Indianapolis Journal, Volume 53, Number 9, Indianapolis, Marion County, 9 January 1903 — Page 6

O Ttiü II J J I A IM AI' ULIS JU UltiAL, J?1XUAX, dAiUAUI

ISIeEMffll Mmg tf Ute Governor to Ute SkyTlhiil Gsmera laMy

Gentlemen of the Senate and House of Representatives: The Sixty-third General Assembly of Indi ana convenes at a time of universal prosperity. Teace. happiness and contentment more generally prevail than at the convening of any other session of the General Assembly In the history of our commonwealth, and I Join with the people of the State in returning thanks to the elver of all gifts for the generous bounty He has bestowed upon us all. Capital and labor are profitably employed and mutually satisfied; industrial and manufacturing enterprises are converting our resources Into products which are being carried Into every avenue of trade and commerce; the farm and factory are richly productive; railroad construction is opening new territory, and applied electricity la connecting our cities and towns into closo neighborhoods. As a result of your deliberations I bespeak a session fruitful of Just and conservative legislation along the lines of the State's needs. Indiana's foremost position among the States of the Union has largely resulted from the progressive and conservative legislation of the General Asaemblles. You are commissioned directly by the people to ennct laws for their government and protection, and I am sure that you will reflect by your actions the will of the people. Party responsibility attaches to the administration of State affairs, but partisan politics, as a motive, has no place In its management or control. The best politics Is exemplified in fidelity to official duty and the protection of the interests of those whom we serve. Without any abatement of loyalty to our political convictions, let the master motive be one of serving the State by giving It our patriotic services, to the end that Indiana may continue to be one of the most progressive and prosperous States cf the Union. State Finances. The financial condition of the commonwealth Is one that can Justly claim the pride of every good citizen. Each individual taxpayer in Indiana is a stockholder In the great business affairs that so largely form the responsible duties of state administration. Not only in the receipt and disbursement of taxes and fees is there care and judgment to be exercised, but a paramount obligation of loyalty to the re(iutrimpnt!i nf the statutes must be enlorced. Any haphazard, tentative policy of dealing with the finances of the public is a monstrous wrong, and can nut result in extravagance, waste and official scandal. Tho fact that the money in the State's treasury Is the contribution of the people ' for the purpose of good government is, of Itself, sufficient reason why a Jealous guardianship should be associated with its disbursement, and, as a business proposition, there can be no Justification or toleration in not requiring fidelity in accountings, detail in itemization, and a strict construction of the appropriation acts as to the latitude of expenditures. Public fiscal methods should be the exemplar not only of eclectic principles and practices, but In all that is so diversely associated with careful, conservative and cleanly business management. Other States have separate " bureaus and retinues of officers and clerks for insurance, building and loan, banking, lands, railroads and varied departments of governmental oversight, that furnish meager duties and substantial salary lists, but Indiana saves this unnecessary expense by merging under central authority these subordinate divisions, thus not only saving thousands of dollars in superfluous expenses, but giving the public much better nd more methodical service. The incidental factors that have given to the taxrayers substantial records of the admirable and purely business financial status of our beloved State, are liberal appropriations for the maintenance of every state Institution, the practice of economy, uniform fiscal methods, the exclusion of partilmony and waste due to careless discipline, the Identity of the dollar In accounting from purchase to consumption and the em ployment of all surplus revenues to debt reduction instead of permitting the same to needlessly swell the Idle balance in tne treasury. The tax rate in Indiana la one of the lowest cf any of the States of the Union, and when the growing necessities, both as to permanent improvements and yearly

maintenance are taKen into account, was assets of 119,327,212.47. Their deposits on acr.cvcr as light as at present. The State count of savings amounted to J3.08S.86.

revenue ana Denevoient insmuuon evies cf 11 cents are really all that go into the general fund. The school revenue is redistricted on a statutory basjs; the slight rpeclflc levy for the State debt can be t'sed only for Its prescribed purpose, and the 1 2-3 cents- to the educational institutions aggregates the 23 2-3 cents of the State's share of taxes. The average rate In Indiana is about $1.50 on the 1100, so It will be seen the burdens of taxation are local. Permit me to suggest that the problem Involved in the solution of high tax levies Is associated with township, county and city governments. There never was a greater demand for careful and economical business administration of local public trusts than at present. The careless or shiftless handling of public revenues Inevitably produces extravagance and deficits, and in this age of practical economics there Is no room or reason for prodigality, political pensions or selfish InterestThe aggregate taxes of the State revenue and benevolent institutions in 1902 were Ji013.7iS.5O. The amount of fees paid into the treasury by the state officers was 1302.CCS.02. making an aggregate of J2.413.7S3.52. which, with incidental minor collections from receipts and earnings of tho different Institutions of the State, constituted the general fund. The total tax duplicates of the 8:&te is J 1.337.981,41)7; the amount of mortgage exemption is $35,163.200; the arount of delinquent taxes Is J2. 633, 439. 51. 1 especially direct the attention of the legislature to this excessive, delinquency. The legislature of 4837 sought to correct this great wrong In Increasing the county treasurer's commission on delinquent collections from 4 to 6 per cent., but this has not proven entirely efficient. That delinquent taxes can be collected needs only the scan- . ning of settlement sheets in counties where official duty has been performed. Too often the cause for not compelling delinquents to pay Is the fear of political consequence In renomlnatlon or election. If the Legislature, in its wisdom, can enact a remedy It should be done. I suggest that the law row limited to Marion county be applied to the whole State, namely, to allow the county treasurer to pay 50 cents as a demand fee for collecting delinquent taxes on personal property, or for collecting delinquent or poll tax. This law has proven a most efficient means for collecting delinquent taxes from those who own no real estate. The debt-reducing policy has been steadily pursued, and I am gratified to announce that since the last biennial session of the legislature the following payments have been made: June 23. 1901, 3 per cent, school refunding bunds $300,000 Jan. 2. 1902. 3 per cent, school refunding bonds 317,000 July 26. ISO. 3 per cent, school refunding bonds 1,000,000 Jan. 5. 1J03. 3 per cent, school re- . funding bonds 200.000 Total $1,817.000 Of this amount $733,363.34 accrued from the srvclal levy, and the balance, or $1.013.IEU5.66. was derived from the general fund. 1SS5.S59.20 of which being the amount of the war claim for interest and discounts collected from the general government. The Rnnual interest charge now is $35,565. The unpaid balance of the State debt Is $2.67,15.12. which is represented as follows: 3 per cent, refunding bonds, 1SS9..J1. 113.ono.no ZVz per cent, temporary loan, 1X95. 5S3.wo.UO SVa per cent, temporary funding loan. 1S93 500,000.00 5 per cent. Turdue University, lyüö 310,000.00 5 per cent. Indiana University, lv7 lit.OOO.OO State stock certificates 5.615.12 Total J2.6S7.615. 12 Of the above amount Jl.113.0u of 3 ier cent, bonds have the optional clause and are redeemable nt the pleasure of the State; the Jl.oS5.C00 3V4 per cents, cannot be raid until 1310 and are due 1315; the J340.Oi0 per cent, bond. In accordance with the act of Congress requiring the State to perpetually guarantee this bond ami rate of Interest, was by an act of the legislature of isoi (PI 24-35) renewed April 1. 1301. by the Governor and state treasurer for twenty years. The 5 per cent, bond for JMl.ocO due to Indiana L'niversity is also perpetual. bo that the principal of these amounts can never be paid. The State stock certificates ($3.615.12 are Internal Improvement certificates, the Interest on which has ceased, and although the Stato has published far and wide its desire to redeem the same only $!. has been presented In recent years. CO that It Is fair to presume this remaining ftrnount lost. This practically reduces the debt to S2.lfiS.0fi9. I deem It the part of financial wisdom to continue the debt-paying course and retain the present State Ctbt sinking fund levy. The steadfast pur-j-zm of the commonwealth should be to i.ie itself of dbt anil interest and then t:2intain this condition. There Is an ap-

