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State of the Union Addresses of Grover Cleveland

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The Secretary of the Interior suggests a change in the plan for the payment
of the indebtedness of the Pacific subsidized roads to the Government. His
suggestion has the unanimous indorsement of the persons selected by the
Government to act as directors of these roads and protect the interests of
the United States in the board of direction. In considering the plan
proposed the sole matters which should be taken into account, in my
opinion, are the situation of the Government as a creditor and the surest
way to secure the payment of the principal and interest of its debt.

By a recent decision of the Supreme Court of the United States it has been
adjudged that the laws of the several States are inoperative to regulate
rates of transportation upon railroads if such regulation interferes with
the rate of carriage from one State into another. This important field of
control and regulation having been thus left entirely unoccupied, the
expediency of Federal action upon the subject is worthy of consideration.

The relations of labor to capital and of laboring men to their employers
are of the utmost concern to every patriotic citizen. When these are
strained and distorted, unjustifiable claims are apt to be insisted upon by
both interests, and in the controversy which results the welfare of all and
the prosperity of the country are jeopardized. Any intervention of the
General Government, within the limits of its constitutional authority, to
avert such a condition should be willingly accorded.

In a special message transmitted to the Congress at its last session I
suggested the enlargement of our present Labor Bureau and adding to its
present functions the power of arbitration in cases where differences arise
between employer and employed. When these differences reach such a stage as
to result in the interruption of commerce between the States, the
application of this remedy by the General Government might be regarded as
entirely within its constitutional powers. And I think we might reasonably
hope that such arbitrators, if carefully selected and if entitled to the
confidence of the parties to be affected, would be voluntarily called to
the settlement of controversies of less extent and not necessarily within
the domain of Federal regulation.

I am of the opinion that this suggestion is worthy the attention of the
Congress.

But after all has been done by the passage of laws, either Federal or
State, to relieve a situation full of solicitude, much more remains to be
accomplished by the reinstatement and cultivation of a true American
sentiment which recognizes the equality of American citizenship. This, in
the light of our traditions and in loyalty to the spirit of our
institutions, would teach that a hearty cooperation on the part of all
interests is the surest path to national greatness and the happiness of all
our people; that capital should, in recognition of the brotherhood of our
citizenship and in a spirit of American fairness, generously accord to
labor its just compensation and consideration, and that contented labor is
capital's best protection and faithful ally. It would teach, too, that the
diverse situations of our people are inseparable from our civilization;
that every citizen should in his sphere be a contributor to the general
good; that capital does not necessarily tend to the oppression of labor,
and that violent disturbances and disorders alienate from their promoters
true American sympathy and kindly feeling.

The Department of Agriculture, representing the oldest and largest of our
national industries, is subserving well the purposes of its organization.
By the introduction of new subjects of farming enterprise and by opening
new sources of agricultural wealth and the dissemination of early
information concerning production and prices it has contributed largely to
the country's prosperity. Through this agency advanced thought and
investigation touching the subjects it has in charge should, among other
things, be practically applied to the home production at a low cost of
articles of food which are now imported from abroad. Such an innovation
will necessarily, of course, in the beginning be within the domain of
intelligent experiment, and the subject in every stage should receive all
possible encouragement from the Government.

The interests of millions of our citizens engaged in agriculture are
involved in an enlargement and improvement of the results of their labor,
and a zealous regard for their welfare should be a willing tribute to those
whose productive returns are a main source of our progress and power.

The existence of pleuro-pneumonia among the cattle of various States has
led to burdensome and in some cases disastrous restrictions in an important
branch of our commerce, threatening to affect the quantity and quality of
our food supply. This is a matter of such importance and of such
far-reaching consequences that I hope it will engage the serious attention
of the Congress, to the end that such a remedy may be applied as the limits
of a constitutional delegation of power to the General Government will
permit.

I commend to the consideration of the Congress the report of the
Commissioner and his suggestions concerning the interest intrusted to his
care.

The continued operation of the law relating to our civil service has added
the most convincing proofs of its necessity and usefulness. It is a fact
worthy of note that every public officer who has a just idea of his duty to
the people testifies to the value of this reform. Its staunchest, friends
are found among those who understand it best, and its warmest supporters
are those who are restrained and protected by its requirements.

The meaning of such restraint and protection is not appreciated by those
who want places under the Government regardless of merit and efficiency,
nor by those who insist that the selection of such places should rest upon
a proper credential showing active partisan work. They mean to public
officers, if not their lives, the only opportunity afforded them to attend
to public business, and they mean to the good people of the country the
better performance of the work of their Government.

It is exceedingly strange that the scope and nature of this reform are so
little understood and that so many things not included within its plan are
called by its name. When cavil yields more fully to examination, the system
will have large additions to the number of its friends.

