The Daily Alaska empire Newspaper, January 29, 1941, Page 5

TEXT, GOVERNOR'S MESSAGE (Continuved from Page Three) patented mining claims, the owners of which have died, or ppeared. This dead hand upon hundreds of thousands of an acres cannot be removed by any other practical od than taxing this ‘property, however lightly, and permitting foreclosure upon it for non-payment of taxes after a jeriod of years. An inventory by the Alaska Planning ( 0 meil, as of May 30, 1939, showed a total of 132,476 acres 131 mineral lands and 138,164 of non-mineral lands surveyed for patent within the Territory. Only a small fr on of these snrve were not perfected and patented. Some of these tr are owned by corporations now dissolved or not doing business in the Territory. Some are individually owned but their owners have left Alaska; in most instances their whereabouts are unknown. These lands fall into three types —mineral, agricultural, industrial. Among the mineral lands aré numerous lode mining cliims located mainly in southeastern Alaska. Virtually all of Douglas Island and mueh of the mineral area in the Ketchi- kon distriet are in thiscategory. But similar lands, including ;nm«- placer ground, are found in almost every section of the erritory. To a more limited degree, this is true of agricultural land, a factor of increasing importance now that agriculture is beginning to develop in central Alaska and the need for food production is being accentuated both on military grounds and for the general purpose of increasing the self-sufficiency of the Territory. In the Matanuska Valley, progress is definitely impeded because considerable areas of good farm L nd required for the extcnsion of existing farms are held by vanished owners. Among the industrial plants are abandoned salmon ¢an- reries and other fishery manufacturing plants. In a number of places, the equipment has been removed from the buildings, which are not kept in repair and are evidently abandoned. Others have not been operated for years. The problem of restoring these properties to use is being steadily aggravated with the passage of time, and has been the subject of study and concern by former executives of the Territory and legislators. The tax and foreclosure method is apparently the only practical way in which this important situation can be met and is one of the most compelling reasons for the enactment of a general property tax, Likewise it is possible to classify lands for tax purposes. IFarm lands should be elassified at a purely nominal rate for the time being, solely for the purpose of recovering lands held for speculative purposes or whose owners have disappeared. In general, this form of taxation will serve usefully to prevent speculative holding of land and interests therein at no cost whatever to the holder. To avoid unduly increasing the tax burden upon mines and fisheries, I recommend that the property tax upon the operating properties of these industries be alllowed as a credil against the mining severance tax and the pack tax on fisheries products. To recapitulate, this program—consisting of a personal net income tax, corporate net income tax and a general prop- erty {ax along the lines here suggested, together with the existing severance tax on mining and the existing gross pack and fishing license taxes—will permit the outright repeal of the {erritorial license taxes on cold storage plants, meat mar- kets, bakeries, power, light, telephone and water companies, sawmills, optometrists, deéntists, osteopaths, attorneys, under- ¢ mployment agencies and public messengers. Further- more, it will amount to virtual repeal, by allowance of credits against the net income tax, of the miscellaneous federal licer axes upon hotels and restaurants, theatres, drug stor ewelers, insurance agents, public halls, bowling alleys, pool and billiard rooms, abstract offices, real estate deal TS, transfer companies, itinerant physicians, patent medicine vendors, peddlers, taxidermists and pawnbrokers. The enactment of these three new revenue laws, should the legislature see fit to adopt them, would of course involve a -ertain expansion of the existing machinery of tax admin- «ration and collection in the Territory. For purposes of ment, a final tax authority or board of review is neces- It has occurred to me that such a board might well col t of the Territorial Treasurer, Auditor and the Attorney General—three elected officials having the confidence of the community, whose functions ex-officio qualify them supreme- ly by experience and present duties to deal with revenue measures. They will probably require an executive secretary or other administrative officials whose selection may be left to them if the legislature so desires, or be appointed by the Governor subject to confirmation by the legislature if you prefer, or some third alternative. These are details of administration, though important ones. The drafting of tax legislation, or indeed of any legis- lation, is a technical and often somewhat complex assign- ment. Certain members of the legislature during recent months have expressed to me the desire to secure competent legal draftsmanship for the assistance of the legislature dur- its. session. Following this indication, I sought to obtain such service. I approached the Public Administration Clear- ing House of Chicago, a well known, highly reputed, endowed, non-profit agency which has specialized in furnishing assist- ance of various types to federal, state, county and municipal governments. Through