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MESSAGE READ TO CONGRESS No Tariff Revision For the Present. NICARAGUAN TROUBLE. irmpoasiNe Nations Not Pro Itcttd by Monroe Doctrine. A DEFICIT OF $73,075, legislation Urged Against In? junctions Without Notice. Waahlngton, Dec. 7.?Id bis annual jBoeeftge, read to congress, President tfaft said To the Senate and the House of Rep? resentatives: Tie relations of the United States if Ith all foreign governments have con? tinued upon the normal bas;? of uni ty and good understanding and are very generally satisfactory. Europe. The American rights [In the fisheries on the north Atlantic coast] under the fisheries article of the treaty of 1818 hare been a cauae of difference be? tween the United States and Great Britain for nearly seventy years. The Interest! Involved are of great Impor? tance to the American flshlng Industry, and the final settlement of the contro? versy (by the permanent court of ar? bitration at The Hague! will remove m source of constant Irritation and com plaint This is the first case Involving inch great International questions woie% has been submitted to the p?r l as neat court of arbitration at The Negotiations for so international conference to consider end reach sin arrangement providing for the prescr? iption and protection of the fur seals In the north Pacific are in progress irlth the governments of Great Britain, ?fapaa and Raasls. The attitude of the governments interested leads ine to hope for a satisfactory settlement of this questiou at the ultimate outcome of the negotiations. The Near East. The quick transition of tbe govern lient of the ottoman empire from one of retrograde tendencies to a consti? tutional government with a parlia? ment and with progressiv e modern ladlcles df reform and public improve taeut is one of the important phenome? na of our times. Constitutional gov? ernment seems also to have made lnrtber advance in Persia. These events have turned the eyes of tbe world upon the near east. In that quarter tbe prestige of the United State? baa spread widely through tbe graceful influence of American schools. nnlven.ltles aud missionaries. There Is every reason why .we should obtain a greater share of the commerce of tbe near east since tbe conditions are tooro favorable now than ever before. Latin America. One of tbe happiest events iu recent I?an American diplomacy was the pa? cific Independent settlement by the governments of Bolivia and Peru of a Iwniidary difference between them, which for some weeks threatened to cause war aud even to entrain Im blth rments affecting other republics lose directly concerned. Our Citizens Abroad. This aduiinlMtmtton. through the De? partment of state and the foreign serv See, I? lending all proper support to legitimate and beneficial American en? terprises lu foreign countries, the < e gree of such support being measured by the national advantages to he ex pected. A citizen himself cannot by contract or otherv? e divest himself of the right, iior can this government escape the obligation, of his pTOtOC tl?>n In his personal and property rights when these ar?- unjustly in fringed In a foreign country. To avoid ceaseless vexations it Is proper that in considering whether American enter prise should be encouraged or support? ed in a particular country the govern? ment should glvo full weight not only to the national as opposed to the liuli Tldual benefits to accrue, hut also to the fact whether or not the govern ment of the country In question Is in .Its sdmlnlstratlon and in its diplomacy faithful to the principles of mod'vru tlon. equity and Justice upon which Alone depends international credit In diplomacy as well as lu finance. The Monroe Doctrine. The pan-American policy of this ram ment has long beeu fixed In Its Inclples and remains unchanged. Ith the changed circumstances of the Inlted States snd of the republics to the south of us, most of which have it natural resources, stable govem it and progressive Ideals, the ap The fourteenth annual convention of the South Carolina Daughters of preheniilon which gave rise to the Monroe doctrine may be said to have nearly disappeared, and ueither the doctrine as it exists nor any otber doc? trine of American policy should be permitted to operate tor the perpetua? tion of irresponsible govern meat, the escape of juit obligations or the Insidi? ous allegation of dominating a in bit ions on the- part of the United Stutes. My meeting with President Diaz and the greeting exchanged on both Amer? ican and Mexican soil served. I hope, to signalize the close and cordiil rela? tions which so well bind togetter this> republic and the great republic imme? diately to the south, between which there is so vast a network of material interests. 1 am happy to say that all tut one of the cases which for so long vexed our relations with Venezuela have been settled within the past few months and that under the enlight? ened regime now directing the govern? ment of Venezuela, provision has been made for arbitration of the remaining case before The Hague tribunal. On July 80. 