Evening Star Newspaper, December 8, 1931, Page 5

—— e G. 0. P. HEABS HAIL | HOOVER PROGRAM New Relief Methods Con- structive to High Degree, Senater Watson Says. President Hoover's message to the Oongress was hailed by Republican leaders as an adequate chart for the conrrczs in dealing with the present financfal and industrial conditions faced by the Government and by the 'he ‘view was taken at the Capitol that the recommendations of the Pres- ident for relief non-partisan in char- acter should be dealt with promptly for the benefit of the country by the Democratic House and the Republican Benate. Senator James E. Watson of Indiana, the Republican leader of the Senate, had the following comment on the mes- e “I look upon the message as a Te- markably strong document. It is com- prehensive and complete. His sugges- tions for new methods for relieving the country from its present financial and industrial plight are constructive to a high degree. If these measures are adopted, they will have a far-reaching effect on the financial, industrial and commercial situation throughout the entire country “There is nothing that can arouse partisan rancor in a discussion of the measures proposed, and it is to be hoped they will reccive early and iavorable | consideration m order that the people may have the full benefit of their op- | eration.” Lacks Punch, Says La Guardia. At the same time Representative La | Guardia, a Republican, who often dif- fers with his party, said “the Presi- dent’s heart seems to be in the right place, but the punch is just not there Senator McNary, the assistant Re- publican leader, said: “It is a clmr presentation of pending political and economic issues. It sets forth in strang age the attitude of the President.” “Increased taxes must necessarily be for a longer period than the two years Trecommended,” La Guardia contended. “The reconstruction corporation con- tains the germ of a great plan. The President destroys its_effectiveness by suggesting it should be liquidated in two years.” Opposition to broadening the base for Federal Reserve Bank discount operations, as favored by the President, came again from Senator Glass, Demo- crat, Virginia. ARMY OFFICER IN JAIL ON BAD CHECK CHARGE Lieut. Col. Arthur G. Hixson Ar- rested Bhortly After Being Di- vorced From Capital Woman. By the Associated Press. RENO, Ney., December 8—Lieut. Col. Arthur G. Hixson, United States Cal- vary officer at Fort Thomas, Ky., was arrested here late yesterday on & charge of issuing a fraudulent $400 check to, A L. Hammond, club tor.. He is in jail in default of $1.000 Col. Hixson was granted a divorce yesterday on grounds of cruelty from Helen Hixson, Washington, D. C., whom be married last June 20 in New York. SAYS U. S. WILL RECOVER Myron C. Taylor, Steel Man, Calls Present Workers' Test Period. NEW YORK, December 8 (#).—My- ron C. Taylor, chairman of the Finance Committee of the United States Steel Corporation, last night told the St Nicholas Club, organized in 1835 by Washington Irving, that American| character, plus the law of supply and | demand, would bring the country out of its present economic situation. “The present period is a test period,” he said, “which brings to many workers employed for shorter hours the oppor- tunity to choose between employing their spare time for reinvigorating| themselves or succumbing to tempta- sion to waste it.” MAY END INDIAN TRIP LONDON, December 8 (#).—Gossip in parliamentary lobbies said David Lioyd George, veteran British states- man, who is traveling in India, had de- cided to cut short his trip and return home. It was rumored he was seasick and homesick and would leave Ceylon on December 16, instead of staying until the end of January, as he had intended Besides suffering from seasickness, his friends said the former premier was chafing at his absence from political affairs, in which he long was leader of the Liberal party George & Co. Always Sells or ESS.'! Gift MEN’S LEATHER Wind Breakers Your choize of all reversible wind breakers. Both are Men’s 100%, All-Wool COAT SWEATERS All Sizes. Choice of sl 95 unbeatable values It Navy, Brown, Tan O the Senate and House of epresentatives b 1 my duty under the Con- stitution to submit to the Congress information on the state of the Union and to recom- mend for its consideration necessary and expecient measures. e eniet”influence affecting the state of the Unfon during the past year has been the continued world- wide economic disturbance. Our national concern has been to meet the emergencies it has created for us and to lay the foundations for recovery. If we lift our vision beyond these immediate emergencies we find fun- damental national gains even amid depression. In meeting the prob- lems of this difficult period, we have witnessed a remarkable develop- ment of the sense of co-operation in the community. For the first time in the history of our major economic depressions there has been a notable absence of public disorders and in- dustrial conflict. Above all, there is an enlargement of social and spir- itual responsibility among the peo- ple. The strains and stresses upon business have resulted in closer ap- plication, in saner policies and in better methods. Public improve- ments have been carried out on a