44% bonds due Sept. 15, 1928, and Treasury 434% notes and 4% certificates maturing Mar. 15, 1925. These exchanges were not closed as was the cash subscription book, for good reason. By the exchange: 1) The heavy debt maturities in 1928 are lessened, 2) this reduction of maturities is achieved at par although Third 44's are selling at a premium, 3) interest on the Third 44's exchanged is reduced 4% for the next three years nine months. One of the biggest buyers of Government Bonds, the First National Bank of New York, nevertheless considered it the better part of profit to exchange $50,000,000 of the Third 44's (for its own account), in order to be sure of having a large block of government bonds for the next 30 years.

The oversubscription in cash was so extraordinarily heavy that all subscriptions of over $10,000 were declined. Subscriptions up to $1,000 were allotted in full. Subscriptions up to $10,000 but not less than $1,000 were allotted 65%.

Wallace's Report

Henry Cantwell Wallace, gone now some two months, is not forgotten. Last week, his successor, Secretary Howard M. Gore, Governor-elect of West Virginia, transmitted to the President the report of the Department of Agriculture for 1923-24. He said in doing so that, although Mr. Wallace had never seen the final draft, he had superintended the gathering of the material and it was believed to represent his opinions.

The report told of the great, although somewhat uneven, recovery which agriculture had made: wheat, the great gainer; corn, hogs, . cotton, livestock, holding their own; dairy and poultry But it products somewhat behind. looked forward to a farm income of 12 billion dollars for 1924-25, as compared to 11 billion dollars the year previous, and 91⁄2 billion dollars in 1921-22. It suggested that coöperative marketing might disappoint those who have very great hopes of it, and expressed the opinion that, in aiding the movement, the Government's assistance would be of most value if confined to the indirect services of advice and information. The farmers must be left in complete control of their coöperative enterprises.

Work's Report

In the complete edition of his annual report, Secretary of the Interior Work invited Congress:

1) To create a permanent Oil Commission to study conservation of oil deposits, its membership to include the Secretaries of War, Navy, Interior and

Commerce. Last year, his department was called upon to supervise the production of nearly 40,000,000 barrels of oil from the public lands, nearly 8,000,000 barrels of which (valued at about $12,000,000) went to the Government as royalty.

2) To place Government activities in Alaska and Hawaii entirely under one Department in the interests of efficiency and to prevent duplication of effort.

3) To create a new National Park in the East, somewhere in the Southern Appalachian Region. (A committee appointed to select a site for such a park is soon to report.)

Stone's Report

Attorney General Harlan F. Stone presented his report for the last fiscal year, although he has been in office only about three months of the period.

He reported that:

1) The criminal law business of the Government has increased 33% since 1920, more than 500% since 1912.

2) The civil law business of the Government has increased 100% since 1920.

3) The Federal prohibition law has put a "staggering" load on the courts. Pending at the end of the year were 22,339 cases, although 46,609 cases had been terminated, nearly 4,000 cases more than the previous year.

4) Convictions under the prohibition law increased by 3,114, with fines increasing from $5,832,389 to $7,487,235, and the average jail sentence imposed increasing from 21 days to 34.

He recommended that:

1) Section 140 of the Criminal Code (which makes it a crime to assault or wound an officer serving a process) should be extended to include the killing of such an officer-an act against which there is now no Federal Law.

2) It should be made punishable to send through the mails letters threatening life or property-an act now punishable only if such threats are used to defraud or for extortion.

3) A law should be passed to permit the presence of a stenographer in grand jury rooms-a point on which there is now a difference of judicial opinion.

4) It should be made a crime for a single individual to defraud or attempt to defraud the Government-it is now a crime to conspire to defraud the Government.

5) Various improvements should be made in the bankruptcy laws.

Davis' Report

James John Davis, Secretary of Labor (and hence executive head of immigration activities) presented in absentia his report to the President. He

proposed three major changes in our immigration laws:

1) That immigration from Canada. Mexico, Central and South America should be placed under quota restrictions such as now apply to immigration from the rest of the world. At the present time, we have placed no immigration restrictions on our colleagues of the Western Hemisphere. As a result, a flood of immigration pours in over northern and southern borders. With quotas it is hoped to cut down the legal as well as the illegal inflow.

