You recognized last spring that the most serious part of the debt burden affected those who stood in danger of losing their farms and their homes.  I am glad to tell you that refinancing in both of these cases is proceeding with good success and in all probability within the financial limits set by the Congress.

But agriculture had suffered from more than its debts.  Actual experience with the operation of the Agricultural Adjustment Act leads to my belief that thus far the experiment of seeking a balance between production and consumption is succeeding and has made progress entirely in line with reasonable expectations toward the restoration of farm prices to parity.  I continue in my conviction that industrial progress and prosperity can only be attained by bringing the purchasing power of that portion of our population which in one form or another is dependent upon agriculture up to a level which will restore a proper balance between every section of the country and between every form of work.

In this field, through carefully planned flood control, power development and land-use policies in the Tennessee Valley and in other, great watersheds, we are seeking the elimination of waste, the removal of poor lands from agriculture and the encouragement of small local industries, thus furthering this principle of a better balanced national life.  We recognize the great ultimate cost of the application of this rounded policy to every part off the Union.  Today we are creating heavy obligations to start the work because of the great unemployment needs of the moment.  I look forward, however, to the time in the not distant future, when annual appropriations, wholly covered by current revenue, will enable the work to proceed under a national plan.  Such a national plan will, in a generation or two, return many times the money spent on it; more important, it will eliminate the use of inefficient tools, conserve and increase natural resources, prevent waste, and enable millions of our people to take better advantage of the opportunities which God has given our country.

I cannot, unfortunately, present to you a picture of complete optimism regarding world affairs.

The delegation representing the United States has worked in close cooperation with the other American Republics assembled at Montevideo to make that conference an outstanding success.  We have, I hope, made it clear to our neighbors that we seek with them future avoidance of territorial expansion and of interference by one Nation in the internal affairs of another.  Furthermore, all of us are seeking the restoration of commerce in ways which will preclude the building up of large favorable trade balances by any one Nation at the expense of trade debits on the part of other Nations.

In other parts of the world, however, fear of immediate or future aggression and with it the spending of vast sums on armament and the continued building up of defensive trade barriers prevent any great progress in peace or trade agreements.  I have made it clear that the United States cannot take part in political arrangements in Europe but that we stand ready to cooperate at any time in practicable measures on a world basis looking to immediate reduction of armaments and the lowering of the barriers against commerce.