Indianapolis Times, Indianapolis, Marion County, 5 January 1939 — Page 10

Text of Governor Townsend's

e text of Governor Town's message to the Legisature today follows: is a tribute to the enduring ength of democracy and the faith the American people that we are iting today to weigh the probs of several million people. we watch the strange and ter< g march of antidemocratic orces oppressing innocent people in ther lands, we have much to oe

kful for today. : Since 1816 the people of Indiana ave sent their representatives to ‘the Legislature. During these years ocial and economic systems have changed; depressions, droughts and oods have been visited upon us; political fortunes have risen and en, and yet the people have alyays been able to govern themselves. ey have never abandoned their aith in democracy. % ere have been times when men’s aith in democracy wavered, but always God has given us strength and courage to make democracy work.

DEMOCRACY ON TEST

; mocracy is on test today. If you and I permit bitter jealousies and suspicions to dissipate the forces of democracy, we will have riously weakened our own system of government. The fortunes of any litical party are not as important the survival of a democracy which cares for the needs of its people. We must not crucify the people of our democracy on the cross of litical ambitions. 'T do not believe we can afford, either, to turn back the clock and ry to govern by the social philosophies of a quarter century ago. hether we like it or not, our soety has - undergone profound anges which no amount of wishfu thinking can alter, You and TI, as officers of government, have a rious responsibility to the people of Indiana. Their welfare must be our first consideration.

WELFARE AND UNEMPLOYMENT

| The greatest problem of my ad-

id ‘E

is that they require a great deal of serious study and perhaps some fundamental changes. Direct relief is not sufficient to maintain what we like to refer to as a decent American or Hoosier standard of living, and under the present system many townships are approaching a financial crisis. I'am not convinced that our assistance to the aged, the blind and the dependent children does not| need some liberal adjustments. * The present system of security for [the underprivileged was built up ‘from direct relief, and new programs were adopted as the need became apparent. :

URGES RELIEF STUDY

1 believe we must now make a cOordinated study of our relief problem in its entirety. In other words, we | should think of permanent coordination and adjustment of our system of security for that portion of our population in need of public assistance. Congress is expected to

Governor Townsend

amounted to only 4.3 per cent of his take some action on the expansion cash Be Inerease. of the social security program, and gas, water and gas-heating utilities

it will no doubt appropriate funds: for the various Federal relief agen- = Indiana c paid oly Sida pe $100 cies. Afer Congress has acted, we of ‘repo assets for a Xes—

will be in a position to know what local, State and Federal.

|services into rural and economically

|world and care for them,

In fact, the progressive steps taken in the last three regular sessions of the Legislature, and the administrative policies of the Department have advanced education in Indiana to a point where no new basic laws are needed. Any laws pertaining to education should be confined merely to corrective measures which would enable our schools to function even better than today.

PUBLIC HEALTH

This Administration has encouraged the extension of public health

depressed areas. Two years ago a local health administration program was undertaken. ‘Medical directors, nurses and sanitarians of] the state have been helping mothers bring their babies into the and checking the ravages of disease.

GIVES HEALTH FIGURES

Ore of the worst diseases afflicting mankind is syphilis, and within the last two years the State and Federal Governments have launched a vigorous campaign

our own problems are. 1 recommend that you create a ‘commission of House and Senate members and provide it with funds to \make a comprehensive study of our unemployment and relief problems. We must find out what our permanent needs of public’ assistance will be, and how this responsibility ‘should be divided by the Federal, the State and the local governments. I recognize the need for liberal adjustments, but I emphatically do naqt believe we should rush into any basic changes without a careful and ‘objective investigation of the problem. This would not be fair to. the underprivileged or to those who support them. I would suggest that the commission study particularly a coordination of relief and unemployment programs and the financing of

our various programs for the underprivileged. : tablishments was $435,000,000. The TAXES equities of the nominal owners Veui in : amounted to 60 per cent of the total. 'Since organized society began.|ypon this investment the stock-

- LIST RETAIL VOLUME

The estimated total retail volume in 1936 in Indiana was 900 million dollars. Those businesses making a profit accounted for 1$699,300,000 of the total, and those reporting deficits ‘accounted for $200,700,000. The profit group made a profit equal to 3 per cent of the gross income, while the loss group reported a loss amounting to 1.48 per cent of gross income.

If those retailers suffering a loss had deducted no taxes whatever, they would still have shown a loss of .55 per cent. . The total investment in retail es-

ministration has been the welfare of the people with moderate or low incomes. | The problem covers the masses of men and women who have lost their jobs through technjcal improvements, through age, through injury, or because of general economic trends.