2) That the President be empowered to provide for temporary increases and decreases in immigration quotas to conform to periods of labor shortage and unemployment in this country.

3) That naturalization laws be amended to provide for an annual enrollment of resident aliens. This would help to prevent undetected immigrants from coming in by illicit means. Coupled with it would be a plan for educating aliens in U. S. "customs, language, ideals, institutions."

Independent Bureaus

Some of the nine important executive agencies outside the Cabinet to make reports were:

The Veterans' Bureau, which spent $415,138,398 during the last fiscal year$28,000,000 less than the year previous. The reduction was largely due to a decrease in the number of veterans requiring vocational training. Veterans receiving medical care from the Bureau at the close of the year numbered 22,610.

The Interstate Commerce Commission, which asked that Congress make workable Section 28 of the Merchant Marine Act which would authorize reduced railroad rates on products shipped for export. The report declared that: 1) Few railroads were earning the 534% return on investment allowed under the railway act; 2) some $11,000,000 has been reported due the Government under the recapture clause by which the Government takes one-half of what the railways earn over 54%-and most of this amount is still in controversy; 3) the valuation of railroad property had reached a point where 3.3% of railway mileage was completely accounted for and a much larger portion tentatively valued; 4) the estimated amount still due to railways from the Government following Wartime operations was about $28,000,000.

The Tariff Commission, which reported that its activities were likely to be curtailed seriously by cuts in its ap propriations made by the Budget Bureau; also that certain sections of the Tariff Law, ineffective or contradictory. needed revision,

THE CONGRESS

A Message

No pomp and no excitement marked the presentation of Mr. Coolidge's official message to Congress. The Senate and House assembled in their respective Chambers; and, at the same hour, the clerks of those bodies read.

The reading took about one hour. In the Senate, there was no applause, just listening. In the House, William Tyler Page read the message with great gusto, producing some smiles. Once the Democrats laughed when the message mentioned a commission which is considering the means of conserving the oil reserves of the Navy. At the conclusion, all the representatives rose and applauded.

The President's Major Recommendations:

1) Repeal of the publicity clause of the income tax law.

2) Eventual reduction of income surtaxes with a view to securing greater revenue and reducing the burden on business.

3) Flood control on the Mississippi and Colorado Rivers; construction of navigable waterways from the Great Lakes to the Gulf; agreement with Canada on the St. Lawrence waterway; development of the Mississippi Basin; Federal purchase of the Cape Cod Canal.

4) No price fixing for agriculture; farm relief in accordance with plans submitted by the special commission which he recently appointed.

5) Sale or a long term lease of Muscle Shoals to private enterprise with guarantees of nitrate production for agriculture.

6) Railway consolidation in accordance with a flexible plan and, as much as possible, by voluntary action; no changes in railroad labor laws unless the public be represented as an interested party in all settlements.

7) Reorganization of the Shipping Board and the Emergency Fleet Corporation so as to restrict the Shipping Board to its original duties as a semijudicial, policy- and rate-making body and to segregate in the Emergency Fleet Corporation the business of operating the Government merchant fleet.

8) Authority for the Supreme Court to select and reject cases on its docket for consideration in accordance with their importance, in order to overcome the increasing congestion of the Supreme Court docket; authority for the Supreme Court to make rules improving and reforming the procedure in Federal Courts; appointment of a commission to reform

and expedite procedure under the criminal code.

9) Strengthening of the Navy to the full allowance of the Limitation of Armaments Treaty.

10) No cancellation of foreign debts.

Points that received lesser mention:

Extension of time on payments should be granted to distressed farmers on Government irrigation projects.

Election laws should be reformed to equalize the privileges of all Parties.

Reformatories should be built for first and youthful offenders of both sexes in order to preserve them from contact with hardened criminals in Federal penitentiaries.

It would be advantageous to enter the World Court with reservations.

Other Governments have proposed a conference in Europe to extend the scope of the Limitation of Armaments Treaties; but the U. S. should not participate if it restricted her freedom of action.

The movement to outlaw war should be assisted so far as is consistent with safeguarding U. S. liberty.

