N. W. Bell Tel. 78, 1941 109% 107 Pressed Steel Car 5s, 1933 Shef. Farms 628, 924 882 1942 Ogden & Lake C. 4s, 1948 Ohio P. Ser. ref. 7/28, 1946 Ref. 78, 1947...107% 100% Old Ben Coal 6s. 1944, ctfs. Ont. Trans. 58, '45 98 Ont. Power N. F. 8. f. 5s, 1943... 99 Oregon & Cal. 58, 1927 Ore. R. R. & Nav. 48, 1946 Ore. S. L. ref. 48, 1929 98% 92% 1st con. 5s, '46.1061⁄4 101 Gtd. con. 58,'46.106% 101% Ore.-W. R. R. & N. 73% 68% 91% 83% .110% 103% Con Oil 50 39 7s, 1937 91 Pub. Serv. Pow. 68, 1948 872 6s, Ser. B. '38. 90% 82%1⁄2 Sinclair Crude Oil 98 97 94 94% Pub. Serv. G. & E. 528, 1959 528, 1925 .....100% 97% 97% 96% 68, 1926 .101% 95% P. Ser. Cor. N. J. 8. f. 58, 1959...105 Punta Alegre Sug. Sinclair Pipe Line .102 99% 90% 85% 78. 1937 .122 104% Rdg. gen. 48, '97.. 95% 87% Gen. & r. 429. 1997 942 Jersey Cent. 4s.'51 88% R'm'gton Arms 68, 88 83% S. Bell Tel. 5s,'41 99% 58, A, 1947.. 93 87 S. Porto R. S. col. 78, 1941 94 S. W. Bell Tel, ref. 5s. 1954 974 93 S. Pac. col. 48.'49 86% 81% Cv. 48, 1929.... 98% 92% 105 105% 964 92 Ref. 48, 1955 .101% 93 728, 1947 95 84 Gen.& ref. 528,'53 93 Rio Gr. June 1st 5s, 1939 87% Cv. 5s, 1934 92% 84 S.F. Term. 4s.'50 85% S'ernRy.1st 58. '94.102 812 95% Pac. G. E. gen & Rio Gr. Wn. 1st ref. 58, 1942... 95 90% Pac. P. & L. 1st ref. 58, 1930 99% 92% Col. tr. 4s, 1949 72% Rogers Brown 7s, 60 6s, 1956 Pac. T. & T. 1st 1942 96 70 Gen. 48, 1956... 75% Memph. D.58,'97.100 M.&O. col. 4s.'38 84% 76 691 101% 103% 96% 93/4 58, 1937 Ref. 58, 1952... 93% Pan.-Am. P. & T. 68. 1934 w.i... 98 97 Eq. 78, 1930....105% 99% Park Lex. Lease hold gen. 8. f. 90% Rock I., Ark.&La. 428, 1934 Stand. Milling 5s. 1930 ..100% 95% St. Jo. Ry., L. H. Stand. G. & E. cv. 628, 1933 .104 95 Stl. & T. Co.. gen. .101% 95% 68, 1953 .100 94 Penn. 4s, 1948.... 92 871⁄2 Stamped 924 87 Uni.&r. gold48,'29 931⁄2 Riv.& Gulf 48,'33 85% St. L. R. M. & Pac. 59, 1955 831⁄2 72 811⁄2 74 Con. 428, 1960. 99% 94% St. L.-S. F. pr. ln. s. f. 78, 1951...106% 103 Sug. Est. of Oriente 78. 1942 Syracuse Ltg. 58, 1951 Tenn. Cop. cv. 58. 98 942 98% 92 628. 1936 .111 107% 7s. 1930 ..110% 106% 1925 Tenn. Electric 6s. 1947 Term. Assn. of St. .103 981/4 98% 872 58% 4s. 1943 92% 89% Phila. Co. 6s. '44..103% 99% Deb. 58, 1938. 96 90 Phila. & Rdg. Coal 58, 1948 .103% 98 St. L. Tr. 58.'24. 71% 52%2 St. P. & K. C. S. L. 428, 1941 St. P. M. & M. 82% 73 con 6s, 1933...109 106 Con. 48, 1933... 95 428, 1933 91 99 952 gen. 5s, 1935.... 97 Tol. St. L. p. 1, 32s. 1925 911/2 .100 961/4 68% Pierce Oil deb. s. f. 95% Pillsbury F. M. Saks & Co. s. f. 7s, Tol. Trac. Lt. & P. 6s, 1925 101 98% 1952 1st 5s, 1928.... 98% 93 704 62% PRESIDENT'S MESSAGE TO CONGRESS. The present state of the union, upon which | purchasing power of wages. It is felt in the it is customary for the president to report to price of those prime necessities of existence, the congress under the provisions of the con- food, clothing, fuel and shelter. stitution. is such that it may be regarded with encouragement and satisfaction by every American. Our country is almost unique in its ability to discharge fully and promptly all its obligations at home and abroad and provide for all its inhabitants an increase in material resources, in intellectual vigor and in moral power. The nation holds a position unsurpassed in all former human experience. This does not mean that we do not have any problems. It is elementary that the increasing breadth of our experience necessarily increases the problems of our national life. But it does mean that if we will but apply ourselves industriously and honestly, we have ample powers with which to meet our problems and provide for their speedy solution. I do not profess that we can secure an era of perfection in human existence, but we can provide an era of peace and prosperity, attended with free dom and justice and made more and more satisfying by the ministrations of the charities and humanities of life. DOMESTIC PROBLEMS ECONOMIC. Our domestic problems are for the most part economic. We have our enormous debt to pay, and we are paying it. We have the high cost of government to diminish, and we are diminishing it. We have a heavy burden of taxation to reduce, and we are reducing it. But while remarkable progress has been made in these directions, the work is yet far from accomplished. We still owe over $21.000.000,000, the cost of the national government is still about $3,500,000,000, and the national taxes still amount to about $27 for each one of our inhabitants. There yet exists this enormous field for the application of economy. In my opinion the government can do more to remedy the economic ills of the people by a system of rigid economy in public expenditure than can be accomplished through any other action. The costs of our