State of the Union Addresses of Herbert Hoover
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6 This eBook was produced by James Linden.
The addresses are separated by three asterisks: ***
Dates of addresses by Herbert Hoover in this eBook:
December 3, 1929
December 2, 1930
December 8, 1931
December 6, 1932
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State of the Union Address
Herbert Hoover
December 3, 1929
To the Senate and House of Representatives:
The Constitution requires that the President "shall, from time to time,
give to the Congress information of the state of the Union, and recommend
to their consideration such measures as he shall judge necessary and
expedient." In complying with that requirement I wish to emphasize that
during the past year the Nation has continued to grow in strength; our
people have advanced in comfort; we have gained in knowledge; the education
of youth has been more widely spread; moral and spiritual forces have been
maintained; peace has become more assured. The problems with which we are
confronted are the problems of growth and of progress. In their solution we
have to determine the facts, to develop the relative importance to be
assigned to such facts, to formulate a common judgment upon them, and to
realize solutions in spirit of conciliation.
FOREIGN RELATIONS
We are not only at peace with all the world, but the foundations for future
peace are being substantially strengthened. To promote peace is our
long-established policy. Through the Kellogg-Briand pact a great moral
standard has been raised in the world. By it fifty-four nations have
covenanted to renounce war and to settle all disputes by pacific means.
Through it a new world outlook has been inaugurated which has profoundly
affected the foreign policies of nations. Since its inauguration we have
initiated new efforts not only in the organization of the machinery of
peace but also to eliminate dangerous forces which produce controversies
amongst nations.
In January, 1926, the Senate gave its consent to adherence to the Court of
International Justice with certain reservations. In September of this year
the statute establishing the court has, by the action of the nations
signatory, been amended to meet the Senate's reservations and to go even
beyond those reservations to make clear that the court is a true
international court of justice. I believe it will be clear to everyone that
no controversy or question in which this country has or claims an interest
can be passed on by the court without our consent at the time the question
arises. The doubt about advisory opinions has been completely safeguarded.
Our adherence to the International Court is, as now constituted, not the
slightest step toward entry into the League of Nations. As I have before
indicated, I shall direct that our signature be affixed to the protocol of
adherence and shall submit it for the approval of the Senate with a special
message at some time when it is convenient to deal with it.
In the hope of reducing friction in the world, and with the desire that we
may reduce the great economic burdens of naval armament, we have joined in
conference with Great Britain, France, Italy, and Japan to be held in
London in January to consider the further limitation and reduction of naval
arms. We hold high hopes that success may attend this effort.
At the beginning of the present administration the neighboring State of
Mexico was best with domestic insurrection. We maintained the embargo upon
the shipment of arms to Mexico but permitted the duly constituted
Government to procure supplies from our surplus war stocks. Fortunately,
the Mexican Government by its own strength successfully withstood the
insurrection with but slight damage. Opportunity of further peaceful
development is given to that country. At the request of the Mexican
Government, we have since lifted the embargo on shipment of arms
altogether. The two governments have taken further steps to promote
friendly relationships and so solve our differences. Conventions prolonging
for a period of two years the life of the general and special claims
commissions have been concluded.
In South America we are proud to have had part in the settlement of the
long-standing dispute between Chile and Peru in the disposal of the
question of Tacna-Arica.
The work of the commission of inquiry and conciliation between Bolivia and
Paraguay, in which a representative of this Government participated, has
successfully terminated an incident which seemed to threaten war. The
proposed plan for final settlement as suggested by the neutral governments
is still under consideration.
This Government has continued its efforts to act as a mediator in boundary
difficulties between Guatemala and Honduras.
A further instance of profound importance in establishing good will was the
inauguration of regular air mail service between the United States and
Caribbean, Central American, and South American countries.
We still have marines on foreign soil--in Nicaragua, Haiti, and China. In
the large sense we do not wish to be represented abroad in such manner.
