The Bismarck Tribune Newspaper, January 9, 1929, Page 8

an ees cae creo NPE FACE I TIE AOS iy to tl e and inconvenience of annually ince their jands from the operation of this: la condition not only adds to the labor and cost of the of the Auditors Office i: each of such counties: and Heil Insurance Department, but it also creat diseontent ‘and dissatisfaction among farm own ation of the Hail Insurance Law. I believe, therefore, it the Hail Insurance Law should be amended to eliminate € compulsory listing requirement of crop lands in all counties where ge majority of the farmers do not reg- ularly employ this insurance, subject, of course, to an eai 2nd convenient inethod of obtaining this insurance, at the weston of the owners, and under conditions which will safe- guard the Department. This change would, in my judgment, not only facilitate the efficient operation of the Department, but result in more general satisfaction among those who contract this class of insurance. T also direct your attention to the last annual report of the Hail Insurance Department which contains some recom: mendations that merit your consideration. mt the e: STATE SCHOOL LANDS When North Dakota was admitted to the Union in 1889, it was Lt Ra with a large land grant by the United States Government for common school and various state institutional Purposes, This grant was originally 3,131,800 acres; it is now about 1,729,000 acres. The valu» of chis vast property to- gether with the income derived therefrom, and from land sales held in the form of bonds, real estate mortgages, land contracts and other securities, exceeds the sum of $55,000,000, all of which is administered by the State Land Department under the supervision of the Board of University and School Lands. For some reason the problems of this important state department have received but little attention from the legislature in recent years. A portion of the funds derived from the sale and rentals of these lands have for many years been invested in farm mortgages. Something over $9,000,000 of such funds are now so invested. In the course of the farm loan business, a num- ber cf foreclosures have been necessary, and through this process the state has acquired title to 76,650 acres of land formerly ow1.ed by private parties. Thesc lands, of course, are now off the tax list, and the rental income derived there- frdm is less than 3 per cent of the money invested therein. Under these circumstances, it would be advisable to return such lands to private ownership as soon as possible. ‘To accom- lish this, it is necessary to authorize the private sale of such mds on a contract basis at a low rate of interest. and also Provide more lenient terms of redemption from foreclosures in favor of the former owners. I recommend that appropriate legislation on this subject be adopted, ; During the past two years the farm loan business of this department has been especially heavy. More than $4,000,000 ef these trust funds have been invested within that period. The method now provided by law for making these loans on a safe basis is not entirely efficient. Accordingly, I recommend that provision should be made to safeguard this loan business by authorizing the employment of a departmental appraiser to. check the appraisals now made by the county appraisal Loards. A Further recommendations for needed changes in this depart ment are contained in its biennial report, to which you are referred. FARM LEGISLATION During the past eight years the subject of farm relief has held an important place in the public mind. This is a subject of peculiar interest to the people of North Dakota because of ita possible effect upon the future prosperity of the sta! It is new conceded by everyone informed that this problem’ is a na- tienal and not a local one; and that any marketing program that is expected to accomplish anything worth while must be nation- wide in its scope and character. It is perfectly clear that no state legislation and that no state marketing organization can directly affect the price of wheat produced in North Dakota, for the simple reason that over 95 per cent of our total annual wheat crop is sold outside of the state for prices determined upon the basis of the grain market at Minneapolis and Duluth, the principal grain marketing centers of the Northwest. It ‘also seems fairly certain that the federal government will soon enact legislation designed to meet this situation in its national scope. : T-am_ of the opinion, however, that some state legislation could be adopted that would be helpful to the farmers in dealing with this perplexing problem. Such legislation could deal with the organization and operztion of farmers cooperative marketing associations and farm storage. COOPERATIVE ORGANIZATIONS The extensive organization of non-political farmer-owned cooperative marketing associations is advocated by every authority on grain marketing in the country. Farmer-owned ative elevators, terminal warehouses, wheat pools, grain selling agencies, cooperative creameries, etc., have, in my opinion, come to stay in the United States, and the successful organization and operation of such institutions should be the eongern of every citizen interested in the prosperity of agriculture. In the development of cooperative marketing, however, we are twenty years behind our Canadian neighbors. Farmers in have organized grain