TELLS OF PROBLEM

If you buy a farm horse and feed him only when you work him, the horse will die. Yet some complain at the necessity of feeding the people whom we need to keep our society

going. A foundation was laid for the solution of unemployment and the evils ‘which stem from it when unemployment compensation, assistance for the old, the blind, and the dependent children, vocational rehabilitation and work relief profects were established. Within the last two, years, the State Department of Public Welfare has extended its services to give guidance and assistance to more . ‘than 110,000 people. Assistance has been increased and more broadly applied. The number -of aged securing benefits has been increased from 35,000 to 51,000. This year $15,000,000 will go toward the support of the | aged. y Blind assistance has been extended

A have argued holders or proprietors secured a refeel it m duty discuss frank} turn, after all deductions includwi y : y ing Federal income taxes, of 69 per r

th you Ri ind Of Zojernimen: cent. For those making a profit the : : return was 9.55 per cent.

the individual taxpayer, and how 1t} “7; gy) of the retailers’ state and

is spent. |State government is a large and local taxes had been in the form fda B go an of property taxes the amount would

fr-1eaching service organization. : he average taxpayer actually pays have equaled $2.61 per $100 of ref ported assets.

ar less for all his protective services 0 The group which lost money paid

government than he does for his § tilities. For one thing, state gov-|only slightly more than one-half as nment pays no high salaries to high a percentage of taxes as did executives or dividends to coupon |the group making a profit—if Fedclippers. i eral income and excess profits taxes were included. The salaries, wages, officers’ compensation, interest, depreciation and bad debts for the group making a profit amounted to 17 per cent of their gross income, whereas these items came to only 13.66 per cent of the gross income of the loss group. On the other hand, the profit group paid out 80 per cent of gross income for goods and other services purchased, and the loss group paid out 87.82 per cent of their gross: income for these items. The additional charge which the loss group paid for goods and other services purchased may well be the reason for their failures.

Finally, T wish to report to you how our state-collected dollar is spent. For the fiscal year 1936-37, 50.7 cents of the state-collected dollar was returned to the local communities. If the current fiscal year

REFERS TO TAX QUIZ

The last session of the General Assembly authorized the appointnent of a commission to study taxsition. This commission has underlaken and completed an academic and thorough analysis of our tax problems. j I believe the commission has rendered a valuable service and I recommend its report to you for study. Taking all units of government, the commission has found that the people of Indiana contributed less to the support of local and state governments in 1936-37 than they did a decade ago, 1928-29. The population of Indiana increased from 3,216,000 to 3,474,000 during this period, while the per capita cash collections for state and

to almost 2500 additional persons, and this year $600,000 will go toward the support of our Indiana blind. We have been deeply interested in the welfare of dependent children— those children whose lives too often are warped by poverty and lack of loving parental care. Indiana is granting aid to 31,000 children, or an increase of 24,000 in two years. This means that the dependent child and widowed mother burdens have peen lifteds from the shoulders of township trustees, local relief agen-, cies and county treasuries. This year Indiana's dependent children will receive $6,000,000. Supervisory and child guidance care has been increased from 6500 to 10,000 children living in orphanages and foster " homes during my administration. _ State services have jbeen extended to 1500 crippled children, also.

CITES PROGRAM CHANGE

When I became Governor two years ago the Indiana Unemployment Compensation Law had been in operation nine months. The 1937 Legislature, at my suggestion, eliminated contributions of wage earners and saved employees between seven and eight million dollars a year. "The first check to an unemployed worker was presented on April 25 of this year, and from that time until today—through months of economic slump and seasonal layoffs—more than 200,000 wage earners have received benefit payments totaling

|| ago general property tax bore 86 per

only 57 per cent. Since local governments have heretofore been de-

7| Such state-administered taxes as

were used as a basis for calculations the amount would be increased. Of the 1936-37 expenditures of the state-colected dollar, 19.1 cents went for local schools, 22.5 for highways, 8.5 for state institutions, 5.5 for colleges and universities, 1.1 for state police and National guard, 1.5 for conservation, 0.8 cent for state and county courts, 7.4 for welfare distribution, 3.6 for teachers’ retirement, 26.6 for distribution to counties, cities and towns, and 8.4 for all other state functions. T have cautioned the departments of State government concerning increases in their budgets. I hope they will be able to accomplish this. _||If we are able to keep our expendiThe Indiana tax base has been tures at the present level, I see no

broadened so that whereas 15 years need. for a change in our tax structure at this time.

