N6ER ARMY
, AND NAVY 15
; MS PLEA
Thorough Preparedness Theme
of Annual Message to
Congress.
NEED OF IMMEDIATE ACTION
Increased Regular Army, Supplement
ed by Trained Citizenry, Is Plan
Mobilization of Industries Im
portant Problem Gravest
Threats Against Peace
Come From Within.
Washington, Dec. 7. President Wil
son today delivered the following mes
sage to congress:
Gentlemen of the Congress: Since I
last had the privilege of addressing
you on the state of the Union the war
of nations on the other side of the sea,
which had then only begun to disclose
Its portentous proportions, has extend
ed its threatening and sinister scope
until it has swept within its flame
some portion of every quarter of the
globe, not excepting our own hemi
sphere, has altered the whole face of
International affairs, and now presents
a prospect of reorganization and re
construction such as statesmen and
peoples have never been called upon
to attempt before.
We have stood apart, studiously neu
tral. It was our manifest duty to do
so. Not only did we have no part or
Interest in the policies which seem to
have brought the conflict on; It was
necessary, if a universal catastrophe
was to be avoided, that a limit should
be set to the sweep of destructive war
and that some part of the great family
of nations should keep the processes
of peace alive, if only to prevent col
lective economic ruin and the break
down throughout the world of the in
dustries by which its populations are
fed and sustained. It was manifestly
the duty of the- self-governed nations
of this hemisphere to redress, if pos
sible, the balance of economic loss
and confusion in the other, if they
could do nothing more. In the day of
readjustment and recuperation we
earnestly hope and believe that they
can be of infinite service.
American Nations Partners,
In this neutrality, to which they
were bidden not only by their separate
life and their habitual detachment
from the politics of Europe but also by
a clear perception of international
duty, the states of America have be
come conscious of a new and more
vital community interest and moral
partnership in affairs, more clearly
conscious of the many common sym
pathies and interests and duties which
bid them stand together.
There was a time in the early days
of our own great nation and of the re
publics fighting their way to inde
pendence in Central and South Amer
ica when the government of the Unit
ed States looked upon itself as in some
sort the guardian of the republics to
the south of her as against any en
croachments or efforts at political con
trol from the other side of the water;
felt it its duty to play the part even
without invitation from them; and I
think that we can claim that the task
was undertaken with a true and dis
interested enthusiasm for the freedom
of the Americas and the unmolested
elf-government of her independent
peoples. But it was always difficult to
maintain such a rrie without offense
to the pride of the peoples whose free
dom of action we sought to protect,
and without provoking serious miscon
ceptions of our motives, and every
thoughtful man cf affairs must wel
oonin tho altered cir-umstanees of the
new day in whore liilit we now stand,
when there is no claim of guardian
ship or ti ouilit of wards but, instead,
a full and honorable association as of
partners belv. oen ourselves and our
neighbors, in the (.Merest of all Amer
ica, north u,ir.:i. Our concern for
the indc;)c!.'lci!C(i and prosperity of the
slates or ( cal and South America
is not n!N We retain unabated
the t fit it Cat h:-i iu :;p i !--.! us through
out tun . 'iA''.L- life of our government
and v:.:t:i v.-;:.m ko IVaril.iy put Into
word.-) ly IV-s.deiii .Momi.e. We still
mean a!v.- v:-. to iruite a common cause
of national- independence and dl po
litical i iy in America.
A:.:tudo Tovnrd Maxico.
We l.jve been put to the test In
the nF. of Mexico, and we have stood
the tt. fit. Whether we have benefited
Mexico by the course we have pursued
remains to h'i seen. Her fortunes are
in her ovn hands. Rut we Inve at
least proved that we will not take ad
vantage of her Iu her distress and un
dertake to Impose upon her an order
and government of our own choosing.
Liberty is often a fierce and intract
able thing, to which no bounds can be
set, and to which no bounds of a few
men's choosing ought ever to be set.