1009, the government of Panama agreed, after considerable ne? gotiation, to Indemnify the relatives' of the American officers and sailors who were brutally treated, one of them having. Indeed, been killed by the Pans man police this year. This government was obliged to In? tervene diplomatically to bring about arbitration or settlement of the claim of the Emery company against Nica? ragua, which it had loug before ueen agreed should be arbitrated. A settle? ment of this troublesome case* was reached by the signature of a protocol on Sept. 18, 1900. Many years ago diplomatic interven? tion became necessary to the protec? tion of the interests in the American claim of Alsop & Co. against the government of Chile. The govern? ment of Chile had frequently admitted obligation in the case and had prom? ised this government to settle it. There had been two abortive attempts to do so through arbitral commissions, which failed through lack of jurisdiction. Now, happily, as the result of the re? cent diplomatic negotiations, the gov? ernments of the United States and of Chile, actuated by the sincere desire to free from any strain those cordial and friendly relations upon which both set such store, have agreed by a proto? col to submit the controversy to defin? itive settlement by his Britannic majes? ty Edward VII. The Nicaraguan Trouble. Since the Washington conventions of 1907 were communicated to the gov? ernment of the United States as a con? sulting and advising party this gov? ernment has been almost continuously called upon by one or another and in turn by all of the five Central Amer? ican republics to exert Itself for the maintenance of the conventions. Near? ly every complaint has been against the Zelaya government of Nicaragua, which has kept Central America in constant tension or turmoil. The re? sponses made to the representations of Central American republics as due from the United States on account of Its relation to the Washington conven? tions have been at all times conserva? tive and have avoided, so far aa possi? ble, any semblance of interference, al? though it is very apparent'"'"that the considerations of geographic proximity 1 to the canal zone and of the very sub- 1 stantlal American Interests in Central America grve to the United States a special position in the zone o' these 1 republics and the Caribbean sei. I need not rehearse here the patleut efforts of this go vet innen t to promote peace and welfare among tb3se re? publics, efforts which are fully appre- j elated by the majority of then who 1 are loyal to their true interests. It j would be uo less unnecessary to re- | hearse here the sad tale of unspeak? able barbarities and oppression alleged to have been committed by the Zelaya governmeut. Recently two Americans were put t>> death by order ot Presi? dent Zelaya himself. They were ofll cers in the organized forces of a rev? olution which had continued many weeks and was in control of about half of the republic, and as such, ac? cording to toe modern enlightened practice of civilized nulions, they were entkled to be dealt with as prisoners of war. I At the date when this message is printed this government has termi nated diplomatic relations with the Zelnya government for reason.-, made public iu a communication to the for? mer Nicaraguan charge d'affaires and Is Intending to take such future steps as may be found most consistent with its dignity, its duty to Aineii an in? terests and its moral ohllgutlous to Central America and to civilization, it may luter be necessary for DM to bring this subject to the attention of the congress in u special message. In the Far East. In the far east this government pre serves unchanged its polloy of support? ing the principle of equality of OpDOf tunity and serupulous respeet for the Integrity of the Chinese empire. t?> which policy are pledged tbe Interest ed powers of both east and west. By tbe treaty of 1909 Cblna has un? dertaken the abolition of Ilk in with a moderate and proportionate raising of the customs tariff along with currency reform. These reforms being ? mani? fest advantage to foreign commerce as well as to the Interests of Chli a, this government is endeavoring to faclll t?te these measures and the needful acquiescence of the treaty powers. When it appeared that Chinese Ukln revenues were to be hypothecated to foreign bankers In connection with a great railway project It was obvious that the governments whose nntlouals held this loan would have a -ertaln direct Interest in the question of the carrying out by China of the reforms In question. The administrator deem? ed American participation to be of great national interest. Happily, when the Confederacy convened In New berry Tuesday night. it was as a matter of broad polky ur? gent that this opportunity should not be lost, the indispensable instrumental? ity preseuted itself when a group of American hankers of international reputation and great resources agreed at once to share in the loan upon pre? cisely such terms as this government should approve. The chief of those terms was that American railway ma? terial should be upon an exact equality with that of the other nationals join? ing in the loan in the placing of or? ders for this whole railroad system. After mouths of negotiation the equal participation of Americans seems at last assured. Iu one of the Chinese-Japanese con? ventions of Sept. 1 of this year there was a provision which caused consid? erable public apprehension in that upon Its face It was believed in some quarters to seek to establish a monop? oly of mining privileges along the South Manchurian and Antung-Muk ler. rsinrvads