proximate Identity between the individual in debt mortgaged by fixed charges of Interest and the State, which is but the comIosite of its citizenship, with bonds and attendant coupons inexorably sapping tolls from the treasury. The individual free from financial shackles and the commonwealth independent of bonds and bondholders combine both abstract and concrete evidence of prosperous conditions, and relative to the State are inviting to Investments, business enterprise and substantial citizenship. The claim of the State against the federal government for intertst and discounts on its bonds and obligations, made necessary in the recruiting, equipment and maintenance of the volunteer soldiers of Indiana in the war for the Union, was presented to the Treasury Department by Attorney General Taylor and the accounting department of the State and the sum of K"i5.85!).2Q was paid. This amount was immediately applied in liquidating the State debt and was included in the $l.ooo."00 payment on July IS, This claim was an original one on the part of Indiana, and its collection was made possible by congressional action legalizing interest and discounts as a proper charge in the war expenses of the State authorized by the federal government. Its collection was without any fees or costs, the officials of the State presenting and prosecuting it to a successful conclusion. In addition to the e-ervices of the State authorities In this matter the congressional delegation rendered valuable aid In furthering legislation and securing a prompt appropriation for this just, though tardy, reimbursement. I would recommend that the tax levy remain unchanged. With the accruing revenues to the general fund and the fees from the different bureaus of State government there will be ample resources to provide for all the legitimate expenses of the commonwealth, make sufficient appropriation for the maintenance and repairs of our Institutions and keep pace with the growth and necessities of the State in continued

enlargement and construction that from year to year may be necessary. Banks and Trust Companies. Th state banks, trust companies and savings banks are in a flourishing condition. It is a matter of congratulation that these financial agencies of the people are in a position of assured strength and under such careful, conservative management that the public has little fear or alarm as to future conditions. The history of bank ing Institutions In Indiana in the past few years has been one singularly free from experiment or danger. There has been no failure in any of the state banking institutions during the past two years, and no losses have accrued to a single depositor. There are now 114 state banks. They are required to make sworn reports five times each year, and, in addition, are regularly examined at least once a year. The statement of condition on Oct. 31, 1902, showed that the aggregate capital was $4,884.490, with a surplus of $915,443.78. They had bills receivable amounting to $18,S05,135.S6 and deposits amounting to $20,547,906.52. This is the largest volume and the most satisfactory condition of business ever known in the banking history of Indiana. The law ought to be strengthened In that the establishment of branch or collateral banks should not be permitted. At the present time the law Is silent upon this proposition, but there is an Inclination, occasionally, to do a branch banking business as offshoots from a single organisation, which. In my judgment, should not be permitted. There are a very large number of private banks in Indiana. The law treats organizations of this character as copartnerships, and fixes the financial responsibility accordingly. I recommend to the Legislature that the law should definitely fix a capital to be fully paid in cash as a basis for private banks, the minimum amount being 125.000, the same as now provided for In the orKaniaztion of State banks. There has been an increasing number of trust companies organized each year since the law was passed. At present there are thirty-seven. They are uniformly prosper ous and occupy the fiduciary field in their respective locations. For the fiscal year ending Oct. 31, 1902, the trust companies of this State had a capital stock of J1.8G0.00O and a surplus of S465.947.74. They had loans amounting to $11,438,269.52 and total Trust companies are occupying the place of savings banks, becomlne the denosltnrles of persons husbanding small savings, in ad dition to their more legitimate province In the segregation of trust funds. The average rate of Interest paid by these companies for savings is generally 3 per cent, per year, compounded semi-annually. There is a growing tendency on the part of a number of trust companies to do a semi-banking business. The statute is not clear in Its limitations. It should be amended so that they could not invade the field of commercial banking, but should be restricted to the intent of the law, confining their operations to a trust field and not general or commercial banking. There are five savings banks in Indiana, with deposits amounting to J7.812.157. 46 and a surplus of $483,011.03. Their loans on personal security amount to $970,736.40; on mortgages. $4.374.851.52. and on bonds and stocks. $1,320,041.83. The average dividends paid by the savings banks of Indiana to their depositors during the biennial period amounts to $225.000. The Soldiers and Sailors Monument. On the 21st day of October. 1301: the board of control of the state soldiers' and sailors' monument officially reported to the Governor the completion of the monument, after a period of almost fourteen years since ground was first broken for the foundation of the massive shaft. The records show that the entire cost of the monument aggregates $598.318.76. The monument is a source of pride to every citizen of Indiana. It is the greatest soldiers' monument on earth. On the 15th day of May, 1302, this monument was formally dedicated. The Mexican War Veterans, the Grand Army of the Republic, the Spanish-American War Veterans, the Indiana National Guard and other organized military and civic associations, together with a vast concourse of citizens, participated in the dedication. The ceremonies incident to such dedication were worthy of the magnificent memorial to Indiana's heroes of all the wars in which the soldiers of Indiana have participated. By law the battle flags carried by the Indiana soldiery in the war of the rebellion were for the last time taken from their receptacles in the Statehouse and were carried In the great procession by those who had rallied around them In the awful storm of war. From every part of the State patriotic citizens came to witness the ceremonies. Not only officials of Indiana, but officials and representatives of other States united In the solemn rites. Members of every regiment that left Indiana from 1561 to IS60 to help preserve the Union surrounded the tattered flags they once carried in battle. The few remaining numbers of once strong regiments emphasized the truth of how great is the havoc of war. Indiana is justly proud of her great monument, which stands as a perpetual tribute to the heroes, living and dead, who aided In saving the Union. The Shiloh Park Commission. Under the provisions of an act of the legislature of 1301, creating the Shiloh National Military Park Commission, for the purpose of properly establishing monuments commemorating the part Indiana's soldiers took in the battle of Shiloh during the war of the rebellion, I appointed as members of the commission Thomas li. Wood. John. V. Wildman. Edwin Nlcar, George K. Gardiner, llenjamln Hütchens and Nicholas Ensley. The report of the commission shows that their labors have been industriously and faithfully prosecuted. Twenty-one monuments were contracted for, and it was expected that the dedicatory services would be held Sept. 24 and 25 of last year, but unavoidable dey Incident to transportation of materials, has delayed the work and the dedication has not now been definitely decided upon. Because of this delay, the $21.000 approprlated for the monuments lapsed into the treasury at the close of the fiscal year, and also $1.923.68 of the $4.000 appropriated for expenses. I recommend that these unexpended balances be reappropriated in order that the commission may complete the purpose of their labors. Xnncy Hanks Lincoln Monument. On the 1st day of October. 1302, it was my pleasure and honor to accept, on behalf of the people of Indiana, a granite monument erected at the grave of Nancy Hanks Lincoln, mother of the martyred President, at Lincoln City, Spencer county. The memorial was the free-will offering of Mr. J. S. Culver, of Springfield. III., and the dedicatory services were In keeping with the character of the pioneer mother who gave to the world a name synonymous with human liberty a son of humble origin who achieved immortal fame. As a mark of esteem of Mr. Culver's kind thoughtfulnese and generous deed, I recom mend that the General Assembly, by joint resolution or otherwise, express apprecia