Every American who has drunk at the
true fountains of principle and tradi
tion must subscribe without reserva
tion to the high doctrine of the Vir
ginia Bill of Rights, which in the great
days In which our government waa set
up waa everywhere amongst ui accept
ed as the creed of free men. That doc
trine la, "That government la, or ought
it be. Instituted for the common bene
fit, protection and security of the peo
ple, nation, or community;" that "of
all the various modes and forma 'of
government, that la the best which is
capable of producing the greatest de
gree of happiness and safety, and ta
most effectually secured against the
danger of maladministration; and that,
when any government shall be found
inadequate or contrary to these pur
poses, a majority of the community
hath an indubitable, inalienable, and
indefeasible right to reform, alter, or
abolish it, in such manner as shall be
judged most conducive to the public
weal." We have unhesitatingly ap
plied that heroic principle to the case
of Mexico, and now hopefully await
the rebirth of the troubled republic,
which bad so much of which to purge
itself and so little sympathy from any
outside quarter in the radical but nec
essary process. We will aid and be
friend Mexico, but we will not coerce
her; end our course with regard to her
ought to be sufficient proof to all
America that we seek no political
suzerainty or selfish control.
The moral Is, that the states of
America are not hostile rivals but co
operating friends, and that their glow
ing sense of community of interest,
alike In matters political and in mat
ters economic, is likely to give them
a new significance as factors in inter
national affairs and in the political
history of the world. It presents them
as in a very deep and true sense a unit
in world affairs, spiritual partners,
standing together because thinking
together, quick with common sympa
thies and common ideals. Separated
they are subject to all the cross cur
rents of the confused politics of a
world of hostile rivalries; united in
spirit and purpose they cannot be
disappointed of their peaceful destiny.
This is Pan-Americanism. It has
none of the spirit of empire in It. It
is the embodiment, the effectual em
bodiment, of the spirit of taw and in
dependence and liberty and mutual
service.
Drawing the Americas Together.
A very notable body of men recently
met in the city of Washington, at the
invitation and as the guests of this
government, whose deliberations are
likely to be looked back to as marking
a memorable turning point in the his
tory of America. They were represen
tative spokesmen of the several in
dependent states of this hemisphere
and were assembled to discuss the
financial and commercial relations of .
the republics of the two continents
which nature and political fortune
have so intimately linked together. I
earnestly recommend to your perusal j
the report of their proceedings and of
the actions of their committees. You
will get from theW I think, a fresh
conception of the ease and intelligence j
and advantage with which Americans ;
of both continents may draw together
In practical co-operation and of what
the material foundations of this hope
ful partnership of interest must con
sistof how we should build them and
of how necessary it is that we should
hasten their building.
There i.i I venture to Doint out. an
especial significance just now attach- j
ing to this whole matter of drawing
the Americas together in bonds of hon-1
orable partnership and mutual advan-1
tage because of the economic readjust- j
ments which the world must Inevl- ,
tably witness within the next genera- .
tion, when peace shall have at last re- '
sumed its her.lth.ful tasks. In the per
formance of these tasks I believe the
Americas to be destined to play th".ir
parts together. I am interested to fix
your attention on this prospect now
because unless you take it within your
view and permit the full significance
of it to command your thought I can
not find the right light In which to set
forth the particular matter that lies
at the very front of my whole thought
as I address you today. I mean na- .
tional defense.
No one who really comprehends the
spirit of the great people for whom
we are appointed to speak can fall to
perceive that their passion is for
peace, their genius best displayed in
the practice of the arts of peace. Creat
democracies are not belligerent. Tboy
do not seek or desire war. Their
thought Is of indivklual liberty ana of
the free labor that supports life and
the uncensorod thought that quickens
it. Conquest and dominion are not in
our reckoning, or agreeable to our
principles. Hut Just because wo de
mand unmolested development nnd
the undisturbed government of our
own lives upon our own principles of
right and liberty, wo resent, from
whatever quarter it n?ay co.no, tlio as
grossion we ourselves will not praj
tied. We Insist upon security in prose
cuting our self-chosen lines of T.ation- ,
cl development. We do more than that.
We demand it also lor others. We do
not confine our enthusiasm for hull-.
vidual liberty and frcu m.tioinl t'.evo'
opnicnt to the. Incidents and move- t
menu of afialrs which uffer.i only our
selves. We feel it wherever there io
a people that tries to walk in theso
dillicult paths of Independence and .
ril,!it. From the first wo have made '
common cause with all partisans of
liberty on this side the seamaid have
deemed It as important that bur neigh
bors should be free from all outbid a
domination as that we ourselves
should bo; have set America asi.ie as
.a whole for the uses of independent
nations and political freemen.