this agency 1 was fortunate in secur- ing, without expense to the Territory, the loan for a period of three months of Mr. Alfred Harsch, Professor of Law at the University of Washington, who has specialized in prob- lems of taxation and is the author of several publications on the subject. He began his tax work over 12 years ago in the State of Washington, participating in the drafting of that State’s net income tax initiative, which was approved in 1932. Mr. Harsch in 1933 acted as technical advisor to the revenue .committee of the Washington House of Represen- tatives, and assisted in the preparation of the Business and Occupation Tax Act. From 1933 to 1935 he acted as Counsel for the State Tax Commission and prepared a -complete revision of the excise tax laws of the State, including a corporate and personal net income tax measure, which the Legislature adopted in 1935. Since the fall of 1935, Mr. Harsch, while acting as Professor of Law at the University of Washington and teaching taxation, has also acted as consultant upon local tax problems. While Mr. Harsh has been engaged during the last few weeks in preparing for your consideration drafts of these broadly outlined tax proposals, he will, during the balance of ‘the session, be at the Legislature’s disposal for such drafting work, such legal advice, and other assistance as you In this capacity, he will be available not for the se of projecting any particular ideas of his own, but to assist you in formulating in technically correct and legally competent form such legislation as you may desire to introduce. I consider that we are all fortunate in being able to avail ourselves of Mr. Harsch’s technical competence and broad experience. The services of Mr. George Folta should likewise be available to you, subject to the limitation of his duties as counsel for the various federal agencies. Inheritance Taxes Aside from the general program of tax revision which has been previously discussed, a strengthening of the existing inheritance tax law appears. worth considering. Under the federal estate tax, a credit to the extent of 807 of the basic TS, | Secretary of the Navy, this TH allowed in the case of a decedent who has paid s inheritance tax to the state in which he was domiciled. Alaska’s inheritance tax does not always equal 807 of the federal tax. An amendment to take full ad- vantage of the provision for the credit on federal tax seems desirable because it would not increase the total amount of estate and inheritance taxes paid by an Alaska decedent, but would permit the Territory to retain a portion of the tax which is now paid into the federal treasury. In other words Alaska would get what now goes outside. There is also need Ifor a redefinition of the transfers of property subject to linheritance taxation. Since the adoption of Alaska's inheri ance tax law, judicial interpretation and conveyancing devices {have made possible certain avoidances of the Territorial inheritance tax. Federal and state statutes, generally, have |been amended to prohibit tl oidance and it seems ad- | visable likewise to amend the Alaska statute, and so prevent | these needless teaks. . This does not involve any increase in rates. Juvenile Delinguency Various other matters I desire to call to the Legislature's attention, although 1 have trespassed too long on your time and would like to reserve the privilege of addressing you again later in the session should the need arise. Other new legislation, is, I believe, desirable. Our statute concerning ju- venile delinquency is defective in that dependent children who, through no fault of their own, happen to be in unsuitable {homes or have been guilty of minor offenses, are classed as eriminals and are thus stigmatized for life. A bill to cor- rect this, prepared with the assistance of the United States Childern’s Bureau and modeled closely after widely-accepted state legislation will be submitted to you with the recom- | mendation of the Department of Public Welfare and the en- | dorsement of various civic bodies in the Territory. I bespeak | for it your most sympathetic consideration. | Mothers’ Aid Likewise the provisions for allowances to mothers for | support of indigent children, in which Alaska pioneered, | should be liberalized to permit their application in cases where the responsible guardian is an aunt, grandparent,| ‘mher relative or qualified person. Property of Persons Receiving Relief The Territory requires better protection in the case of | individuals receiving relief who are property owners. Present | “statutes. as interpreted, give a prior lien to the Territory, in | case of death, for reimbursement of amounts paid to indi- | viduals as relief, but give the Territory no prior claim during the lifetime of a relief recipient. I therefore suggest legisla- tion empowering the Territory to file liens against property of such recipients. This will establish the claim of the Territory in such a way as to discourage or prohibit transfers of property during the lifetime of any relief recipient, which !in the past have resulted in the Territory’s being deprived of its right to reimbursement. Employment of Alaskans Under the far-reaching provisions of Federal Social | Security legislation, and thereupon adopted in cooperation | with the Federal government by state and territorial legisla- | tures, as it was here four years ago, government, for l.h(-‘l first time, made employment—the opportunity and the right | to earn a livelihood—a matter of its own