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About Capital journal. (Salem, Or.) 1919-1980 | View Entire Issue (Jan. 13, 1941)
1 Eight The Capital Journal, Salem, Oregon Monday, January 13, 1941 Sprague Asks Session to Cooperate with Government Program Offered For Institutions Governor Charles A. Sprague, in his message to the 41st legislative assembly, after calling attention to world condi tions, makes many specific recommendations for conducting Oregon affairs. The complete before a joint meeting of the follows : This Fortv-flrst Legislative Assem bly of Oregon convenes at a time when the situation in world affairs is ominous. Since the close of the previous Assembly, war ha engulfed most or tne nations 01 me t-nu www, APorfKnor states have set out to es tablish a "new order", an order hnAPri on force used not only to de feat but to crush Its foes, an order frankly hostile to the conception or free government long cherished as the highest goal In political organi zation. To date the United States has not become involved in this war; but the turn of events within the past eigh teen months has shaken us from an attitude- of complacement detach ment to one of deep concern. The emotion of sympathy with the demo cratic nations of Europe gave place to stark fear, when, with tho con quest of Denmark, Norway, The Netherlands, Belgium and much of Trance, it was realized that our own political and economic security would be seriously endangered with the tri umph of nnzl Germany. The foreign policy of this country was, there fore, directed toward accelerated aid for Great Britain and preparation of an adequate defense of our own lands and interests. This policy, for mulated by President Franklin U. Roosevelt, has been approved by the great majority of the citizens of the country, Far East Interests In the Far East warfare continues between the great nations of Japan and China, a fact of concern to this country and particularly to the states fronting the Pacific ocean. The Uni ted States has long enjoyed friendly relations with both these great pow ers. It has observed with pride the emergence of the peoples of both countries from the seclusion which Insulated them for centuries. It is disturbed, however, over Japan's ag gression in China, both because of Its threat to China's continuance as an Independent nation and because of Its threat to legitimate American interests In the Orient, and remotely to this side of the Pacific as well. Desirous as we are of maintaining friendly relations with Japan, we cannot Ignore Its alliance with Ger many and Italy which Is pointed at the United States. Our national poll-, cy, therefore, should continue to be one of aid to China and economic restraint to Japan. I hope our gov ernment will give more emphasis to both these lines of effort. I refer to the oriental situation because we of the Pacific Coast are deeply Interest-1 ed in an early and proper peace In 1 the Far East. There Is for us far ; more promise of expansion of com merce and cultural relations with the Orient than there Is with South America. Our national government ought not to become so fully en grossed In pursuing Its policies with respect to Europe and Latin America that It will neglect its obligations rcgnrdlng Eastern Asia, At the present time the national effort Is directed toward increasing production of modern weapons of warfare and the enrollment and training of men In military service,! This must be a major undertaking, I absorbing the energies and the means I of the people in order to provide se curity for ourselves and curbs against revolutionary aggressors. I am proud to report to you that Oregon has responded in full measure to every appeal lor cooperation made by the nations! government. In the fall of 1939 the war department ordered an expansion or enrollment or the Na tlonal Guard. Oregon was the first state to complete Its quota of 913 men. Intensified drill was required of the Guard during the winter and lost summer the customary ten-day encampment was extended to three weeks of divisional maneuvers at Camp Murray, Washington, In Sep tembcr the entire Oregon National Guard 4,532 oincers and men won ordered Into federal service for year of training. These men were among the first state troops to be mobilized, and are now stationed at camp Murray and at Camp Clatsop, Oregon. Draft Machinery Set Up With the enactment of the Selec tive Service and Training Act, I was cauea upon oy tne president to or ganize the administration of the act in this state. In anticipation of tne passage or the law, preparation for Its application had been made in the orrice of the adjutant general. When presidential authority came, I designated Lieutenant Colonel Elmer v. wooton or the state staff as Direc tor of the Selective Service Admlnls- iration ror Oregon. The necessary machinery for applying the law was promptly set up. Through the assist ance of county officials and volun teer cltlecns over the stnte Lhn rat. tratlon of men under the act took place on October 16; and tho initial quotas have been filled. Recognizing that preparedness calls for economic mobilization as well as military, this state, through Its em ployment service, has conducted a labor Inventory, obtaining a lint of men skilled in selected trades which may be needed In defense Industries. This census shows that Oregon has a sizable reservoir of workmen avail- aoio ior inese occupations. Oregon has been called on to mm. ply needed materials such as lumber for cantonments, parts for airplanes. vessels ana supplies ror the United States Navy, and woolen goods for the Army. Additional demands will undoubtedly be made. I hope through the Inventory of labor and of manu facturing facilities to Increase the states participation in this vast in- mistrial undertaking. Pnllrv riieprfnl Hun My policy as Governor of tlm stat has been to meet cheerfully all tho calls of the national government. At the same time X have sought to avoid hysteria and to keep our people at wor. j. nave uiiuzea existing agon cles