Our civil-service reform may be imperfect in some of its details; it may be
misunderstood and opposed; it may not always be faithfully applied; its
designs may sometimes miscarry through mistake or willful intent; it may
sometimes tremble under the assaults of its enemies or languish under the
misguided zeal of impracticable friends; but if the people of this country
ever submit to the banishment of its underlying principle from the
operation of their Government they will abandon the surest guaranty of the
safety and success of American institutions.

I invoke for this reform the cheerful and ungrudging support of the
Congress. I renew my recommendation made last year that the salaries of the
Commissioners be made equal to other officers of the Government having like
duties and responsibilities, and I hope that such reasonable appropriations
may be made as will enable them to increase the usefulness of the cause
they have in charge.

I desire to call the attention of the Congress to a plain duty which the
Government owes to the depositors in the Freedman's Savings and Trust
Company.

This company was chartered by the Congress for the benefit of the most
illiterate and humble of our people, and with the intention of encouraging
in them industry and thrift. Most of its branches were presided over by
officers holding the commissions and clothed in the uniform of the United
States. These and other circumstances reasonably, I think, led these simple
people to suppose that the invitation to deposit their hard-earned savings
in this institution implied an undertaking on the part of their Government
that their money should be safely kept for them.

When this company failed, it was liable in the sum of $2,939,925.22 to
61,131 depositors. Dividends amounting in the aggregate to 62 per cent have
been declared, and the sum called for and paid of such dividends seems to
be $1,648,181.72. This sum deducted from the entire amount of deposits
leaves $1,291,744.50 still unpaid. Past experience has shown that quite a
large part of this sum will not be called for. There are assets still on
hand amounting to the estimated sum of $16,000.

I think the remaining 38 per cent of such of these deposits as have
claimants should be paid by the Government, upon principles of equity and
fairness.

The report of the commissioner, soon to be laid before Congress, will give
more satisfactory details on this subject.

The control of the affairs of the District of Columbia having been placed
in the hands of purely executive officers, while the Congress still retains
all legislative authority relating to its government, it becomes my duty to
make known the most pressing needs of the District and recommend their
consideration.

The laws of the District appear to be in an uncertain and unsatisfactory
condition, and their codification or revision is much needed.

During the past year one of the bridges leading from the District to the
State of Virginia became unfit for use, and travel upon it was forbidden.
This leads me to suggest that the improvement of all the bridges crossing
the Potomac and its branches from the city of Washington is worthy the
attention of Congress.

The Commissioners of the District represent that the laws regulating the
sale of liquor and granting licenses therefor should be at once amended,
and that legislation is needed to consolidate, define, and enlarge the
scope and powers of charitable and penal institutions within the District.

I suggest that the Commissioners be clothed with the power to make, within
fixed limitations, police regulations. I believe this power granted and
carefully guarded would tend to subserve the good order of the
municipality.

It seems that trouble still exists growing out of the occupation of the
streets and avenues by certain railroads having their termini in the city.
It is very important that such laws should be enacted upon this subject as
will secure to the railroads all the facilities they require for the
transaction of their business and at the same time protect citizens from
injury to their persons or property.

The Commissioners again complain that the accommodations afforded them for
the necessary offices for District business and for the safe-keeping of
valuable books and papers are entirely insufficient. I recommend that this
condition of affairs be remedied by the Congress, and that suitable
quarters be furnished for the needs of the District government.

In conclusion I earnestly invoke such wise action on the part of the
people's legislators as will subserve the public good and demonstrate
during the remaining days of the Congress as at present organized its
ability and inclination to so meet the people's needs that it shall be
gratefully remembered by an expectant constituency.

***

State of the Union Address
Grover Cleveland
December 6, 1887

To the Congress of the United States:

You are confronted at the threshold of your legislative duties with a
condition of the national finances which imperatively demands immediate and
careful consideration.

The amount of money annually exacted, through the operation of present
laws, from the industries and necessities of the people largely exceeds the
sum necessary to meet the expenses of the Government.

When we consider that the theory of our institutions guarantees to every
citizen the full enjoyment of all the fruits of his industry and
enterprise, with only such deduction as may be his share toward the careful
and economical maintenance of the Government which protects him, it is
plain that the exaction of more than this is indefensible extortion and a
culpable betrayal of American fairness and justice. This wrong inflicted
upon those who bear the burden of national taxation, like other wrongs,
multiplies a brood of evil consequences. The public Treasury, which should
only exist as a conduit conveying the people's tribute to its legitimate
objects of expenditure, becomes a hoarding place for money needlessly
withdrawn from trade and the people's use, thus crippling our national
energies, suspending our country's development, preventing investment in
productive enterprise, threatening financial disturbance, and inviting
schemes of public plunder.

This condition of our Treasury is not altogether new, and it has more than
once of late been submitted to the people's representatives in the
Congress, who alone can apply a remedy. And yet the situation still
continues, with aggravated incidents, more than ever presaging financial
convulsion and widespread disaster.

