no avail. At pres­ ent. while the average juryman undoubt­ edly wishes to see trusts broken up, and Is quite ready to fine the corporation itself, he is very reluctant to find the facts proven beyond a reasonable doubt when It comes to sending to jail a mem­ ber of the business community for in­ dulging In practices which are profound­ ly unhealthy, but which, unfortunately, the business community has grown to recognize as well-nigh normal. Both the present condition of the law and the present temper of juries render It a task of extreme difficulty to get at the real wrongdoer In any case, especially by Im­ prisonment Yet it is from every stand­ point far preferable to punish the prime offender by imprisonment rather than to fine the corporation, with the attendant damage to stockholders The two great evils in the execution of our criminal laws to-day are sentimen­ tality and technicality. For the latter the remedy must come from the hands of the legislatures, the courts and the laywers. The other must depend for Its cure upon the gradual growth of a sound public opinion which shall insist that re­ gard for the law and the demands of reason shall control all other Influences and emotions In the Jury box. Both of these evils must be removed or public discontent with the criminal law will con­ tinue. The i/m and the A bone of InJnnetlOBs. ' "Instances of abuse In the granting of injunctions In labor disputes continue to occur, and the resentment in the minds of those who feel that their rights are being invaded and their liberty of action and of speech unwarrantably restrained continues to grow. Much of the attack on the use of the process of injunction Is wholly without warrant; but I am con­ strained to express the belief that for some of it there Is warrant. This ques­ tion Is becoming more and more of prime importance, and unless the courts will themselves deal with it in effective man ner, it Is certain ultimately to demand some form of legislative action. It would be most unfortunate for our social wel­ fare if we should permit many honest and* law-abiding citizens to feel that they had just cause for regarding our courts with hostility. I earnestly com­ mend to the attentio/i of the congress this matter, so that some way may be devised which will limit the abuse of In­ junctions and protect those rights which from time to time It unwarrantably In­ vades. Moreover, discontent Is often ex­ pressed with the use of the process of injunction by the courts, not only in la­ bor disputes, but where state laws are concerned. I refrain from discussion of this question as I am informed that It will soon receive the consideration of the supreme court." Of other legislation in the interest of labor he favors federal Inspection of rail­ roads; providing limited bu| definite com­ pensation for accidents to all workmen employed in any way by the government, and says: "The Constitutionality of the employers' liability act passed by the pre'eeding con­ gress has been carried before the courts. In two jurisdictions the law has been de­ clared unconstitutional, and in three Juris­ dictions its constitutionality has been af­ firmed. The question has been carried to tue supreme court, the case has been heard by that tribunal, and a decision is expected at an early date. In the event that the court should affirm the consti­ tutionality of the act, I urge further leg­ islation along the lines advocated in my message to the preceding congress. The practice of putting the entire burden of loss of life or limb upon the victim or tne victim's family is a form of social In­ justice in which the United States stands in unenviable prominence. In both our federal and our state legislation we have, with tew exceptions, scarcely gone farther than the repeal of the . fellow- servant principle of the old law of liabil­ ity, and in some of our States even this slight modification of a complete out­ grown principle has not yet been se­ cured." He favors the extension of the eight- hour law to all departments of the gov­ ernment, and to all work carried on by the government. He urges legislation for the compulsory Investigation of in­ dustrial disputes, and says: "The need for some provision'for such investigation Was forcibly illustrated during the past summer. A strike of telegraph operators seriously interfere^ with telegraphic communication, caus­ ing great damage to business Interests and serious inopnvenience to the gen­ eral public. Appeals were made to me from many parts of the country, from city councils. from boards of trade, from chambers of commerce, and from labor organisations, urging that steps be taken to terminate the strike. Everything that cotild with any pro­ priety be done by a representative of the government was done without avail, and for weeks the public stood by and suffered without recourse of any kind. Had the machinery existed and had there been authority for compulsory investigation of the dispute, the public would have been placed in possesion public opinion would