Our finances are in sound condition.

I have the honor to transmit herewith the Budget of the United States for the fiscal year ending June 30, 1931.

With regard to the Boulder Dam project authorized by the act of Congress approved December 21, 1928, the details have not been completed in time to permit of this project being included in the estimates contained in this Budget.

As the custodian of the national forests, national parks, and other public lands the Federal Government is responsible for their protection.

We are wisely committed to a policy which insures the further progressive reduction of the debt.

The importance of the functions devolving upon these two departments in the conduct of our foreign affairs and in law enforcement and the administration of our penal system are of vital concern to the Nation.

Our estimated expenditures for this and the next year are well within our expected receipts.

The obligations of this stewardship can not be met within the limits of the present appropriation.

We can well be deeply concerned, however, at the growing expense.

The budget as it goes to Congress, of course, is built up by departments, and not by the particular purpose for which expenditures of the Government are made.

So I thought--not for publication--but I will release it to you as soon as we get it mimeographed--probably let you have it for release on Thursday after you are done with the normal budget.

Our Army and Navy are being maintained in a most efficient state under officers of high intelligence and zeal.

In a large sense we do not wish to be represented abroad in such manner.

I recommend that Congress give earnest consideration to the possibilities of prudent action which will give relief from our continuously mounting expenditures.

To promote peace is our long-established policy.

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.

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.

Our adherence to the International Court is, as now constituted, not the slightest step toward entry into the League of Nations.