tion of the donor's munificence, likewise a vote of thanks to the commissioners and citiztns of Spencer county for land donated surrounding the last resting place of the mother of the great emancipator. I further recommend that suitable provision be made by appropriation to put the grounds in proper order and maintain same. State Lahor Commission. The State ' labor commission, operating under the wise and beneficent law created by the Sixty-first General Assembly, has accomplished great good, and the work so Industriously and conscientiously performed by the commissioners, Messrs. L. P. McCormack and H. F. Schmid. has been of euch a character as to attract favorable at

tention throughout the country. During the past two years this commission has made satisfactory adjustment of forty-two labor controversies. Involving 202 firms and 10,000 employes, not including nearly a score of boycotts lifted during that period. For various reasons, a large part of the work of this commission, such as advising witn employes, drawing up wage agreements and doing other acts for the promotion of industrial harmony, does not become a mat ter of public record, but there is ample proof that the good results accomplished far exceed the expectations of the framers of the law. In pursuing investigations and acting in the capacity of arbiters, the com missioners have proceeded with admirable conservatism, basing their rule of -conduct on the broad principle that the rights of all persons concerned in a controversy are entitled to unbiased consideration. 1 am convinced that no other State In the Union is so fortunately situated as Indiana with reference to the amicable relations between the employing and the working classes, nor is there to be found anywhere better laws for the protection of these respective Interests. The contract system especially, as It relates to the coal industry, has proved satisfactory, and experience has shown that it is one of the most effective means yet deviled for maintaining harmonious relations between employers and employes. Recently a request was made to me by the president of the United Mine Workers of America for a statement concerning the operations of the Indiana law bearing upon the arbitration of labor troubles by the intervention of commissioners duly authorized to take the initiative, and it was my pleasure to submit a statement for the con sideration of the commission appointed by the President to investigate the lamentable anthracite coal strike, which. I dare say, will have the jrood effect of creatine even more favor in behalf of the advanced stand taken by the lawmaking power of Indiana with reference to one of the gravest problems that has ever confronted the Ameri can people. It should be the constant aim of all right-thinking men to encourage. by every possible means, the growth of tolerance between man and man, regardless of class or station, especially In the re lations of employers and employes. Their interests being mutual, there is no valid reason why any feeling of enmity or re sentment should exist. The Indiana plan. which provides that men disposed to strike shall continue at work, pending arbitration through the medium of accredited repre sentatives, is most highly commendable because It Insures to the families of workingmen maintenance that would be denied them under a condition of general suspen sion of labor during the period of efforts at settlement, as recently witnessed in Penn sylvania. Mine Inspection. The report of the mine Inspector exhibits the work most Intelligently done in that department. The mines of Indiana are in creasing in number and there are employed therein In this State about 13,000 miners. I am glad to report that never in the min ing industry of Indiana nave so many mines been in operation or so many miners at work. It is further a matter of congrat ulation that none of our miners are out on a strike, but that their wages have been gradually increased, and the material pros perity of these miners was never so gen eral or generous as to-day. Mining is one of the great Industries of the State and Is constantly growing. The working condi tions have been greatly improved and I commend the work of the labor commission and the mine Inspector and his deputies in their efforts to assist In the Improvement of working conditions and the material prosperity of this great body of workmen In our State. . . l-'orestry. The subject of forestry is now engaging the earnest attention and consideration of practical men, as it Is realized that unless Immediate and active steps are taken to preserve the timber now growing and to provide for future needs by forest propagation it is but a matter of a few years until the timber supply of the State will be entirely exhausted. The attention of the members of this General Assembly Is directed to this im portant matter, and It is recommended that forestry be given careful thought and de liberation, to the end that ample means may be provided to enable the forestry commission to Intelligently prosecute prac tical forestry work as intended by the law creating the department. The future value of forestry, as a prac tical business industry, will have to be de termined largely by experiment in order to demonstrate to the people the financial worth of the institution. Donrd of State Charities. Tho work of the Board of State Charities is of inestimable value. Its supervision over the benevolent, charitable and correc tional Institutions Is of special value and adds materially to the efficient, humane and economical management of these institu tions. I especially commend the services of Mr. Amos W. Butler, secretary of the Board of State Charities, who, in a signal manner, has been faithful to the responsi ble duties of his position. State Board of Tax Commissioners. Experience has demonstrated that the amendments to the tax law made by the Legislature of 1301. in that the assessment of street and electric railroads, intercounty gas and pipe lines, etc., is now delegated to the State Board of Tax Commissioners, have given more uniformity to values, be cause of the merging of this class of prop erty within the province of a single taxing authority. It has been the aim of the State Hoard of Tax Commissioners to equalize the value of corporate property in con formity with the revenue law of the State so that the physical elements of the prop erty and earning capacity, as demonstrated by receipts and operating expenses, would place each corporation upon such a basis that it would pay to the State in proportion to its teal value. The assessment and equal ization of nearly $200,000.000 of values Is one of the greatest responsibilities devolving upon the public duty of any of the bureaus of this Commonwealth, and It requires a fidelity and judgment that, from the dif ferent standpoints of basis, can deduce an assessment that will be alike fair and equitable both to. the parties in interest as investors and the State from whom the parent franchise was obtained. The statute of 1301 specifically taxing transportation companies should be so amended that It would be treated as an excise tax or license payable directly to the treasurer of state. These companies do not traverse, generally, the different counties of Indiana, but operate from east to west on trunk lines, so that the values are distributed upon the records of quite a number of counties, but in such minor amounts as to render the revenue to any one county insignificant. The statute authorizing the annual meeting of the county assessors has been of much benefit In that it has helped to equal ize values In the assessment of personal property, and by tne interchange of Infor mation between counties there has re sulted the discovery of quite an amount of omitted property. The time of county board3 of review ought to be extended so that where bus! ness requires they may remain in session forty-five days. Instead of the present limit. There are a number of counties In Indiana where the Interests are so large that Justice cannot be done either the State, individual or corporation within the present prescribed term. The larger counties should have more time than the statute now pre scribes, and 1 would suggest that the limit be fixed at forty-five days at the option of the nirterent ooards of review based on the amount of business to be transacted. Creation of Bureau. I consider it Is timely to direct attention to the fact that in Indiana we have been creating bureaus at a prodigious rate; some desirable, others of small practical conse quence, and still others that are next to needless. The result of this tendency to a bureaucracy is especially pernicious in that the creation of a new department marks only the beginning of demands on the treasury for "more. Additional deputies. additional excuses for spending money in order to provide preferred persons with employment, are matters with which each succeeding Legislature is called upon to consider in connection with general and specific appropriations. While we should endeavor to lend encouragement to everv movement honestly designed to be helpful

to public Interests, we cannot afford to be unmindful of the rights of citizens who are