About 1,600 marines remain in Nicaragua at the urgent request of that
government and the leaders of all parties pending the training of a
domestic constabulary capable of insuring tranquility. We have already
reduced these forces materially and we are anxious to withdraw them further
as the situation warrants. In Haiti we have about 700 marines, but it is a
much more difficult problem, the solution of which is still obscure. If
Congress approves, I shall dispatch a commission to Haiti to review and
study the matter in an endeavor to arrive at some more definite policy than
at present. Our forces in China constitute 2,605 men, which we hope also
further to reduce to the normal legation guard.
It is my desire to establish more firmly our understanding and
relationships with the Latin American countries by strengthening the
diplomatic missions to those countries. It is my hope to secure men long
experienced in our Diplomatic Service, who speak the languages of the
peoples to whom they are accredited, as chiefs of our diplomatic missions
in these States. I shall send to the Senate at an early date the
nominations of several such men.
The Congress has by numerous wise and foresighted acts in the past few
years greatly strengthened the character of our representation abroad. It
has made liberal provision for the establishment of suitable quarters for
our foreign staffs in the different countries. In order, however, that we
may further develop the most effective force in this, one of the most
responsible functions of our Government, I shall recommend to the Congress
more liberal appropriations for the work of the State Department. I know of
no expenditure of public money from which a greater economic and moral
return can come to us than by assuring the most effective conduct of our
foreign relations.
NATIONAL DEFENSE
To preserve internal order and freedom from encroachment is the first
purpose of government. Our Army and Navy are being maintained in a most
efficient state under officers of high intelligence and zeal. The extent
and expansion of their numbers and equipment as at present authorized are
ample for this purpose.
We can well be deeply concerned, however, at the growing expense. From a
total expenditure for national defense purposes in 1914 of $267,000,000, it
naturally rose with the Great War, but receded again to $612,000,000 in
1924, when again it began to rise until during the current fiscal year the
expenditures will reach to over $730,000,000, excluding all civilian
services of those departments. Programs now authorized will carry it to
still larger figures in future years. While the remuneration paid to our
soldiers and sailors is justly at a higher rate than that of any other
country in the world, and while the cost of subsistence is higher, yet the
total of our expenditures is in excess of those of the most highly
militarized nations of the world.
Upon the conference shortly to be held in London will depend such
moderation as we can make in naval expenditure. If we shall be compelled to
undertake the naval construction implied in the Washington arms treaty as
well as other construction which would appear to be necessary if no
international agreement can be completed, we shall be committed during the
next six years to a construction expenditure of upward of $1,200,000,000
besides the necessary further increase in costs for annual upkeep.
After 1914 the various Army contingents necessarily expanded to the end of
the Great War and then receded to the low point in 1924, when expansion
again began. In 1914 the officers and men in our regular forces, both Army
and Navy, were about 164,000, in 1924 there were about 256,000, and in 1929
there were about 250,000. Our citizens' army, however, including the
National Guard and other forms of reserves, increase these totals up to
about 299,000 in 1914, about 672,000 in 1924, and about 728,000 in 1929.
Under the Kellogg pact we have undertaken never to use war as an instrument
of national policy. We have, therefore, undertaken by covenant to use these
equipments solely for defensive purposes. From a defense point of view our
forces should be proportioned to national need and should, therefore, to
some extent be modified by the prospects of peace, which were never
brighter than to-day.
It should be borne in mind that the improvement in the National Guard by
Federal support begun in 1920 has definitely strengthened our national
security by rendering them far more effective than ever heretofore. The
advance of aviation has also greatly increased our effectiveness in
defense. In addition to the very large program of air forces which we are
maintaining in the Army and Navy, there has been an enormous growth of
commercial aviation. This has provided unanticipated reserves in
manufacturing capacity and in industrial and air personnel, which again
adds to our security.
I recommend that Congress give earnest consideration to the possibilities
of prudent action which will give relief from our continuously mounting
expenditures.