companies which operate hun- dred: of local elevators, many terminal elevators, hold seats ca the grain exchanges at Winnipeg and Chicago, and conduct selling agencies in the United States and foreign countries. ‘hese farmers have, in the last two years, organized wheat pools that control the selling of as much as 40 per cent of the entire annual Canadian wheat crop. ; In this country there has been much less progress in co- operative grain marketing. In North Dakota, the farmers cooperative method has been confined largely to the ownership st of local farmers elevators. I believe that we can fit by studying the successful methods of the: Canadian Tce,’ and by adopting in this country, such marketin; methods as their experience has proven to be practical an suited to conditions in the United States. I believe also that any national marketing program authorized by Congress will stimulate the organization and expansion of cooperative mar- keting companies. This seems assured.’ Under these cireum- stances, I believe it is the duty of the state government to encourage the efficient development of cooperative marketing methods. ‘I, therefore, recommend the adoption of. such legi lation as will facilitate the sound development of cooperative marketing in North Dakota. FARM STORAGE PLAN It is, however, in the field of farm storage that I think the state-can render the most beneficial se- ice at this time. It is apparent that one serious defect in our grain marketing system is the lack of adequate storage facilities, resulting in too rapid & movement of grain onto the market centers during the fall and early winter months. While we have over 1700 local elevators i: North Dakota with a large aggregate storage capacity, yet their method of operation is not s actually keep the grain stored with them off the any considerable time. On the contrary, as grain is placed in stor with them, a large part of it moves at once to the inal markets, and is sold to the millers and exporters for tediate consumption. Thus farmers who place grain in itor storage because of the unsatisfactory condition of the are actually pulling against themselves by putting jin into channels of trade instead of keeping it off the market. An adequate and proper storage system should * operate to keep the stored grain’ off the market until the is ready to sel] it. This defect is particularly apparent in. our'state thi. year when we have a big crop and unsatisfac- a2 question is, then, how can the grain storage system be i ed to meet tlris situation. It has been proposed that he state build and operate come more so-called terminal ware- - 1 amy opposed to t!.is idea for two reasons: First, I to state ow: ship of private business as a matter ciple. Should the state expand its program of state- tors, it would not only result in a greatly increased ite debt by many millions of dollars, but i: would involve the people in endless politicel controversy over questions of ree While dealing with the subject of farm storage, I would also Suggest that you consider the feasibility of providing for the Fevate storage of grain by members of local wheat pools at local shipping points upon the same principle as farm storage. PROGRESS IN AGRICULTURE The post-war deflation struck North Dakota, in common with all other agricultural states, with great severity in 1920 and 1921. Since our state was second among all the states in the production of wheat, the sudden collapse of the wheat market in- 1920 dealt our grain farmers and al' business institutions dependent upon them, a hard and lasting financial blow. The necessities of our situation compelled the introduction of new and improved farming methods, and the trend toward diversi fied farming at once began. The progress made along these lines has been remarkable during the past eight years. Accord- irg to our best economic experts, the following increases in the value of livestock products produced in North Dakota since 1921 is shown: Increase in dairy products, 71 per cent; in- crease’ ‘in hogs, 205 per cent; increase-in poultry, 152 per cent increase in muttoa and wool, 362 per cent; and increase in beef Products, 78 per cent. In 1928, the total value of livestock products is 30 per cent of the value of all agricultural products Produced °. the state, The total of all such products including grair, livestock, etc., raised in 1928 was $370,000,000 as against $206,000,000 in 1921. -This is the highest productive value in agricultural products that the state has produced in any year since 1921, except the year of 1924. This splendid record shows a steady and sure march toward agricultural normalcy,’ the goal of which will be reached in the not too far distant future if there is continued improvement in production methods, and an efficient marketing system is provided. To the accomplishment of this twofold task the best intelligence and untiring efforts of our people should be dedicated in the years immediately ahead, and in the solution of. this great problem our’state government should, wherever and whenever possible, contribute its part according to the opportunity afforded and the means evailable. __ The process of improving our farm production methods includes, among other things, the production of better quality grain and livestock, the eradication of nuxious weeds, such as quack grass, sow thistle, and other weeds which destroy the producing