taxed for the support of such departments or bureaus, especially in cases where the preponderance of evidence indicates mat private gain is the mctive rather than righteous regard for the public weal. Legislative Committee. The work of the legislative committee. while being a new departure, is one of the most valuable reforms authorized by statute. Its labors are very arduous and comprehend in scope every feature of Institutional necessity and management. The personal inspection of buildings and grounds, examination of books and needs, is embodied in recommendations to the General Assembly. In accordance with the statute, I appointed as the committee to make a report to the Legislature Senator Fremont Good wine, Bepresentatives Henry W. Marshall and Joseph M. Cravens, and I commend their work and conclusions. Nonpartisan Ilonrils. Under the law all of the boards of the penal, correctional and benevolent Institutions are nonpartisan, excepting that of the Indiana State Prison. Becently, In filling a vacancy on this board, created by resigna tion, I made this board also nonpartisan. The State Institutions. The public institutions of Indiana, for the support of which the State makes such liberal provision, are to be commended for their conditions of general excellence. The boards of management are carrying into effect the admirable provisions of law whereby the merit system, humano methods and business detail are enforced, thus securing the very best administration in the discharge of all the multiplied duties and cares, and guarding expenditures without narrow restrictions, but within lines or prudence and econemy. There are no defi cits to be considered by this General Assembly. Insane Convict. The prorer care of the insane convicts has. I believe, been satisfactorily solved. There tad been an embarrassing condition at the Indiana Prison because of the num ber of Insane inmates, with no place for detention except in the prison cells. The board of managers and warden Reid of that institution, after careful investigation. provided for their care in a ward connected with the hospital, which has proven satis factory, and 1 do not believe any legisla tion is necessary at this time. The Number and Pay of Members of State Board. The various boards In control of the state institutions are, by law. composed of mem bers varying in number. Most of these boards have three members, but some have four, five, eight and nine members. The members of one-half of the boards receive as compensation $300 per annum, and ex penses not exceeding $100. Three of them receive $500 per annum by law and one the same amount by appropriation, although the law provides but $160 per annum. One receives $5 per diem and actual expenses, while cne receives same pay as provided for members of the Legislature. Another receives mileage and per diem. I recom mend that there be a uniformity in tho number of members composing the boards and also as to the compensation. Homes for the Children Warda of the State. The great value to the State derived from the existing law which authorizes the appointment of agents to look after the wards of the State who are released from public institutions is universally rec ognized, as shown in the supervision of dependent children, of the men from the Reformatory and the boys from the lieform School. Orphan asylums of Indiana. I both public and private, have seen the results of thb work and are now turning their attention to the finding of homes for I the children under their care. Provision should be made for such agents to secure places for and to exercise con stant supervision over those taken from the Soldiers and Sailors Orphans Home, and also from the Industrial School for Girls. - This t will, without doubt, increase the number of those who will successfully go Into life, and decrease, as a consequence, the cost of maintaining the institutions. What these children need is the influences of a good home. Home life Is better than institutional life, and I recommend that such institutions be authorized to employ an agent or agents, with proper duties and powers of selecting places for and exercis ing watchrul care over children from the Soldiers' and Sailors Orphans Home and the Industrial School for Girls, and that proper additional appropriation be made tnereror. Institutional Emergency Fond. The Governor's Institutional Emergency Fund carries an appropriation of $30.000 an nually to be at the disposal of the chief executive for emergency uses as are Inevitable in connection with the State Institutions. It Is a prudent precaution because of the liability of fires, cyclones and omissions from the regular appropriation act. and I heartily Indorse the continuation of this Item, 'there was a balance reverted to the treasury from this fund, for the fiscal year 1901, of $27,447.03, and for the past fiscal year, s20.5ys.fa. Of the amounts ex pended, $3,108.67 was for the Indiana Re formatory. The new cell-house had been completed before the regular appropriation was available, and. to expedite furnish ings, I advanced the above amount from this fund. The regular appropriation was not used and lapsed Into the treasury. Be cause of a cyclone last spring, the grounds and buildings of the Sollders Orphans' Home at Knlghtstown were damaged, and I paid on this account $268.51. The appropriation for a new building at the Eastern Hospital for the Insane was found to be inade quate. The Board of Trustees and superin tendent, before contract was let, conferred with the chief executive, and rather than delay the bullding, I paid $3.259.30 from thla fund, believing, with the Board of Trustees. that it was wise business judgment to do this rather than delay erection, awaiting a specific appropriation from this Legisla ture. I discovered, after the adjournment of the Legislature of 1901, that In reporting the de ficiencies to that legislature by the superintendent of the Feeble Minded Institute at Fort Wayne, that there had been purposely omitted $5,317.87 for materials furnished in the building known as Colonla. Accompanied by the attorney general and auditor of State, I made an exhaustive investigation of the causes for this deficiency and found that It was being nursed by the superin tendent, without the knowledge of the board, with the intent of being reimbursed from an appropriation made by the last General Assembly for other specific pur poses. The investigations developed that this deficiency was being carried in the shape of notes and due bills with the guar antee of the superintendent that payment would be made with Interest from the said appropriation. The law would not admit of any such payment. There was no ques tion of loss to the State on account of the materials furnished, but the principle that would carry an unauthorized indebtedness with the expectation of payment from an appropriation that did not contemplate this expenditure was in every way pernicious. I have accordingly paid from my emergency fund this amount less Interest and carrying charges. Survey of Knnknkee Lands. By the gradual lowering of the water of the Kankakee ba?ln and the narrowing of the Kankakee river a large amount of land has been redeemed from overflow. Much of this land has never been surveyed, and at the last session of the General Assembly a provision was Inserted In the ap propriation act authorizing me to appoint a competent surveyor to run tne levels along the Kankakee river from the Illinois State line to the crossing of the Kankakee river by the Pittsburg, Fort Wayne & Chi cago itauroad. Also to survey the swamp. lands belonging to the State and located in the counties lying In the basin of the Kankakee river. In accordance with such authority I appointed Mr. George W. Parks, of Lafayette, who -has made an excellent survey with plats, profiles and blue prints. The work to be done was much more extensive than at first supposed, and the $1.0u0 appropriated was not sufficient to pay for the entire work. 1 took the responsibility of directing the surveyor to proceed with the survey, and have paid Mr. Parks $30 out of the civil contingent fund. It will require about $1.0i0 more to pay all expenses necessarily Incurred and to be incurred in carrying out the purpose of the law. From the report of the surveyor it appears that there are about 9.000 acres of land within the meander lines that presumabljr belong to the State, some of which certainly does, and has become valuable. Convict Labor. Some time ago I Invited representatives of organized labor to consider with me the subject of convist labor. We visited the State Prison and the Indiana Reformatory In order that the representatives of labor might for themselves see and Investigate

our system of dealing with the subject. I also Interested gentlemen engaged in manu