Question of Preparedness.
Out of such thoughts grow all our
policies. We regard war merely as a
means of asserting the rights of a peo
ple against aggression'. And we are
as fiercely jealous of coercive or dic
tatorial power within our own nation
aa of aggression from without We
will not maintain a standing army ex
cept for uses which are aa necessary
la times cf peace as in times of war;
and we shall always see to It that our
military peace, establishment Is no
larger Cian Is actually nd continu
ously needed 'for 'the ''uses of day's la
'which no enemies move against us.
But we do believe ta a body of free j
citizens ready and sufficient to take
care of themselves and of the govern
ments which they have set up to serve
them. In our constitutions themselves
we have commanded that "the right of
the people to keep and bear arms shall
not be infringed," and our confidence
has been that our safety In times of
danger would He in the rising of the
nation to take care of Itself, as the
farmers rose at Lexington.
But war has never been a mere mat
ter of men and guns. It Is a thing of
disciplined might. If our citizens are
ever to fight effectively upon a sudden
summons, they must know how mod
ern fighting is done, and what to do
when the summons comes to render
themselves immediately available and
immediately effective.
And the gov- .
servant in this
ernment must be their servant in this
matter, must supi ly them with the
training they need to take care of
themselves and of it. The military '
arm of their government, which they
will not allow to direct them, they may
properly use to serve them and make
their independence secure, and not
their own independence merely but
the rights also cf those with whom
they have made common cause, should
they also be put In jeopardy. They
must be fitted to play the great role
In the world, and particularly in this
hemisphere, for which they are quali
fied by principle and by chastened am
bition to play.
It is with these Ideals in mind that
the plans of the department of war
for more adequate national defense
were conceived which will be laid be
fore you, and which I urge you to
sanction and put Into effect as soon
as they can be properly scrutinized
and discussed. They seem to me the
essential first Bteps, and they seem
to me for the present sufficient.
Larger Army Plan.
They contemplate an Increase of the
standing force of the regular army
from Its present strength of 5,0L3
officers and 102,985 enlisted men of
all services to a strength of 7.136
officers and 134,707 enlisted men,
or 141,843, all told, all servuec,
rank and file, by the addition
of fifty-two comprnles of coast
artillery, fifteen companies of engi
neers, ten regiments of Infantry, four
regiments of field artillery, and four
aero squadrons, besides 750 officers
required for a great variety of extra
service, especially the all -important
duty of training the citizen force of
which I shall presently speak, 7H2
noncommissioned officers lor serv
ice in drill, recruiting and the
like, and the necessary quota of en
listed men for
the quartermaster ,
corps, the hospital corps, the ord
Q ,
nance department, und other similar
auxiliary services. These are the ad
ditions necessary to render the army
adequate for its -present duties, duties
which it has to perform npt only upon
our own continental coasts and bor
ders and at our interior army posts,
but also in the Philippines, in the
Hawaiian islands, at the isthmus, and
in Porto Rico. a..
By way of making the country ready
to assert somo part of its real power
promptly and upon a larger scale,
should occasion arise, the plan also
contemplates supplementing the army
by a force of 400,000 disciplined citt
zens, raised In Increments of 133.- i ,H "e,mMr' . WB,h"1-' ,c
000 a year throughout a period j B0,1S of national efficiency and devel
of three years. This It Is proposed , I,mont tnat we shou,d nave a
to do by a process of enlistment Un- ! merchant marine. The great merchant
der which the serviceable men of the ! flcot wft once UEed t0 make 1,8 ri'
country would be asked to bind them- that Prat bod' of 8tur,1y Bnilors wnn
solves to serve with the colors for pur- to rry our flag into every sea,
pose of training for short periods j and h0 were the Pr,de nnd often thB
throughout three veais, and to come bulwark of the nation, we have almost
to the colors at call at any time , driven out of existence by Inexcusable
throughout an additional "furlough" neglect nd Indifference and by a
period of three years. This force of ; hopelessly blind and provincial policy
400,000 men would be provided with of so-called economic protection. It
nersonal accoutrements as fast as i s nBh time we repaired our mistake
enlisted and their equipment for
the field made ready to be sup
plied at any time. They would be
assembled for training at stated in
tervals at convenient places in nsso-
elation with suitable units of the j
regular army. The'r period of annual
training would not necessarily exceed
two months in the year. j
It would depend upon tho patriotic
feeling of the ycurger men of the
country whether they responded to
such a call to service or not. H would
depend upon tho patriotic r-pirit of the
employers of the country whether !