of government, but have felt iree to can on citizens for special asslstonce when that was retiuireri. The ordering out of the Notional Guard has deprived the state of anv local military bony subject to my call in event of local emergency. I have relied on the regular civil law en forcement agencies to maintain the authority of government, and shall continue to do so. It Is conceivable, though, that In case of our Involve ment In war conditions may arise In which a atoto guard would be needed for local duty. Such an organization ior local aorenso is approved by fed eral law. r have had prepared ft plan for such an organization, which is rrany ior immediate use. While I believe tho present law gives tho Governor sufficient authority to en roll a state guard, I recommend pass age of an act making defenlte tho governor's power In this respect. I assure you that that power will not be abused. We In Oregon must play our parti text 01 nis message, aenvereu senate and house today, is as ' in support of our country's interest and In support of the national poli cy which has been laid down by our government. We must be prepared to make whatever sacrifices may be reaulrcd .whether or men or or ma terlals for war. I urge that all our citizens rally loyally In unity of pur pose for tne common aerense. Powers of Stntes In the field of political relations between the states and the federal government, I have to report the continued Invasion of the powers of the states until the unique federal character of our government nas oeen virtually destroyed. We are now a national state. The states are duced to administrative units with greatly diminished powers of legis lation. Within the blcnnlum, decisions of the United States supreme court de nying to states the power to regu late picketing and asserting lull led' eral authority over waters of non- navlgblo streams, quite in line with the recent trend, mark the further transfer of power from states to the national government. We have also experienced the constant pressure of federal administrative agencies to dictate In the field of federal-state cooperation. Hereafter public ophr Ion, not the courts, will be the only effective brake on national aggres sion In the area of local government, I recognize the national charac ter of many of the problems of our modern me; nut i rear tne progres sive centralization of authority may end In the erection of a bureaucracy unresponsive to popular will. I feel. howover, that the best way for tho states to preserve dignity ana author ity is for the states, within their field, to do a superior Job of legis lation and administration, and thus Justify their existence by their merits. Economic Condition of Oregon Two years ago In my Inaugural message I stated that Oregon's most pressing problem was economic increase the Income of the people and provide for its fair distribution. That these objects might be attained I have consistently sought to encour age business enterprise and to mam toin orderly relations In industry, me results are gratnying. Tho Immediate need was fuller env ployment. I moved first to reorgan ize the employment service to make It function actively as an agency locating Jobs for workers. With the full cooperation or employers ana of labor organizations the service , haa operated with increasing success. Job placements, which totaled 70,516 in 193B. rose to 172,107 in 1940. an in crease of 246 per cent. Additional evidence of fuller employment Is seen in other official reports. Pay rolls as reported to the State industrial Accident commission Increased from SI 34 ,903. 138 for the first eleven months Of 1938 to (164,468,704 for the same period In 1940, a gain of 15 per cent. The unemployment com pensation commission reports that benefits paid on account of unem ployment declined from 4,639,000 the first eleven months of 1938 to (3.892,000 for the same months of 1940, a drop of 14 per cent. These figures show a substantially Increased income, widely aistrioutea, ior ure gon workers. Oregon s industries nave enjoyed steady operation during tne men nlum. This state has now reached first rank in volume of Its lumber production. Paper and pulp mills have been running at maximum ca- puclty. Six new plywood plants havo been established in Oregon. Three new chemical plants have come to Portland to use energy from the Bonneville power plant, under the stimulus of defense orders, ship' building on the Willamette river Is being revived. Mining in Oregon has reached new peaks of production, the Increase coming chiefly in gold and mercury, Economic Survey Made Fisheries have operated at fair volumo of production nad new spe cialized products are Increasing the wealth derived from this source. It Is hoped that further development will follow from research at tho new fisheries laboratory at Astoria. Results in agriculture have been mixed the past two seasons. Wheat, rresh and dried fruits, which are Important items of production, have suffered because the wars have cut off export markets. On the other hand, rising prices have aided pro ducers or boer, wool, dairy products, canned and frozen fruits and vege tables. There has been a marked ex pansion of seed production here; and flax plants are running at full ca paclty. unable to meet the demand for fiber. To survey the economic needs of the stnte, I appointed the Oregon Economic council, composed of 22 men, representing various occupa tlonal and public interest, with Hon. E. B, MacNaughton of Portland as cnairman. The council has had conv mtttces at work for some months studying special problems: and I be lleve It will make an Important con tribution to the state a development The atote has also been represented on tne Poclllc Northwest Regional Planning council, While the current economic condi tion In Oregon represents distinct Improvement, with tho largest level oi employment and the highest bust nesa profits in a decade, this situa tion Is by no means stable. Part of the present prosperity is due to lib' eral federal expenditures for rearma