facturing and further selected one memrer of the board of managers of the State Prison and of the Reformatory, requesting them all to give the subject thought, gath er Information and öfter suggestions as how best to solve the problem. A few weeks ago the matter was discussed In conference with me by all the said representatives. No satisfactory substitute for the present system was decided upon. It is a question of large proportions, and many elements enter Into it. I submit for your consideration the following report from the Board of State Charities: "The question of convict labor is one of the several features of the prison prob lem. The purpose of a prison is to protect society by confining the prisoner and to reform him if possible. Work is one of the necessary things with which he must be supplied. Other essentials are food. water, clothing, shelter and medical treat ment. "Th-3 solution of. the convict labor prob lem In so far as it relates to Indiana is one which Is now pressing. The contracts at the Slate Prison will expire in UctoDer, 1901; those at te Beformatory through the spring and early summer of 1906. It Is Im perative, then, that the coming Legislature shall settle this question In so far as it relates to the State Prison. Under the present law no more contracts for convict labor can be made. What Khali we do? "There are three recognized systems for the employment of convictsthe lease" system, the contract system and the public ac count system. The two latter are each represented by two different types. The contract system may be either for a stipu lated wage per day or at an agreed price for each piece of work done. The latter is called the piece price plan. The public ac count system is also conducted In two ways, in one the convicts are worked by the State, which furnishes the capital and disposes of the product to the public the same as any other manufacturer. This sys tem is generally termed 'state account.' The other is a more restricted form, in which the State employs the men in Itsown factories and furnishes the capital, but restricts the sale of the product to the public institutions and political divisions of tne commonwealth. "The lease system Is that which is in vogue principally throughout the South. The convicts are leased to the highest bid der, wno may or may not furnish officers to guard them. They are largely employed upon public works and plantations. The abuses of the lease system have been no torious, and the sentiment of the people is becoming aroused to the undesirabilitv of having convicts employed publicly under tne gaze or all passing until one State after another is abandoning this system. At tempts nave been made In States in the North to employ convicts upon roads and other public works, but this has uniformly proven unsatisfactory. The inclement weather, the expense of transporting, hous ing and guarding the men and the fact that It is contrary to public sense to have persons in the convict garb exposed to public view, as well as local protests against their employment for various local reasons, have all combined to render such use of the convicts impracticable. Still more, such em ployment is degrading rather than uplift ing. "Different States have at one time or an other tried the public account system. In a few institutions it has proven fairly satisractory, out generally it has not. Illinois tried it for a number of years, and the legislative committee appointed to invest!gate the system reported a loss during the lour years and five months management of $314,212. The committee further said: 'It would be a measure of economy for the State, to feed, guard and clothe the convicts by direct appropriation and leave the labor unemployed rather than to engage in manufacturing. It is our understanding that the state prison of Minnesota has two industries one the manufacture of binder twine, run on public account, the other the manufacture of. shoes contracted on the piece price plan. This institution has been in good hands and has been successful financially. We are informed that Kansas. xsorth Dakota and Canada each tried the manufacture of binder twine on public ac count: that the results have not been so satisfactory In any of these cases, and that Canada has decided to ouit the business. Workhouses in Cleveland, Toledo and else where have been conducted on the public account plan with greater or less success financially. In Massachusetts, under the public account system, the prisons and reformatory manufacture good3 which are sold first to the Institutions of the State. and any surplus may be disposed of to the public. New York has adopted the state use system, which has been in operation for nve years, under it the prisons manufacture goods for the use of the institu tions and lesser divisions of the State. They can sell to no one else. "The system was experimental In New York. At first there were objections from some of the labor interests to the prisons doing certain kinds of work, which resulted In the typographical unions securing an amendment to- the law prohibiting them doing much of the public printing. In the attempt to frame a lnw to establish a theoretical thing, without any pervious experlence to guide, mistakes were made. as was to be expected, and limitations and restrictions were imposed which interfered with the proper operation of the law. While amendments have been made, and it is yet, after five years' operation, vari ously reported as satisfactory or unsatis factory, depending upon the persons from whom the information is received, those who have Investigated the system as illus trated there do not feel yet like giving it their approval. liven ir it should work out fairly satisfactorily under a definite law, by persons who are continued in office sufficiently long to establish a satisfactory system, they feel there Is tho continual danger of the opposition of any labor in terest which may feel itself aggrieved, or of politicians to secure a desired end, or of amendments to the law which would ser iously interfere with Its success. "The other side of the question is that of those in charge of Institutions which are supplied with these prison made goods. Almost uniformly they are strong In their criticism of the law, stating, it is said. that the goods received are inferior and cost more than they would if bought on the market; that delays are long and fre quent, and that at times when goods are received they are not what is desired. It is said that the unfortunate public wards who are cared for in other institutions, are discriminated against by the operations of this system. "That In use in Massachusetts seems to be the most satisfactory of the public ac count t-ystem. It will be well for us to study it in connection with the New York plan, and, possibly from them both we may learn something that will be to our advantage. "The existing law in Indiana, so far as the State Prison is concerned, restricts the number of men employed to practically half the population, the number on any one contract to one hundred, and the time to eight hours a day. It is perhaps the best effort at restricting the contract system that has been attempted. The conditions existing in our State are more satisfactory. we are informed by students of the labor problem, than in any of our surrounding States, vv 1th the end of the contracts at the Reformatory at JefTersonville, the law providing for the proper education and training of the young men in that institution should be fully enforced. Thl3 will keep them employed, and at the same time teach tl.em that by which they can earn their living when they go forth, and further, will relieve the institution of the evils of the contract system. No reform atory on do its proper work and have Its Inmates employed upon contracts. There fore, the only serious question that comes before us at thu time is the best method of employment at the State Prison. Inasmnch as there has been no satisfactory solution of the convict labor problem and as certain States are experimenting in that direction, would it. not be wiser for us to extend cur present law-, so that conditions may remain substantially as they are at the State Prison for a few years until some satisfactory solution has been had. without the effort or expense of conducting what may io5iiily be an unsatisfactory and unprofitable experiment. Perhaps the existing law might be amended by providing that some of the remainder of the population not employed on contracts might be utilized to test for ourselves the public account system. Municipal nntl School Corporations. There Is a continuing friction between municipal and school corporations so far as the constitutional limit of bonded debt is concerned. Under the operations of the present law the municipal government can cover the full statutory limit of debt and so can the school corporation. The line of distinction is not as clear In the statute as it should be, and I earnestly recommend that the General Assembly amend the law by making definite provision that there can not be incurred by municipal and school corporations combined and debt beyond the present constitutional limit. In this connectlon I would sugest that hereafter bond issues by county, municipal or school

boards, or by the State, can only bo made with a provision for optional payment after a period of ten years from date of issue. Also, in this connection. I suggest your earnest consideration of the proposition of exempting all State, county and municipal bonds from taxation. As the law now stands, all public property is exempt from taxation and these bonds being the public property of the public corporations of Indiana, it would seem appropriate that such obligations should not be taxed. I make this as a suggestion rather than a rec