probably have brought' about prompt adjustment. "It is idle to hold that without good laws evils such as child labor, as the overworking Of women, as the fail­ ure to protect employes from loss of life or limb, can be effectively reached, any more than th$ evils of rebates and stock-watering can be reached without good laws. To fail to stop these prac­ tices by legislation means to force honest men into them, because other­ wise the dishonest who surely will take advantage of them will have everything their own way. If the states will correct these evils, well and good; but the nation must stand ready to aid them. When the department of agriculture was founded there was much sneering as to Its usefulness. No department of the government, however, hu more em­ phatically vindicated Its usefulness, and none save the post office department comes so continually and Intimately Into touch with the people. The two citizens whose welfare is in the aggregate most vital to the welfare of the nation, and therefore to the welfare of all other citi­ zens, are the wage-worker who does manual labor and the tiller of the soil, the farmer. There are, of course, kinds of labor where the work must be purely mental, and there are other kinds of labor where, under existing conditions, very little demand indeed is made upon the mind, though I am glad to say that the proportion of men engaged in this kind of work Is diminishing. But in any community with the solid, healthy quali­ ties which make up a really great nation the bulk of the people should do work which calls for the exercise of both body and mind. Progress can not permanently exist in the abandonment of physical labor, but in the development of physical labor, so that it shall represent more and more the work of the trained mind in the . Ir&ined body. 6ur school System la gravely defective in so far as it it puts a premium upon mere literary training and tends therefore to train the boy away from the farm and the workshop. Noth­ ing is more needed than the best type of industrial school, the school for me­ chanical industries in the city, the school for practically teaching agriculture in the country. The calling of the skilled tiller of the soil, the calling of the skilled me­ chanic, should alike be recognize^ as professions, just as emphatically as the callings of lawyer, doctor, merchant, or clerk. The schools should recognize this fact and It should be equally recognized in popular opinion. The young man who has the farsightedness and courage to t%cognize It and get over the idea that it makes a difference whether what he earns is called salary or wages, and who refuses to enter the crowded field of the so-called professions, and takes to con­ structive industry instead, is reasonably sure of an ample reward in earnings, In health. In opportunity to marry early, and to establish a home with a fair amount of freedom from worry. It should be one of our prime objects to put both the farmer and the mechanic on a higher plane of efficiency and reward, so as to increase their effectiveness in the economic world, and therefore the dig­ nity, the remuneration, and the power of their positions in the social world. Inland Waterway System* Should Be Deevloped. The conservation of our. national re­ sources and their proper use- constitute the fundamental problem which under­ lies almost every other problem of our national life. We must maintain for our civilization the adequate material basis without which that civilization cannot exist. We must show foresight, we must look ahead. As a nation we not only enjoy a wonderful measure of present prosperity but if this prosper­ ity is used aright it is an earnest of future success such as no other nation will have. The reward of foresight foi this nation Is great and easily foretold. But there must be the look ahead, there must be a realisation of the fact that to waste, to destroy, our natural resources, to skin and exhaust the land instead of using it so as to increase its usefulness, will result in undermining in the days of our children the very prosperity which we ought by right to hand down to them amplified and devel­ oped. For the last few years, through several agencies, the governmerlt has been endeavoring to get our people to look ahead and to substitute a planned and orderly development of our re sources In place of a haphazard striv ing for immediate profit. Our great river systems should be developed as national water highways; the Missis­ sippi. with Its tributaries, standing first In importance, and the Columbia sec­ ond, although there are many others of importance on the Pacific and Atlantic and the gulf slopes. The national gov­ ernment should undertake this yrork, and I hope a beginning will be made In the pVesent congress; and the great­ est of all our rivers, the Mississippi, should receive especial attention. From the Great Lakes to the mouth of the Mississippi there should be a deep wa­ terway, with deep waterways leading from it to the east and the west. Such