they made it pov.siVo for tho younrer
men in tli'ir emplcy to res-mud under ;
favoralie err.dit.lonp or not. I, for r.v.c,
do not e jiiiit the pal nolle rt'jvolion!
cither of nv.r your." men or of thoa
who give them Piiiploymert -tlinsa for i
v.-hoM benefit and py led Ion they ,
would In f i' t rn'.i-.t. I would look i
forward to the suecjas of such an cs
p:rhrcnt with eii';rc confidence. !
At !ei.t so much oy the way of j
Errparrtion for cl i' iiso seems to roe '
to be ahs-jaitely imperative now. We
cannot do le:3. !
Ths N.tval Program. t
The program which will bn laid be- !
foro you by the secret ary o'. the navy ',
is slm'laiiy conceived. It involves j
only a 6hortctiiu;t ot the tlmo within
which plans long matured shall be '
carried out; but it does make definite j
and exr'iclt a program which has
heretofore been only implicit, held In
the minds of tho tvo committees on 1
naval affairs and disclosed In the de-'
bates of the two house's but nowhero
formulated or formally adopted. It
seems to me very clear that It will be
to the advantage of the country for
the congress to adopt a comprehen
sive plan for putting the navy upon
a final footing of strength and effi
ciency and to press that plan to com
pletion within tho next five years.
We have always looked to the navy of
the country as oar first and chief
line of defense; we have always seen
It to fr our manifest course 'of pru-
denm to be, strong on the seas. ' Tear
by year m have been creating a aavy
which now ranks very high indeed
among the navies of the maritime na-
tions. We should now definitely fle
termine how we shall complete what
we have begun, and how soon.
The program to be laid before yon
contemplates the construction within
flv years of ten battleships, six bat
tle cruisers, ten scout cruisers, fifty
destroyers, fifteen fleet submarines,
eighty-five coast submarines, four gun
boats, one hospital ship, two ammuni
tion ships, two fuel oil ships, and one
regular repair ship. It is proposed
that of this number we shall the first
year provide for the construction of
two battleships, two battle cruisers, 1
three scout cruisers, flften destroyers, j
Eve fleet submarines, twenty-five coast
submarines, two gunboats, and one
hospital ship; the second year, two '
battleships, one scout cruiser,' ten de-1
battleships,
stroyer's, four fleet submarines, fifteen
coast submarines, one gunboat, and
one fuel oil ship; the third year, two
battleships, one battle cruiser, two
scout cruisers, five destroyers, two
fleet submarines, and fifteen coast
submarines; the fourth year, two bat
tleships, two battle cruisers, two scout
cruisers, ten destroyers, two fleet sub
marines, fifteen coast submarines, one
ammunition ship, and one fuel oil
ship; and the fifth year, two battle
ships, one battle cruiser, two scout
cruisers, ten destroyers, two fleet sub
marines, fifteen coast submarines, one
gunboat, one ammunition ship, and
one repair ship.
More Men for the Navy.
The secretary of the navy is asking
also for the immediate addition to the
personnel of the navy of 7,500 sail
ors, 1,200 apprentice seamen, and
1,500 marines. This increase would
be sufficient to care for the ships
which are to be completed with
in the fiscal year 1917 and also for the
number of men which must be put in
training to man the ships which will
be completed early in 1918. It is also
necessary that the number of midship
men at the Naval academy at Annap
olis should be increased by at least
three hundred
If this full program should be car
ried out we should have built or build
ing In 1921, according to the estimates
of survival and standards of classifi
cation followed by the general board
of the department, an effective navy
consisting of 27 battleships, of the first
line, 6 battle cruisers, 25 battleships
of the second line, 10 armored cruis
ers, 13 scout cruisers, 5 first-class
cruisers, 3 second-class cruisers, 10
third-class cruisers, 108 destroyers, 18
fleet submarines, 157 coast submarines,
A MAnlMci 9(1 vnnhnata A. nunnlv
, , , , ' '
snips, 10 I'itsi snipn, irnuoyiiua,
! 3 tenders to torpedo vessels, 8 ves
sels of special types, and 2 ammuni
tion ships. This would be a navy fit
ted to our noeds and worthy of our
traditions.