national and local governments combined new stand at a sum close to $100 for each inhabitant of the land. A little less than one-third of this is represented by national expenditure, and a little more than two-thirds by local expenditure. It is an ominous fact that only the national government is reducing its debt. Others are increasing theirs at about $1.000.000.000 each. The depression that overtook business, the disaster experienced in agriculture, the lack of employment and the terrific shrinkage in all values which our country experienced in a most acute form in 1920 resulted in no small measure from the prohibitive taxes which were then levied on all productive effort. The cstablishment of a system of drastic economy in public expenditure, which has enabled us to pay off about one-fifth of the national debt since 1919, and almost cut in two the national tax burden since 1921. has been one of the main causes in re-establishing a prosperity which has come to include within its benefits almost every one of our inhabitants. Economy reaches everywhere. It carries a blessing to everybody. The fallacy of the claim that the costs of government are borne by the rich and those who make a direct contribution to the national treasury cannot be too often exposed. No system has been devised. I do not think any system could be devised, under which any person living in this country could escape being affected by the cost of our government. It has a direct effect both upon the rate and the It would appear to be elementary that the more the government expends the more it must require every producer to contribute out of his production to the public treasury, and the less he will have for his own benefit. The continuing costs of public administration can be met in only one way-by the work of the people. The higher they become the more the people must work for the government. The less they are the more the people can work for themselves. The present estimated margin between public receipts and expenditures for this fiscal year is very small. Perhaps the most important work that this session of the congress can do is to continue a policy of economy and further reduce the cost of government, in order that we may have a reduction of taxes for the next fiscal year. Nothing is more likely to produce that public confidence which is the forerunner and the mainstay of prosperity, encourage and enlarge business opportunity with ample opportunity for employment at good wages, provide a larg er market for agricultural products and put our country in a stronger position to be able to meet the world competition in trade than a continuing policy of economy. Of course, necessary costs must be met, proper functions of the government performed and constant investments for capital account and reproductive effort must be carried on by our various departments. But the people must know that their government is placing upon them no unnecessary burden. REDUCTION IN TAXES. Every one desires a reduction in taxes and there is a great preponderance of sentiment in favor of taxation reform. When I approved the present tax law, I stated publicly that I did so in spite of certain provisions which I believed unwise and harmful. One of the most glaring of these was the making public of the amounts assessed against different income-tax payers. Although that damage has now been done. I believe its continuation to be detrimental to the public welfare and bound to decrease public revenues, so that it ought to be repealed. Anybody can reduce taxes, but it is not so easy to stand in the gap and resist the passage of increasing appropriation bills which would make tax reduction impossible. It will be very easy to measure the strength of the attachment to reduced taxation by the power with which increased appropriations are resisted. If at the close of the present session the congress has kept within the budget which I propose to present, it will then be possible to have a moderate amount of tax reduction and all the tax reform that the congress may wish for during the next fiscal year. The country is now feeling the direct stimulus which came from the passage of the last revenue bill, and under the assurance of a reasonable system of taxation there is every prospect of an era of prosperity of unprecedented proportions. But it would be idle to expect any such results unless business can continue free from excess-profits taxation and be accorded a system of surtaxes at rates which have for their object not the punishment of success or the discouragement of business but the production of the greatest amount of revenue from large incomes. I am convinced that the larger incomes of the country would actually yield more revenue to the