ommendation. 1 do. however, desire to emphatically approve the policy of constantly and as rapidly as possible, paying off the public obligations, and as far as possible restrict the issuance of new obliga tions by any of the public corporations 01 Indiana. Perhaps there is no pudiic evil to-dav franeht with so srreat injury to the public Interests as the ready Issuance of State, county of municipal bonds. e should be a debt-paying, and not a debtcreating State. We should set our faces against the issuance of additional bonded obligations. Cities and counties, as well as the State, ought not to mortgage tneir future. I believe the people of this commonwealth most heartily approve of the constitutional restrictions against increasing the public debt. The combined school and civil debts of all public corporations should not exceed the 2 per cent, limitation fixed by the Constitution. Fire Lonnrii and Insurance. One of the utilities most intimately as sociated with our citizenship is that of insurance. I am pleased to say to you that the stigma of Indiana's being the home of "wild-cat" insurance has been sub stantially removed. The assessment law of 18S3 should be repealed and statutes plain and direct enacted that will prevent life Insurance by shares or bearing the taint of "graveyard Insurance. Assessment lnsurance, other than fraternal, has been the source of Inestimable loss, deception and disappointment, and the time must soon come, If It has not already arrived, tor the State to add greater safeguards. I recommend the enactment of a fire marshal law, modeled after that of the State of Massachusetts. The fire loss is directly responsible for excessive premiums. There Is Just cause for complaint because of high schedules, but with a dally connagration loss of $400.000 It can be readily seen that rates to maintain solvent indemnity must be on a parity. A comparison of the fire insurance reports of Indiana and other States for three years past is a compendium of losses that has severely tried the stabillty. of many of the standard companies, and driven into liquidation or reinsurance a number of reputable and conservatively managed organizations, in states wnere fire marshal laws have been enacted better conditions prevail, and when these laws are general fire losses can. but be less and premiums thereby lowered. A fire marshal statute, properly enrorced, win decrease the loss ratio in fire insurance. To require bv law that property shall be kept In an Insurable condition, to officially investigate and control building construction, to pursue and punish incendiarism, to Investigate causes and carelessness, are the general remedies sought to be applied in the fire marshal legislation of recent years, inc revenue accruing to the State from Insurance fees and taxes last year was $279.S85.74. and It is due the Insured and insurer mat laws of reciprocal benefit shall be passed, especially when the effect will cheapen premiums. ... The law in relation to ine speciai-cuai in companies should be amended to require State supervision ana examination. u should be a penal offense to solicit insurance for an unauthorized company. The evil of placing irresponsible insurance by correspondence cannot be. reached by State statute, but congressional legislation bear ing on frauds will. It is nopea, soon oeprlve these worthless corporations of the use of the mails. I suggest the laws be so strenethened as to prevent the debenture. so-called co-operative investment, mining, oil and kindred alluring concerns tnat cannot comply with. an arbitrary standard of statutory requirement, from imposing upon the public. In these times of universal prosperity there is a multiplication 01 worthless combinations preying upon the credulity and confidence of the ieople. and, while vigilance and heroic action has in large measure prevented tneir invasion 01 Indiana, it is only by explicit statutes and severe penalties that the future can cer tainly be closed against their open aepreaattons. I also recommend that the statute be broadened as to the class of securities foreign Insurance companies shall possess In order to be admitted to Indiana. It should be amended so as to Include municipal and county bonds of other States. Perfectly solvent and reputable fire companies have withdrawn during the past two years, oecause they could not profitably purchase and retain the statutory securities now re quired. The ecurity to our people would be as standard, while the facilities för fire indemnity would be increased. Governor Residence. To the last General Assembly was sub mitted a bill providing for a residence for the Governor. At my request the same was withdrawn. My. experience in securing what I deemed a suitable home has been unsatisfactory, and I am firm in the belief that a residence should be provided for the chief executive of the State, and one In keeping with the dignity of the office. I earnestly recommend legislation that will provide for the purchase or erection ana furnishing 01 a residence to De occupiea Dy the chief executive of the State. The heads of all the State's institutions, educational excepted, are provided with residence. maintenance for family and attendants, while the Governor must provide all these from his salary and allowance for rent. Many of the States make suitable provision for their Governors in the way of house and furnishings, and this