FINANCES OF THE GOVERNMENT
The finances of the Government are in sound condition. I shall submit the
detailed evidences and the usual recommendations in the special Budget
message. I may, however, summarize our position. The public debt on June 30
this year stood at $16,931,000,000, compared to the maximum in August,
1919, of $26,596,000,000. Since June 30 it has been reduced by a further
$238,000,000. In the Budget to be submitted the total appropriations
recommended for the fiscal year 1931 are $3,830,445,231, as compared to
$3,976,141,651 for the present fiscal year. The present fiscal year,
however, includes $150,000,000 for the Federal Farm Board, as to which no
estimate can as yet be determined for 1931.
Owing to the many necessary burdens assumed by Congress in previous years
which now require large outlays, it is with extreme difficulty that we
shall be able to keep the expenditures for the next fiscal year within the
bounds of the present year. Economies in many directions have permitted
some accommodation of pressing needs, the net result being an increase, as
shown above, of about one-tenth of 1 per cent above the present fiscal
year. We can not fail to recognize the obligations of the Government in
support of the public welfare but we must coincidentally bear in mind the
burden of taxes and strive to find relief through some tax reduction. Every
dollar so returned fertilizes the soil of prosperity.
TAX REDUCTION
The estimate submitted to me by the Secretary of the Treasury and the
Budget Director indicates that the Government will close the fiscal year
1930 with a surplus of about $225,000,000 and the fiscal year 1931 with a
surplus of about $123,000,000. Owing to unusual circumstances, it has been
extremely difficult to estimate future revenues with accuracy.
I believe, however, that the Congress will be fully justified in giving the
benefits of the prospective surpluses to the taxpayers, particularly as
ample provision for debt reduction has been made in both years through the
form of debt retirement from ordinary revenues. In view of the uncertainty
in respect of future revenues and the comparatively small size of the
indicated surplus in 1931, relief should take the form of a provisional
revision of tax rates.
I recommend that the normal income tax rates applicable to the incomes of
individuals for the calendar year 1929 be reduced from 5, 3, and 1 ½
per cent, to 4, 2, and ½ per cent, and that the tax on the income of
corporations for the calendar year 1929 be reduced from 12 to 11 per cent.
It is estimated that this will result in a reduction of $160,000,000 in
income taxes to be collected during the calendar year 1930. The loss in
revenue will be divided approximately equally between the fiscal years 1930
and 1931. Such a program will give a measure of tax relief to the maximum
number of taxpayers, with relatively larger benefits to taxpayers with
small or moderate incomes.
FOREIGN DEBTS
The past year has brought us near to completion of settlements of the
indebtedness of foreign governments to the United States.
The act of Congress approved February 4, 1929, authorized the settlement
with the Government of Austria along lines similar to the terms of
settlement offered by that Government to its other relief creditors. No
agreement has yet been concluded with that government, but the form of
agreement has been settled and its execution only awaits the Government of
Austria securing the assent by all the other relief creditors of the terms
offered. The act of Congress approved February 14, 1929, authorized the
settlement with the Government of Greece, and an agreement was concluded on
May 10, 1929.
The Government of France ratified the agreement with us on July 27, 1929.
This agreement will shortly be before the Congress and I recommend its
approval.
The only indebtedness of foreign governments to the United States now
unsettled is that of Russia and Armenia.
During the past year a committee of distinguished experts under American
leadership submitted a plan looking to a revision of claims against Germany
by the various Governments. The United States denied itself any
participation in the war settlement of general reparations and our claims
are comparatively small in amount. They arise from costs of the army of
occupation and claims of our private citizens for losses under awards from
the Mixed Claims Commission established under agreement with the German
Government. In finding a basis for settlement it was necessary for the
committee of experts to request all the Governments concerned to make some
contribution to the adjustment and we have felt that we should share a
proportion of the concessions made.