But armies and instruments of war
are only part of what has to be con
sidered if we are to consider the su
preme matter of national self sufficien
cy and security In all Its aspects.
There are other great matters which
will be thrust upon our attention
whether we will or not. There is, for
example, a very pressing question of
trade and shipping involved In this
great problem of national adequacy.
1 1. l
and resumed our commercial inde
pendence on the seas.
Need of Merchant Marine.
For It is a question of independ
ence. If other cations go to war or
seek to hamper each other's com-
merce, our merchants, it sceris, are
nt their mercy, to do with as they
plep.se. We must ur.e the'r phlps, and
uss them as the.y determine. We havo
not snips niiourn oi our own. v e j
cannot handle our own commerce on j
tho so::. Our Independence Is provin-1
c'al, and Is only on land nnd within
oar own borders. We are not likely j
to be permitted to use even the ships
of other nations Iu rivalry of their 1
own tado, mid are without means to
exie!:(1 oi.r commerce even where the
doors are wide open and our goods
tloLlrol. S ich a l ituation Is not to j
be endured It is of Cfnitul import-,
anon rot oi'ly that the United States j
shoul I be its own carrier on tho seas i
pnd enjoy tho economic indeiirrdence j
w'uie.'i only an ndequr-to merchant ma
rine '.v on hi rive it, Vit also that tho
American hcrnlsphoro n3 a wbola
s.ioui'i enjoy a 116 ndepDu-J'Hice and
flc'lf-Kiifflck-rtcy, if It is not to be drawn I
Into tho tangle of European affairs. '
V.'lt'.iciit such Independence tho whole j
question of our political unity and'
t.y:f-ieterminat:on i3 very saiiously
clouded and complicated Iw'cd.
Mori-over, we cp.u dovclop no true
or effective American policy without
ships of our own not chips of war,
but hlrps of peace, carrying goods and
carrying much more; creating friend
ship." and rendering Indispensable
services to all Interests on this side
the w ater.
The task of building up an adequate
merchant marine for America private
capital must ultimately undertake and
achieve, as It has undertaken and
achieved every other like task amongst
us in the past, with admirable enter
prise. Intelligence and vigor; and it
seems to me a manifest dictate of wis
dom that we should promptly remove
every legal obstacle that may stand
Ui way of this much to be d?clrod
revival of our old lnaepaudunce and
should facilitate in every possible way
the building, purchase and American
registration of ships. But capital can
not accomplish this great task of a
sudden. It must embark upon It by
degrees, as the opportunities of trade
develop. Something must be done at
once; done to open routes and devel
op opportunities where they are as
yet undeveloped; done to open the ar
teries of trade where the currents
have not yet learned to run special
ly between the two American conti
nents, where they are, singular
enough, yet to be created and quick
ened; and It is evident that only the
government can undertake such be
ginnings and assume the Initial finan
cial risks. When the risk has passed
and private capital begins to find its
way in sufficient abundance into these
new channels, the government may
withdraw. But it cannot omit to be
gin. It should take the first steps,
and should take them at once. Our
goods must not lie piled up at our
ports and stored upon side tracks In
freight cars which are daily needed
on the roads; must not be left 'with
out means of transport to any foreign
quarter. We must not await the per
mission of foreign ship-owners and
fortsign governments to send them
where we will.
Must Provide Ships.
With a view to meeting these
pressing necessities of our commerce
and availing ourselves at the earliest
possible moment of the present un
paralleled opportunity of Unking the
two Americas together in bonds ot mu
tual interest and service, an oppor
tunity which may never return again
if we miss it now, proposals will be
made to the present congress for the
purchase or construction of ships to
be owned and directed by the govern
ment similar to those made to the last
congress, but modified in eome esson
tial particulars. I recommend these
proposals to you for your prompt ac
ceptance with tho more confidence
because every month that has elapsed
sinse the former proposals were made
has made the necessity for such action
more and more manifestly imperative.