capacity of the soil and adds heavily to the dockage in the grain produced. Much of our older farmed sections in the state is no longer virgin soil, and has become seriously affected in late years with foul weeds. Also, much of our livestock, especially cattle, is low grade stock, costly to raise and not highly productive in value. While the improvement so much desired along these lines, is largely 'a matter of indi- vidual initiative, yet, I think that appropriate legislation dealing with these matters would be very helpful. Suitable legislation, together with the educational research facilities of the State Agricultural College and its extension agencies, and a well directed public opinion, will, I am sure, contribute much toward the development of a better agricultural condition in North Dakota. INDUSTRIAL AND COMMERCIAL PROGRESS ° _ While there have been a few bank closings during the past biennium, due principally to the trend of business from the small business centers to the larger centers, a movement which has been so marked in North Dakota of late, in general a steady improvement in the condition of our'state anc national banks is evident. Deposits have increased, cash reserves are higher, real estate holdings, and loans and discounts are con- siderably less in 1928 than at any time for some years. Considerable expansion in industrial development has also taken place in North Dakota recently. The lignite coal indus- try has made great advances in production and mine develop- ment. Large power companies have built great power plants within and established electric transmission lines across the state. A million dollar briquetting plant has just been com- pleted in Stark County. A project to import natural gas from the Montana gas fields into and across North Dakota along the route of the Northern Pacific Railway Company, is under way, and many other industrial and commercial institutions are in Prospect in the near future. For nearly forty years North Dakota has been almost entirely an agricultural state, producing huge quantities of grai ind livestock, and sending it in raw condition to other states for processing, manufacturing and distribution. We are how emerging from the pioneer stage of agricultural develop- ment, and entering a, period of industrial and commercial development. We are at the threshold of a time when manu- facturing, mining, processing, storing and distributing indus- tries of various kinds and character will be established and operated within the boundaries of the state. We have the re- sources and the opportunities suitable for a well balanced agricultural, commercial and industrial development. This is, indeed, desirable and necessary, in order to make for a sounder economic and social structure and establish our future pros- perity on a firm foundation. To hasten our industrial, as well as agricultural growth, we need more capital, and more people; we need the confidence and assistance of the business and com- me! world; we need to build up and foster the spirit of good-will and cooperation, not only among all classes and groups within the state, but likewise between the people of this state and those of other states. Economically and geograh- ically speaking, we are an integral part of the great north- west. We do not, and cannot live onto ourselves,alone. Our welfare is deeply interwoven into and with the Welfare of the people and business interests of our neighboring states, and the sooner we see and realize our basic common interests, the better we can work and plan for a prosperous future. Con- sistent with thes2 principles, I urge a policy of governmental friendship and cordial cooperation with all legitimate business interests that look with favor toward North Dakota for loca- tion. Let us banish the spirit of antagonism and extend the hand of encouragement to all people and capital that would seek lodgment within our boundaries. Let us take the barbs and sharp edges out of our laws which tend to drive investors and other ‘business interests away from the state and dis- courage industrial development. While always safeguarding the property and rights of resident citizens, can we not follow a policy of protection and encouragement to every outside interest which seeks investment in our state, a state so rich in resources and so promising in industrial and commercial opportuni Without dealing in specific recommendations, 1 urge: tl general principle as a sound and constructive to be hereafter followed by both the legislative and executive departments of the government. IT have thus briefly touched on a few of the many matters which will come before you for legislative action. . There are meny others, such as bills relating to the public health, morals, and eafety of th> people, bills touching the administration of our elaborate educational system, bills relating to the state’s duty to its dependent citizens, the inmates of our penal and charitable institutions, those unfortunate people, sick in mind and body, whose needs touch our sympathies and sense of social responsibility. In dealing with all these matters, you will, I am sure, be actuated by spirit of fairness, tolerance, and vision characteristic of a progressive state. For -sixty days, or thereabouts, you will take counsel to- gether on these important issues, and from your labors, there will come forth the laws and legislative policies