EDUCATION

local governments decreased from. $69.32 to $63.39. Even including welfare and other Federal grants, the per capita has decreased from $70.24 to $69.23. ; Even though the tax load ‘upon Indiana citizens has not increased over what it was 10 years ago, the private spendable income in 1937 was as high as it was in 1929. One of the reasons is that Indiana is securing an increasingly larger share of the national income, as shown by the National Industrial Conference Board.

EXPLAINS TAX SETUP

cent of the tax load, it now bears

against it. : Working closely with private physicians, the State has provided

digeats. A member of. the State laboratory ' staff -has developed a new, cheaper, and more accurate test for syphilis which promises much for the future. Scme 50,000 children have been immunized against diphtheria and small pox by physicians in co-op-eration with local health officers in the last two years, Pollution of streams and other water supplies has become a serious modern problem, and within the last two years the pollution of 235 miles of streams has been eliminated. The Board of Health estimates that by 1941 more than 80 per cent of Indiana's sewage will be adequately treated. - Disease and injury are two prime sources of unemployment and poverty, and two years ago the Legislature approved a two-point program against occupational diseases, those diseases that strike at the lungs of workmen. The Board of Health began to study the sources of occupational diseases and how to

free medicine and free tests for in-|

Message to Sst Se

189,000 wage-earners have been settled peacefully around our conference table. No state can compare with this record.’ : ; In addition, the Labor Division has begun an apprentice training program and is assisting in the administration of the Federal WageHour Law. | ; Thousands of dollars are being lost annually by our wage-earners in amounts too small for the individual to prosecute in the courts. 1 would, therefore, suggest the enactment of a state wage collection

law. INDUSTRY

Te Nn SA EF

ssion of

saved farmers participating in 24 projects alone $90,000 a year. : Since the Indiana Rural Electric Membership Corporation Act was passed in 1935, approximately 10,650 miles of rural electric lines have

places us among the top three states in rural electrification. : About 4250 miles of rural electric lines have been constructed by private and municipal utilities, and 6400 miles by local REMC projects. Present plans call for an additional 9500 miles of line to be constructed through the REMC. ,

"It has been neeessary to enact laws protecting the welfare of the wage-earners in Indiana, and we can be justly proud today of the wages and conditions of work gen-

erally prevailing in our state. We must now take some definite action to protect both our Indiana industries and Indiana workers

|from ‘the competition from states

included in the Southern Governors’ Conference: ; Last year I represented the Middle West at the Interstate Commerce Commission hearing held in Buffalo, N. Y., on freight rates demanded by certain Southern states, which, if granted, would adversely affect the. industrial, ' agricultural and labor interests of Indiana. _ I recommend that you appropriate $10,000 to be used to defend the interests of Indiana labor and capital in this and other matters where efforts; are made to industrialize the South or. any other territory at the expense of and to the serious disadvantage of Indiana.

PUBLIC SERVICE COMMISSION

This Administration has encouraged the extension of electric power to the farm, and today Indiana ranks among the foremost states in development of rural electrification. A sympathetic Public. Service Commission has speeded the development of rural electrification. At one time, it seemed that rural electrification might be retarded for many years in Indiana, because the farmers could not secure wholesale rates low enough to justify the projects. The Public Service Com-

POINTS TO RECORD

Within the last two years, the Public Service Commission has completed two of the most important rate cases in its history, and in each case has obtained substantial reductions for consumers. Very recently reductions amounting to $350,000 annually for customers of the Indiana Bell Telephone Co., located in 22 different cities and towns, were ordered by the Commission following a statewide investigation of the Company's rates and charges. Utility rate reductions made effective during the past two years alone, on gas, water, electric and telephone service, represent total savings to Indiana consumers of $3,041,209.59 annually. : I know of no additional legislation needed to continue this program of service to the people.

INSTITUTIONS One of the most difficult administrative problems has concerned our state institutions. Two years ago they did not have adequate facilities to care for the sick, the delinquent, the ‘mentally afflicted and the criminals entrusted to their keeping. We were not getting the maximum benefit from our institutional farms and industries. After studying the problems and the reports of scientific, nonpartisan investigations, we co-ordinated the management of institutions under a Division of Institutions. This Division has placed into effect programs for the medical care, training and social rehabilitation of 6000

inmates of penal institutions and

mission obtained an agreement from the private utilities which

eliminate them, and compensation was authorized for the victims of this terrible affliction. : Yor the fiscal year ending this July; nearly three million dollars were awarded diseased or injured workmen, enabling them to obtain

soiirce of income to the dependents of the fatally injured.