and thus to exclude Americans from a wide field of enter? prise, to take part in which they were by treaty with China entitled. After a thorough examination of the conven? tions and of tbe several contextual documents the secretary of state reach? ed the conclusion that no such monop? oly was intended or accomplished. This government made inquiry of the Imperial Chinese and Japanese gov? ernments and received from each offi? cial assurance that the provision had no purpose Inconsistent with the poli? cy of equality of opportunity to which the signatories, in common with the United States, are pledged. Our traditional relations with the Japanese empire continue cordial, as usual. The arrangement of 1908 for a co-operative control of the coming of laborers to the United States has proved to work satisfactorily. The matter of t revision of the existing treaty between the United States and Japan which is terminable in 1912 is already receiving the study of both countries. 1 The Department of State. 1 earnestly recommend to the favor? able action of the congress the esti? mates submitted by the department of state and most especially the legisla? tion suggested in the secretary of state's letter of this date whereby it will be possible to develop and make permanent tbe reorganization of the department upon modern lines in a manner to make it a thoroughly ef? ficient instrument in the furtherance of our foreign trade and of American interests abroad. Under a provision of the act of Aug. 5, 1909, I have appointed three officials to assist the officers of the government in collecting information necessary to a wise administration of the tariff act of Aug. 5. 1909. As to questions of customs administration they are co? operating with the officials of the treasury department and as to matters of the needs and the exigencies of our manufacturers and exporters with the department of commerce and labor in its relation to the domestic aspect of the subject of foreign commerce. As a consequence of section 2 of the tariff act of Aug. 5, 1909, it becomes the duty of the secretary of state to con? duct as diplomatic business all the negotiations necessary to place him in a position to advise me as to whether or not a particular country unduly dis? criminates against the United States in the sense of the statute referred to. Q vernment Expenditures and Rev? enues. Perhaps the most Important ques? tion presented to this administration is that of economy in expenditures and sufficiency of revenue. The report of the secretary shows that the ordinary expenditures for tbe current fiscal year ending June 30, 1910. will exceed the estimated re? ceipts by $34.075.020. if to this deficit are added the sum to be disbursed for tbe Panama canal, amounting to $38, 000.000. and $1.000,000 to be paid on the public debt, the deficit of ordinary receipts aud expenditures will be in? creased to a total deficit of $73.075,020. This deficit the secretary proposes to meet by tbe proceeds of bonds issued to pay the cost of constructing the Panama canal. I approve this pro? posal. The Panama Canal. The policy of 'paying for the con? struction of the Panama canal not out of current revenue, but by bond issue, was adopted In the Spooner act of 1002, and there seems to be no good reason for departing from the princi? ple by which a part at least of the burden of the cost of the canal shall fall upon our posterity, who are to enjoy it, and there is all the more rea? son for this view because the actual cost to date of the canal, which is now half done and which will be completed Jan. 1, 1015, shows that the cost of engineering and construction will be '9807*700,000 instead of $180,705,200, as originally estimated. In addition to engineering and construction, the Oth? er expenses, including sanitation i government and the amount paid for the properties, the franchise and the privilege of building the canal, in? crease the cost by $75,435,000 to a total of $875,201,000. The increase In the cost of engineering and construc? tion is due to a substantial enlarge? ment of tlio plan of construction by Widening the canal lOO feet in the Cu lebra CUt and by increasing the di? mensions of the locks, to the under? estimate of the quantity of the work to be done under the original plan and to an underestimate of the ;ost of la? bor and materials, both of which have greatly enhanced In price since the original estimate was made. Government Economy. In order to avoid a deficit for the ensuing fiscal year I directed the heads of departments iu the prepara? tion of their estimates to make them as low as possible consistent with im? perative governmental necessity. The result has been, as I am advised by Next the Tobacco Trust will he In? vited to step up and lay Its neck the secretary of the treasury, that the estimates of the expenses of the gov? ernment for the fiscal year ending June 30, 1911?that is, for the next fiscal year?are less by $??,0G3,000 than the total of appropriations for the current fiscal year and less by $94,000,000 than the estimates for that year. So far as the secretary of the treasury is aide to form a judgment as to future income, there will be no deficit in the year ending June .??0, 1011. but a small surplus of $712.UK). J In the present estimates the needs of the departments aud of the gov? ernment have been cut to the quick. For the