according to whieh the state will be governed during the next two years. In the course of your deliberations, special interests will, no doubt, ke their appearances and cunningly seek your favor. If so, subject their applications to the test of the pauls welfare, and if, by that test, they fail, pass them by. Pro! bly sectional and group ‘interests will be in evidence, looking for advantage fcr the part, at the expense of the whole, If so, banish these special demands from your councils if they conflict with your conception of the general welfare. Recall always that the highest interest of each section of the state and of each class of its citizenry, in the last analysis, 1 in the general welfare ‘ of the whole state and all its people. Let us regard the interest, - needs and requirements of cach part of North Dakota on a basis of equality and fairness. Let us give heed to the fair claims of every business interest, whether commercial, indus- trial, or agricultural, and let us take notice of the proper needs of every group of society, however organized or classified, from the humblest citizen who earns his daily bread by patient teil, to those who occupy the high place in the agricultural, business and professional world. May we glso, not forget that we no longer liye in the herse- and-buggy days of yesterday, but rather in the automobile plane age of today. Recent inventions and mechanical achi (iia including the popalay use cf automobiles, im- proved highways, radios, telephones, electrical and gasoline appliances. easy means of transmitting heat, light. and power, beve ten ly eliminated time and distance as measured by the stan of a generation ago, have broken down the ancient barriers which once separated peopl and communities, and have abolished in a large degree, bot! vidual and community isolation, The effeet of these modern physical forces is rapidly the many smaller communities into a few large ones, it will make of our state one great neighborhood, thin the confines of which lotal interests and ambitions isa ; section rivalries will be forgotten, class senti- no longer be heard, and a broader, more tolerant more far-sighted ideal of state service and state loyalty ested in the minds and hearts of our . jislate for the future of cur state, be not unmindful I and rapid trend toward centralization in our business and social life, and frame your lines which will comprehend, not only Dakota of today, but’ the needs of Es & abu and > to. tas trom th ‘Colored’ Rives WEDNESDAY, JANUARY 9, 1929 Maddock’s Farewell Address To the, Members of the Twenty-First Legislative Assembly: In compliance with the provisions of our State Constitue tion, and in accordance with established custom, I appear bee fore you today to give voice to my conclusions and recom- mendations arrived at during my very short term in office as Governor of the State of North Dakota, embracing a pe- Yiod of slightly more than four months. During this brief period I have not -had contact with governmental affairs per taining to the State to place me in a position to give you dee tailed information relating to the various activities in which the State is interested; but upon these matters with which I have-had contact and upon which I have had opportunity to form definite opinions based on actual contact, I wish to lay before you some definite information and_recommendations. GOVERNOR A. G. SORLIE The State was called upon to mourn the death of its Gov- ernor, the Honorable A. G. Sorlie, on August 28, 1928. His death occurred at the Executive Mansion sfter a month’s ilness. While the people of the State knew of his illness it was not anticipated that his death was impending. His death was a great shock and was sincerely mourned by the people of the State irrespective of party alignments. This is the second time within our history that we have been called upon to mourn the death of a Governor while in office. The death of Governor Sorlic evoked a more heartfelt feeling of per- sonal loss than probably any event that has ever transpired in the history of the State. This was particularly noticeable as the funeral train moved across the State from Bismarck ° to Grand Forks, people standing at salute with bared heads as the train passed by; railway employes, teamsters, boys herding cattle, plowmen in the fields, crowds gathered at railway crossings and in the towns through which the train passed, people in all walks of life gave evidence of their sin- cere affection for their Governor and their sorrow at his passing. It is my conviction that no event has transpired in North Dakota to create in the minds of the people greater respect than this evidence of their respect for government, as typified by their regard for their chief executive. The mem- ory of that funeral train and the respect of the people will not soon fade. OATH OF OFFICE Pursuant to constitutional provisions I_ immedi: ified as Governor and entered upon the duties; of on August 28, 1928. FORMER SENATOR LADD In Statuary Hall of the United States Capitol at Washing- ton there are placed a large number of statues from the sev- eral States, honoring the memory of deceased citizens from within their borders. The State of North Dakota is not yet represented although every State has been invited to place two statues in the Hall. I wish to present for your consid= eration the name of our deceased Senator Edwin