larger scale than even in normal times. The country is richer in physical property, in newly discov- ered resources and in productive ca- pacity than ever before. There has been constant gain in knowledge and education; there has been continu- ous advance in science and inven- tion; there has been distinct gain in public health. Business depres- sions have been recurrent in the life of our country and are but tran- sitory. The Nation has emerged from each of them with increased strength and virility because of the enlightenment they have brought, the readjustments and the larger un- derstanding of the realities and ob- ligations of life and work which come from them National Defense. Both our Army and Navy have been maintained in a high state of efficiency. The ability and devotion of both officers and men sustain the highest traditions of the service. Reductions and postponements in expenditure of these departments to meet the present emergency are being made without reducing ex- isting personnel or impairing the morale of either establishment. The agreement between the leading naval powers for limitation of naval armaments and establishment of their relative strength, and thus elimination of competitive building, also implies for ourselves the gradual expansion of the deficient categories in our Navy to the parities provided in those treaties. However, none of the other nations, parties to these agreements, is today maintaining the full rate of construction which the treaty size of fleets would imply. Although these agreeements se- cured the maximum reduction of fleets which it was at that time pos- sible to attain, I am hopeful that the naval powers party to these agree- ments will realize that establishment of relative strength in itself offers opportunity for further reduction tween France and Italy. world is to regain its standards of life, it must further decrease both naval and other arms. The subject will come before the General Dis- armament Conference, which meets in Geneva on February 2 next. Foreign Aftairs, We are at peace with the world. ‘We have co-operated with other na- tions to preserve peace. The rights of our citizens abroad have been pro- tected. ‘The economic de has con- tinued and deepened in every part of the world during the past year. In many countries political instabil- ity, excessive armaments, debts, gov- ernmental expenditures and taxes have resulted in revolutions, in un- balanced budgets and monetary col- lapse and financial panics, in dump- ing of goods upon world markets and in diminished consumption of com- modities. Within two years there have been revolutions or acute social disorders in 19 countries, embracing more than hdlf the population of the world. Ten countries have been unable to meet their external obligations. In 14 countries, embracing & quarter of the world's population, former mone- tary standards have been tempo- rarily abandoned. In a number of countries there have been acute financial panics or compulsory re- straints upon banking. These dis- turbances have many roots in the dislocations from the World War. Every one of them has reacted upon us. They have sharply affected the markets and prices of our agricul- tural and industrial products. They have increased unemployment and greatly embarrassed our financial and credit system. As our difficulties during the past year have plainly originated in large degree from these sources, any effort to bring about our own recuperation has dictated the necessity of co-oper- ation by us with other nations in reasonable effort to restore world confidence and economic stability. Co-operation of our Federal Re- serve System and our banks with the central banks in foreign countries has contributed to localize and ame- liorate & number of serious finan- clal crises and thus avert disasters which would have affected us or moderate the pressure upon us. The economic crisis in Germany and Central Europe last June rose to the dimensions of a general paniec, from which it was apparent that without assistance these naticns must collapse. Apprehensions of such collapse had demoralized our agri- cultural and security markets and so threatened other nations as to im- pose further dangers upon us. But of highest importance was the ne- cessity of co-operation on our part to relieve the people of Germany from imminent disasters and to maintain their important relations to progress and stability in the world. Upon the initiative of this Government a year's postponement of reparations and other intergovernmental debts was brought about. Upon our fur- ther initiative an agreement was made by Germany's private creditors providing for an extension of such credits until the German people can develop more permanent and definite forms of relief. We have continued our policy of withdrawing our Marines from Haiti and Nicaragua. The difficulties between China and Japan have given us great concern, not alene for the maintenance of the spirit of the Kellogg-Briand pact, but for the maintenance of the treaties to which we are a party as- suring the territorial integrity of China. It is our purpose to assist in finding solutions sustaining the full spirit of those treaties. I shall deal at greater length with our foreign relations in a