a waterway would practically mean the extension of our coast line into the very heart of our country, It would be of incalculable benefit to our people. If begun at once it can be carried through in time appreciably to relieve the con­ gestion of our great freight-carrying lines of railroads. The work should be systematically and continuously carried forward in accordance with some well- conceived plan. The main streams should be improved to the highest point of efficiency before the improve­ ment of the branches is attempted; a.pd the work should be kept free from every taint of recklessness or jobbery." Attention is called to the work of ir­ rigation and reclamation of govern­ ment lands. In the same connection he asks for a revision of the public land laws along the lines proposed by the public lands commission. Believes the government should increase its efforts to conserve our forests and should in crease by purchase the existing forest preserves. On the subject of the natural resources of the nation he says: "In the eastern United States the mineral fuels have already passed Into the hands of large private owners, and those of the west are rapidly following. It is obvious that these fuels should be conserved and not wasted, and it would be Well to protect the people against unjust and extortionate prices, so far as that can still be done. What has been accomplished in the great oil fields of the Indian Territory by the action of the administration offers n striking example of the good results of such a policy. In my Judgment the government should have the right to keep the 'fee of the coal, oil and gas fields in its own possession and to lease the rights to develop them under proper regulations; or else, if the con­ gress will not adopt this method, the coal deposits should be sold under lim ltations, to conserve them as public utilities, the right to mine coal being separated from the title to the soil The regulations should permit coal l/inds to be worked in sufficient quan tlty by the several corporations. The present limitations have been absurd, excessive, and serve no useful purpose, and often render it necessary that there should be either {.raud or else abandonment of the work of yetting out the coal." ProgreM of the Work On the Panama Canal. "Work on the Panama canal is pro­ ceeding in a highly satisfactory man­ ner. In March the total excavation in the Culebra Cut, where effort was chiefly concentrated1, was £15,270 cubic yards. In April this was increased to 879.527 cubic yards. There was a con­ siderable decrease in the output for May and June owing partly to the ad vent of the rainy season and partly to temporary trouble with the steam shovel men over the question of wages. This trouble was settled satisfactorily to all parties and tn July the total ex- cavatloi# advanced materially and in August the grand total from all points in the canal prism by Mteam shovels and dredjfes exceeded all previous United States records, reaching 1.274, 404 cubic yards. In September this rec­ ord was eclipsed and a total of 1.517. #12 cubic yards was removed. Of this amount 1,461.307 cubic yard* were from were from accessory works. These re­ sults were achieved in' the rainy sea­ son with a rainfall In August of 11.89 inches and In September of 11,65 Inches. Finally, in October, the record was again eclipsed, the total excavation be­ ing 1,868,729 cubic yards; a truly ex­ traordinary record, especially in view of the heavy rainfall, which was 17.1 inches. In fa:ct, experience during the last two rainy seasons demonstrates that the rains are a less serious ob­ stacle to progress than has hitherto been supposed. "Work on the ioclcs and dftms at Gatun, which began actively in March last, has advanced so far that it Is thought that masonry work on the locks can be begun within 15 months. | "Last winter bids were requested and received for doing the work of canal construction by contract. None of them was found to be satisfactory and all were rejected. It Is the unanimous opinion of the present commission that the work can be done better, more cheaply, and more quickly by the gov­ ernment than by private contractors. Fully 80 per cent, of the entire plant needed for construction has been pur­ chased or contracted for; machine shops have been erected and equipped for making all needed repairs to the plant; many thousands of employes have been secured; an effective organi­ zation has been perfected; a recruiting System Is in operation which Is capable of furnishing more labor than can be used advantageously; employes are well sheltered and well fed; salaries paid are satisfactory, and the work Is not only going forward smoothly, but it is producing results far in advance of the most sanguine anticipations. Under these favorable conditfohs, a change In the method of prosecuting the Work would be unwise and unjusti­ fiable; for it would inevitably disorgan­ ize existing conditions, cheok progress, and Increase the cost and lengthen the time of completing the canal. President