F. Ladd. It would be quite appropriate for the Legislative Assembly through a joint resolution to name former Senator Ladd as the one for whom a statue shall be placed in Statuary Hall and to name a Commission to have charge of the raising of funds for that purpose and to have charge of the work of placing the statue in position. HIGHWAY DEVELOPMENT The automobile, whether passenger or truck, has wrought a tremendous change in transportation methods. It has re- sulted in a nationwide demand for better roads as speedily as they can be built and, within our financial ability to provide them, The situation in the nation is reflected in our State. Despite the fact that during the past few years we have built over half of our State Highway System and early next year will have completed 4,000 miles of earth grading of which 2,- 400 miles dre gravel surfaced out of a total of 7,600 miles, the State Highway Commission has on file applications for the improvement of over 1,300 miles. No doubt the requests would be even larger were the State Highway Commission more capable of keeping pace with the requests already on file. As these applications afe made by boards of county come missioners and in response to the pressure of their constitu- ents, it must be apparent to all that the people are insistent in their demands for better ny Akay It also reflects their readiness to tax themselves liberally for this purpose. In 1920 we spent in round figures some eight million dol- lars for the improvement of our state, county and township roads and in 1928, nine years later, our expenditures for the Same purposes are not very much greater, but in the mean time car registration has increased ninety per cent. To cone serve this tremendous investment if motor vehicles as well as to provide a safe, economical and continuous means of travel and transportation, good roads are essential. Consequently, any expenditures for this purpose may be regarded as an investment rather than expense, especially since the car owns er is spared the expense and delay incurred in traversing a poor road. Therefore, since he receives an especial benefit it would seem no more than fair that motor vehicles should contribute more generously to construction and upkeep of roads than the average taxpayer. The financial resources of the State Highway Commission at present are derived wholly from automobile license tax and from a two cent tax on gasoline employed in motor vee hicles, The cost of upkeep of our present improved state high- ways must increase due in part to obsolescence and in part to greater traffic. Also, as new roads are built, the total cost of upkeep or maintenance will grow at a faster pace than the income of the Commission. Ultimately the State High- way Commission will find itself in no position to build new highways or certainly, incapable of meeting the road de- mand. In view of these facts, I recommend to your serious con- sideration an increase in the gasoline tax to provide the State Highway Commission with additional revenue. 'AXATION The property tax in North Dakota is not applied as a measure of individual ability to pay taxes. It is a tax based ‘on ownership of property. It is measured by the sale value of property. The amount of tax paid by any individual de- pends upon the value of the property to which he has title, and does not depend upon his equity in the prop- erty or upon his net worth. The property tax is based entirely upon the market value of the property and in no way depends upon the tax paying ability of the owner. All property taxes become a charge against the earnings from the particular piece of property. When property has no earning ability the tax results in a confiscation of capital vale ues. é If farm taxes in North Dakota were. based on the earnin; power of farm lands and of farm Property, the tax bill o! North Dakota would be appreciably lessened. Our present laws do not permit assessors or boards of equalization to consider the earning capacity of property in determining true cash value. Under conditions that have existed for a nume ber of years, the market value of farm lands vhas been ime possible to determine because of the absence of any market. for farm lands. In the cause of justice and in the interest of distributi the tax burden on the basis of ability to pay, I cecorimenn that legislation be enacted which will require the state board of equalization to take into consideration in ualizing land values, not only the market price or usual selling price of such property, but shall also require said bcard to consider the average earning capacity of such property in this state and that shall require that both factors ‘iven equal weight, I call your attention to suggested legislation Proposed by Tax Commissioner Thoresen: (1) Changing the present system of assessment by local assessors to a county assessment plan. Assessing wholesale and retail merchants on the average inventory during the year previous to assessment- nae or such lesser term as they may have been engaged in usiness. # (3) Making the county treasurer the treasurer of all taxing districts and abolishing the office of city treasurer, quale he office * village treasurer and school treasurer. (4) Prescribing a budget system for school districts. (5) Providing Tegislative authorty for taxation of all pub- - lie utilities, ‘ Taxing natural resources withdrawn from the seil. MISSOURI RIVER DIVERSION PROJECT It is within the mission of this Legislature to sincerely urge the Missouri River Diversion Project. “North Dakota’ stands a great, neglected inland empire, capable of almost unlimited agricultural: production and with great power and manufacturing possibilities, With proper development of our State we cen support and employ a population al times, the present number. The proper diversion of the Missouri River would be one, of the greatest boons to North Dak and the Nation. 