That need wa then foreseen; it Is
now acutely felt and everywhere real
ized by those for whom trade Is wait
ing but who can find no conveyance
for their goods. I am not so much in
terested in the particulars of the pro
gram as I am in taking immediate ad
vantage of the great opportunity which
awaits us It we will but act In this
emergency.
There is another matter which
seems to me to be very intimately as
sociated with the question ot national
safety and preparation (or defense.
That is our policy towards the Philip
pines and the people of Porto Rico.
Our treatment of them and their atti
tude towards us are manifestly of the
first consequence in the development
of our duties In the world and in get
ting a free hand to perform those du
ties. We must be free frpm every un
necessary burden or embarrassment;
and there Is no better way to be clear
ot embarrassment than to fulfill our
promises and promote the interests of
thoso dependent on us to the utmost.
Bills for the alteration and reform of
tho government ot the Philippines and
for rendering fuller political justice to
the people of Porto Rico were submit
ted to the Sixty-third congress. They
will be submitted also to you. I need
not particularize their details. You
are most of you already familiar with
them. But I do recommend them to
your early adoption with the sincere
conviction that there are few meas
ures you could adopt which would
more scrvlceably clear the way for
the great policies by which we wish to
make good, now and always, our right
to lead In enterprises of peace and
good will and economic and political
freedom.
The plans for the armed forces of
.the nation which I have outlined, and
for the general policy of adequate
preparation for mobilization and de
fense, involve of course very large ad
ditional expenditures of money ex
penditures which will considerably ex
ceed the estimated revenues of the
government. It is made my duty by
law, whenever tho estimates of ex
penditure exceed the estimates of
revenue, to cull the attention of the
congress to the fact and suggest any
nieans of meeting the deficiency that
It may be wise or possible for me to
suggest. I am ready to believe that it
would be my duty to do so In any case;
and I feel particularly bound to speak
of tho matter when it appears that the
deficiency will arise directly out of
the adoption by tho congress of meas
ures which I myself urge it to adopt.
'Allow me,- therefore, to speak briefly
of the present state of the treasury
and of the fiscal problems which the
next year will probably disclose.
State of the Finances.
On the thirtieth ot June lust there
was an available balance in the gen
eral fund of tho treasury of $104,170,-
105.78. The total estimated receipts
for the year 1916, on the assumption
bat the emergency revenue measure
passed by tho last congress will not be
extended beyond Its present limit, the
thirty-first of December, 1915, and
that the present duty of one cent per
pound on sugar will be discontinued
after tbe. first of May, 1916, will be
$070,365,500. The balance of June last
and these estimated revenues come,
therefore, to a grand total of $774,-
435,605.78. The total estimated dis
bursements for the present fiscal year,
including $25,000,000 for the Panama
canal, $12,000,000 for probable de
ficiency appropriations, and $50,-
000 for miscellaneous debt redemp
tions, will be $753,891,000; and
the balance in the general fund of tre
treasury will be reduced to $20,844,
605.78. The emergency revenue act. If
continued" beyond its present time lim
itation, would brbdUG. during the halt
year then remaining, about til ana
ww. vi uua coni per pound-
u cusar, i-uuunuea, would produce
during the two months of the flecal
year remaining after the Brat ot m.t
about $15,000,000. These two soma.
.".vuuuuj usiwr io DO,UUU,000, JI
added to the revenues ot the second
half of the fiscal year, would yield ths
treasury at the end ot the year an
available balance of $76,644,605.78.
