The Constitution and laws of our country are adopted and enacted through the direct action of the people, or through their duly chosen representatives. They reflect the enlightened conscience of our country. They ought always to speak with the true and conscientious voice of the people. Such voice has from time immemorial had the authority of divine sanction. In their great fundamentals they do not change. As new light arrives they may be altered in their details, but they represent the best that we know at any given time. To support the Constitution, to observe the laws, is to be true to our own higher nature. That is the path, and the only path, towards liberty. To resist them and violate them is to become enemies to ourselves and instruments of our own destruction. That is the path towards servitude. Obedience is not for the protection of someone else, but for the protection of ourselves. It needs to be remembered that it has to be secured not through the action of others, but through our own actions. Liberty is not collective, it is personal. All liberty is individual liberty.

It was the fate of Europe to be always a battleground. Differences in race, in religion, in political genius and social ideals, seemed always, in the atmosphere of our mother continent, to be invitations to contest by battle. From the dawn of history, and we can only conjecture how much longer, the conflicts of races and civilizations, of traditions and usages, have gone on. It is one of the anomalies of the human story that these peoples, who could not be assimilated and unified under the skies of Europe, should on coming to America discover an amazing genius for cooperation, for fusion, and for harmonious effort. Yet they were the same people when they came here that they had been on the other side of the Atlantic. Quite apparently, they found something in our institutions, something in the American system of Government and society which they themselves helped to construct, that furnished to all of them a political and cultural common denominator.

Ours is a new land. It has had an almost unbelievable task to perform, and has performed it well. We have been called to fit the institutions of ancient civilization to the conditions of a new country. In that task the leaders of the Nation have been supported by a deep devotion to the essentials of freedom. At the bottom of the national character has been a strain of religious earnestness and moral determination which has never failed to give color and quality to our institutions. Because our history shows us these things, we dare make honest appraisal of our shortcomings. We have not failed. We have succeeded. Because we have been privileged to rely upon generations of men and women ready to serve and to sacrifice, we have magnificently succeeded.

Anybody can reduce taxes, but it is not so easy to stand in the gap and resist the passage of increasing appropriation bills which would make tax reduction impossible. It will be very easy to measure the strength of the attachment to reduced taxation by the power with which increased appropriations are resisted. If at the close of the present session the Congress has kept within the budget which I propose to present, it will then be possible to have a moderate amount of tax reduction and all the tax reform that the Congress may wish for during the next fiscal year. The country is now feeling the direct stimulus which came from the passage of the last revenue bill, and under the assurance of a reasonable system of taxation there is every prospect of an era of prosperity of unprecedented proportions. But it would be idle to expect any such results unless business can continue free from excess profits taxation and be accorded a system of surtaxes at rates which have for their object not the punishment of success or the discouragement of business, but the production of the greatest amount of revenue from large incomes. I am convinced that the larger incomes of the country would actually yield more revenue to the Government if the basis of taxation were scientifically revised downward. Moreover the effect of the present method of this taxation is to increase the cost of interest. on productive enterprise and to increase the burden of rent. It is altogether likely that such reduction would so encourage and stimulate investment that it would firmly establish our country in the economic leadership of the world.

Latin America. While we are desirous of promoting peace in every quarter of the globe, we have a special interest in the peace of this hemisphere. It is our constant desire that all causes of dispute in this area may be tranquilly and satisfactorily adjusted. Along with our desire for peace is the earnest hope for the increased prosperity of our sister republics of Latin America, and our constant purpose to promote cooperation with them which may be mutually beneficial and always inspired by the most cordial friendships.

Property is held and transferred on terms fixed by the States. In short, the structure of social and business relationship is built chiefly about the laws of the States. It depends upon the exercise by the States of that vastly greater share of Government power which resides in them, to the exclusion cf the Federal Government. In ordinary times nearly the entire burden of taxation represents State and local demands. Even now, despite the enormous increase of Federal taxes from pre-war years, State and local taxes far exceed the Federal requirements. Moreover, the national burden is being continually reduced, while that of the local units is growing and likely to continue to grow.

That statement can not be too much emphasized. The country's growth has compelled the Federal establishment to exceed by far the Government plants of even the greatest States. With this growth in physical extent, in revenue, in personnel, there has inevitably been the suggestion that the Federal Government was overshadowing the States. Yet the State governments deal with far more various and more intimate concerns of the people than does the National Government. All the operations of the minor civil divisions, parishes, wards, school districts, towns, cities, counties, and the like, are dependencies of the State. The maintenance of order through police, the general business of enforcing law, is left to the States. So is education.

We must also recognize that the national administration is not and cannot be adjusted to the needs of local government. … The states should not be induced by coercion or by favor to surrender the management of their own affairs. The federal government ought to resist the tendency to be loaded up with duties which the States should perform. It does not follow that because something ought to be done the national government ought to do it. …

It is preeminently the province of government to protect the weak. The average citizen does not lead the life of independence that was his in former days under a less complex order of society. When a family tilled the soil and produced its own support it was independent. It may be infinitely better off now, but it is evident it needs a protection which before was not required.

We must remember that we have not only the present but the future to safeguard; our obligations extend even to generations yet unborn. The unassimilated alien child menaces our children, as the alien industrial worker, who has destruction rather than production in mind, menaces our industry. It is only when the alien adds vigor to our stock that he is wanted. The dead weight of an alien accretion stifles national progress. But we have a hope that can not be crushed; we have a background that we will not allow to be obliterated. The only acceptable immigrant is the one who can justify our faith in man by a constant revelation of the divine purpose of the Creator.

Foreign debts. About $12,000,000,000 is due to our Government from abroad, mostly from European governments. Great Britain, Finland, Hungary, Lithuania and Poland have negotiated settlements amounting close to $5,000,000,000. This represents the funding of over 42 per cent of the debt since the creation of the special Foreign Debt Commission. As the life of this commission is about to expire, its term should be extended. I am opposed to the cancellation of these debts and believe it for the best welfare of the world that they should be liquidated and paid as fast as possible. I do not favor oppressive measures, but unless money that is borrowed is repaid credit can not be secured in time of necessity, and there exists besides a moral obligation which our country can not ignore and no other country can evade. Terms and conditions may have to conform to differences in the financial abilities of the countries concerned, but the principle that each country should meet its obligation admits of no differences and is of universal application.

Several offers have been made for the purchase of this property. Probably none of them represent final terms. Much costly experimentation is necessary to produce commercial nitrogen. For that reason it is a field better suited to private enterprise than to Government operation. I should favor a sale of this property, or long-time lease, under rigid guaranties of commercial nitrogen production at reasonable prices for agricultural use. There would be a surplus of power for many years over any possibility of its application to a developing manufacture of nitrogen. It may be found advantageous to dispose of the right to surplus power separately with such reservations as will allow its gradual withdrawal and application to nitrogen manufacture. A subcommittee of the Committees on Agriculture should investigate this field and negotiate with prospective purchasers. If no advantageous offer be made, the development should continue and the plant should be dedicated primarily to the production of materials for the fertilization of the soil.

To meet these necessities the Government has been developing a water power project at Muscle Shoals to be equipped to produce nitrogen for explosives and fertilizer. It is my opinion that the support of agriculture is the chief problem to consider in connection with this property. It could by no means supply the present needs for nitrogen, but it would help and its development would encourage bringing other water powers into like use.