purpose of securing informa? tion which may enable the executive and the legislative branches to unite In a plan for the permanent reduction ot the cost of governmental- adminis? tration the treasury department has Instituted an investigation by one of the most skilled expert accountants in the United States. Tbe object of the investigation is to devise means to in? crease the average efficiency of each employee. There is great room for im? provement toward this end, not only by the reorganization of bureaus and departments and in the avoidance of duplication, but also in the treatment of the individual employee. Under the present system it constant? ly happens that two employees receive the same salary when the work of one is far more difficult and important and exacting thau that of the other. Su? perior ability is not rewarded or en? couraged. Civil Pensions. As the degree of efficiency in all the departments Is much lessened by the re? tention of old employees who have out? lived their energy and usefulness it is indispensable to any proper system of economy that provision be made so that their separation from the service Bhill be easy and inevitable, it is im? possible to make such provision unless there is adopted a plan of civil pen? sions. We cannot, in view of the ad? vancing prices of living, hope to save money by a reduction in tbe standard of salaries paid, indeed, if any change is made in that regard an increase rather than a decrease will be neces? sary, aud the only means of economy will be in reducing the number of employees and in obtaining a greater average of efficiency from those re? tained in the service. Frauds In the Collection of Customs. I regret to refer to the fact of the discovery of extensive frauds in the collection of the customs revenue at New York city, in which a number of the subordinate employees in the weighing and other departments were directly concerned and In which the beneficiaries were the American Sugar Refining company and others. The frauds consisted in the payment of du? ty on underweights of sugar. The gov? ernment has recovered from tbe Amer? ican Sugar Refining company all that it Is shown to have been defrauded of. The sum was received in full of the amount due which might have been recovered by civil action against the beneficiary of the fraud, but there was an excess reservation in the contract of settlement by which the settlement should not interfere with or prevent the criminal prosecution of every one who was found to be subject to the same. Criminal prosecutions are now pro? ceeding against a number of the gov? ernment officers. The treasury de? partment and the department of jus? tice are exerting every effort to dis? cover all the wrongdoers, Including the officers and employees of the compa? nies who may have been privy to the fraud. It would seem to me that an Investigation of the frauds by con? gress at present, pending the probing by the treasury department and the department of justice, as proposed, might by giving immunity and other? wise prove an embarrassment in se? curing conviction of the guilty parties. Maximum and Minimum Clause In Tariff Act. Two features of the new tariff act call for special reference. In order that the maximum duty shall be charg? ed against the imports from a country it is necessary that the executive shall find on tbe part of that couutry not only discriminations lu Its laws or the practice under them against the trade of the United States, but that the dis? criminations found shall be undue? that Is. without good and fair reason. No one Is seeking a tariff war or a con? dition in which the spirit of retaliation 1 shall be aroused. Tariff Readjustment. The new tariff law enables me to ap- j point a tariff board to assist me in con- I neotion With the department of state iu , the administration of the minimum and I maximum clause of the act and also to j assist officers of the government in the administration of the eutlre law. I be? lieve that the work of this board will be of prime utility and importance whenever congress shall deem it wise again to readjust the customs duties, if the facts secured by the tariff board are of such a character as to show gen? erally that the rates of duties imposed ?, by the present tariff law are excessive under the principles of protection as described in the platform of the suc? cessful party at the late election I shall not hesitate to invite the atten? tion of congress to this fact and to the necessity for action predicated there? on. Nothing, however, halts business and Interferes with the course of pros parity so much ns the threatened revi? sion of the tariff, and unlll the facts are at hand, after careful and deliber? ate investigation, upon which such re? vision can properly be undertaken, it seems to me unwise to attempt it. War Department. In the Interest of immediate econ? omy I have required a reduction in the estimates of the war department for the coming fiscal year which brings the total estimates down to an amount forty-five millions less than across the chopping block.