The additional revenues reauiLt
to carry out the program aot militaryi
picimmiiun oi wnicn I nave
spoken, would, as at present estimated,
be for the fiscal year 1917, $93,800,000
Those figures, taken r ' Ji the fleur
for the present fiscal year which l
nave aireaay given, disclose our finan
vmi prouiem ior me year 1917. An.
suming that the taxes imposed by the
emergency revenue act and the pres
ent duty on sugar are to be discontin
ued, and that the balance at the close
of the present fiscal year will be only
$20,644,605.78, that the disbursement!
for the Panama canal will again b
about twenty-five millions, and that
the additional expenditures for tbe
army and navy are authorized by the
congress, the deficit in the general
fund of the treasury on the thirtieth.
of June, 1917, will be nearly two hun
dred and thirty-five millions. To this
sura at leas fifty millions should be
added to represent a safe working bal
ance for the treasury, and twelve mil
lions to include the usual deficiency
estimates in 1917; and these additions
would make a total deficit of some two
hundred and ninety-seven millions. If
the present taxes should be continued
throughout this year and the next,
however, there would be a balance In
the treasury of some seventy-six and
a half millions at the end of the pres
ent fiscal year, and a deficit at the
end of tbe next year ot only some fifty
millions, or, reckoning in sixty-two
millions for deficiency appropriations
and a sate treasury belance at the end
of the year, a total deficit of some
one hundred and twelve millions. The
obvious moral of the figures is that It
is a plain counsel of prudence to con
tinue all of the preesnt taxes or their
equivalents, and confine, ourselves to
the problem of providing $112,000,000
of new revenue rather than $297,000,-
000.
New Sources of Revenue.
How shall we obtain the new rem
nue? We are frequently reminded
that there are many millions of bonds
which the treasury is authorised un
der existing law to sell to reimburse
the sums paid out of current revenues
for the construction of the Panama
canal; and it is true that bonds to the
amount of $22,432,000 are now arall-l
able for that purpose. Prior to 1913
$138,000,000 of these bonds had actual
ly been sold to recoup the expenditures
at tbe isthmus; and now constitute a
considerable Item of the public debt.
But I, for one, do not believe that the
people of this country approve of
postponing the payment of their bills.
Borrowing money is short-sighted
finance. It can be justified only whenJ
permanent things are to be accom-j
pllshed which many generations wUf
certainly benefit by and which It!)
seems hardly fair that a single genera-l
tion should pay for. The objects we
are now proposing to spend money
for cannot be so classified, except in
the sense that everything wisely done
may be said to be done in the Interest
of posterity as well as in our own. It
seems to mo a clear dictate of prudent
statesmanrhip and frank finance that
in what we are now, I hope, to under
take we should pay as we go. Tin
people of the country are entitled to
knuw just what burdens of taxation
they are to carry, and to know from
the outset, now. The new bills should
be paid by internal taxation.
To what sources, then, shall we
turn? This is so peculiarly a question
which tho gentlemen of the house of
representatives are expected under
the Constitution to propose an answer
to that you will hardly expect me to
do more than discuss it in very gen
eral terms. We should be following
an almost universal example of mod
ern government If we were to draw
the greater part or even the whole of
the revenues we need from the is
come taxes. By somewhat lowering the
present limits of exemption and the
figure at which tho surtax shall begin
to be imposed, and by increasing, step
by step throughout the present gradu
ation, tho surtax itself, the income
taxes as at present apportioned
would yield sums sufficient to balance
the books of the treasury at the end
of the fiscal year 1917 without any
where making tho burden unreason
ably or oppressively heavy. Tbe pro
ciso reckonings are fully and accurate
ly set out in the report of the Becre
tary of the treasury which will be un
mediately laid before you.
And there are many addition
sources of revenue which can Justly e
resorted to without hampering the Is
dustries of the country or putting any
too great charge upon Individual e
penditure. .A one per cent tax P
gallon on gasoline and naptha uw
yield, at the present estimated pro
duction, $10,000,000; a tax of 50 cents
per horse power on automobiles n
internal explosion engines, 15''
000; a stamp tax on bank cnec".
probably $18,000,000; a tax ot 25 cents
per ton on pig iron. $10,000,000; a tax
of 50 cents per ton on fabricated iron
and steel, probably $10,000,000. to
country of great Industries like this , i
ought to be easy to distribute the i our
dens of taxation without making tnew
anywhere bear too heavily or too
clusively upon any one set of perso
or undertakings. What is clear
that the industry ot this tr
should pay the bills of thi- krtJJ
j have spoken to you today.
men. upon a slngl. thsme the
ough preparation of the nUonto g
for Its own security and to '
t astir freedom to pi the imp