1 : ngineers tell us that in a general way the it prace » tical solution is to pump wate eae the Coteau. That fa source very abundant and very cheap ‘turn requires of j Power. Our State Engineer Department has endorsed Suggestion of placing a dam in Missouri River with one cr more smaller dams in\Montana. This will provide abu bide id MACE edt rl will He cae Gores wil the National prob! of Missouri 2 ; Flood Control. The cost will probably not ex ti lion dollars and is decidedly cheaper to: banks and straighten the channel its - Jen Mcreover there is no other way whereby June’s water can made to flow in September. and gory ‘ io pbunianee bid eeet ad the TEN oe, ; analgous * ‘recently come. to be a successfal fruition on the Co! yl ore. parted Vth beney oi le” am Bill: for a dam to cost three ‘cost. You will remember that one of the }\ hind that bill was the need ingeles o. cheap power 7 é. Fee SF 5 ‘yhe entire cost of this projett would be no more than the ok se two or three modern battleships, of which we could easily dispense with. We may well direct se efforts toward ull for itd welfare and happi- ther than for destruction. — mothe possibilities of development in our State, See the Western half arc almost unlimited. The great | i AN beds, the possibilities of water power development, ii ae prospects of the discovery of great pools of crude oil, i! many eminent geologists greatly encourage, opens a@ Medes of future development which is difficult to comprehend. e fact that capital. is now interested in the devel opment © a north and south railroad through the western part of our State indicates :-1mediate possibilities of develo»ment. "COUNTY AGRICULTURAL AGENiS Since the World War, when all our efforts were bent to- ward increased agricultural production vast changes have sad curred in our entire economic structure. Greater attention. must now be paid to problems of marketing and reduced cost of production, In this connection I would call the at- tention of our rural population to the constructive educa- tional service that is lable through the county agents employed through the co-operation of our Agricultural Col- le _, the Department of Agriculture of the Federal Govern- ment and various counties. These joint representatives are in a position to render extremely valuable service in point- ing out means of reducing our production costs, and fur- nishing econcinic information on which sound market pro- may be based. Se DHRAG ‘the past year, representative’ farmers and farm women have co-operated with the Agricultural College and county agents in participating in a series of conferences des- ignated to point out a sound agricultural program for the state, having in mind our possibilities as compared with other areas, and the general economic situation as it re- lates to agriculture. This fundamental work should con- tinue, and the recommendations of such conferences should . se..¢ as a guide to our agricultural development. st would ao point out the far i2aching and valuable ef- fects ofthe work that is being carried on with our boys and girls through the 4H Club work, and the work of the Home- makers Clubs. I would urge that our rural people take ad- vantage of all these educational activities for themselves and their children, as a means of sound and progressive agricul- tural_improvement. PUBLIC SAFETY AND TRAFFIC REGULATION About two years ago, through the interest and efforts of Governor Sorlie, and at his direction, the first State Safety Conference held in the United States convened in Bismarck. There had previously been two national conferences, but North Dakota was the first state to take hold of the problem of public safety and traffic regul in earnest. As a re- sult of that conference the North Dakota Safety Council was organized and is doing a splendid work to promote public safety in this state. 3 Z The Council was largely instrumental in securing the pas- sage of Chapter 162, Session Laws of 1927, known as “The Rules of the Road Act.” Which was one of the so-called Hoover Vehicular Code. We now have on our statute books a comprehensive regulation of all traffic on our roads. This law has already had a very salutary effect and when more fully understood and more thoroughly enforced, should do much to reduce the accident and death toll due to careless and wreckless driving on our roads. PENAL LEGISLATION A problem confronts us which demands careful consider- ation and proper legislation. The grave danger in confining youthful offenders of the laws of the state in the penitentiary for considerable periods of time, where they come in contact with hardened and vicious criminals, is noticeably apparent. We must find means for taking care of these young offend- ers in a better and more intelligent manner. It has been suggested upon good authority that a workable plan would be to incarcerate such young criminals