later mes- sage. The Domestic Situation. Many undertakings have been or- ganized and forwe.ced during the past to m the new and changing emergencizs which ' have constantiy confronied us. Broadly, the community has co- operated o meet the needs of honest distress and to take such emergency measures as would sustain confidence in our financial system and would cushion the violence mn&dnuflon in and 3 ustment credits without TEE EVENING STAR, WASHINGTON, D. L l %mc and widespread bankruptcy. es¢ measures have served those Ppurposes and will promote recovery. In these measures we have striven to mobilize and stimulate private in- itlative and local and community re- sponsibility. There has been the least possible Government entry into the economic field, and that only in temporary and emergency form. Our cltizens and our local governments have given a magnificent display of unity and action, initiative and pa- triotism in solving a multitude of difficulties and in co-operating with the Federal Government. For a proper understanding of my recommendations to the Congress it is desirable very briefly to review such activities during the past year. The emergencies of unemployment have been met by action in many directions. The appropriations for the continued speeding up of the great Federal construction program have prov.ded direct and indirect aid to employment upon a large scale. By organzed unity of act.on, the States and municipalities have also maintained large programs of pub- lic improvement. ~ Many industries have been prevailed upon to antici- pate and intensify construction. In- dustrial concerns and other em- ployers have been organized to spread available work among all their employes, instead of discharg- ing & portion of them. A large ma- jority have maintained wages at as high levels as the safe conduct of their business would permit. This course has saved us from industrial conflict and disorder which have characterized all previous depres- slons. Immigration has been cur- tailed by administrative action. Upon the basis of normal immigration the decrease amounts to about 300,000 individ who otherwise would have been added to our unemploy- ment. The expansion of Federal em- ployment agencies under appropria- tions by the Congress has proved most effective. Through the Presi- dent’s organization for unemploy- ment relief, public and private agencies were successfully mobilized last Winter to provide employment and other measures against distress. Similar organization gives assurance against suffering during the com- ing Winter. Committees of lead- ing citizens are now active at practically every point of unem- ployment. In "the large major- ity they have been assured the funds necessary, which together with local government aids, will meet the situation. A few exceptional locali- ties will be further organized. The evidence of the Public Health Serv- ice shows an actual decrease of sick- ness and infant and general mor- tality below normal years. No greater proof could be adduced that our geople have been protected from unger and cold and that the sense of social responsibility in the Nation has responded to the need of the unfortunate. ‘To meet the emergencles in agri- culture the loans authorized by Congress for rehabilitation in the drought areas have enabled farmers to produce abundant crops in those districts. The Red Cross undertook and magnificently administered re- lief for over 2,500,000 drought suf- ferers last Winter, It has under- taken this year to administer relief to 100,000 sufferers the new drought area of certain Northwest States. The action of the Pederal Farm Board in granting credits to farm co-operatives saved many of them from bankruptey and increased their purpose and strength. By en- abling farm co-operatives to cush- don the fall in prices of farm prod- ucts in 1930 and 1931 the board se- cured higher prices to the farmer would have been obtained otherwise, although the benefits of this action were partially defeated by continued world overproduction, Incident to this action the failure of & large number of farmers and of country banks was averted which could quite possibly have spread into & major disaster. The banks in the South have co-operated with the Farm Board in creation of & pool for the better marketing of accu- mulated cotton. Growers have been materially assisted by this action. Coustant effort has been made to reduce overproductlt in rellef of agriculture and to ote the for- eign buying of agricultural products by sustaining economic stability abroad. To meet our domestic emergen- cles in credit and banking arising from the reaction to acute crises abroad the National Credit Associa- tlon was set up by the banks with resources of $500,000,000 to support sound banks against the frightened withdrawals and hoarding. It is giving aid to reopen solvent banks which have been closed. Federal of- ficlals have brought about many beneficial unions of banks and have employed other means which have prevented many bank closings. As & result of these measures the gmrd- ing withdrawals which had risen to over $250,000.000 per week after the British crisis have substantially ceased. Further Measures. The major economic forces and weakn:sses at home and abroad have now