Pronouncements of the Message: GOVERNMENT DEBT AND TAXES. "The costs of our national and local Governments combined now stand at a sum close to $100 for each inhabitant of the land. A little less than one-third of this is represented by national expenditure. . . It is an ominous fact that only the national Government is reducing its debt. Others are increasing theirs at about $1,000,000,000 each year. . .

AGRICULTURE, "It is estimated that the value of the crops for this harvest year may reach $13,000,000,000, which is an increase of over $3,000,000,000 in three years. It compares with $7,100,000,000 in 1913; and, if we make deduction from the figures of 1924 for the comparatively decreased value of the dollar, the yield this year still exceeds 1913 in purchasing power by over $1,000,000,000; and in this interval there has been no increase in the number of farmers. . .

"The crop area of this season is estimated at 370,000,000 acres, which is a decline of 3,000,000 acres from last year and 6,000,000 acres from 1919. This has been a normal and natural application of economic laws."

MUSCLE SHOALS. (Additional excerpts from the message will be found under WATERWAYS. See Page 4.) Adjectival Comment:

SENATOR CURTIS (Rep. Leader): "Very strong."

SENATOR LADD (Insurgent): "Very good."

Heard the President's message (see this page).

Elected to committees in accordance with the desires of the party caucuses: for the Republicans, Borah, Chairman of Foreign Relations; McLean and Edge, Foreign Relations; Phipps, Chairman of Education and Labor; Hiram Johnson, Chairman of Immigration; Willis, Chairman of Territories; Cummins, Chairman of Judiciary; Butler, Judiciary, Naval Affairs, Patents; Means, Claims, Immigration, Judiciary, Mines; Metcalf, Education and Labor, Library, Naval Affairs, Patents. For the Democrats: George, Banking and Currency: Ashurst, Irrigation and Reclamation.

Discussed the administration bill for spending $10,000,000 a year for five years on adequate Housing for Government offices in the Capital: given up when Senator Fletcher offered an omnibus building bill as an amendment.

Took up discussion of Muscle

Shoals.

Confirmed the appointment of Howard M. Gore to be Secretary of Agriculture.

Appointed a joint committee to arrange a Woodrow Wilson Memorial Service, to be held in the House of Representatives on Dec. 15.

Π Passed a deficiency bill (providing funds for the soldier bonus) which was left on the calendar since last June when, in the closing minutes of the Session, Senator Pittman talked it to death because it did not include an appropriation of $500,000 for the "Spanish Springs immigration project" in which he was interested. This appropriation was included in the

Heard the President's Message. Received the President's budget recommendations.

Adopted a resolution limiting the Christmas recess to one week, Dec. 20 to 29. (Went to the Senate.)

Adopted a resolution providing for a joint session of Congress in honor of Woodrow Wilson, on Dec. 15.

Received from committee the Department of Agriculture supply bill, carrying $125,000,000, of which $80,000,000 would go toward road construction. The total is $59,000,000 greater than that of last year; $61,000,000 of this increase is for roads.

MUSCLE SHOALS

Spotlight Again

The first order of business in the reconvened Senate was the settlement of the perdurable question: "What shall we do with Muscle Shoals?"

Of the suggested answers, one of the most prominent-"Sell it to Henry Ford"-was largely out of the question because Henry Ford withdrew his bid for the plant last October.

There remained a substitute answer: "Let the Government run it," offered by Senator Norris of Nebraska.

In his message to Congress, President Coolidge called attention to the question thus: "The production of nitrogen for plant food in peace and explosives in war is more and more important. It is one of the chief sustaining elements of life. It is estimated that soil exhaustion each year is represented by about 9,000,000 tons and replenishment by 5,450,000 tons. The deficit of 3,550,000 tons is reported to represent the impairment of 118,000,000 acres of farm lands each year.

"To meet these necessities, the Government has been developing a waterpower project at Muscle Shoals to be equipped to produce nitrogen for explosives and fertilizer. . . . 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.

"Several offers have been made for the purchase of this property. Probably

none of them represents 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 guar

Keystone

OSCAR W. UNDERWOOD

He created a flexible scheme

antees of commercial nitrogen production at reasonable prices for agricultural use. . . ."