DEATH RATE FALLS

The wide-spread interest in health and public health activities is reflected by the fact that the year 1937 showed the lowest death rate in the history of the State, and it appears that the 1938 figure will be even lower. Epidemic diseases in serious form have been almost

thie past two years. . Indiana is in need of revising its

handling and sale of foods and drugs as well as cosmetics and therapeutic devices. At present our lew does not control dangerous drugs, ‘cosmetics and therapeutic devices. I would suggest that this condition be remedied by law. Such a law would require no additional appropriation.

MARRIAGE LAWS

It has been apparent for some time tnat changing conditions have required a revision of our marriage statutes in the interests and health snd social stability. Last year I appointed a committee to study this problem. tee against recommending any changes that might further complicate the problem or which would place too many restraints against marriage. The Committee and I have been narticularly interested in preventng the spread of syphilis through marriage, and recommendations of the Committee do set up definite safeguards which would protect the parties to a marriage, their prospective children and society as a ‘whole. The report of the Commit-

adequate medical care or provide a |

entirely absent from this State for |

Food and Drugs Act to better con-| trol the production, manufacture,

I cautioned the Commit- |

tee is nof available for your con-|

cle,

Education is one of the most important responsibilities of government, and I am happy to report to. you that Indiana is now advanced to a place of pre-eminence in the field of education.

pendent almost entirely on the property tax, the loss to local, civil and school units has been made up by grants from the State. These grants have been made possible by

sideration. The Committee felt that the problem was so vast that it confined its recommendations to the hygienic problem involved and has asked for two years’ additional time

Since the depths of the depression, successive General Assemblies have responded to the needs of and a number of basic changes have been made in the educational structure of Indiana.

gross income, intangibles, excise and motor fuel taxes.

As state distributions have increased, local taxes have dropped for the State as a whole. State distribution to local governments increased from 10 million in 1932 to 36 million in 1937, while local levies decreased from 124 million to 91 million during the same period.

LAUDS SCHOOL BUS ACT

edu- | ‘a wise decision, because we cannot

The property tax per capita fell from $42.05 in 1932 to $29.70 in 1937.

about 17% million dollars. | The special session last summer further improved the law by elimi= nating the so-called “$10 clause.” The elimination of this clause permitted 47,000 unemployed workers to receive about 33 million dollars. During the last two years local communities in some cases failed to provide projects for the employment of WPA labor. Rather than send hundreds of able-bodied workmen and their families back on the support of property taxpayers, the State established WPA projects and paid for the cost of materials. Last summer when thousands of citizens had been laid off their jobs, 1 called a special session of the Legislature and a program was enacted which will provide more than 15% million man-hours of work on WPA ‘and PWA projects, when they are completed. : :

| TELLS OF JOB SERVICE

The Indiana State Employment Service in the last two years placed rimately 110,000 vate employment. am, by executive order, transhe duties of the Governor's ission on Unemployment Reover to the State Department of Welfare, and I am confident - this move should both increase efficiency of unemployment reof and reduce administrative exases $500,000 to $1,000,000 during two years. :

persons in|

A factor in this reduction is undoubtedly the acts which provide for careful review of local budgets. These Acts should be amended to provide a longer period of/ time between publication and the adoption of budgets, in order that ‘the public may have a better opportunity to study their tax proposals.

- GIVES DEBT FIGURES.

After reaching a high point of 196 million dollars in 1930, the bonded debt of state and local governments have fallen gradually to 150 million in 1938. Interest payments are consequently three million dollars less per year now than they were several years ago.

Groups or industries, such as farmers, urban home owners, businesses with property, railroads and other utilities with heavy property investments have been given considerable relief through the lightening of the property tax load. Certain businesses including retailers, service businesses, wholesalers and such individuals as professional persons, officeholders, puolic employees and others whose incomes are chiefly from salaries, wages, rents, dividends, etc., are contributing more toward the support of Fovernment now than in 1933 or beore. 5 The Indiana farmers’ taxes were highest in 1932" when his taxes ar to 20.4 per cent