-?Chicago News. the corresponding estimates for last year. This could be accomplished only by cutting off new projects and sus? pending for the period of one year all progress In military matters. For the same reason I have directed that the army shall not be recruited, up to Us present authorized strength. These measures can baldly be more than temporary, for 1 am sure that the in? terests of the military establishment are seriously in need of careful con? sideration by congress. The secretary of war calls attention to a number of needed changes in the army, in all of which 1 concur, but the point upon which I place most em? phasis is the need for an elimination bill providing a method by which the merits of officers shall have some ef? fect upon their advancement and by which the advancement of all may be accelerated by the effective elimination of a definite proportion of the least efficient. The military and naval joint board have unanimously agreed that It would be unwise to make the large expendi? tures which at one time were contem? plated in the establishment of a naval base and station in the Philippine Is? lands and have expressed their judg? ment, in which I fully concur, in fa? vor of making an extensive naval base at Pearl Harbor, near Honolulu, and not in the Philippines. Th<? Navy. The return of the battleship fleet from its voyage around the world in more efficient condition than when it started was a noteworthy event of In? terest alike to our citizeus and the naval authorities of the world. The marked success of the ships in steam? ing around the world in all weathers on schedule time has increased respect for our navy and has added to our na? tional prestige. It is a regrettable fact that the higher officers are old for the respon? sibilities of the modern navy, and tbe admirals do uot arrive at flag rank young enough to obtain adequate train? ing in their duties as flag officers. Owing to the necessity for economy in expenditures, I have directed the curtailment of recommendations for naval appropriations so that they are thirty-eight millions less than the cor? responding estimates of last year, and the request for new naval construction Is limited to two first class battleships and one repair vessel. The secretary of the navy has inau? gurated a tentative plan involving cer? tain changes in the organization of the navy department, including the navy yards, all of which have been found by the attorney general to be in ac? cordance with law. I have approved the execution of the plan proposed be? cause of the greater efficiency and economy it promises. Department of Justice?Expedition In Legal Procedure. The deplorable delays in the admin? istration of civil and criminal law have received the attention of committees of the American Bar association and of many state bar associations as well as the considered thought of judges and jurists. In my judgment, a change In public procedure, with a view to re? ducing its expense to private litigants in civil cases and facilitating the dis? patch of business and final decision in both civil and criminal cases, consti? tutes the greatest need in our Ameri? can institutions. 1 do not doubt for one moment that much of the lawless violence and cruelty exhibited in lynch ings are directly > to the uncertain? ties and injustice growing out of the delays in trials, judgments and the exe? cutions thereof by our courts. I therefore recommeud legislation providing for the appointment by the president of a commission with author? ity to examine 4be law and equity procedure of the iederal courts of first Instance, the law of appeals from those courts to the courts of appeals and to the supreme court and the costs imposed in such procedure upon the private litigants and upon the public trenfmry aud make recommendation with a view to simplifying and ex pedbiing tbe procedure as far as pos? sible and making it as inexpensive as may be to the litigant of little means. The platform of the successful party in the last election contained the fol? lowing: Injunctions Without Notice. "We believe that the rules of proce? dure in the federal courts with respect to the issuance of the writ of Injunc? tion should be more accurately defined by statute and that no injunction or temporary restraining order should be Issued without notice, except where irreparable injury would result from delay, in which case a speedy hearing thereafter should be granted." I recommend that In compliance with the promise thus made appropriate leg? islation be adopted. Moreover, every such injunction or restraining order issued without previous notice and op? portunity by the defendant to be heard ?hOUld by force of the statute expire find be of no effect after seven days from the issuance thereof or within any time less than that period which the court may lix unless within such seven days or such less period the in? junction or order is extended or re? newed after previous notice and op? portunity to be heard. Anti-trust and Interstate Commerce Laws. The jurisdiction of the general gov? ernment over Interstate commerce has led to the passage of the St called "Sherman anti-trust law" and the "In? terstate commerce law" and its amendments. The developments in the operation of those laws call for a dis? cussion and some suggestions as to amendments. These I prefer to em? body in a special message. Postoffice Department?Second Class Mail Matter. The deficit every year in the post office department is largely caused by Commissioner Watson will make a special report to the legislature on the low rate of postage of 1 cent a pound charged on second class mail matter, which includes