It will not do to neglect this situation because its dangers are not now
palpably imminent and apparent. They exist none the less certainly, and
await the unforeseen and unexpected occasion when suddenly they will be
precipitated upon us.

On the 30th day of June, 1885, the excess of revenues over public
expenditures, after complying with the annual requirement of the
sinking-fund act, was $17,859,735.84; during the year ended June 30, 1886,
such excess amounted to $49,405,545.20, and during the year ended June 30,
1887, it reached the sum of $55,567,849.54.

The annual contributions to the sinking fund during the three years above
specified, amounting in the aggregate to $138,058,320.94, and deducted from
the surplus as stated, were made by calling in for that purpose outstanding
3 per cent bonds of the Government. During the six months prior to June 30,
1887, the surplus revenue had grown so large by repeated accumulations, and
it was feared the withdrawal of this great sum of money needed by the
people would so affect the business of the country, that the sum of
$79,864,100 of such surplus was applied to the payment of the principal and
interest of the 3 per cent bonds still outstanding, and which were then
payable at the option of the Government. The precarious condition of
financial affairs among the people still needing relief, immediately after
the 30th day of June, 1887, the remainder of the 3 per cent bonds then
outstanding, amounting with principal and interest to the sum of
$18,877,500, were called in and applied to the sinking-fund contribution
for the current fiscal year. Notwithstanding these operations of the
Treasury Department, representations of distress in business circles not
only continued, but increased, and absolute peril seemed at hand. In these
circumstances the contribution to the sinking fund for the current fiscal
year was at once completed by the expenditure of $27,684,283.55 in the
purchase of Government bonds not yet due bearing 4 and 41/2 per cent
interest, the premium paid thereon averaging about 24 per cent for the
former and 8 per cent for the latter. In addition to this, the interest
accruing during the current year upon the outstanding bonded indebtedness
of the Government was to some extent anticipated, and banks selected as
depositories of public money were permitted to somewhat increase their
deposits.

While the expedients thus employed to release to the people the money lying
idle in the Treasury served to avert immediate danger, our surplus revenues
have continued to accumulate, the excess for the present year amounting on
the 1st day of December to $55,258,701.19, and estimated to reach the sum
of $113,000,000 on the 30th of June next, at which date it is expected that
this sum, added to prior accumulations, will swell the surplus in the
Treasury to $140,000,000.

There seems to be no assurance that, with such a withdrawal from use of the
people's circulating medium, our business community may not in the near
future be subjected to the same distress which was quite lately produced
from the same cause. And while the functions of our National Treasury
should be few and simple, and while its best condition would be reached, I
believe, by its entire disconnection with private business interests, yet
when, by a perversion of its purposes, it idly holds money uselessly
subtracted from the channels of trade, there seems to be reason for the
claim that some legitimate means should be devised by the Government to
restore in an emergency, without waste or extravagance, such money to its
place among the people.

If such an emergency arises, there now exists no clear and undoubted
executive power of relief. Heretofore the redemption of 3 per cent bonds,
which were payable at the option of the Government, has afforded a means
for the disbursement of the excess of our revenues; but these bonds have
all been retired, and there are no bonds outstanding the payment of which
we have a right to insist upon. The contribution to the sinking fund which
furnishes the occasion for expenditure in the purchase of bonds has been
already made for the current year, so that there is no outlet in that
direction.

In the present state of legislation the only pretense of any existing
executive power to restore at this time any part of our surplus revenues to
the people by its expenditure consists in the supposition that the
Secretary of the Treasury may enter the market and purchase the bonds of
the Government not yet due, at a rate of premium to be agreed upon. The
only provision of law from which such a power could be derived is found in
an appropriation bill passed a number of years ago, and it is subject to
the suspicion that it was intended as temporary and limited in its
application, instead of conferring a continuing discretion and authority.
No condition ought to exist which would justify the grant of power to a
single official, upon his judgment of its necessity, to withhold from or
release to the business of the people, in an unusual manner, money held in
the Treasury, and thus affect at his will the financial situation of the
country; and if it is deemed wise to lodge in the Secretary of the Treasury
the authority in the present juncture to purchase bonds, it should be
plainly vested, and provided, as far as possible, with such checks and
limitations as will define this official's right and discretion and at the
same time relieve him from undue responsibility.

In considering the question of purchasing bonds as a means of restoring to
circulation the surplus money accumulating in the Treasury, it should be
borne in mind that premiums must of course be paid upon such purchase, that
there may be a large part of these bonds held as investments which can not
be purchased at any price, and that combinations among holders who are
willing to sell may unreasonably enhance the cost of such bonds to the
Government.

