are now in operation under Executive order, and that legislative authority be given to the President, affirmatively empowering him to create further reservations covering the remaining Alaskan waters.

Pollution of Coastal Waters.

During the past year a large amount of data has been collected relative to the pollution of our coastal waters, which results largely from the unrestricted dumping in harbors or other inland waters of bilges of oil-burning ships. These data are contained in a comprehensive report by the Bureau of Mines, which is at present uncompleted, but which will probably be in finished form for submission to the coming session of Congress. It is a subject of great importance, for this pollution menaces the safety, health, and comfort of large numbers of our people.

Based upon the facts which will be available, I recommend that legislation be enacted for its prevention.

Amendment, Improvement, and Revision of the Navigation Laws.

The navigation laws are badly in need of revision. Under acts of Congress providing for recommendations in this respect, a large amount of work has been done and it had been hoped that a complete plan of revision, bringing into harmony and clarity the various provisions, might be ready for submission at the coming session. The completion of this work has, however, been delayed. It is of the greatest importance to the shipping public, to the officials whose duty it is to enforce the navigation laws, and to those actually engaged in the industry that the codification of these laws be no longer delayed.

Transfer of the Admeasurement of Vessels from the Treasury Department to the Department of Commerce.

The transfer from the Treasury Department to the Department of Commerce of the staff of officers engaged in measuring tonnage of vessels has been approved by both departments, and is essential to the uniform application of our admeasurement laws and regulations so as to prevent discrimination against American vessels and to bring our admeasurement system up to the standard of other maritime nations. This work should be performed by men selected because of their technical knowledge of ship architecture and admeasurement and with the training to solve the mathematical problems often involved.

Load-Line Law.

Load-line bills were introduced in the Sixty-seventh Congress, but no legislation was enacted on the subject. It is imperative

to the welfare of our merchant marine that legislation substantially similar to the laws of the European maritime powers on this subject be enacted in the near future, inasmuch as our cargo-carrying steamers are now allowed to clear from the ports of these powers solely as an act of courtesy and not as a matter of right.

A representative committee has been named to draft a suitable bill for presentation to the next Congress; and it is hoped that during the coming session legislation upon this important subject may be enacted.

Radio Regulation.

The rapid growth of radio communication makes necessary an affirmative declaration by Congress of a governmental policy in accordance with which the art is to be conducted and the empowering of some agency to carry that policy into effect. This can only be done through an officer with discretionary powers and under regulations which will be made by him in conformity with the general terms of the law. I most earnestly commend this matter to the attention of Congress.

Aviation.

During the past year the commercial use of aircraft has increased to a considerable extent, though there is reason to fear that in this respect the United States is not keeping pace with some foreign countries. This method of transportation means much to our economic and social progress and every encouragement, legislative and otherwise, should be given to its development. At the same time there should be created a proper system for its regulation, having in view, primarily, the safety of life both of passengers and operators, and the orderly conduct of air navigation.

Federal Taxes on Americans Resident Abroad and Engaged in American Commerce.

The income taxes imposed upon our merchants resident abroad place them at a disadvantage in competition with the merchants of other nations. Some relief is afforded by the provision that the amount of taxes paid in the foreign countries may be deducted from the income tax which is payable to the United States, but this does not cover the entire problem. For instance, American merchants in the Latin-American countries. the Orient, and some European States pay our very high income tax, while the amount deductible for taxes paid in those countries is very small. British and some other merchants resident

there pay no taxes to their home Governments, and thus the cost of our doing business through merchants of our own nationality willing to reside abroad in the cause of promotion of American commerce is greater than that of our competitors or of our doing business through foreigners. No sound continuous distribution of our goods can be built up unless our own merchants are in the field selling goods upon service and contact as well as upon price.

Bureau of Foreign and Domestic Commerce.

The following items of legislation are recommended for the Bureau of Foreign and Domestic Commerce:

1. Reclassification of the foreign service, providing that all representatives abroad above the grade of clerk be classed as commercial secretaries; be divided into classes according to salaries; and be accredited by the Department of State in the same manner as are the commercial attachés at present.

2. Legislation to simplify the handling of funds by the disbursing agents of the bureau, and, as a result, to simplify the whole process of accounting.

3. Legislation permitting the Secretary of Commerce to accept contributions of money for use in payment of expenses in connection with a particular piece of work or investigation. Bureau of the Census.

It is recommended that the law concerning the collection of cotton statistics be amended so as to advance the dates for the early reports on quantity of cotton ginned; that provision be made for collecting information as to the several grades of cotton held in the United States at different dates; and that the act of August 7, 1916, providing for the collection of statistics of the quantity of cotton, linters, etc., used in the manufacture of guncotton and explosives be repealed, since this information, originally demanded by war conditions, is no longer important. With a view to avoiding duplication it is recommended that the collection of data concerning the quantities of leaf tobacco. held by certain classes of manufacturers and dealers be transferred from the Bureau of the Census to the Bureau of Internal Revenue.

It is recommended that the Official Register be discontinued, and that instead the Bureau of the Census be authorized to compile statistics regarding the civilian personnel of the Federal Government. The Register costs about $50,000 per issue and serves no sufficient purpose to justify this expense.

Lighthouse Service.

The following items of legislation are recommended for the Lighthouse Service:

(a) Extension of the retirement law to cover (1) cases of disability in the field personnel of the Lighthouse Service; (2) retirement, in the discretion of the Secretary of Commerce, after 30 years of service; and (3) retirement of persons attending minor lights.

(b) Provision of medical relief for light keepers at remote stations inaccessible to Public Health Service hospitals, and extension of Public Health Service treatment to employees on lighthouse vessels.

(c) Authorization of the payment of claims of lighthouse employees for losses of personal property incident to their work.

(d) Extension to lighthouse employees of privileges now accorded to similar services respecting the purchase of commissary supplies and transportation.

(e) Provisions for the protection of aids to navigation damaged by passing vessels and making sums received in payment for such damages available for the repair of aids.

Adequate Building for Department.

The department's need for an adequate Government-owned building to provide necessary additional space and in which its now scattered bureaus may be brought together is so compelling that I feel it must be given special mention in this report. Exclusive of the Bureau of Standards, which is admirably housed in buildings especially adapted to its work and which, therefore. does not enter into the problem, there are approximately 1,980 employees of the department housed in the District of Columbia. Only 800 of these are housed in the so-called main building (and this building is rented), the other 1,180 employees being scattered in three buildings, two of which are ancient structures, expensive to operate and unsafe for the employees who are compelled to work in them. The third is one of the temporary war structures, which will be condemned within a year or two as unfit for habitation. It is now being used by the Census and contains invaluable records dating back to the founding of the Government which if destroyed could never be duplicated.

It is impossible to secure proper administration with the department so scattered over the city. Therefore, aside from the total unfitness of the buildings, it must be obvious that sound administration and efficient transaction of the public business demand the assembling under one roof of the now scattered activi

ties of the department. Moreover, all the buildings are badly overcrowded. Additional space is imperatively needed. With normal growth of the department, not to speak of possible additions arising from a regrouping of Government functions, it is only a question of time before further services will have to be moved from the present main building, with resulting further disintegration and difficulties of administration.

The only cure for this whole situation is the erection of a modern Government-owned building adequate for the department's needs, and the economies in rent and better administration would more than cover interest upon the Government outlay. The construction of such a building would be sound economy.

Yours faithfully,

HERBERT HOOVER, Secretary of Commerce.

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