been exposed and can be ap- praised, and the time is ripe for forward action to expedite our re- covery. Although some of the causes of our depression are due to specula- tion, inflation of securities and real estate, unsound foreign investments, and mismanagement of financial in- stitutions, yet our self-contained na- tional economy, with 1ts matchless strength and resources, would have enabled us to recover long since but for the continued dislocailons, shocks. and setbacks from abroad Whatever the causes may be, the vast liquidation and readjustments which have taken place have left us With a large degree of credit pa- ralysis, which, together with the sit- uation in our rai'ways ard the con- ditions abroad, are now the out- standing obstacles to recuperation If we can put our financial resources to work and can ameliorate the financial situation in tne raflways, I am confident we can make a large measure of recovery independent of the rest of the world. A strong America is the highest contribution mowurlv:’ stability. ne phase of the credit situation is indicated in the banks, During the past year banks, representing 3 per cent of our total deposits have been closed. A large part of these fail- ures have been caused by with- drawals for hoarding, as = dis- tinguished from the failures early in the depression where weakness due to misman: ment was the ]?rgvr cause of falure. Despite their closing, many of them will pay in full. Alihough such withdrawals hade practically ceased, yet $1,100,000,000 of currency was previously with- drawn which has still 1o return to circulation. This represents a large reduction of the ability of our banks to extend credit which would other- wise fertilize industry and agricul- ture. Furthermore, many of our bankers, in order to prepare them- selves to meet possible withdrawals, have felt compelled to call in loans, to refuse new credits, and to reaize upon securities, which m turn has demoralized the markets ‘The par- alysis has been further augmented by the steady increase in recent years of the preportion of bank as- seis invesied in long-term securijes, such as mo:tgage and bond-. These sezurities tond to lose their liruidity in depre sic arily to fall = value LIty of the banks to meet the 810ck of sudden withdrawal is greatly lessened and the restriction of all kings of credit of values All of this tends to stifle business, especially the smaller units, and finally expresses itself in further de- pression of pr.c:s and values, in re- striction on new enterprise, and in increased unemployment. The situation largely arises from an unjustified lack of confidence. We have enormous volumes of idle money in the banks and in boarding. We do not require more money or werk.ng capital—we need to put what we have to work. ‘fhe fundamental difficulties which have brought about financial strains in foreign countries do not exist in the United States. No external drain on our resources can threaten our position, becaus: the balance of in- ternational payments is in our fa- vor; we owe less to foreign co: than they owe to us; our indusirial are efliciently organized; our cur- rency and bank deposits are pro- tected by the greatest gold reserve in history. Our first step toward recovery is to re-establish confidence and thus restore the flow of credit which is the very basis of our ezonomic life. We must put some stecl beams in the foundations of our credit struc- ture. It is our duty to apply the full strength of our Government not only to the immediate phases, but to provide security against shocks and the repetition of the weaknesses which have been proven. The recommendations which I here lay before the Congress are designed to meet these needs by strengthening financial industrial, and agricultural life through the medium of our existing matitutions, and thus to avoid the entry of the Government into competition with private business. Federal Government Finance. The first requirement of confi- dence and of economic rccovery is financial stability of the United States Government. I shall deal with fiscal questions at greater length in the budget message. But I must at this time call attention to the magnitude of the deficits which have developed and the resulting necessity for determined and cour- ageous policies. These deficits arise in the main from the heavy de- crease in tax receipts due to the de- pression and to the Increase in ex- penditure on construction in aid to unemployment, aids to agriculture and upon services to veterans. During the fiscal year ending June 30 last we incurred a deficit of about $903,000,000, which included the statutory reduction of the debt and represented an increase of the na- tional debt by $616,000,000. Of this, however, $153,000,000 is offset by in- creased cash balances. In comparison with the fiscal year 1928 there is indicated a fall in Federal receipts for the present fiscal year amounting to $1,683,000,- 000, of which $1,034,000,000 is in individual and corporate income taxes alone. During this fiscal year there will be an increased expendi- ture, as compared to 1928, on veter- ans of $255,000,000, and an increased expenditure on construction work which may reach $520,000,000. De- spite large economies in other di- rections, we