The state herald., 1909-12-10

according to the modern enlightened
practice of civilized nations, they were
entitled to be dealt with as prisoners of
war.
At the date when this message is
printed this government has terminated
diplomatic relations with the Zelaya gov
ernment. for reasons made public in q
communication to the former Nicaragua
charge d'affaires. and Is intending to take
such future steps as may be found most
consistent with Its dignity, its duty to
American interests and Its moral obliga-
tions to Central America and to civillza-
ton.
Department Of State.
earnestly recommend to the favor
able consideration of the congress the es-
timates submitted by the department of
state and most especially the legisla-
ton suggested In the secrtary of states
letter Of this date. whereby 1t will be
possible to develop and make permanent
the reorganization OF the department
upon modern lines in n manner to make
1t thoroughly efficient instrument in
the furtherance Of our foreign trade and
of American interests abroad. The plan
to have divisions of Iatin-American and
Far-Eastern AFFAIRS and to institute a
certain specialization In business with
Europe and the near east will at once
commend itself. These epolitico-geograph-
ical divisions and the detail from the
diplomatic or consular service to the
department of n number OF men who
bring to the study of complicated prob
lens In different parts of the world
practical knowledge recently gained on
the spot, clearly is of the greatest ad-
vantage to the secretary of state In
foreseeing conditions likely to arise and
in conducting the great variety of corre-
spondence and negotiation. 1t should be
remembered that such facilities exist in
the foreign offices of all the leading COM
mercial nations and that to deny them
to the secretary of state would be to
place this government at a great disad-
vantage in the rivalry OF commercial
competition.
The consular service has been i'm
proved under the law OF April 8. 1906,
and the executive order of June q. 1906.
and | commend to your consideration the
question of cmbodying In a statute the
principles of the present executive order
upon which the efficiency OF our consular
service is wholly dependent
Expenditures and Revenues.
Perhaps the most important question
presented to this administration is that
of economy In expenditures and SUM-
cheney of revenue. The deficit of the
last fiscal year. and the certain deficit
OF the current year. prompted congress
to throw greater responsibility on
the executive and the secretary of the
treasury than had heretofore been de-
clared by statute. This declaration
imposes upon the secretary of the
treasury the duty of assembling all the
estimates OF the executive departments.
bureaus and Offices OF the expenditures
necessary In the ensuing fiscal year,
and of making an estimate OF the reve-
nues of the government for the same
period: and II a probable deficit is thus
81 a..
dent to recommend the method by
which such deficit can be met.
The report OF the secretary shows
that the ordinary expenditures for the
current fiscal year ending June 30. 1910.
will exceed the estimated receipts by
s3i,075.620. If to this deficit Is added
the sum to be dlsbursed for the Pam
anna Canal, amounting to s3s. 900. 900.
and $1,000, 900 to be paid on the public
debt. the deficit OF ordinary receipts
and expenditures will be increased to
a total deficit of s73.O75.G20. This def
icit the secretary proposes to meet by
the proceeds of bonds issued to pay
the cost OF constructing the Panama
Canal. / approve this proposal.
In order to avoid a deficit for the
ensuing fiscal year. directed the
heads OF departments In tho prephra-
tion of their estimates to make them
as low as possible consistent with i'm
peratlye governmental necessity.
Civil Pensions.
am aware that there Is strong
feeling In both houses of congress. and
possibly in the country. against the
establishment OF civil pensions, and
that this has naturally grown out Of
the heavy burden of military pensions
which IL has always been the policy
OF our government to assume; but |
am strongly convinced that no other
practical solution OF the difficulties
presented by the approximation of
civil servants can be found than that
OF system OF civil pensions.
Frauds In the Collection Of Customs.
regret to refer to the fact Of the
discovery OF extensive frauds in the
collection OF the customs revenue nt
New York city, In which n number of
the subordinate employees In the weigh
ing and other departments were di-
rectly concerned, and In which tho
benenclnries were the American Sugar
Refining Company and others. The
frauds consisted in the payment Of
duty on underweiRhts OF sugar The
government has recovered from the
American Sugar Refining Company all
that II In shown To have been dcfraud-
ed Of The sum was received Ia fun
OF the amount due. which might have
been recovered by civil suit against
the beneficiary Of the fraud. but there
was an EXPRESS reservation In the con-
tract of settlement by which the settle
mcnt should not Interfere with. or pre-
vent the criminal prosecution nf every
one who was found TO be subject to
the same,
Criminal prosecutions are now pro-
ccedlng against "A number Of the gov
ernmsnt officers, The treasury de-
pnrtmcnt and the department OF JUS
ticc are cSerting every effort to dis
cover all the wronEdocrs. including
the officers and employees Of the com
panies who may have been privy TO
the fraud II would seem 10 me that
an Investigation OF the frauds by con-
greHs nt present pending the probing
by the treasury department and the
department Of justice. as proposed.
might by giving immunity md other
wise prove nm embarrassment In secur-
ing conviction Of the guilty parties.
The Tariff Act.
Two features OF the new tariff net
call for special reference. By virtu.
of the clause known ms the maximum
and minimum clause, II In the duty
Of the oSecutiv. to consider the laws