It has been suggested that the present bonded debt might be refunded at a
less rate of interest and the difference between the old and new security
paid in cash, thus finding use for the surplus in the Treasury. The success
of this plan, it is apparent, must depend upon the volition of the holders
of the present bonds; and it is not entirely certain that the inducement
which must be offered them would result in more financial benefit to the
Government than the purchase of bonds, while the latter proposition would
reduce the principal of the debt by actual payment instead of extending
it.

The proposition to deposit the money held by the Government in banks
throughout the country for use by the people is, it seems to me,
exceedingly objectionable in principle, as establishing too close a
relationship between the operations of the Government Treasury and the
business of the country and too extensive a commingling of their money,
thus fostering an unnatural reliance in private business upon public funds.
If this scheme should be adopted, it should only be done as a temporary
expedient to meet an urgent necessity. Legislative and executive effort
should generally be in the opposite direction, and should have a tendency
to divorce, as much and as fast as can be safely done, the Treasury
Department from private enterprise.

Of course it is not expected that unnecessary and extravagant
appropriations will be made for the purpose of avoiding the accumulation of
an excess of revenue. Such expenditure, besides the demoralization of all
just conceptions of public duty which it entails, stimulates a habit of
reckless improvidence not in the least consistent with the mission of our
people or the high and beneficent purposes of our Government.

I have deemed it my duty to thus bring to the knowledge of my countrymen,
as well as to the attention of their representatives charged with the
responsibility of legislative relief, the gravity of our financial
situation. The failure of the Congress heretofore to provide against the
dangers which it was quite evident the very nature of the difficulty must
necessarily produce caused a condition of financial distress and
apprehension since your last adjournment which taxed to the utmost all the
authority and expedients within executive control; and these appear now to
be exhausted. If disaster results from the continued inaction of Congress,
the responsibility must rest where it belongs.

Though the situation thus far considered is fraught with danger which
should be fully realized, and though it presents features of wrong to the
people as well as peril to the country, it is but a result growing out of a
perfectly palpable and apparent cause, constantly reproducing the same
alarming circumstances--a congested National Treasury and a depleted
monetary condition in the business of the country. It need hardly be stated
that while the present situation demands a remedy, we can only be saved
from a like predicament in the future by the removal of its cause.

Our scheme of taxation, by means of which this needless surplus is taken
from the people and put into the public Treasury, consists of a tariff or
duty levied upon importations from abroad and internal-revenue taxes levied
upon the consumption of tobacco and spirituous and malt liquors. It must be
conceded that none of the things subjected to internal-revenue taxation
are, strictly speaking, necessaries. There appears to be no just complaint
of this taxation by the consumers of these articles, and there seems to be
nothing so well able to bear the burden without hardship to any portion of
the people.

But our present tariff laws, the vicious, inequitable, and illogical source
of unnecessary taxation, ought to be at once revised and amended. These
laws, as their primary and plain effect, raise the price to consumers of
all articles imported and subject to duty by precisely the sum paid for
such duties. Thus the amount of the duty measures the tax paid by those who
purchase for use these imported articles. Many of these things, however,
are raised or manufactured in our own country, and the duties now levied
upon foreign goods and products are called protection to these home
manufactures, because they render it possible for those of our people who
are manufacturers to make these taxed articles and sell them for a price
equal to that demanded for the imported goods that have paid customs duty.
So it happens that while comparatively a few use the imported articles,
millions of our people, who never used and never saw any of the foreign
products, purchase and use things of the same kind made in this country,
and pay therefor nearly or quite the same enhanced price which the duty
adds to the imported articles. Those who buy imports pay the duty charged
thereon into the public Treasury, but the great majority of our citizens,
who buy domestic articles of the same class, pay a sum at least
approximately equal to this duty to the home manufacturer. This reference
to the operation of our tariff laws is not made by way of instruction, but
in order that we may be constantly reminded of the manner in which they
impose a burden upon those who consume domestic products as well as those
who consume imported articles, and thus create a tax upon all our people.

It is not proposed to entirely relieve the country of this taxation. It
must be extensively continued as the source of the Government's income; and
in a readjustment of our tariff the interests of American labor engaged in
manufacture should be carefully considered, as well as the preservation of
our manufacturers. It may be called protection or by any other name, but
relief from the hardships and dangers of our present tariff laws should be
devised with especial precaution against imperiling the existence of our
manufacturing interests. But this existence should not mean a condition
which, without regard to the public welfare or a national exigency, must
always insure the realization of immense profits instead of moderately
profitable returns. As the volume and diversity of our national activities
increase, new recruits are added to those who desire a continuation of the
advantages which they conceive the present system of tariff taxation
directly affords them. So stubbornly have all efforts to reform the present
condition been resisted by those of our fellow-citizens thus engaged that
they can hardly complain of the suspicion, entertained to a certain extent,
that there exists an organized combination all along the line to maintain
their advantage.

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