government if the basis of taxation were scientifically revised downward. Moreover, WATERWAY PROJECTS. Meantime our internal development should go on. Provision should be made for flood control of such rivers as the Mississippi and the Colorado and for the opening up of our inland waterways to commerce. Consideration is due to the project of better navigation from the great lakes to the gulf. Every effort is being made to promote an agreement with Canada to build the St. Lawrence waterway. There are pending before the congress bills for further development of the Mississippi basin. for the taking over of the Cape Cod canal in accordance with a moral obligation which seems to have been incurred during the war, and for the improvement of harbors on both the Pacific and the Atlantic coasts. While this last should be divested of some of its projects and we must proceed slowly, these bills in general have my approval. Such works are productive of wealth and in the long run tend to a reduction of the tax burden. NEED OF RECLAMATION. a Our country has a well-defined policy of reclamation established under statutory authority. This policy should be continued and made a self-sustaining activity administered in manner that will meet local requirements and bring our arid lands into a profitable state of cultivation as fast as there is a market for their products. Legislation is pending based on the report of the fact-finding commission for the proper relief of those needing extension of time in which to meet their pay; ments on irrigated land, and for additional amendments and reforms of our reclamation laws, which are all exceedingly important and should be enacted at once. No more important development has taken place in the last year than the beginning of a restoration of agriculture to a prosperous condition. We must permit no division of classes in this country, with one occupation striving to secure advantage over another. Each must proceed under open opportunities and with a fair prospect of economic equality. The government cannot successfully insure prosperity or fix prices by legislative fiat. Every business has its risk and its times of depression. It is well known that in the long run there will be a more even prosperity and a more satisfactory range of prices under the natural working out of economic laws than when the government undertakes the artificial support of markets and industries. Still, we can so order our affairs, so protect our own people from foreign competition, so arrange our national finances, so administer our monetary system, so provide for the extension of credits, so improve methods of distribution as to provide a better working machinery for the transaction of the business of the nation with the least possible friction and loss. The government has been constantly increasing its efforts in these directions for the relief and permanent establishment of agriculture on a sound and equal basis with other business. It is estimated that the value of the crops for this harvest year may reach $13,000,000,000, which is an increase of over $3.000.000,000 in three years. It compares with $7.100,000,000 in 1913, and if we make deduction from the figures of 1924 for the comparatively decreased value of the dollar the yield this year still exceeds 1913 in purchasing power by ver $1,000,000,000, and in this interval there has been no increase in the number of farmers. Mostly by his own effort the farmer has decreased the cost of production. A marked increase in the price of his products and some decrease in the price of his supplies have brought him about to a parity with the rest of the nation. The crop area of this season is estimated at 370,000,000 acres, which is a decline of 3,000,000 acres from last year, and 6,000,000 acres from 1919. This has been a normal and natural application of economie laws, which has placed agriculture on a foundation which is undeniably sound and beginning to be satisfactory. AID TO AGRICULTURE. A decrease in the world supply of wheat has resulted in a very large increase in the price of that commodity. The position of all agricultural products indicates a better balanced supply, but we cannot yet conclude that agriculture is recovered from the effects of the war period or that it is permanently on a prosperous basis. The cattle industry has not yet recovered and in some sections has been suffering from dry weather. Every effort must be made, both by government activity and by private agencies, to restore and maintain agriculture to a complete normal relationship with other industries. It was on account of past depression, and in spite of present more encouraging conditions, that I have assembled an agricultural conference made up of those who