ment; part is due to the rapid con sumption of exhaustible resources. We need, therefore, as individuals and as a state to man ahead If we hope to maintain the present levels or prosperity. Fiimm-lal Affairs The condition of tho state's fi nances Is fully reviewed In my mes sage accompanying the biennial bud get, copies or which have been fur nished you. Citizens of the state may well be proud of It showing. In tho blcnnlum Just ended, the bonded Indebtedness or the state hns de creased from 42,79t,935 to 35,181, 385. with corresponding decreases In indebtedness of subordinate units of government. The state general fund hns had ample cash balances at all times. Receipts from state Income and exclo taxes and from other sources hnvs made a state tax lew on real property unnecessary for tho current year. in order to avoid a threatened de ficit, I directed the bmint nfficn to scale down exnnnril turns nf tnt departments and institutions by ap- J nrvi'll per CCnt 01 llie authorized appropriations. Through tho cooperation of department heads the resulting savtnon mmintrt 703. B40. which brounht th and outgo of tho state Into balance for the btennlum. i Surplus Margin Narrow Tat budget lor tht 1941-1943 bltn-1 nlum Is balanced with a very nar row margin of surplus. There must be no extravagance In appropriating state funds, or this balance will be wiped out, A state has only limited credit; It must live within its means. Any substantial Increase in appro priations must be accompanied by provision for added revenues. I would remind you that the cost of national rearmament will be enor mous, and that the federal govern ment must Impose heavy additional taxes upon tho people. We should recognize a priority of claims for this cause and hence the state should avoid Increasing the tax burdens of our people. I hope the legislature win not devote valuable time in try ing to uncover new sources of rev enue, but that It will seek to ap portion wisely the revenues now fur nished under the existing tax atruc ture. Public Welfare In the post, expenditures for pub He assistance in excess of cash avail able for the purpose have been ft nanced by Issuing anticipation cer tificates on liquor revenues. Soon after taking office I saw that If this continued the outlay for public wei fare might pile up an embarrassing indebtedness. Thus, while the total state appropriations ror public wel fare in the post biennlum amounted to (9,260,000 the actual cash available for this expenditure was (8,500,000, less (700,000 In liquor certificates outstanding at the close of 1938. It was deemed prudent, therefore, to nring expenditures in line with ac. tuai casn receipts ror tms rund. This has not been fully accomplished, but the amount of anticipation certlfl cates has been reduced to (93,000 outstanding at the end of 1940. Tne rood stamp plan ior distribu ting surplus foodstuffs to needy fam ilies has been introduced and ex tended to 26 counties. It Is prov ing a practical means of relief, and helps to expend the market for farm products. Oregon Proves Generous Oregon has not been ungenerous In its treatment of those needing aid. The total expenditures for this purpose amounted to (14,847,000 dur Ing the 1937-1938 biennlum. This to tal was Increased to approximately (18.849,000 during 1939-1940. The new budget provides a fund or (21,' 690.000 for tho next biennlum. realize that when a sum even this large is broken up and distributed among some 60,000 persona the amounts available ior individuals are often quite meager. But I do not see how we can devote a greater pro portion of aggregate revenues to pub lic assistance tnan tne amount sei up In the budget submitted. Tho state Public welfare commis slon has only minor changes to rec ommend In the public laws. A recent federal act nas increased tne maxi mum federal allowance for old-age assistance from (15 to (20 a month, recommend that the state law be changed, removing the maximum limit but leaving payments on matching basis In tho present ratio or federal, state, and county iunds, It is understood, of course, that the amount of assistance actually paid will depend on the sum of money provided. The responsibility will rest with the state and county public welfare commissions, as in practice It does now, for tho wise distribu tion of the funds. Stnte Institutions The state maintains and operates twelve charitable, penal, and elee mosvnary Institutions. Their Inmates, whose average number rose during tne menneum irom e,7oi to 7,iib, are peculiarly the wards of the state. All but one are under the direct ad ministration of the State Board of Control, which Is keenly sensitive to its responsibility in their man agement. Because tne inmates come from all sections of the state, there Is wide public Interest In the way they are managed, Where that interest leads to vigilance In super vision. It is neipiui. But sometimes that Interest Is preyed upon by crit ics who are Ill-Informed or preju diced or actuated by petty grlevanco and then the results may be damag ing. Oregon has been rather fortu nate In this regard. I think this Is largely due to the fact that these institutions have been kept reason ably freo from political manlmUa tlon: and because succeeding Boards or control have sought faithfully to operate them In the Interests of the wards and of the state. Members of tho Legislature are Invited to visit any of the institutions and observe conditions for themselves, I bellovo that, on the whole, you will feel proud of the care given and the results accomplished. During the depression years of the early '30s, outlays for physical plants at the institutions were greatly re stricted; but In the past several years more money has been provided for copitai outlay and many oi the insti tutions have used federal work pro grams to advantage. It Is true that neeas are eviaent in nearly an tne institutions and critical in some, but for the most part Oregon s state in stitutions are reasonably adequate and wen maintained. Building Program Started For the orderly