The situation at Muscle Shoals is this: The Government is completing a waterpower plant, built at an expense of some $160,000,000. The electrical power there generated will soon be available in quantity for any use to which it may be turned. Because we have been dependent in large measure for nitrogen on imports of nitrate of soda from Chile (there occurring as a natural mineral caliche), it has been suggested that the power of Muscle Shoals be devoted to the manufacture of nitrogen compounds from the free nitrogen of the air. This free nitrogen is an inert element and has to be forced and cajoled to enter into compounds with other elementsand only in these compound forms is it usable as fertilizer or in the manufacture of explosives. There are several methods of getting this nitrogen out of the air and into compounds-none of them entirely satisfactory. With experiment, these methods should be improved.

The Muscle Shoals power, while a nitrogen-fixing industry is developing, will probably be considerably greater than is needed. But, if Muscle Shoals plants were eventually called upon to furnish all the nitrogen compounds nec

essary for domestic agriculture and industry, they would probably fall short of the demand for lack of power-they certainly would at the present stage of development. On account of the many "ifs," "buts" and uncertainties, whatever disposal is made of the plant must be reasonably flexible in its provisions.

To solve this knotty problem Senator Oscar W. Underwood of Alabama began work on a new bill. If he was to succeed he must have the support of the Administration. He called on the President and, by inference, he got a substantial endorsement of his plans. That the Administration was so favorably impressed was in itself a tribute to the Alabama Senator. His tact, his pleasant personality, his ability long ago won him the respect of his Republican opponents. His 20 years of service in the House, culminating in his leadership in that body, his nine years in the Senate have won him a large place even in Republican eyes. Not so brilliant as Harrison, nor so brilliant as Heflin, not so witty as Caraway, nor so downright as Robinson, his prestige is as great as that of any of them. Muscle Shoals lie in his own state. Heflin, also from Alabama, has done an almost endless amount of talking about it. Underwood sent out to find a practical settlement.

If the Underwood Bill should pass it would be a triple feather in the Senator's cap-for solving a knotty problem, for exercising tact as well as ability, for taking a problem out of the hands of the majority and arranging such a settlement that it won them to his support.

His plan, in brief, provides: 1) That the Government shall retain ownership of Muscle Shoals; 2) that at any time the Government may take over the plant on five days' notice for the manufacture of nitrates for war purposes; 3) that the operators of the plant are to produce 40,000 tons of fertilizer annually after the fourth year and sell it at a profit of not over 8%; 4) that the Secretary of War is to lease the plant for 50 years to a private enterprise, on these conditions and on others concerning the disposal of surplus power, etc; 5) that if the plant has not been leased by July 1, 1925, a Government corporation is to be organized-its stock to belong to the U. S., its bonds (at 5% and not exceeding $50,00,000 in total) to be sold to the public, all profits after de ductions for improvements, payment of interest, reserve, etc., to go to the U. S. Treasury.

WATERWAYS

Miles and Miles

In his annual message to Congress the President turned to the question of waterways and laid out in broad

outline some of the major projects now in view:

"Provision should be made for flood control of such rivers as the Mississippi and the Colorado and for the opening up of our inland waterConsideration ways to commerce. is due to the project of better navigation from the Great Lakes to the Gulf. Every effort is being made to promote an agreement with Canada to build the St. Lawrence waterway.

There are pending before the Congress bills for further development of the Mississippi Basin, for the taking over the Cape Cod Canal in accordance with a moral obligation which seems to have been incurred during the War, and for the improvement of harbors on both the Pacific and the Atlantic Coasts."

He went on to say that such works are productive of wealth and in the long run reduce the tax burden. The Federal Government is improving some 375 channels, not to mention others that are private or stateowned. Some of the major projects:

The Mississippi Basin. A 9-ft. channel is open up the Mississippi River to Cairo, Ill., continuing with 8-ft. depth to St. Louis. There are plans for continuing a 6-ft. channel as far up as St. Paul. A host of tributaries to the Missouri River are either being made navigable or are being considered. The Missouri, running over a thousand miles northwest from St. Louis into the heart of Montana, is now used for regular navigation only in a few stretchesand those, strangely enough, in its upper portion. Illinois is building a connecting link from Chicago to the Mississippi to complete a Great Lakes to Gulf waterway. The Ohio River is likewise being improved by a great series of dams from Pittsburgh down. The Great Lakes-St. Lawrence Waterway. This project, long dear to Middle Westerners, can only be undertaken in concert with Canada; for a large part of the project is to makes the St. Lawrence navigable to ocean vessels as far as Lake Ontario. The Welland Canal is at present being improved by Canada. The lakes themselves are easily navigable to sea-going ships; it is the bottlenecks between them and the harbors which must be made so that the whole of this section of the Middle West can reduce its freight rates to Europe.