The State and Treasury Departments will be in a position shortly to submit
for your consideration a draft of an agreement to be executed between the
United States and Germany providing for the payments of these revised
amounts. A more extensive statement will be submitted at that time.
The total amount of indebtedness of the various countries to the United
States now funded is $11,579,465,885. This sum was in effect provided by
the issue of United States Government bonds to our own people. The payments
of the various Governments to us on account of principal and interest for
1930 are estimated at a total of about $239,000,000, for 1931 at about
$236,000,000, for 1932 at about $246,000,000. The measure of American
compromise in these settlements may be appreciated from the fact that our
taxpayers are called upon to find annually about $475,000,000 in interest
and in addition to redeem the principal of sums borrowed by the United
States Government for these purposes.
ALIEN ENEMY PROPERTY
The wise determination that this property seized in war should be returned
to its owners has proceeded with considerable rapidity. Of the original
seized cash and property (valued at a total of about $625,000,000), all but
$111,566,700 has been returned. Most of the remainder should be disposed of
during the next year.
GENERAL ECONOMIC SITUATION
The country has enjoyed a large degree of prosperity and sound progress
during the past year with a steady improvement in methods of production and
distribution and consequent advancement in standards of living. Progress
has, of course, been unequal among industries, and some, such as coal,
lumber, leather, and textiles, still lag behind. The long upward trend of
fundamental progress, however, gave rise to over-optimism as to profits,
which translated itself into a wave of uncontrolled speculation in
securities, resulting in the diversion of capital from business to the
stock market and the inevitable crash. The natural consequences have been a
reduction in the consumption of luxuries and semi-necessities by those who
have met with losses, and a number of persons thrown temporarily out of
employment. Prices of agricultural products dealt in upon the great markets
have been affected in sympathy with the stock crash.
Fortunately, the Federal reserve system had taken measures to strengthen
the position against the day when speculation would break, which together
with the strong position of the banks has carried the whole credit system
through the crisis without impairment. The capital which has been hitherto
absorbed in stock-market loans for speculative purposes is now returning to
the normal channels of business. There has been no inflation in the prices
of commodities; there has been no undue accumulation of goods, and foreign
trade has expanded to a magnitude which exerts a steadying influence upon
activity in industry and employment.
The sudden threat of unemployment and especially the recollection of the
economic consequences of previous crashes under a much less secured
financial system created unwarranted pessimism and fear. It was recalled
that past storms of similar character had resulted in retrenchment of
construction, reduction of wages, and laying off of workers. The natural
result was the tendency of business agencies throughout the country to
pause in their plans and proposals for continuation and extension of their
businesses, and this hesitation unchecked could in itself intensify into a
depression with widespread unemployment and suffering.
I have, therefore, instituted systematic, voluntary measures of cooperation
with the business institutions and with State and municipal authorities to
make certain that fundamental businesses of the country shall continue as
usual, that wages and therefore consuming power shall not be reduced, and
that a special effort shall be made to expand construction work in order to
assist in equalizing other deficits in employment. Due to the enlarged
sense of cooperation and responsibility which has grown in the business
world during the past few years the response has been remarkable and
satisfactory. We have canvassed the Federal Government and instituted
measures of prudent expansion in such work that should be helpful, and upon
which the different departments will make some early recommendations to
Congress.
I am convinced that through these measures we have reestablished
confidence. Wages should remain stable. A very large degree of industrial
unemployment and suffering which would otherwise have occurred has been
prevented. Agricultural prices have reflected the returning confidence. The
measures taken must be vigorously pursued until normal conditions are
restored. AGRICULTURE
The agricultural situation is improving. The gross farm income as estimated
by the Department of Agriculture for the crop season 1926-27 was
$12,100,000,000; for 1927-28 it was $12,300,000,000; for 1928-29 it was
$12,500,000,000; and estimated on the basis of prices since the last
harvest the value of the 1929-30 crop would be over $12,650,000,000. The
slight decline in general commodity prices during the past few years
naturally assists the farmers' buying power.