have an indicated def- ictt, including the statutory retire- ment debt, of $2,123,000,000, and an indicated net debt increase of about $1,711,000,000. The budget for the fiscal year be- ginning July 1 next, after allowing for some increase of taxes under the present laws and after allowing for drastic reduction in expendituri still indicates a deficlt of $1,417, After offsetting the statu- tory debt requirements this would indicate an increase in the natonal debt for the fiscal year 1933 of about $921,000,000. Several conclusions are inevitable, We must have insistent and deter- mined,reduction in Government ex- penses. We must face a temporary Increase in taxes. Such increase should not cover the whole of these deficits or it will retard Tecovery. We must partially finance the deficit by borrowing. It is my view that the amount of taxation should be fixed 50 as to balance the budget “for 1933 except for the statutory debt retirement. Such Government receipts would assure the balance of the following year’s budget including debt retirement. It is my further view that the additional taxation should be imposed solely as an emergency measure terminating defi- nitely two years from July 1 next, Such a basis will give confidence in the determination of the Govern- ment to stabilize its finance and will assure taxpayers of its temporary character. Even with increased tax- ation, the Government will reach the utmost safe limit of its borrowing capacity by the expenditure for which we are already obligated and the recommendations here proposed. To go further than these limits in either expenditures, taxes or borrow- ing will destroy confidence, denude commerce and industry of its re- sources, jeopardize the financial sys- tem and actually extend unemploy- ment and demoralize agriculture rather than relieve it. Federal Land Banks, I recommend that the Congress authorize the subscription by the Treasury of further capital to the Federal land banks to be retired as provided in the original act or when funds are available, and that repay- ments of such capital be treated asa fund avallable for further subscrip- tions in the same manner. It is urgent that the banks be supported 50 as to stabilize the market values of thelr bonds and thus secure capi- tal for the farmers at low rates, that they may continue their services to agriculture and that they may meet the present situation with consider- ation to the farmers. Deposits in Closed Banks. A method should be devised to make available quickly to depositors some portion of their deposits in closed banks as the assets of such banks may warrant. Such provision would go far to relieve distress in a multitude of families, would stabil- ize values in many communities and would liberate working capital to thousands of concerns. I recom- mend that measures be enacted promptly to accomplish these results and I suggest that the Congress should consider the development of such a plan through the Federal Reserve banks. Home-Loan Discount Banks. I recommend the establishment of a systtem of hom an discount banks as the necessary companion in our financial structure of the Fed- eral Reserve banks and our Federgl land banks. Such action will relieve present distressing pressures against home and farm property owners. It will relieve pressures upon and give added strength to bullding and loan associations, savings banks and Adne- posit banks engaged in_extending such credits. Such action would further decentralize our credit stmc-l ture. It Wvuldd reVlv!ln;;‘::S:nll;! ruction &) emp] :V‘:)I:lsltluenlble ;‘lch loaning institu- tions more effectually to promll.’)lte home ownership. I discussed t! L: plan at some length in a suwmzi"l;s made public November 14 last. Tb plan has ba:n warmly indorsed by cent MNational Conference Upon ‘Qwnership and Hous'nz, whose \ba:s were designated by the Governors of the States and the groups interested. Reconstruction Finance Corporation. In order that the public may be sbeolutely assured and that the - ernment may be in position to meet any public necessity, I recommen that an emergency reconstruction corporation of the nature of the former War Finance Corporation should be established. It may not be necessary to use such an instrumen- tality very extensively. The very existence of such & bulwark will strengthen confidence. The Treas- ury should be authorized to subscribe a reasonable capital to it, and it should be given authority to issue its own debentures. It should be placed in liquidation at the end of two years. Its purpose is that by strengthening the weak spots to thus liberate the full strength of the Na- tion’s resources. It should be in po- sition to facilitate exports by Ameri- can agencies; make advances to ag- ricultural credit agencies where nec- essary to protect and aid the agri- cultural industry; to make tempo- rary advances upon proper securities to establish industries, rail and financial institutions which cannot otherwise secure credit, and where such advances will protect the credit structure and stimulate employment. Its functions would not overlap those of the National Credit Corporation. Federal Reserve Eligibility. On October 6th I issued a state- ment_that I should recommend to the Congress an exension during