are representative of this great industry in both its operating and economic sides. Every one knows that the great need of the farmer is markets. The country is not suffering on the side of production. Almost the entire difficulty is on the side of distribution. This reaches back, of course, to unit costs and diversifiingly intricate, for our domestic and foreign cation and many allied subjects. It is exceedtrade, transportation and banking, and in fact our entire economic system, are closely related to it. In time for action at this session I hope to report to the congress such legislative remedies as the conference may recommend. An appropriation should be made to defray their necessary expenses. The production of nitrogen for plant food in peace and explosives in war is more and more important. It is one of the chief sustaining elements of life. It is estimated that soil exhaustion each year is represented by about 9,000.000 tons and replenishment by 5,450.000 tons. The deficit of 3.550,000 tons is reported to represent the impairment of 118.000.000 acres of farm lands each year. To meet these necessities the government has been developing a water power project at Muscle Shoals to be equipped to produce nitrogen for explosives and fertilizer. It is my opinion that the support of agriculture is the chief problem to consider in connection with this property. It could by no means supply the present needs for nitrogen, but it would help and its development would encourage bringing other water powers into like use. Several offers have been made for the purchase of this property. Probably none of them represent final terms. Much costly experimentation is necessary to produce commercial nitrogen. For that reason it is a field better suited to private enterprise than to government operation. I should favor a sale of this property, or long-time lease, under rigid guaranties of commercial nitrogen production at reasonable prices for agricultural use. There would be a surplus of power for many years over any possibility of its application to a developing manufacture of nitrogen. It may be found advantageous to dispose of the right to surplus power separately with such reservations as will allow its gradual withdrawal and application to nitrogen manufacture. A subcommittee of the committees on agriculture should investigate this field and negotiate with prospective purchasers. If no advantageous offer be made the development should continue and the plant should be dedicated primarily to the production of materials for the fertilization of the soil. RAIL CONSOLIDATION. the commission and in supplying government pressure to secure action after the expiration of such a period. There are other proposals before congress for amending the transportation acts. One of these contemplates a revision of the method of valuation for rate-making purposes to be followed by a renewed valuation of the railways. The valuations instituted by the interstate commerce commission ten years ago have not yet been completed. They have cost the government an enormous sum, and they have imposed great expenditure upon the railways. most of which has in effect come out of the public in increased rates. This work should not be abandoned or supplanted until its results are known and can be considered. The railways during the last year have made still further progress in recuperation from the war, with large gains in efficiency and ability expeditiously to handle the traffic of the country. We have now passed through several periods of peak traffic without the car shortages which so frequently in the past have brought havoc to our agriculture and industries. The condition of many of our great freight terminals is still one of difficulty and results in Another matter before the congress is legisimposing large costs on the public for inward- lation affecting the labor sections of the transbound freight and on the railways for out-portation act. Much criticism has been directed ward-bound freight. Owing to the growth of at the workings of this section and experience our large cities and the great increase in the has shown that some useful amendment could volume of traffic, particularly in perishables, be made to these provisions. the problem is not only difficult of solution but in some cases not wholly solvable by railway action alone. In my message last year I emphasized the necessity for further legislation with a view to expediting the consolidation of our railways into larger systems. The principle of government control of rates and profits, now thoroughly imbedded in our governmental attitude toward natural monopolies such as the railways, at once eliminates the need of competition by small units as a method of rate