concern. Here in | | Alaska it became possible for the first'time for those desiring | work to register with a public agency, the Territorial Em- ployment Service, and to be put in touch without .cost with { all possible opportunities for employment. Likewise this was a valuable service for the employer. Here in Alaska our lown Territorial Employment Service has a special significance | related to the imperative necessity to secure for Alaskan residents the first right to work in Alaska. You probably | know that discrimination against Alaskans took place even | ion some of the Navy defensé projects at the start. A con- ‘Irm't between Seattle labor unions and the contractors fav- ored workers from “outside” in priority of employment and other respect. I considered this an outrage, but I am-happy to report that as a result of vigorous representations which I' finally found necessary to carry personally up to the situation has changed and the Territorial Employment Service now gets first consideration ifrom the Navy in its efforts to place properly qualified resi- dents of the Territory. The Service is increasingly being recognized and utilized by other employers. The struggle to give Alaskans first claim on Alaska employment is an | important sector on our larger battle front; that struggle must be intensified, must be carried on unrelentingly and; uncompromisingly and extended to every branch of private | industry as well as to public undertakings. The record of ; this Territorial Employment Service is most gratifying and | deserves to be called to your special attention. In 1938, its' first year, it placed 3,606 Alaskans in jobs; it placed 5,231 in 1939, and 6,917 in 1940. Unemployment Compensation Unemployment compensation is a natural corrollary of | the governmental effort to help secure employment. Adopted throughout the Union, unemployment benefits from the Al-| aska Unemployment Compensation fund first became payable | here two years ago. As first drawn the law applies only to employees in establishments employing eight or more for| twenty weeks, but since that time this provision has been gen- erally liberalized. It seems distinctly unfair that an employee' working with seven others is entitled to these benefits, while one working in a smaller establishment is not. The Social Se- curity Board is urging all States to revise and liberalize their laws to include all’employees under the unemployment insur- ance laws. Such an amendment seems to me just and desirable. | Traffic Law With the impending extension of our highways (for it is my conviction that the construction of the trunk highway system sponsored by the Territorial Highway Engineer will shortly begin), I recommend the enactment of a territorial traffic law. The Alaska Planning Council is now completing a factual study of traffic legislation in the States which will be of material assistance in adapting the best practice else- where to the Territory’s special conditions. Reckless driving, with serious injuries and fatalities, is.likely to increase unless adequate steps are taken to establish a punitive code and provide for its enforcement. Regulations concerning the weight of loads and dimensions of trucks, and their relation to automobile license fees, should be part of this. Health Department 1 consider it important that our Department of Health be legalized, and furnished with the powers and facilities to cope with the new and important health problems, made greater by the recent influx of newcomers and by the steady growth of our widely scattered population. I.hope that this session will enact a suitable law aiming to achieve this objective. City Manager Law Acute growing pains afflict a number of municipalities, and existing facilities for water supply, sewage disposal, fire prevention and policing, street and dock space are sorely overtaxed. These communities need assistance, often guid- ance, in meeting their problems in conformity with modern | methods. The recent success of the Alaska Planning Council in obtaining from the National Resources Planning.Board, wnhput cost to the Territory, the services as consultant on municipal problems of an Alaskan engineer familiar with the m_'oblems of the Territory, is most gratifying, and will be highly useful. In addition, I deem it helpful to enact legisla- federal tax is this amount | | | a bounty on this national bird. Iranted unless and until careful research establishes their | value. However this is a question for the Legislature to {to the entire community of the interruptions caused by | where five or more employees are engaged. It is manifestly E DAILY ALASKA EMPIRE, WEDNESDAY, JAN. 29, 1941. city management could serve only for the length of the term of the municipal council that hired him; and the best talent could probably not be secured for such a short tenure. Territorial School Lands An inventory of the surveyed land of Alaska 1939 listed 100,881.71 acres of public school lands, and Uni- hool lands 11,845.93 acres. There is a deficiency in these items of 29,115 acres. Under the Act of Congress, il the Territory is to obtain lands in lieu of this deficiency, it will be necessary for the Legislature to create a land board and specifically authorize it to select the lieu lands. Inasmuch as the amount of school lands and de- ficieneies will inerease as the program of rectangular surveys is carried out by the U. S. General Land Office, it seems wise that provision be made for the Territory to protect its interest. 