improvement of the several Institutions, a building pro- :ram has been prepared for the State Board of Control by consultants of the National Resources Planning Board, wnose services were ottered the state. A preliminary draft of the program appears in the volume of the budget, and the final draft will bo published and furnished you. The schedule adopted is within the bud get limitations of the next three btennlums, both as to capital vestment and subsequent operating cost. Sealng the need for closer coordi nation of the business and farming operations or tne institutions, tne Board of Control created the posi tion of business supervisor in the of fice of the secretary of the board and assigned a competent man to the position. The results already shown Justify the appointment. Based on the study made by the business su pervisor, tne board recommends tho acquisition of a large tract of river bottom land near Salem for the grow ing of food crops for the State Hos pttal for the Insane, which will make unnecessary the present dependence on leased lands. Tho most pressing need for plant improvement is at tne state nospttai In Salem, where the overcrowding deplorable. Deciding to obtain outside counsel for formulating plans ior envelopment, tne uoara oi con trol invited the United States Public Health service to mako an Insnection of our mental hospitals. Dr. Samuel Hamilton was assigned to make tho Investigation and his report will soon be available. A committee of the Oregon Mental Hygiene society has also studied the state's needs for proper care of the mentally 111 and submitted a comprehensive report. Hospital rseens men I would summarize the needs of the State Hospital In Salem as fol lows: First. new hospital unit, and the proposed budget allows (325,000 ror ft 300-bed hospital. Second, re placement or reconstruction of pres ent wards and administration unit at the main hospital and erection of new dormitories at Cottage Form Third, Increase in number of persons on the professional staff and of at tendants. Fourth, revision of laws covering commitments to the hos pital, relieving It of the care of elder ly people who are not really mental esses. They can bp eared for nut. side of in Institution with old-age assistance provided In case of need To Insure proper treatment of old people who are cared for In private, commercial homes, the Public Wel fare commission should have Juris diction over such homes, such as It has over commercial boarding homes ior cnuaren. There is one urgent need for most or the institutions and that is a re duction in the length of the work ing day for employees; also allow ance for employees' outside main tenance. The Board of Control favors these changes. The additional costs entailed are reported In the budget una i nope tne legislative commit tees ca nflnd a way to linanco the extra burden. State Land Board Tho condition of the state lire- duclble common school fund Is the best It has been for many years. The system of making farm loans only after careful appraisal by the board's own experienced appraisers has worked out well. All new loans re quire the regular annual amortiza tion of principal. During the blen nlum the Investment In mortgage loans In good standing Increased 12.6 per cent; bond Investments 4.1 per cent. The decrease in mortgages delinquent amounted to 30.2 per cent, ana in mortgages Being fore closed to 43.8 per cent. There was a xurtner sale or foreclosed property, so this account showed a decrease of 12.9 per cent. While the Investments are In sound condition, the Income has decreased because of the falling off In payment oi delinquent interest and the re duction In Interest rates of new In vestments. The State Land board Is of the opinion that certain shifts could be made which would with safety increase the income of the common school fund. More Buildings Needed There Is urgent need for an addi tional building In the capitol group In Salem. Large departments like the Public Utilities commissioner and the Unemployment Compensation commission occupy rented Quarters. The latter is under criticism from the Federal Social Security board becauus It has no fireproof vaults at its quarters ior protection of Ir replaceable records. At present, mar ket prices of bonds held In the school rund snow a substantial enhance ment In value. The Land Board be lieves It would be wise to sell about one million dollars' worth of the bonds, thus realizing Its nroflts. and re-Invest the proceeds In a new state office building on block 85, opposite the new state library. The building would be occupied by self-sustaining departments on a rental basis yield three and one-half per cent In terest to tne scnooi iund and amor tize the investment over a term of years. Tho previous experience of tne state in erecting an office build ing through Investment of funds of the State Industrial Accident com mission proved highly satisfactory for tne commission and a valuable im provement for the state. Use of the state school fund Is recommended now because it is adapted for long time Investment with no need of sudden realization of principal mignt oe true or the funds of the industrial Accident commission. Revenue Source Seen Another source of Increased in come for the common school fund would oe loans on improved urban property. Tnis would call for amendment of the nresent law cov ering eligible Investments. The basis ior tnis suggestion Is the experience of the World War Veterans' State Aid commission where the record of re payments of urban loans and of sale oi ioreciosca property is very much better than for farm loans. Tho Lend board submits this as a recommenda tion for the careful consideration nf tne legislature. in tne past two years the Lund oara reopened ior study tho sub ject of administering the state-owned grazing lands amounting to about enree-quarters oi a million acres of lana in Eastern Oregon. The counsel oi scnooi leaaers ana or representa tives of stockmen and of men in state ana leaerai service was sousht. me ooara nas determined