Boston to Key West. There is a project for a continuous semi-inland waterway from Boston to Key West, off the coast of Florida. Parts of it are in existence, other links are

Keystone

HERBERT HARTLEY

He captains a ship which cannot capsize

missing. Its route would be through the Cape Cod Canal, Long Island Sound, the Delaware and Raritan Canal, the Delaware River, through a canal now being built to Chesapeake Bay and a canal from Norfolk, Va., to Beaufort, N. C. There is a gap thence to Georgetown, S. C., from where coastwise channels extend to Miami, Fla.

Gulf Waterway. A sheltered channel now leads from Mobile, Ala., to Lake Ponchartrain and thence to the Mississippi at New Orleans. From New Orleans all the way to Corpus Christi, Tex., it is proposed to build a channel, parts of which are already functioning.

Hudson. Plans are being made for a 27-ft. channel for ocean vessels up to Albany to connect with the New York State Barge Canal, successor of the Erie Canal.

Pacific Coast. Deep water channels to both Sacramento and StockThe Columbia ton are considered. River, now navigable to Portland and somewhat farther, is also waiting its turn from improvement.

There is an infinity of lesser undertakings and projects, more especially in the Mississippi Basin and on the Atlantic and Gulf Coasts, where the topography is most favorable. Sooner or later many of them will have their time.

Storm

SHIPPING

Man has conquered the sea. Complex steel engines, 900 ft. in length, 54,000 tons in capacity, plow across it, 600 miles a day or more, over the same spots where, on the ancient maps, great monsters with fluctuating tails engulfed the early mariner, across the same areas

where great storm gods with puffing cheeks emerging from the cloud in bas relief blew the chill blast of sudden death upon lost adventurers. The mystery is gone. And the danger?

Hardly a full day out from Cherbourg, churning her white wake westward into the seas of the leviathans, steamed the only Leviathan remaining. Her skipper, Captain Hartley, leaning into the wind upon the bridge, had had his last night's sleep within his bunk for he did not know how long. Into a towering gale, momentarily increasing, swept the vessel. Great seas pounded her. Within her thin steel walls reposed a freight of notables. David Warfield, the actor, returning from sojourn abroad; Julius Fleischmann, the yeast millionaire, turned race-horse breeder in his post-marital retirement; two baseball teams, the White Sox and the Giants, homing from winter play abroad; Charalambous Simopoulos, the new Greek Ambassador to the U. S., and his Secretary C. Diamantopoulos; a Manhattan cloak and suit dealer with two diamonds set in his teeth; and many souls humbler, but equally divine, from steerage to first cabin.

Against these all the great storm broke. A wave slapped the tall ship's side, burst in a thick glass port, flooded a cabin and swept a man reclining in security out of his berth, wrenching his shoulder out of place. The gale increased. At times it blew 100 miles an hour. More ports were driven ineleven ports in all. On three successive days, green water rolled over the boat deck, 90 ft. above the keel. Two stewards were thrown down a companionway and broke their arms. The expansive panes of the windows protecting the promenades and staterooms were shattered. The roll of injuries rose to 32. In one day, the Leviathan progressed a bare 200 miles. Captain Hartley never took off his clothes. Beneath the buffeting, the ship heeled over 20° to port.

But, in the end, the man-made Leviathan steamed into Quarantine, 6 days and 14 hours out from Cherbourg. The timorous passengers smiled and rolled across the solid earth upon their sea legs. The timid questioned whether ever again they would go to sea, questioned whether the sea were conquerable, asked in their hearts whether some day or other some such man-made Leviathan might not succumb to the demons of the ancient deep. Indeed, it would be a serious question for the Shipping Board, or any other shipping agency, if one of its great ships should ever sink before the onslaught of the storm.

What is the chance of such a sinking? Is it impossible? The grizzle