not only news? papers, but magazines and miscella? neous periodicals. The actual loss grow? ing out of the transmission of this second class mail matter at 1 cent a pound amounts to about $<;3,0<KJ,000 a year. The average cost of the trans? portation of this matter is more than 9 cents a pound. The statistics of 1907 slmw that second class mail matter constituted Go.JH per cent of the weight of all the mail and yielded only 5.10 per cent of the revenue. The figures given are startling and show the payment by the government of an enormous subsidy to the news? papers, magazines and periodicals. A great saving might be made, amount? ing to much more than half of tbe loss, by imposing upon magazines and peri? odicals a higher rate of postage. Postal Savings Banks. I believe postal savings banks to be ?sscessary in order to offer a proper i^lucement to thrift and saving to a fpeat many people of small means who Ao sot now have banking facilities and to whom such a system would offer an opportunity for the accumulate of capital. They will furnish a satUsaseauw substitute, based on sound principle and actual successful trial in asarly all the countries of the world, for the system of government guaranty of deposits now being adopted in several western states which, with deference to those who advocate it. seems to me to have In it the seeds of demoraliza? tion to conservative banking and cer? tain financial disaster. Ship Subsidy. Following the course of my distin? guished predecessor, I earnestly rec? ommend to congress the consideration and passage of a ship subsidy bill. Interior Department?New Mexico and Arizona. The successful party in the last elec? tion in its national platform declared in favor of the admission as separate states of New Mexico and Arizona, and 1 recommend that legislation ap? propriate to this end be adopted. Alaska. With respect to the territory of Alas? ka, I recommend legislation which shall provide for the appointment by the president of a governor and also of an executive council, the members of which shall during their term of office reside in the territory and which shall have legislative powers sufficient to enable it to give to the territory lo? cal laws adapted to its present growth. I strongly deprecate legislation looking to the election of a territorial legisla? ture in that vast district. Conservation of Natural Resources. In several departments there is pre? sented the necessity for legislation looking to the further conservation of our national resources, and the sub? ject is one cf such importance as to require a more detailed and extended discussion than can be entered upon In this communication. For that rea? son I shall take an early opportunity to send a special message to congress. The White Slave Trade. There is urgent necessity for addi? tional legislation and greater executive activity to suppress the recruiting of the ranks of prostitutes from the streams of immigration into this coun? try?an evil which, for want of a bet? ter name, has been called "the white slave trade." Bureau of Health. There seems to be no reason why all the bureaus and offices In the general government which have to do with the public health or subjects akin thereto should not be united in a bu? reau to be called the "bureau of pub? lic health." | Political Contributions. I urgently recommeud to congress that a law be passed requiring that candidates in elections of members of the house of representatives and com? mittees in charge of their candidacy and campaign file iu a proper office of the United States government a state? ment of the contributions received and of the expenditures Incurred in the campaign for such elections and that similar legislation be enacted in re? spect to all other elections which are constitutionally within the control of congress. i Conclusion. Speaking generally, the country is i iu a high state of prosperity. There is j every reason to believe that we are on ; the eve of a substantial business ex-| pausiou. and we have just garnered a harvest unexampled iu the market val-j ue of our agricultural products. The high prices which such products bring mean great prosperity for the farming community; but, 00 the Other baud, they mean a very considerably increas ed burden upon those els sags in the community whose yearly compensation does not expand with the improvement in business and the general prosperity. Various reasons are given for the Ligh prices. The proportionate increase iu the output of gold, which today is tbe chief medium of sxchauga and is in some respects a measure of value, fur-, nislies a substantial explanation of at least part of the increase in prices.' The increase iu population and the more expensive mode of living of the people, which have not beeu accom-j panled by a proportionate increase in acreage productiou, may furnish a fur? ther reason. It is trail to note that the increase in the cost of living Is not confined to this country, hut prevails the world over, and that those who would charge increases in prices to the existing protective tariff must meet the fact that the rise in prices has taken place almost wholly in those products of the factory and farm In respect to which there has been either no Increase in the tariff: or In many Instances a very considerable reduc? tion. I -1 the growth and development at Char? leston. I