Among major acts have been the State Tuition Support Law, which has functioned to equalize the burden of educational costs and main-. tain a standard system of learning as provided for by the State Constitution. The School Bus Act has given our state a-system of safe school transportation which has transported a daily load of more than 200,000 for more than three years without g fatal accident, a record unsurpassec anywhere in the world. : The minimum standard wage scale provision, based on the training and experience of teachers, is in line with legislation to be founci

only in the more progressive states. The level of teaching has been raised by requiring that all beginning teachers complete four years of study in an institution of higher learning, and by a reorganization of the teacher training pattern. Public safety has been advanced by the all-metal school bus requirements and the introduction of safety education classes in the schools. We have inaugurated a progressive building program which has eliminated about 500 eld type school buildings and replaced them with modern structures, financed in pait by the Federal Government, ; "We have extended vocationsl education services within the last two years, because we believe that the educational system must accept greater responsibility for the success or failure of its ‘pupils in

the business world. ‘As a service io

to study the questions of eugenics, child marriage, common law marriage and divorce. I believe this is

afford to rush hastily into a funda'mental problem which affects all our people. :

LABOR RELATIONS

The relation of Industry to Labor is very important to the three and a half million people of Indiana, because a major share of the wealth of our State comes from laboring people. The year 1937 was one of unusual tension in Labor and Industry, and many states became battlegrounds for bitter conflicts. Indiana was spared this ordeal. The majority of workers and employers accepted the right of collective bargaining in good faith, but the technique was still new and strange two years ago. ’

REVIEWS LABOR SETUP

The Indiana Divison of Labor was established in the hope that we might ‘dissipate this confusion by reason and logic. We set up & conference table and invited workers and employers ‘to sit around it as good neighbors. During the two years, hundreds of people have come to the conference table with anger in their hearts and departed as friends with a deeper appreciation of each other’s problems. Originally, some employers Opposed the Labor Division, but with-

come to regard the Division as a friendly office,-“interested in the welfare of both business and labor. New industries valued at more than 100 million dollars have come fo Indiana partly “because we have demonstrated that collective bargaining can be ¢onducted peacefully and fairly. Our laboring people have benefitted by improved working conditions, and industry has

in the last two years they have]

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The problem of farms and industries within our institutions was carefully appraised, and a centralized program was developed which has increased the, productivity and efficiency many fold. ; Modern, scientific knowledge in the fields of nutrition, psychiatry, sociology and medicine have been employed in our institutions program. Overcrowding has been greatly alleviated by the building program which in two years has started 10 million dollars in improvements, at a cost of only five and 2 half mil-

{lion dollars to the state. Much of

this work has been made possible by the action taken by the Legislature in the special session last year. 1 would ask ‘the Legislature to scrutinize critically any further request at this time for additional buildings. DISASTER RELIEF

When my administration was only a few weeks old, thousands of our people and their properties were threatened by the worst disaster in the history of Indiana. Several state agencies were mobilized and their services co-ordinated with the entire Federal-state disaster relief pro-

gram during the 1937 ficod. The national relief administrator told me that no other state handled its flood problems better than Indiana. No lives were lost, no disease epidemic raged, and no major fires broke out. Communication was maintained, and law and order upheld.

STATE STANDS READY

Based on this experience, we have devised a disaster plan in the event that calamity should ever strike again. The basic policy of this program has been adopted by the American Bod) Crest for all other states. The slature at that time. appropriated $1,000,000 to be loaned to communities in the devastated areas. I am proud to report to you that by pratciced economies and good management, the communities in that area found it necessary to borrow from that fund only $110,000. I, therefore, recommend that the balance be returned to the General Fund by your act.

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Indiana Legislature

CONSERVATION

made in the conservation of natural

developed by the Department Conservation.

We have inaugurated a policy of

active participation of 243,000 men and women in our conservation pro= gram. We believe in education rather than enforcement and are giving the *

cies.

LISTS ACTIVITIES

past two years: Establishment. of the Frances Slocum state forest and Pike County state forest, adding nearly 2500 acres to our ptblie lands; increased efficiency in prop= agating fish and game that has al= ready given Indiana better hunting and fishing; better recreational facilities, drawing more than a mil

parks;

and forest protection; and progress

sembly codified the laws relating ta fish and wildlife and enacted other legislation to advance Indiana's . conservation program. Some fure ther adjustments of these statutes have been recommended by the : conservation clubs of the state and |

eration. SAFETY he 3 Two years ago I was determ ed ¢ that my administration should make some definite contribution to traffic safety. I shared with all ‘our citizens a horror at the number of

dents. The 1937 Legislature set up the machinery for Indiana’s model safe= ty program, co-ordinating the activa: ities of various departments, tights. ening up enforcement and” uti=

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resources during the past two years and urge your favorable considera= ~ tion of the program initiated and “5 of So iN

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sportsman and naturalist and the :- nature lover a voice in the deters Pi mination and operation of all polis °«

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fur

- You are already familiar with much of the progress made in the:

a lion visitors annually to our state more effective reforestation .

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