State should have an official residence for Its Governor, where its citizens may, at any time, find the chief executive. Louisiana Purchase Exposition. On the 21st day of February, 1901. I communicated to the Sixty-second General Assembly a special message conveying the information that the Congress of the United States had appropriated the sum of $5,000,000 as a means of promoting the proposed Louisiana Purchase Exposition to be held in the city of St. Louis in 1904. The original intention was to have the exposir tlon held during the year 1903, but, after much deliberation, an arrangement was agreed to by the management, with the consent ot Congress, which postponed the opening one year. At the time my special message was communicated to the Legislature other measures were pending look ing to appropriations for the International Exposition at Charleston, S. C, and the Pan-American Exposition at Buffalo, and. owing to these unusual conditions, the Gen eral Assembly deemed it expedient to decline to take favorable action with reference to either of the three enterprises then appealing for recognition. Existing condi tions are less embarrassing. There is but one great exposition in prospect, ahd that is the world's fair to be held in St. Louis next year. There is abundant assurance that it will be one of the greatest achievements of its kind ever undertaken in this country or elsewhere. Primarily It is designed to commemorate the purchase by the united states or wnat wa. originally known aa "Louisiana Territory a territory so vast that it is now a teeming empire of Itself, enjoying all the wondrous advantages vouchsafed by a republican form of government. The mere fact that the Na tional Congress has voted to expend many millions in aid of the enterprise is assur ance that it is worthy of full faith and confidence. The State of Missouri and the city of St. Louis have guaranteed many more millions, and there is no doubt but that the exposition will surpass any that have preceded it, either in this country or Europe. The director of works estimates that the great fair will have cost $30,000,000 before the opening day, and the total expen ditures will probably aggregate $10,000.000, or about double the amount expended in producing the splendid Columbian Exposi tion at Chicago, isy reason of certain con ditions imposed by the federal government it became necessary for the St. Louis managers to allot sites for state building before the close of the year 1902, and. being officially advised that such allotments would be made during the closing davs of October, I deemed it expedient to appoint a provisional committee representing the two houses of the Indiana General Assembly to De present on mai occasion to safeguard the State's Interest in anticipation of nosi. ble favorable action at this session concerning an appropriation and the creation of a commlsMon. I he committee, as annointed. consisted of Lieutenant Governor Gilbert and Senator Fleming, of the Senate, and jteprescntaiives rsiacg and Stechhan. of the House. Mr. Stechhan was unavoidably prevented from attending, but Messrs. Gilbert. Fleming and Slack ably performed the duty assigned them, accepting a site for an Indiana building on the exposition grounds and making a formal report thereof to my office. Inasmuch as early action Is necessary. If the subject Is to receive favorable conslderatlon. I respectfully recommend that a

special Joint committee be appointed as early as practicable to viit St. Louis for the purpose of securing all necessary data for the information of the General Asyembly, said committee to consist of the Lieutenant Governor and two members of the Senate, the speaker of the House and three members thereof, the members in each cate to be appointed by the presiding officer of each branch, respectively. With such facts as the commltu may assemble and present In comprehensive form, your honorable bodies will be enabled to act intelligently and in behalf of what your deliberate Judgment directs as being in the interest of the people: Votlntt Machines. Admitting the so-called Australian system of conducting elections to be a vast improvement over previous methods, the conclusion is forced upon us that it is so fax from being satisfactory that it becomes our bounden duty to adopt measures providing for radical betterments. Experience has demonstrated the fact that the election system as it now exists In this State results In the loss of too many ballots by improper marking which were honestly cast and which in full Justice should be counted. In providing safeguards against fraud the present law goes to the extent of affording opportunities for the Introduction of technical objections which are frequently used, unfairly for the disqualification of electors. This condition should not be permitted to further exist. It is a fundamental principle of our government that the rights of men are equal, but the theory cannot be accepted as effective as long as we permit any considerable number of voters to be subjected to disfranchisement by election boards invalidating ballots through the Instrumentality of trivialities. The stability of republican institutions depends upon the power of the people as expressed at the polls, and every man privileged to cast a ballot should be lirotected in the fullest measure in the exercise of a right which is . likewise his patriotic duty.