on a gen eral policy under which it hopes to increase tne income irom these lands The lands will be leased In blocks oi varying sizes to stockmen or as sociations of stockmen, first under an excnange-oi-use plan; later, if tne trial justifies, on a ions-term oasis, ine ooara nas engaged Mr Marvin Klemme of Burns, formerly with the Federal Grazing service, to supervise the blocking and leasing of incae tanas ior me state. Highways 'ine state Hlnrhwav commission hnn functioned under Its present tvDe of organization ior a period or twenty- mre years, in mat time mere nas been expended approximately (250, 000,000 on the state highway system ior construction and maintenance. The state Is now very effectively served with a system of hard-sur faced roads. Of the 4,782 miles in the primary system 4.211 miles are pavea or ouea. 330 miles are rock surfaced. Tho secondary roads totol a, 3 48 miles, of which 962 miles are paved or oiled, 794 rock surfaced. While the initial task of construc tion and surfacing Is now pretty wen completed, mere is pressing de mand for reconstruction of roads now regarded as antiquated. In the last decade thc.e has been a great Im provement In engineering standards tnat roaas ount or rebuilt in that period are strictly modern, able to carry safely and expeditiously the increasing venicuiar trailic. The utilization of this fine high way system by operators of com mercial trucks and stages creates an important economic problem. Rail. ways, which once enjoyed a monooolv of land transportation, now face sharp competition from vehicles wnicn use the public highways. This complicates regulation of freight rates wnicn once was safely based on tne assumption or rauwav monoo oiy. in tne last oiennium this issue became acute in the matter of pe troleum rates between tidewater ter mini and the Interior. With three carriers railways, motor trucks and water barges competing for the Diisiness, Doin tne interstate Com merce commission and the Public Utilities commissioner of Oregon iouna tne questions involved dim- cult of solution on the conventional basis of regulation. The public will havo to decide whether It wants rates to be determined by competition or by regulation. Whichever method Is adopted should apply to all types of transportation rainy, it is unjust to restrain one form of transporta tion by regulation and then allow competing rorm to operate with out restraint. This competition Is felt In the writing of laws covering truck oper ation, where trucks and railroads have battled over such matters as tne dimensions of trucks allowed to run on highways. The railroads pro test mat wnii tney maintain and pay taxes on their own rights-of-way ns wen as taxes on otner property tho public provides hishwavs used by motor trucks. Solution Is NugRrsted it we break apart this problem I think we may find a reasonable so lution. It seems to me that the de termining factor as to sizes of trucks should be the safe carrying capacity of tho highways. The state has made large investment In Its highway sys tem: the principal roads have been greatly Improved In recent years by widening, reducing nf curvatures. lowering of grades, and suengthtniuf of the surface. These roads are able to handle a larger volume of traffic. That Is what they were built for. They can also carrying commercial vehicles of larger capacity with safety to other highway users and without injury to roads. I approve of a proposal of the Highway com mission to allow the operation of trucks of larger dimensions than at present, on roads where, in the Judg ment of the commission, they can operate with safety. We should real ize that there are great areas In the state where the principal or only means of freight transport Is the highway and motor truck. To strict unduly the carriers operating there, simply means to deprive the residents of those communities of the full benefits of the highway sys tem. There ought to be, however, an eoualtzatlon of the tax burden be tween railroads and commercial motor vehicles. The states should show no favors or Impose no penalties In Its treatment of the two types or trans portatlon. I call your attention to the fact that commercial truck and stage operators escape all contrlbu tton to the support of general gov ernment except what they may pay sb state excise or Income tax or on terminal properties. The taxes they oav motor license fees, gasoline tax es, earnings taxes all go to the high way fund ror use in building im proved roads on which they may op erate. I see no reason why the? commercial operators snouia not pay taxes to the support or general gov ernment. This could be accomplished either by Imposing an additional tax on operations or commercial vehi cles or by the capture of all or part of the present earnings tax which amounts to over one million dollars a year. There should be no change In the allocation of proceeds of the tax on gasoline. Logging Creates Hazard The transport of logs from the woods to mills Is being done In growing proportion oy motor trucic, This has created hazards, not only to the other users of highways but also to the men engaged in this occupa tion. To meet the problems that have arisen, a committee from the state departments concerned with administration In this field has drafted a code to govern the truck movement 01 logs, a more rigia system 01 inspection win bo imposed, wnicn it is nenevea win contribute greatly to highway protection and public sofetv. In this connection new legislation is needed to make clear the author ity of the State Highway commission In regulating the transport of logs and piling, particularly to permit tne nauung 01 long logs unaer regula tion. I recommend to you the bill which the commission has had drafted on this subject. Vneiniiiovnient Compensation The unemployment compensation law has imposed payroll taxes for five years and benefits have been paid the past three. This was a new field of government endeavor for this country. A new organization was required which had to pioneer in establishing