The attribution of those quote is partially incorrect. T. Roosevelt did not write or say this in 1907. The reference to the "red flag" should be a tip off to that.
See http://urbanlegends.about.com/library/bl_roosevelt_on_immigrants.htm.
I would expect a Congressman to have his staff at least verify the quote he uses for political gain. The mistake becomes fodder for his opponents. :(
When he spoke of the "red flag" he was generally referring to the confederate flag.
The quote is from a letter TR wrote in 1919, just before his death. This was the Red Scare period, immediately after the end of WWI, when (mostly) foreign born radicals were committing various terrorist acts in the US.
"In the first place we should insist that if the immigrant who comes here in good faith becomes an American and assimilates himself to us, he shall be treated on an exact equality with everyone else, for it is an outrage to discriminate against any such man because of creed, or birthplace, or origin. But this is predicated upon the man's becoming in very fact an American, and nothing but an American...There can be no divided allegiance here. Any man who says he is an American, but something else also, isn't an American at all. We have room for but one flag, the American flag, and this excludes the red flag, which symbolizes all wars against liberty and civilization, just as much as it excludes any foreign flag of a nation to which we are hostile...We have room for but one language here, and that is the English language...and we have room for but one sole loyalty and that is a loyalty to the American people."
Apparently the staff(or whoever does any vetting) was correct. TR gave this speech before the House Immigration Subcommittee on Sept. 29, 1907; But the date doesn't change the substance and importance of the address.
I think the reference to the red flag was a reference to anarchists, Marxists, and violent revolutionaries of every stripe and variety. Remember - the first Russian Revolution was in 1905 and Marxists played a role in it. This was closely watched in the U.S.
Also, McKinley was assassinated by a foreign anarchist in 1901 when TR was Vice President.