emergencies of the iigibility pro- visions in the Fed-ril Reserve act. This statement vas approved by a representative gather:ng of the mem- bers of both Houses of the Congress, including memt of thé appro- priate committ It was approved by the officials of the Treasu partment, and I understand such an extension has been approved by a majority of the governors of the Fedegal Rescrve banks. Nothing should be done which would lower the safeguar€s of the system The establishment of the mortgage- discount banks herein referred to will also contribute to further re- serve strength in the banks without inflation, Banking Laws. Our people have a right to a bank- ing system in which their deposits shall be safeguarded and the flow of credit less subject to storms. The need of a sounder system is plainly shown by the extent of bank failures. I recommend the prompt improve- ment of the banking laws. Changed financial conditions and_commercial practices must be met. The Congress should investigate the need for sepa- ration between different kinds of banking; an enlargement of branch banking under proper restrictions, and the methods by which enlarged membership in the Federal Reserve System may be brought about. Postal Savings Banks. The Postal Savings deposits have increased from about $200,000,000 to about $550,000,000 during the past year. ~This experience has raised important practical questions in re- lation to desposils and_investments which should receive the attention of the Congress. Railways. The railways present one of our immediate and pressing problems. They are and must remain the back- bone of our transportation system. ‘Their prosperity is interrelated with the prosperity of all industries. Their fundamental service in trans- portation, the volume of their em- ployment, their buying power for supplies from other industries, the enormous investment in their se- curities, particularly their bonds, by insurance companies, savings banks, benevolent and other trusts, all re- flect their partnership in the whole economic fabric. Through these institutions the railway bonds are in & large sense the investment of every family. The well maintained and successful operation and the sta- bility of rallway finances are of pri- mary importance to economic re- covery. They should have more ef- fective opportunity to reduce oper- ating costs by proper consolidation. As their rates must be regulated in public interest, so also approximate regulation should be applied to com- peting services by some authority. The methods of their regulation should be revised. The Interstate Commerce Commission has made important and far-reaching recom- mendations upon the whole subject, which I commend to the early con- sideration of the Congress, Anti-Trust Laws. In my message of a year ago I commented on the necessity of con- gressional inquiry into the economic action of the anti-trust laws. There is wide conviction that some change should be made, especially in_the procedure under these laws. I do not favor their repeal. Such action would open wide the door to price- fixing, monopoly and destruction of healthy competition. Particular at- tention should be given to the in- dustries founded upon natural re- sources, especially where destructve competition produces great wastes of these resources and brings great hardships upon operators, employes and the public. In recent years there has been continued demorali- zation in the bituminous coal, oil and lumber industries. I again commend the matter to the con- sideration of the Congress, Unemployment, As an ald to unemployment the Federal Government is engaged in the greatest program of public build- ing, harbor, flood control, highway, waterway, aviation, merchant and 1 ship construction in all his- Our expenditures on these works during this calendar year will Teach about $780,000,000, compared with $260,000,000 in 1 Through this increased construction, through the maintenance of a full comple- ment of Federal employes and through services to veterans it is estimated that the Federal taxpayer is now directly contributing to the livelihood of 10,000,000 of our citi- zen: CHRISTMAS GIPT STORE roRr ALL THE pEorLp Jewelers Stat'cners We must avoid burdens upon the Government which will create more unemployment in private industry than can be gained by further ex- pansion of employment by the Fed- eral Government. We can now stimulate employment and agricul- ture more effectually and speedily through the voluntary measures in progress, through the thawing out of credit, through the building up of stability abroad, through the home loan discount banks, through an emergency finance corporation and the rehabilitation of the rail- ways and other such directions. I am opposed to any direct or in- direct Government dole. The break- down and increased unemployment in Europe is due in part to such practices. Our people are proviing against distress from unemployment in true American fashion by a mag- nificent response to public appeal and by action of the local govern- ments, General Legislation, There are many other subjects re- quiring legislative action at this ses- sion of the Congress. I may list the following among them: Veterans’ Services, The law enacted last March au- thorizing