adjustment. It would be helpful if a plan could be adopted which, while retaining the practice of systematic collective bargaining with conciliation and voluntary arbitration of labor differences, could also provide simplicity in relations and more direct local responsibility of employes and managers. But such legislation will not meet the requirements of the situation unless it recognizes the principle that the public has a right to the uninterrupted service of transportation, and therefore a right to be heard when there is danger that the nation may suffer great injury through the interrupCompetition must be preserved as a stimu- tion of operations because of labor disputes. lus to service, but this will exist and can be If these elements are not comprehended in increased under enlarged systems. Consequent-proposed legislation it wou'd be better to gain ly the consolidation of the railways into larger further experience with the present organiunits for the purpose of securing the substan-zation for dealing with these questions before tial values to the public which will come from undertaking a change. larger operation has been the logical conclusion of congress in its previous enactments, and is also supported by the best opinion in the country. Such consolidation will assure not only a greater element of competition as to service but it will afford economy in operation, greater stability in railway earnings and more economical financing. It opens large possibilities of better equalization of rates between different classes of traffic so as to relieve undue burdens upon agricultural products and raw materials generally which are now not possible without ruin to small units owing to the lack of diversity of traffic. It would also tend to equalize earnings in such fashion as to reduce the importance of section 15A. at which criticism, often misapplied, has been directed. A smaller number of units would offer less difficulties in labor adjustments and would contribute much to the solution of terminal difficulties. The consolidations need to be carried out with due regard to public interest and to the rights and established life of various communities in our country. It does not seem to me necessary that we endeavor to anticipate any final plan or adhere to any artificial and unchangeable project which shall stipulate a fixed number of systems, but rather we ought to approach the problem with such a latitud: of action that it can be worked out step by step in accordance with a comprehensive consideration of public interest. Whether the number of ultimate systems shall be more or less seems to me can only be determined by time and actual experience in the development of such consolidations. Those portions of the present law contemplating consolidations are not sufficiently effective in producing expeditious action and need amplification of the authority of the interstate commerce commission, particularly in affording a period for voluntary proposals to THE SHIPPING BOARD. The form of the organization of the shipping board was based originally on its function as a semijudicial body in regulation of rates. Dur ing the war it was loaded with enormous administrative duties. It has been demonstrated time and again that this form of organization results in indecision, division of opinion and administrative functions which make a wholly inadequate foundation for the conduct of a great business enterprise. The first principle it. securing the objective set out by congress in building up the American merchant marin upon the great trade routes and subsequently disposing of it into private operation cannot proceed with effectiveness until the entire fune tions of the body are reorganized. The immediate requirement is to transfer into the Emergency Fleet corporation the whole responsibility of operation of the fleet and other Property, leaving to the shipping board solely the duty of determining certain major policies which require deliberative action. The procedure under section 28 of the mer.. chant marine act has created great difficulty and threatened friction during the last twelve months. Its attempted application developed not only great opposition from exporters, particularly as to burdens that may be imposed upon agricultural products, but also great anxiety in the different seaports as to the ef fect upon their relative rate structures. This trouble will certainly recur if action is attempted under this section. It is uncertain in some of its terms and of great difficulty in interpretation. It is my belief that action under this section should be suspended until the congress can reconsider the entire question in the light of the experience that has been developed since its enactment. |