its procedures. The breaking-in period is now pretty well concluded and the administration is functioning with creditable efficiency at the present time. Tho interpretation and application of the unemployment compensation law frequently leads to sharp con troversy. The stakes are high, and initial rulings may serve as con trolling decisions for a long time. Out of the clash or interest or con tributors to and beneficiaries of the fund, will come proposals for changes in tho law. it is your auty to stuay carefully the changes demanded, keeping the group Interest subordi nate to the broad public purpose Intended to be served by the act. on the mucn-deoated question 01 "experience rating". I recommend that this provision In the law should be allowed to stand and be put to the test of experience. It was part of the original enactment, conforms with tho federal law, and has been adopted In principle by some forty states and territories. If, after trial. errors are manifest, future legisla tures may take the required steps to correct them. Workmen's Accident Compensation I have previously transmitted to members of the Assembly reports from the Interim committee appoint ed by me in conformity with a reso lution of the lost Legislative assem bly to study operations of laws pro viding for compensation for Injured workmen. The time Is at hand for an overhaul of these laws. While the accldont fund has remained solvent through years of war and depres sion, the margin Is very thin and on strict accounting 01 liabilities, non-existent. The State Industrial Accident com mission operates under some inher ent difficulties. Its liability Is auto matic unless the employer nas dell nltely rejected the act either to carry his own risk or to take out private Insurance. The private insur ance company can select Its own risks and requires payment of pre mium In advance. The state cannot sort its risks and has not been able to collect Its premiums In advance, with resulting losses to the fund. If private Insurers could offer unl-1 versal coverage at satisfactory rates and benefits, one might be tempted to turn all the business over to pri vate companies. For a variety of reasons this is not feasible. Ac cordingly, I favor an exclusive state system of accident Insurance, This will not of Itself solve all the prob lems; but I do not believe ths other reforms proposed will prove ade quate alone. The Interim committee recom mends creation of the office of man after as administrative head of the department. I prefer the type of organization adopted In the Unem ployment Compensation commission where the administrator is the execu tive but Is subordinate to the com mission. There Is general agreement tnat tne commission snouia oe re lieved of responsibility for adminis trative aetan. witn that duty as signed to a single, qualified person. Safety Code Unanimous new safety code is the unani mous recommendation of the Interim committee. Accident prevention of fers one hope of reducing the drain on the compensation funds. I hearti ly endorse tho objectives of the pro posed code and accept the recom mendation of the Interim committee that the administration bo consoli dated under the Industrial Accident commission. The financial position of the fund will be strengthened by adoption of bills providing for minimum fees and making collections more certain. The proposal to abolish trial by Jury on appeals from commission awards has opened an old contro versy. The Importance of Jury trials both to workers and to the fund has been considerably exaggerated am impressea. nowever. with the comment of Chairman Victor P. Mor ris or tne interim commutes, who says In his report: "At the present time only four states In the Union permit Jury trials on matters of fact In con nection with their accident com pensation laws. The weight of authority and of experience sup port the proposal to tllmlnate the right of trial by Jury and the attendant Inroads upon compen sation funds'. I'nlr Awards Wanted we are concerned to tht wards are fairly made, bermme the state holds the fund as trustee. J I believe a method of appeal could be provided which wouia insuie a great er degree of Justice to claimants and contributors man me present meth od of jury trial. For many years representatives of workers nave urgea an increase in the schedule of benefits paid on ac cident claims, pointing out that the present scale was adopted a quarter of a century ago when wage rates and living costs were much lower. It is true that compensation ror perma nent disability and to dependents is definitely inadequate. This Is not true 01 claims ior temporary time- law because awards there follow the trend of wage rates which have been steadily upward since the fund was created. Payments ior medical and hospital care also show constant and burdensome increases. I am favor able to adoption of a higher scale of awards In the fixed categories, but I warn you that such Increases can not be ordered unless adequate rev enues are In sight to meet the cost I do not have time to discuss other recommendations, both of the major ity and the minority of the commit tee. I regard this subject of work men' j compensation as one of tho most Important to come before this body. 1 urge you to work out perma nent solutions to the problems in volved. It will be a serious disap pointment to me and to the state if the conflicting pressures of the chief parties at Interest employers and workers merely result in a leg islative stalemate. Forestry Forests rank next to agriculture as the principal economic resource of Oregon. The rapid Increase In cut ting of virgin forests, while giving me iiusn 01 immediate prosperity, means a shortening of the life of this great asset, vine spectacle 01 an ex hausted economy In the cutover lands of northern Wisconsin and Michigan and of portions of our own state has alarmed the people of Ore gon Into action to conserve and to renew our forest resources. At my request a committee of the Oregon Economic council, headed by Hon Kouert