1 believe it unnecessary to create a salarie board for thig purpose, and suggest that an ex-officio board composed of heads of Territorial departments now in existence be authorized and empowered to handle this matter. Bounties Over a quarter million of dollars—$260,000—were ex- pended on bounty payments in the last biennium on wolves, coyotes, hair seals, eagles and trout. The usefulness of these various bounties, the amount of damage done by the predators on which bounties are paid, the effectiveness of the bounty method of extermination as against some other method where extermination appears desirable—these are varyingly con- troversial issues. With so large a sum involved it would seem only proper that those who desire to expend these public monies should assume the burden of proof that these expen- ditures are essential and represent the best method of dealing with the situation. Since the last meeting of the Territorial Legislature, eagles, on which the Territory has been paying a bounty of $1.00, have been protected by Federal statute. It is now against the law to kill an eagle anywhere in the United States except in Alaska. While Alaska was exempted out of con- sideration for existing Territorial legislation, it would seem reasonable for us to move in the direction of practice now established everywhere else and at least to cease paying as of May Twenty-five thousand dollars was appropriated for the last biennium for Dolly Varden trout bounties. There seems to be little question that quantities of rainbow trout tails and young salmon tails have been included in the trophies pres- ented for collection. Further, Dolly Varden trout are ad- mittedly predators on stickleback which in turn are de- structive of salmon. The Fish and Wildlife Service has ex- pressed to me its view that such expenditures are unwar- decide. Meanwhile no request has been made for funds to continue eagle and trout bounties. The matter is treated more fully in the current biennial report of the Territorial Board of Budget, signed by the Treasurer, Auditor and Governor, and I commend this fuller treatment to your attention. A good deal of the bounty leg- islation in the past has been in part motivated by the economic needs of Alaskans, who are assisted through these bounties. It is, I think desirable not to confuse this issue with relief. feral and Territorial appropriations are increasingly taking care of that aspect of the problem. Permanent Conciliator for Alaska Every-season disputes between employer and employee which apparently could not be settled by discussion and agree- ment have stopped the wheels of industry, created unemploy- ment, interrupted the orderly flow of commerce throughout our communities. When strikes have been called and after they have continued for some time it has been customary for one or both parties to the conflict to call upon the Concilia- tion Service of the United States Department of Labor to send an arbitrator from the States. Believing that Alaska was entitled to-a full-time offi with these duties, both hecause of our general objective to cease being considered and treated as an appendage of some unit “down below,” and because such an official constantly on the job here would itend to speed settlement of industrial disputes, I requested and secured the full-time services of such a conciliator, who beginning last spring was stationfed here and will so continue, Every effort should be made to arrive at a peaceful settle- ment of industrial disputes because of the damage and cost strikes. Workmen’s Compensation Act In an effort to improve industrial relations certain inherent weaknesses that experience seems to have revealed in the Territorial Workmen’s Compensation Act ought to be corrected. 1. The existing law provides coverage only in operations hard on a worker who lose an arm or an eye to receive no compensation if there happen to be only four fellow-workers or fewer. Complete coverage would seem elementary justice if we accept the principle of compensation for injuries, which I assume all do. 2. Coverage should also be extended to include Terri- torial employees. Federal employees are now protected by Federal law. Let’s do as much for our own. 3. The present law requires that all disputed compen- sation cases may be settled only by compromise or by suit in Court. Settlement procedure should be simplified in cases where relatively small sums are involved. By authorizing some existing Territorial official or agency to assist in the collection of small claims where employers fail or unreason- ably delay settlement, we may rectify an occasional injustice and at the same time avoid setting up costly and cumbersome administrative machinery. ° 4.. Employers should be made accountable to some Ter- ritorial board or agency, to which reports should be made at regular intervals regarding the collection and use of the so called medical 4nd hospitalization fund, to which employees contributéd. At present there is no such accounting. 