loans of 50 per cent upon adjusted-service certificates has, to- gether with the loans made under previous laws, resulted in payments of about $1,260,000,000. Appropri- ations have been exhausted. The administrator of veterans' affairs advises that a further appropriation of $200,000,000 is required at once to meet the ob'igations made neces- sary by existing legislation. There will be demands for further veterans’ legislation; there are in- equalities in our system of veterans’ relief; it is our national duty to meet our obligations to those who have served the Nation. But our present expenditure upon these services now exceeds $1,000,000,000 per annum. I am opposed to any extension of these expenditures until the country has recovered from the present situation. Electrical-power lation. I have recommended in previous messages the effective regulation of interstate electrical power as the es- sential function of the reorganized Federal Power Commission. I renew the recommendation. It is urgently needed in public protection. Muscle Shaoals. At my suggestion, the Governors and Legislatures of Alabama and Tennessee selected three members each for service on a committee to which I appointed a representative of the farm organizations and two representatives of the War Depart- ment for the purpose of recom- mending a plan for the disposal of these properties which would be in the interest of the people of those States and the agricultural industry throughout the country. I shail transmit the recommendations to the Congress, Reorganization of Federal Departments. I have referred in previous mes- sages to the profound need of fur- ther reorganization and consolida- tion of Federal administrative func- tions to eliminate overlap and waste and to enable co-ordination and definition of Government policies now wholly impossible ‘in scattered and conflicting agencies which deal with parts of the same major func- tlon. I shall lay before the Con- gress further recommendations upon this subject, particularly in relation lo the Department of the Interior. “There are twe directions of such re- organization, however, which have an important bearing upon the emergency problems with which we are confronted, Shipping Board. At present the Shipping Board exercises large administrative func- tions independent of the execu- tive. These administrative functons should oe transferred to the Depart- ment of Commerce, in keeping with that single responsibility which has been the basis of our gevernmental structure since its foundation. There should be created in that depart- ment a position of assistant secre- tary for merchant marine, under whom this work and the several bureaus having to do with merchant marine may be grouped. The Shipping Board should be made a regulatory body acting also in advisory capacity on loans and policies, in keeping with its origi- nal conception. Its regulatory powers should be amended to inw clude regulation of coastwise ship- ping s0 as to assure stability and better service. It is also worthy of construction that the regulation of rates and services upon the inland waterways should be assigned to such a reorganized board. Reorganization of Public Works Administration. I recommend that all building and construction activities of the Gov- ernment now carried on by many departments be comsolidated into an independent establishment under the President to be known as the “public works administration” di- rected by a public works adminis- trator. This agency should under- take all construction work in serv- ice to the different departments of the Government (except naval and military work). The services of the corps of Army engineers should be delegated In rotation for military duty to this administration in con- tinuation of their supervision of river and harbor work. Great econo- mies, sounder policies, more effective co-ordination to employment and expedition in all construction work would result from this consolidation. Law Enforcement. I shall present some recommenda- tions in a special message looking to the strengthening cf criminal law WATCHES ——OF MERIT —— 17-JEWEL GRUEN g $52.50 ouette w it h sitk cord. 15-JEWEL GRUEN 14-kt. old $37.50 case, lg-:euel open link brace- let attached. First Time Presented 15-JEWEL GRUEN 15-jewel open link metal bracelet attached. Platinumsmiths A. Kahn Jne. Arthur J. Sundlun, President 39 Years at 935 F Street enforcement and improvement in ax&!:m procedure connected there- Inland Waterway and Harbor Improvement. These improvements are now pro- ceeding upon an unprecedented scale. Some indication of the volume of work in progress is conveyed by the fact that during the current year over 380,000,000 cubic yards of ma- terial have been moved an amount equal to the entire removal in the construction of the Panama Canal. The Mississippl waterway system, connecting Chicago, Kansas City, Pittsburgh and New Orleans, will be in full operation during 1933. Substantial progress is being made upon‘the projects of the upper Mis- souri, upper Mississippi, etc. Negotiations are now in progress with Canada for the construction of the St. Lawrence Waterway. The Tariff. Wages and standards of living abroad have been materially low- ered during the past year. The temporary