in the State penitentiary for a period of a few days, making pro- vision for parole or suspension of sentence for, the remainder of the term. A valuable lesson is learned by such youths from a few days confinement in prison. . ~ CAPITAL PUNISHMENT : I wish to advise againét any, reversion to barbarism by a return to capital punishment in’this state. In a well regulat- ed state where the public has every opportunity to confine criminals in safe confinement for as long a period as may be necessary, there is no occasion for resorting to thé barbarous method of capital punishment. PARDON BOARD SECRETARY | _ 3 Under our present laws the secretary to the governor is ex-officio secretary of the Board of Pardons. hen such legislation was adopted there was no need for any other pro- vision to properly handle the work of the Pardon Board. To anyone who is at all familiar with the volume of, work that now comes before this board and the almost constant de- mands‘ upon the secretary, it is apparent that a c e in the law is necessary and advisable, and that provision; should now be made for the development of a full time secretary for . this deparement of state government. In addition to handling the clerical work of the boaid the secretary should become parole officer for the state, and should act in an advisory capacity to prisoners. The work of such officer in the rehabilitation and reinstatement of ‘pris- oners who have served their sentences, would in a great any instances prevent a repetition of criminal acts and would prove an economic saving to the state. The time has come when we must give consideration to the prevention of crime for the protection of our citizens. STATE INSURANCE The so-called state industries or enterprises occu: y an im- portant place in the economic life of our State, and it would seem proper that some mention should be made of the prog- ress and present status of that part of such program which falls under the head of insurance and is administered by the Insurance Department. A few of the outstanding facts and figures taken from the last reports of the various branches of that Department as of 1927 are very interesting and instructive. The State Fire & Tornado Fund was created by legislative act in 1919 for the purpose of insuring against fire and tornado any and all pine Property of the State. _ The sum of $478,017.61 has een paid out for reinsurance in accordance with the provi- sions of the statute while $60,303.24-has been recovered un- der such protection. Had no reinsurance been placed what- soever, then in that case the Department would have approxi- mately $417,000 more in the fund than it has today. For the payment of this volume of picaiare the Department has Teceived approximately, $9,000, ¢ tion on the larger risks throughout the State for the greater part of the Department’s existence. The net insurance in force December 31, 1927, was $20, 088,791 fire and $19,190,431 tornado; present amount in hands of State Treasurer, over.one million dollars. The records of the Department show that losses paid during the entire pe- riod of ten years operation amount to only $500,000 or an average loss ratio of $50,000 per year, and that almost an equal amount has been spent for reinsurance with private companies. I recommend the amendment of the law to read: “When- ever the earned premiums in the Fire and Tornado Fund shall equal $2,000,000 that all earned premiums thereof shall be paid back to the political subd proportion to the sums paid by the Political subdivisions into the Fire and Tornado Fund.” This will necessitate the col- lecting of premiums each year but will ever be a safeguard to the Fund in the event of excess losses, A’ penny saved is.a penny earned. In consideration of this surplus, the exceedingly low fire loss ratio of 28% estab- lished over a period of ten years, together with the antici- pated cycle of better times, I therefore also urge the repeal of the reinsurance clause in the statute governing this fund in order that still greater savings may be effected for the Petthe State Bonding Der e ni ent has served the State ver: well in two ways, fest, agen 8 financial success thereby saving the taxpayer; second, by making uniform and sto. bilizing the rates on bonds for parle officials, Had not the department been in existence during the past few years of Pinaceae He peanatis to. sere that the rates Is’ bonds wou 80 hi bons ‘almost prohibitive, HED as to: make such He gross premiums received by the Depa: 0 entire period since 1919 is $423,763. In addition ae Pei practically the only other income, is that ed from in. terest on the accumulated fund and equals at the end of 1927 fee. _The largest source of disbursement has been the average to ine ross income of 29%, The Bonding’ Law, like the Fire and Tornado jact provides for excess or reinsurance on certain risks. The sum of $38,. insurance tnd iis sige opens the form of re » . - occurred on any such risks during the entire period. Trane reopen ae a emtinnance a this reinsurance feature, $201,702 over all liabilities, ° December 31, 10927, was es. From’ com STATE HAIL INSURANGS eet paciapas made of charged a com] Dent the ates me have bao chased by it is sl n cag) Jeena, had been carried with fe eae i = pe Sal i Rog a8 was te with the ei Peete rates would eras fang fog ded sav i his eepet ould, mater ver: mt a fire and tornado protec- ~ >» re