The number of farmer bankruptcies is very materially decreased below
previous years. The decline in land values now seems to be arrested and
rate of movement from the farm to the city has been reduced. Not all
sections of agriculture, of course, have fared equally, and some areas have
suffered from drought. Responsible farm leaders have assured me that a
large measure of confidence is returning to agriculture and that a feeling
of optimism pervades that industry.
The most extensive action for strengthening the agricultural industry ever
taken by any government was inaugurated through the farm marketing act of
June 15 last. Under its provisions the Federal Farm Board has been
established, comprised of men long and widely experienced in agriculture
and sponsored by the farm organizations of the country. During its short
period of existence the board has taken definite steps toward a more
efficient organization of agriculture, toward the elimination of waste in
marketing, and toward the upbuilding of farmers' marketing organizations on
sounder and more efficient lines. Substantial headway has been made in the
organization of four of the basic commodities--grain, cotton, livestock,
and wool. Support by the board to cooperative marketing organizations and
other board activities undoubtedly have served to steady the farmers'
market during the recent crisis and have operated also as a great stimulus
to the cooperative organization of agriculture. The problems of the
industry are most complex, and the need for sound organization is
imperative. Yet the board is moving rapidly along the lines laid out for it
in the act, facilitating the creation by farmers of farmer-owned and
farmer-controlled organizations and federating them into central
institutions, with a view to increasing the bargaining power of
agriculture, preventing and controlling surpluses, and mobilizing the
economic power of agriculture.
THE TARIFF
The special session of Congress was called to expedite the fulfillment of
party pledges of agricultural relief and the tariff. The pledge of farm
relief has been carried out. At that time I stated the principles upon
which I believed action should be taken in respect to the tariff: "An
effective tariff upon agricultural products, that will compensate the
farmer's higher costs and higher standards of living, has a dual purpose.
Such a tariff not only protects the farmer in our domestic market but it
also stimulates him to diversify his crops and to grow products that he
could not otherwise produce, and thus lessens his dependence upon exports
to foreign markets. The great expansion of production abroad under the
conditions I have mentioned renders foreign competition in our export
markets increasingly serious. It seems but natural, therefore, that the
American farmer, having been greatly handicapped in his foreign market by
such competition from the younger expanding countries, should ask that
foreign access to our domestic market should be regulated by taking into
account the differences in our costs of production.
"In considering the tariff for other industries than agriculture, we find
that there have been economic shifts necessitating a readjustment of some
of the tariff schedules. Seven years of experience under the tariff bill
enacted in 1922 have demonstrated the wisdom of Congress in the enactment
of that measure. On the whole it has worked well. In the main our wages
have been maintained at high levels; our exports and imports have steadily
increased; with some exceptions our manufacturing industries have been
prosperous. Nevertheless, economic changes have taken place during that
time which have placed certain domestic products at a disadvantage and new
industries have come into being, all of which create the necessity for some
limited changes in the schedules and in the administrative clauses of the
laws as written in 1922.
"It would seem to me that the test of necessity for revision is, in the
main, whether there has been a substantial slackening of activity in an
industry during the past few years, and a consequent decrease of employment
due to insurmountable competition in the products of that industry. It is
not as if we were setting up a new basis of protective duties. We did that
seven years ago. What we need to remedy now is whatever substantial loss of
employment may have resulted from shifts since that time.
"In determining changes in our tariff we must not fail to take into account
the broad interests of the country as a whole, and such interests include
our trade relations with other countries." No condition has arisen in my
view to change these principles stated at the opening of the special
session. I am firmly of the opinion that their application to the pending
revision will give the country the kind of a tariff law it both needs and
wants. It would be most helpful if action should be taken at an early
moment, more especially at a time when business and agriculture are both
cooperating to minimize future uncertainties. It is just that they should
know what the rates are to be.
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