abandonment of the gold standard by certain countries has also reduced their production costs compared to ours. Fortunately any increases in the tariff which may necessary to protect agriculture and industry from these lowered foreign costs, or decreases in items which may prove to be excessive, may be undertaken at any time by the Tariff Commission under au- thority which it possesses by virtue of the tariff act of 1930. The com- mission during the past year has reviewed the rates uron over 254 items subject to tariff. As a result of vigorous and industrious action, it is up to date in the considera- tion of pending references and is prepared to give prompt attention to any further applications. This procedure presents an orderly method for correcting inequalities. I am opposed to any general con- gressional revision of the tariff. Such action would disturb industry, business and agriculture, It would prolong the depression. Tmmigration and Deportation. I recommend that Immigration restriction now in force under ad- ministrative action be placed upcn a more definite basis by law. The deportation laws should be strength- ened. Allens lawfully in the coun- try should be protected by the issuance of a certificate of residence. Public Realth, I again call attention to my previ- ous reccmmendations upon this sub- Ject, particularly in its relation $o children. Tne moral results are of the utmost importance. Conclusion. It is inevitable that in these times much of the legislation pro- posed to the Congress and many of the recommendations of the Ex- ecutive: must be designed to meet emergengies. In reaching solutions we must not jeopardize those prinei- ples which we have found to be the basis cf the growth of the Nation. The F:deral Government must not encroach upon nor permit local communities to abandon that precious possession of local initia- tive and responsibility. Again, just as the largest measure of responsi- bility in the government of the Nation rests upon local self-govern- ment, so dces the largest measure of social responsibility in our coun- try rest upon the individual. If the individual surrenders his own ini- tiative and responsibilities, he is COMPLETE INSURANCE with every.diamon ' ring wl:.l e lrl ld.pmst o ki extra charge! America's Credit Jewelers 8. 21931 ! gl Text of President Hoover’s Message to Congress tury and & half to leadership of ti economic world. If our economic system does not match our highest expectations at all times, it does not require revolutionary action to bring it into accord with any. necessity that experience may prove. It has successfully adjusted itself to chang- ing conditions in the past. It will do &0 again. The mobility of our institutions, the richness of our re- sources and the abilities of our many of our people, but they have shown qualities as high in fortitude, courage and resourcefulness as ever in our history. With that spirit, I have faith that out of it will come & sounder life, a truer standard of values, a greater recognition of the results of honest effort and @& healthier atmosphere in which te Tear our children, Ours must be a country of such stability and se- curity as cannot fall to forward and enlarge among all the people that abundant life of ma- terial and spiritual opportunl.lfi which it has represented among nations since its beginning. HERBERT HOOVER. ‘The White House, December 8, 1931. HELD “SYNTHETIC HERQ” Los Angeles Policeman Is Laid Of After Tale of Battle Fails. LOS ANGELES, December 8 (#).—Po. lice Officer L. E. McDermon was suse pended from the police force yesterday for what Inspector Walter Davidson sald was & “synthetic hero complex.” For several days McDermon had been | something of a hero among his fellow | offigers. He had turned up with a bul- | let_embedded in the emblem of his cap | and a story of a pistol fight with twa burglars. Then detectives noticed the buliet resembled those used in thefy | pistols. Ballistic experts said it had been fired by the officer himsel{. McDermon con~ fessed, and said he had been on the force seven years waiting for an oppor. tunity to become a hero and none had come. S0 he got tired wafting. B 1 Ireland is warring youths who catch salmon with wire snares. evERFRESH CITRATE or MAGRESIA THE MOST PLEASANT 25{‘ IN CLEAN NEW BOTTLES | \ $100 Luys this amazing beauty—three large, brilliant dia~ monds in a smart mounting of white 1004 F St. N.W Sti Plano Man eff ufacturers Factory to Your Home Is all you need! Choose any Piano In Drastic PRICE Reductions Remember! Atfter this GREATEST STIEFF SALE, thess prices and terms are positively withdrawn, We deliver free within a radius of sixty miles Think of purchasing your favorite make in a brand new Baby Grand or Upright Pi- ano at only $3.00 down and $1.00 per week to those of approved credit. Your old piano or phono- graph will be accepted in trade at a liberal allowance it you have one. Open every evening—better ome in tonight. New and Used the Store - - - Greatest STIEFF SALE! * Every PIANO Reduced In NEW Grand Pianos Such Famous Names as Stieff Shaw Upright Pianos Stieff Used Steinway Used Knabe Shaw Davies & Sons Bennett-Bretz Bennett-Bretz Davies & Sons $3Down -- $1 a week& Chas. M. Stieff, Inc. 1340 G Street Every E . W. Until 9