w, eowyer or send, nas un dertaken to outline a constructive and, at tho same time, practical plan for Immediate application in Oregon. The specific legislation proposed has for the most part been reviewed and approved by the State Board of Forestry and by representatives of the timber industry. The bills seek to protect existing forests by means 01 stricter regulation ior fire pre vention and suppression, to enforce minimum standards in forest prac tices to allow for natural reforesta tion, and to facilitate acquisition of cutover lands ior growth or new forests. I strongly urge favorable action on these bills, which present a comprehensive program In forest conservation. Problem Acute One The last legislature authorized the State Board of Forestry to acquire rrom tne counties logged-orr lands ana to maintain tnem as state ior- ests. A beginning has been made under this act. A total of 72.483 acres of forest lands have been taken over, located in eight, counties. The forestry department plans to admin ister the lands carefully, seeing they are restocked and protected against fire so they may become permanently productive. Tnis iorest problem is one or acute importance, and delay In action will be aamaging to tne iuture 01 ure eon. There must be sincere coopera tion among an interests, tne ieaerai state, and county governments and private owners of timber. Bv adop tion of progressive policies now, we may Miccessruuy oriage tne transi tion period irom the "cut out and get out ' practice or tne past to stable economy based on sustained production In the future. Eduentlon The 1939 act for reorganization of school districts was barren of direct results, but it did stimulate volun tary consolidation of school districts In many counties. The need for bet ter equalization of school taxes re mains. While Oregon professes to take pride In its education system, actuauy it makes inadequate finan cial provision all along the line from the elementary schools to the higher institutions of learning. The state system 01 Higher Educa tion has worked under difficulty because in tne past decade enroll ment has increased much more rapid ly than appropriations for support of the institutions, unified administra tion of the system has been In ef fect now nearly twelve years and has won for Itself general public ap proval. A serious deficiency In our school system is in vocational education, Definite occupational training needed under modern conditions of Industry and agriculture. A begin nlng has been made, but there Is need for genuine vocational schools or oeiow-conege level located a strategic centers over the state. Edu cational leaders have agreed on 1 measure to expand vocational educa tion. This has been approved bv the state Board lor vocational Educa tlon and will be submitted to the assembly. Paroles The new organization governing parole and probation, established by the last Legislature, has functioned with distinct success. Cases of all inmates of the penitentiary have oeen reviewca. uue to carerui selec tion of parolees and their supervi sion after release, the percentage of revocations nas declined. The nonu latlon of the penitentiary has also declined, due In part to the work or the Parole department. I strongly urge that the constitu tion or tne state be amended to per mit the restoration of the right to vote to persons who have performed tneir period or penal servitude, with out the necessity of Issuing a full paraon oy the Governor, as Is re quired at present. A report will later be filed with your honorable body, reviewing, as required by the constitution, the cases of extension of executive clem ency auring tne oiennium. Liquor Administration By overwhelming vote tht people 01 uregon at me last election re jected a measure to overturn the existing system of state control of the liquor traffic. I recognize this as a general endorsement of the plan and of Its administration. The Li quor Control commission has labored faithfully to manage the system strictly out isiriy. From tne bust ness aide Its operations have yielded increasing returns to tne state. The commission Is submitting no recommendations for amendment of tne present act. Labor Relations Peace In industry has generally prevailed during the past biennlum. Few disputes went to the point of strike or lockout. The efforts of the Executive and of the State Labor commissioner have been directed to ward conciliation of differences. 1 compliment employers and workers on the more friendly attitude dis played In negotiations over condi tions or employment. There Is in. creasing use of contracts with labor organizations and a better disposi tion to live up to contracts that have been agreed to. The federal government has now largely assumed control of labor re lations through the Wagner Act. cre ating the National Labor Relations board, the Wsges-and-Hours Act. and through court decisions validating tht extension of federal authority. The power of tho state does not ap pear to go much beyond efforts at mediation and local policing. If the states are denied power to legislate in this area, they are thus freed of responsibility. Only time will tell wnetner we can saieiy reiy on wasn lngton for Justice and security In labor relations. At any rate, I recom mend no labor legislation at this session. Game Management A very large number of people are interested in hunting and nsning They are often vocal, frequently di vided In their counsels and some times Intolerant of opposing opinion Consequently, the Game commission ooes not nave an easy task in per forming Its duties. These duties are becoming Increasingly those of game management ana not merely 01 law eniorcement, our commission is en deavoring to work out Plans for con servation of fish and game resources on tne basis of scientnic observation, Progress in this work Is naturally slow. I believe If our sportsmen will be patient that the policies now be ing puisuea win yieia gratuying re suits. The Game commission should be given full power to fix seasons and bag limits