Recommend* Postal Savings Banks., I commend to the favorable consid­ eration of the congress a postal sav­ ings bank system, as recommended by the postmaster general. The primary object is to encourage among our peo­ ple economy and thrift and by the use of postal savings banks to give an opportunity to husband their re= sources, particularly those who have not the facilities at hand for depositing their money in savings banks. Viewed, however, from the experience of the past few weeks, it is evident that the advantages of such an Institution are still more*far-reaching. Timid depos­ itors have withdrawn their savings for the time being from national banks; in­ dividuals have hoarded their cash and the workingmen their earnings; all of which money has been withdrawn and kept in hiding or iri the safe de­ posit box to the detriment of pros­ perity. Through the agency of the pos­ tal savings banks such money would be restored to the channels of, trade, to the mutual benefit of capital and labor. "I further commend to the congress the consideration of the postmaster general's recommendation for an ex­ tension of the parcel post, especially on the rural routes. There are now 38,- 215 rural routes, serving nearly 15,000,- 000 people who do not have the ad­ vantages of the inhabitants of cities In obtaining their supplies. These recom­ mendations have been drawn up to benefit the farmer and the -ayyuntry^ storekeeper; otherwise, I should not favor them, for I believe that It is good policy for our government to do every­ thing possible to aid the small town and the country district. It Is desirable that the country merchant should not be crushed out. "The fourth-class postmasters' con­ vention has passed a very strong reso­ lution in favor of placing the fourth- class postmasters under the clvil-serv- ice law. The administration has al­ ready put into effect the policy of re fusing to remove any fourth-class post masters save for reasons connected with the good of the service; and it Is endeavoring so far as possible to re­ move them from the domain of partisan politics. It would be a most desirable thing to put the fourth-class postmas­ ters in the classified service." He renews his recommendations of last year in regard to Alaska; calls at­ tention to the admission of Oklahoma as a state; urges the importance of pro­ viding shipping relief for Hawaii; asks for citizenship far Porto Ricans, and' promises submission of Secretary Taft's report on Philippines when that official returns. He asks for the creation of a bureau of mines; recommends the providing of funds for preserving The Hermitage, the home of Andrew Jackson; and the erection of a naval monument at Vicksburg. Corporation Contributions to Compaiam Expense*. "Under our form of government voting is not merely a right but a duty, and, moreover, a' fundamental and necessary duty if a man is to be a good citizen. It is well to provide that corporations shall not contribute to presidential or national campaigns, and furthermore to provide for the publication of both con­ tributions and expenditures. There Is, however, always danger in laws of this kind, which from their very nature are difficult of enforcement; the danger being lest they be obeyed only by the honest, and disobeyed by the unscrupulous, so as to act only as a penalty upon honest men. Moreover, no such law would ham­ per an unscrupulous man of unlimited (means from buying his owq way Into of­ fice. There Is a very radical measure which would,, I believe, work a substan­ tial improvement In our system of con­ ducting a campaign, although I am well aware that it will take some time for people to so familiarize themselves with such a proposal as to be willing to con­ sider its adoption. The need for collect­ ing large campaign funds would vanish it congress provided an appropriation for the proper and legitimate expenses of each of the great national parties, an ap­ propriation ample enough to meet the necessity for thorough organization and machinery, which requires a large .ex­ penditure of money. Then the stipula­ tion should be made that no party re celving campaign funds fnjm the treasury should accept more than a fixed amount from any individual subscriber or donor; and the necessary publicity for receipts and expenditures could without difficulty be provided." WHti Improvement Is the Ocean Mall Scrvlce. "I call your e-specla! attention to the un­ satisfactory condition of our foreign mail service, which, because of the lack of American steamship lines. Is now largely done through foreign lines, and which particularly so far aft South and Central America are concerned, is done in a man­ ner which constitute* a serious barrier to the extensions of our commerce. "The time has come, in my judgment, to set to work seriously to make our ocean mall service correspond more closely with our recent commercial and political development. A beginning was made by the ocean mail act of March 3, 1831, but even at that time the act was known to be