The Sixty-second General Assembly created what is known as a "voting machine commission." the report of which will b submitted for your formal consideration, and I trust It will receive your earnest attention. We are confronted with abundant proof that the "Australian system." while it is in many respects superior to former methods, is lamentably deficient In the respect that it permits of the practical disfranchisement of an astonishingly large number of electors whose ballots should be counted as they were intended to be by those who cast them. The efficacy of the voting machine has been tested, and It is the consensus of opinion among those who have given the subject thorough consideration that It guarantees more satisfactory results than may be hoped to be obtained by any other method. The great expense involved in the proposed machine system of voting is the only objection, but I am nevertheless inclined to the belief that the matter of cost where reasonable concessions can be secured should not stand as the sole obstacle against any movement designed in good faith to protect the people to the utmost degree in the exercise of their Inalienable rights. An Aggressive Evil. I consider it the duty of this General Assembly to consider carefully the lottery evil, ar It exists in many forms, especially with reference to so-called "guessing contests" conducted by certain newspapers of metropolitan pretensions published outside the confines of Indiana. Years ago tho lottery evil became so manifestly harmful that the Congress of the United States was forced to resort to the most drastic measures for its suppression. It is an insidious form of vice, and as promoted by newspapers of large circulation it permeates circles that could not be reached through any other medium. These "guessing contests." as a rule, do not differ materially from lotteries, and they have become such. a menace that they cannot be regarded otherwise than demoralizing, especially so on account of the fact that they are patronized largely by persons who can 111 afford to spare money thrown away in taking chances against manifestly unfair odds. It is the duty of the State to provide proper safeguards for Its citizens, ar.tl. in my Judgment, provision should be made 'by statute. If possible, to prohibit the sale or circulation in Indiana of newspapers or other publications engaged directly or Indirectly in promoting lottery schemes undtr whatever guise or pretense. The Prlie-FJght Evil. I respectfully submit to your honorable bodies the necessity for the enactment of more clearly defined laws and more drastlo measures for the suppression of prize fights and the regulation of so-called boxing con tests. The existing law, as Interpreted by the Supreme Court, defines a prize fight according to the definition given in the dictionaries; but the spirit of the law is being constantly violated by promoters of alleged "athletic sports," when, in fact, exhibitions conducted under the ptetense of "manly art, are nothing less than contests of brute force. Legitimate athletics are worthy of commendation, but it is a lament able fact that many persons persistently take advantage of the existing law for the purpose of promoting lawlessness. Pugilism flourishes under the pretext of scientifia boxing, and peace officers, as well as courts, appear to be helpless In the matter of es tablishing legal distinction. Prize fighting. whether conducted frankly or covertly, is debasing and demoralizing. It is prompted by brutal instincts, and. on the whole. It Is so utterly disreputable that every pos sible means should be adopted for the sup pression of the manifold evils that attend the dishonored profession of pugilism, prac ticed under various hypocritical pretexts, but all alike designed to prostitute manhood, breed criminals, and cast the law in contempt. I believe it to be the duty of this Legislature to take action in the premises which will insure the public protection against disgraceful exhibitions of brutality, under whatever guise It is proposed that they be given. Codification of Corporation Laws. Notwithstanding the vigorous efforts of the auditor of state and the attorney general, who have succeeded, within the Uft four years, in driving out scores of fraudulenf companies organized extensively to sell debentures, bonds, stocks and memberships in all kinds of co-operative schemes, it has been Impossible, under the existing law, to eradicate the entire evil of the sale of such stocks, bonds, memberships and certificates to Inncent purchasers. While I believe this State is as free, or more so, than most States, from fraudulent concerns, still the law should be strengthened so as to enable the state and county officers to prevent these concerns from doing business within our borders. The corporation laws of Indiana should be codified so that each corporation may be organized under a law, or section of a law. by itself, and the right, powers and duties should be clearly defined. No corporation should be permitted to Incorporate in Indiana with & capital stock published to the public unless such capital stock has been paid In cash, or its equivalent, such payment to be made within a reasonable time after such articles are filed. Adventurers should not be permitted to carry on a business in this State. Adequate capital, fully paid up. thould be the rule. In this period of great business activity and speculation irresponsible companies are likely to Increase and are increasing greatly in number, and a confiding public is the ready but unwilling victim. I suggest for your consideration the appointment of a commission to codify all the corporation laws of Indiana, to be submitted at the next session of the General Assembly. Public Dalldlna-s and Grounds. From time to time requests arc made to the custodian for the use of the legislative chambers by various bodies desiring to hold conventions there'n. Some of these requests come from organizations having more or less connection with the State government, but many more requests are from organizations having no official connection with the State. The halls of the Senate and House have been newly furnished, and It remains for your honorable bodies to determine definitely for what purpose, if any. other than legislative, these halls shalF be used. Another matter now pressing for action is the right of railroads and Interurban lines passing through State grounds. These companies are asserting the right under existing laws to condemn a right of wajr through the grounds of the State devoted to State purposes. This question should at once be finally determined by law. In nome cases the use of prison grounds for railroad or Interurban lines would practically destroy the value of such grounds for prison purposes. I advise that action be taken repealing or amending existing laws so as to prevent any rauroau. street railway or interurban railway company from condemning a right of way into or through any ground owned by the State without authority therefor properly given by duly designated State officers or boards, as mar be determined. sale of Concealed Weapons. Crime In Indiana. I am sure, has never beea more vigorously prosecuted than It U