5. The clause in the existing Workmen’s Compensation law which provides that when a fatality occurs to an unmar- ried person without dependents the payment of a certain sum be made to the Territory, “to be credited to the current appropriation for allowance to aged residents,” has been declared unconstitutional. Its unconstitutionality arises from the diversion of the money to a purpose unrelated to the subject of the act. Competent authtories have suggested that a legally sound substitute for this clause may be framed by providing that the sum paid to the Territory be credited to a Rehabilitation and Second Injury fund, to be used for the sole benefit of those entitled to participate therein. A study of the advisability of incorporating such a clause in the law is recommended. Investigation of Steamship Freight Rates In 1939, the legislature adopted a joint memorial asking for an investigation of the freight rates on water carriers operating between the States and Alaska, stating that they were excessive and that further unjustified increases were expected which would threaten the economy and well-being of Alaska. In Washington last spring, I transmitted this memorial to the United States Maritime Commission, re- questing action thereon. An investigation was ordered, and hearings were held last summer at Seattle, Ketchikan, Ju- neau and Anchorage. Meanwhile the anticipated further tion to permit such communities as may desire to hire a City Mapagel:——a competent engineer familiar with and especially trained in the great variety of mupicipal problems. Several communities have expressed to me an interest -in this form lof government.. Under present Alaskan law, sueh expert in [} increase had been made and the commission permitted the new rates on condition that should they be held unjustified, all increases collected thereunder would be refunded to the shippers. The decision of the Maritime Commission should be available shortly, but meanwhile I have a copy for each! 5 I T e e ey Dorothy Gray %BLUSTERY \WEATHER LOTION THE USUAL $1 SIZE limited fime ;Ioo Grand anti-chapping help, smooth powder base, comforting body rub—ALL IN ONEI A luscious creamy-pink Blustery Weather Lotion. Heavenly soothing on your skinl Grand for hands. Get several bottles at this double-size value. Stock up for the sleet-and-snowy weather now! SPECIAL DRY-SKIN MIXTURE $1.00Limited Time SAVESL2S Richly Lubricating Night Cream . . . Famous for smoothing skin that’s flaky-dry from exposure to heat, cold, wind, dust. Special dry-skin mixtures coaxes skin to feel pliant, look beautifullv soft, at less than half price. GET SEVERAL JARS NOW! B. M. Behrends Co. “QUALITY SINCE 1887” DSR4 \ e i e i i iy member of the legislature of the brief presented by the commission’s attorneys. While we do net know that the Maritime Commission will act upon the recommendation of its attorneys, it is interesting to note that they sustain the legislature’s contention that the freight increase of last spring was unjustified. Conclusion . 1 have noted that my predecessors in their messages have urged the legislature to refrain from sectionalism, and I think it may be said at this time that there is so much in prospect for each section of Alaska, if we live up to our op- portunities, that no division and no part of the territory need feel seriously concerned about its share of the gen- eral welfare. The program which I hope you will see fit to adopt here will be of such far-reaching benefit to all Alaska that we will have little time or concern for keeping books on which seetion gets the most. I would like to urge, also, that in view of the importance of our problems, con- sideration of them be begun promptly and be not deferred to the latter days of the session. Sixty days are none too many for mature consideration of the many matters before you. Finally, at this time of crisis in world affairs when our system of government by consent of the governed is chal- lenged from within and without as never before in its his- tory it behooves all of us public servants to feel more keenly than ever our responsibility to make our democratic system work, and to demonstrate by actions our faith that whatever may be its faults it is still the best system yet devised by man. Barber, Barkeep, Florist, | Flier, Druggist, Railroader, Three Lawyers and Seven Miners in 1'5Ih Legislature {—l_l::p. Ion:: in the By occupation, they're all Legis- lators at present, but the mem- bers of the 15th Territorial Legis- lature come from a widely varied * field of business and professional pursuits. Here they are: FIRST DIVISION ! Senator Henry Roden, Juncnu,l attorney |46 Senator Norman R. (Doc) Walk- | er, Ketchikan, druggist. Rep. Allen Shattuck, Juneau, in- surance. . Rep. James V. Davis, Juneau, transportation and fishing, Rep. John McCormick, Juneau, businessman. Rep. Crystal Snow Jenne, Juneau, florist. SECOND DIVISION Senator O. D. Cochran, Nome, attorney. Senator Leroy M. Sullivan, Nome, attorney. Rep. Howard Lyng, Nome, min- ing. Rep. Frank H. Whaley, flier and miner. Rep. Stuart L. Stangroom, Nome, grocery salesman. Rep. W, Leonard Smith, Nome, field engineer, THIRD DIVISION Senator Edward Coffey, Anchor- age, insurance, Senator Don Carlos Seward, theatre wan. Rep. Harvey J. Smith, Anchor- age, property owner and miner. Rep. H. H. McCutcheon, An- chorage, retired railroad man. Rep. Willlam A. Egan, Valdez, tavern owner. ! Rep. Almer J. Peterson, Anchor- age, attorney. FOURTH DIVISION Senator C. H. (Alabam) LaBoy- teaux, Livengood, miner, Senator Hjalmar Nordale, Fair- banks, hotel owner. | Rep. Leo Rogge, Fairbanks, min- ing superintendent. Rep. Jesse Lander, barber. Rep. Frank Gordon, merchant. Rep., Charles F. Herbert, banks. miner, Nome, G-E Sunlamp gives your Baby all Winter long the vitra-violet that doctors Brownel, fecommend Use a G-E Sunlamp and pro- vide your baby with “Summer Sun” at the flip of a switch— anytime. Buy your lamp on the easy rental plan. GENFRAL §? FLECTRIC SUNLAMPS Alaska Electric Fairbanks, Fairbanks, Fair-