inadequate in various par ticulars. Since that time events have moved rapidly in our history. We hav acquired Hawaii, the Philippines, and leeser islands in the Pacific. We are steadily prosecuting the great work of uniting at the Isthmus tiic waters of the Atlantic and the Pacific. To a greater extent than seemed probably even dozen years ago we may look to an American future on the sea worthy of the tradition of our past. As the first step in that direction, and the step most feasible at the present time, I recommend the extension of the ocean mail act of 1891. That act has stood for some years free from successful criticism of Its prin ciple and purpose. It was base* on theo ries of the obligation's of a great mart time nation, undisputed in our own land and followed by other nations since the beginning of steam navigation. Briefly those theories sre, that it Is the duty of a first-class power so far as practicable to carry its ocean mails under its own flag; that the fast oce^n steamships and their crews, required for such mail serv­ ice, are valuable auxiliaries to the sea of the shipyards in whlcb. i must be built. ,«•&• Aakft Increase In Pay wny NATIVE mm The president devotes much space to the affairs of the army, and strongly urges that our regular military organi­ zation be kept up to the highest possible standard of efficiency, and says; "The medical corps should be much greater than the needs of our regular army In war. Yet at present It Is small­ er than the needs of the service demand even in peace. The Spanish war oc­ curred less than ten years ago. The chief loss we "Buffered In It was by dis­ ease among the regiments which never left the country. At the moment" the nation seemed deeply Impressed by this fact; yet seemingly It has already been forgotten, for not the slightest effort has been made to prepare a medical corps of sufficient size to prevent the repetition of the same disaster on a much larger scale if we should ever be engaged in a serious conflict. "But the medical department Is not the only department for which Increased pro­ vision should be made. The rate of pay for the officers should be greatly ln- crea^d; there is no higher type of citizen thanthe American regular officer, and he shourd have a fair reward for his ad­ mirable work. There should be a rela­ tively evert greater Increase in the pay for the enlisted men. An especial provision should be made for establishing grades equivalent to those of warrant officers in the navy, which should be open to the enlisted men who sqrve sufficiently Jong and who do their work well. Inducements should be offered sufficient to encourage really good men to make the army a life' occupation. The prime needs of our pres­ ent army 'is to secure and retain compe­ tent noncommissioned officers. This diffi­ culty rests fundamentally on the ques­ tion of pay. The noncommissioned officer does not correspond with an, unskilled la­ borer; he corresponds to the best type of skilled workman or to the subordinate official jn civil Institutions. Wages have greatly Increased in outside occupations in the la^t 40 years and the pay of the soldier, like the pay of the officers, should be proportionately Increased. The first sergeant of a company, if a good man, must be one Of such, executive and ad­ ministrative ability, and such knowledge of his trade, as to be worth far more than we at present pay him. The same is true of the regimental sergeant major. These men should be men who had fully re* solved to malie the army a life occupa­ tion and they should be able to look for­ ward to ample reward; while only men properly qualified should be given a chance to secure these final rewards. The increase over the present pay need not be great in the lower grades for the first one or two enlistments, but the increase should be marked for the noncommis­ sioned officers of the upper grades who serve long enough to make it evident that they intend to stay permanently in the army, while additional pay should be given for high qualifications in target practice. "Among the officers there should be severe examinations to weed out the unfit up to the grade of major. From that position on appointments should be solely by selection and it should b« understood that a man of merely av­ erage capacity could never get beyond the position of major, while every man who serves In any grade a certain length of time prior to promotion to the next grade without getting the promotion to the next grade should be forthwith retired." President Sees Need of Largely Increased Navy. The president asks for a continuous increase In the navy, and asks present congress for appropriations for four new battleships, and says: "We need always to remember that in time of war the navy Is not to "be used to defend harbors and sea-coast cities; we should perfect our system of coast fortifications. The only efficient use for the navy Is for offense. The only way in which it can efficiently pro­ tect our own coast against the possible action of a foreign navy is by destroy­ ing that foreign navy. For defens* against a hostile fleet which actually attacks them, the coast cities must de­ pend upon their forts, mines, torpedoes,. submarines and torpedo boats and de­ stroyers. All of these together are ef­ ficient for defensive purposes, but they in no way supply the place of a thor­ oughly efficient navy capable of acting on the offensive; for parrying never yet won a fight. It can only be won by hard biting, and an aggressive sea-go­ ing navy alone can do this hard hitting of the offensive type. But the forts and the like are necessary so that the navy may be footloose. In time of war there is sure to be demand, under pres­ sure of fright, for the ships to be scat­ tered so as to defend all kind of ports. Under penalty of terrible disaster, this demand must bo refused. The ships must be kept together, and their ob­ jective made the enemies' fleet. If fortifications are sufficiently strong, no modern navy will venture to attack them, so long as the foe has In exist­ ence a hostile navy of anything like the same size or efficiency. But unless there exists such a navy then the forti­ fications are powerless by themselves to secure the victory. For of course the mere deficiency means that any resolute enemy can at his leisure com­ bine all his forces, upon one point with the certainty that he can take it. Gives Reasons for Despatch Of Fleet to th« Pacific. Until our oattle fleet Is much larger than at present it should never be split Into detachments so far apart that they could not In event of emergency be „peedlly united. Our coast line is on the Pacific just as much as on the At­ lantic. The interests ,of California, Oregon and Washington are as em­ phatically the interests of the whole union as those of Maine and New York, of Louisiana and Texas. 'The battle fleet should now and then be moved to the Pacific. Just as at other times it i HAS PROVED MATCH FOR ClOUS WHITE MAN. Monarch of the Motqulto Cc Nicaragua Both Far-Seel ng tnd Wise'-- Refuses to Dr. L. E. Flanagan, a former citiwwi Of Charlottesville, Va., but who bar for the last five years been living at Cape Graela, an important town on the east coast of Nicaragua, ts at the Belvedere, says the Baltimore Ameri­ can. The doctor is a friend of G«n. Zelaya, president of the republicji(E*4 Nicaragua, and has been honored by him with several Important offices., "There Is probably no richer coun­ try in the world than Nicaragua," said Dr. Flanagan. "It is, however, almost In 4 virgin state, as there has been scarcely any development of its great resources. President Zelaya, the abl6 and energetic chief executive, is giv­ ing the country a most excellent ad­ ministration and enjoys the absolute confidence of the people. The natijps of the Mosquito coast, as my section is called, are known as Mosco, or Sambo., Indians, and are »--queer mix- ic ture of Indian, negro and Caucasian elements, with the native Indian type predominating, though -most of them show their strain of African blood by ^ a kinkiness of the hair, while others are fair-haired and light of skin, as a reminder of Scotch buccaneer progen­ itors. Not one in fifty of these Sambos ever slept in a bed and not more than one In five ever handles a piece of , money. The older members of the. family sleep in hammocks woven from the fibers of the hennequin or the banana stalk, while the juveniles curl up on the floor. They are about as near to nature as any people under the sun, for nature supplies them with everything necessary to sustain life. "These Sambos are nominally under the Nlcaraguan government, it is true, but ttyey pay direct allegiance to a king, a monarch of their own tribe. His authority extends over many vil­ lages and settlements, embracing a coast line of 150 miles, and he is by no means a figurehead, for in periodi­ cal revolutions he often holds the bal­ ance of power and dictates terms to the contending leaders. The Mosquito coast is the most backward, commer­ cially and industrially, of all the re­ gions bordering on the Caribbean, «ad for this the Sambo king is directly re­ sponsible. He is shrewd enough to know that wherever the white man gets a footing the native soon van­ ishes, and therefore has he refused the granting of concessions for the exploitation of the valuable forests of his kingdom, nor will he allow his subjects to sell their lands. Thus this wily Indian rtiler, who can't write his name, has managed to hold his terri­ tory in its primal state against the avaricious schemes of the white man. His people obey him unquestionably and the general government is con­ tent to let him alone." ; & ' ?..V. <?> - '-5 When You Don't Cee IL i' Here is a story of the pupil who had never been able to discern the dif­ ference between "I seen" and "I saw." Her instructor, after laboring long and patiently to instill a ray of light Into her mind on the subject, finally suc- ceeded in getting some good examples from the child which would seem to prove that the difference was at last recognized and appreciated. The teacher paused for a moment and de­ manded of the child a correct explana­ tion of the difference as she saw It. The girl answered beamingly. She was sure of herself, but it took some thinking to express just what she wanted to say. However, after much inward tumult and obvious effort, the following statement was heard: "When you see a thing it's 'see,' and when you don't see it it's 'saw.'" ---San Fraficisco Call. Universal Postage The world s postage stamp meas­ ures four by three inches and Is head­ ed: "Coupon -- Response Interna­ tional." The stamp really is a coupon postal order to the bearer, to be ex­ changed for stamps, so that any one writing, say, from Europe to America, and wishing to send a stamp for re­ ply, can take advantage of it. »Four million stamps have been made in Switzerland. The countries which have entered into the arrangement include Great Britain, France, Ger­ many, Austria, Belgium, United ^ _ _ _ _ States, Spain, British colonies, Egypt, should*^be^ke"ptW 1 n"the Atlantic. When ; Mexico, Bosnia-Herzegovina, Sweden, the isthmian canal Is built the transit of the battle fleet from one ocean to the other will be comparatively easy, l&ntil It is built I earnestly hope that the battle fleet will be thus shifted be­ tween the two oceans every year or two- The marksmanship on all our ships has Improved phenomenally dur­ ing the last five years. Until within the last two or three years it was not possible to train a battle fleet In squad­ ron maneuvers under service conditions, and It is only dnringr these last two or thfe© years that th6 trainings undfi* these conditions has become really ef­ fective. Another and most necessary stride in advance Is now beinjf taken, •jhe battle fleet fs about starting by the Straits of Magellan to visit the Pacific coast. Sixteen battleships are going under the command of Rear Ad­ miral Evans. while eight armored ruisers and two other battleships will meet him f.t San Francisco, whither certain torpedo destroyers are also go­ ing No fleet of such sise has «"*'"• Switzerland, Roumania, Japan, Slam. Korea, Greece, Italy, Chili, Costa Rica, Crete, Denmark, Louxemburg and Norway. Each of these countries will order several hundred thousand stamps. The vignette on the stamp represents the figure of a goddess as a messenger of peace from one hemi­ sphere to the other. - In the back­ ground are olive branches. The col­ ors form a soft harmonious blend of yellow-green and blue-gray. Ability That Won Success. It wa» his ability to sign his name fd a hurry that won for Third As­ sistant Postmaster General Lawshe the promotions leading to his present position. Years ago he entered the office of atiditor for the postoffice de- made such a voyage, and it will be of } partment. He managed to have his very great educational use to all cn- stuff off before any of his associates gaged in it. rhe-onlyJr^7^ytTr h'andie because he was able to sign his name teach officers and men bow to hanuio gaged In it. the fleet IV "as" to meet every possible strain an', emergency in time of war Is to have them practice under similar conditions In time of peace. Moreover, the only way to find out our actual needs is to perform in time of peace whatever maneuvers might be neces­ sary In time of war. After war is de- clarcd it is too late to And out th* needs; that means to in,y,,te. d,sas^ef; The trip to the Pacific will show what some of our needs are and will enable us. to provide for them. The proper place for an officer to learn h.s duty is at sea. and the only way in which • navy can ever be made efficient Is by practice at sea. under all the condi­ tions which would have to be met It war existed." He ^reviews the work accomplished by the second peace conference at The Hague; notes the improvement of af­ fairs in Cuba, and the preparations be- in* made to reestablish the govern­ ment of the Island republic asks per­ mission to cancel the remainder of with such speed and legibility. Later he went • to the Philippines in the capacity of auditor. To-day he is the , most rapid signature -writer of all the men in the higher offices of the fO*- ernment. of the merit*$®t the controversy. aa« the canal prism an# *«.1M cubic yard* nowe- of a nation. Furthermore, the I China's Indemnity oblf^htion to us. and oonatruction of such steamships insures I reviews* the effect of Secretary Roots the maintenance la an efficient coadUttea vlelt to Jiexlflifc Oldest Living English Artist. The oldest living English artist* William Callow, in his ninety-sixtl^,. year, is honored by the opening of thei. galleries in Leicester square, London^j ^ with a collection of some 70 drawings, showing the. whole range of his aril . >..••• from 1840 to 1904, when failing sight ^ compelled him to drop his brush* Mr. Callow was the founder of tt old water-color society. We have had, in America one artist at least wh(| painted after he was 90 years old-*" Asher B. Durand? and Wortkingtoi| Whlttredgc, who still paintu well, far alms in eigbtiea. -'-'"-'A