in fishing and hunting. This will remove vexing and some times trivial questions from absorb ing the time of the legislature, and enable a competent authority to ad just limits according to the vary ing conditions in this state. This action is strongly supported by tho uregon wuaiue leaeration ana oy representative sportsmen. Public Utilities The Public Utilities commissioner has been diligent In protecting the interests of users of utllttv services His department has been alert to press for reductions in rates, the savings to customers through reduc tions In electric rates in 1940 alone amounting to (1.517.000. Six new districts were established under the People's Utility district law during the biennlum and nine proposed districts were voted down To date eleven districts have been created and two have voted bonds to .finance acquisition or construc tion of an electric distribution sys tem. Undoubtedly the availability of energy from the federal power pro ject at Bonneville has stimulated in terest In public ownership. Private companies serving the territory have been aggressive In rate reductions and line extensions in an effort to preserve their field for private oper ation. Observing the financing of public utility districts in Washington, I am convinced of the soundness of the Oregon requirement that bonds be sold only at public sale. I do, how ever, recommend an amendment which would permit sale by negotl aon of utility district bonds to the federal government or a wholly owned agency of the government. This would be necessary In case a group 01 districts took over an en tire system with financing provided by the Reconstruction Finance cor poration. The Bonneville administration, on my request, reviewed our People's Utility District law and made sug gestions of changes which, with my comments, will be referred to ap propriate committees of your body. While certain amendments wouid smooth out the operation of the act, I do not propose its re-wrltlng. Districts are being formed under the act, and Its main structure has been tested In the courts and approved. Retirement Plan After the last Legislature I ap pointed a committee to work out a plan for the retirement of public employees. This committee has stud ied annuity systems and prepared a plan which Is entirely sound from an actuarial standpoint. 1 realize that there is much opposition to a re tirement system for public em ployees; but as federal social security is extended to cover more and more groups of citizens, the state and lo cal units of government must move to set up suitable retirement plans for their employees. I do not favor adoption of a pension system piece meal for selected classes of public employees, veterans' State Aid Commission The Veterans' State Aid commis sion Is making satisfactory progress In liquidating its outstanding loans, disposing of foreclosed properties, and is meeting Its bond obligations punctually. Additional Recommendations The movement In opposition to trade barriers at state borders Is growing, with the full encourage ment 01 governors or tne several states. The policy of trying to pro tect local industries by discrimina ITS FUN TO RIDE STREAMLINED CHAIR CARS-Sun parlor windows, Reclining chairs with foam rubber cushions Big rest rooms -Free pillows-Porter service. MODERN TOURIST PULLMANS Lounge ear for tourist passengers TO SAN FRANCISCO IN CHAIR CARS Oat war JlMiarftW, $1045 1885 IN TOURIST PULLMANS Os ws t Rouadtrip $15G 2530 (Hum tmtll ttit tiirtf hr csmerfsfrs btrtk.) tory laws and regulations Is short sighted and I hope will not be ap proved In Oregon. Chapter 474. Oregon Laws 1939, di rected administrative department to file copies of general orders and rules with tho secretary of state, who was required to provide for their publi cation. The experiment has not been a success because there Is no demand for the publication. I recommend the repeal of the chapter. Measures designed to Improve the administration of Justice, which have been prepared by national or ganizations of standing the National Conference of Commissioners on Uni form Laws, the Interstate Crime commission, the section of Judicial Administration of the American Bar association In all of which Oregon has representation, will be submit ted. Since these measures have been prepared by experts In particular fields and are designed to simplify practice through uniformity of text, they should receive the careful study of appropriate committees of the assembly. Administration Bills Ready Nearly a year ago I directed heads of departments under my control to prepare well in advance of this date the measures which they desired to recommend to the assembly. These bills have been prepared and are ready for presentation. I hope that this punctuality will assist the as sembly In expediting Its work. Execu tive departments are ready to cooper ate with the Legislature In every way possible. In the new State Li brary the government room has been placed at your disposal with trained staff members ready to assist In ref erence work for legislators. In closing this message I wish, as Governor, to report to you and to the people of Oregon, on the basis of my observation during two years as governor, that yours Is a good state government. By virtue of the ability and high character of state officials of the past, both the prac tices and the traditions of adminis tration here are worthy. Misuse of public funds or property Is extremely rare; there Is little or no extrava gance; and there Is a high degree of loyalty to tho public interest among all the state employees. I desire to express appreciation of the coopera tion I have received from other elected and appointed officials; and wish particularly to commend my colleagues on the principal boards of the state during tho past biennlum Hon. Earl Snell, secretary of state, and Hon. Walter E. Pearson, state treasurer for their ablo and consci entious Bcrvice. But self-satisfaction Is a sure road to dry rot and stagnation. Proud as we are of present attainments, we must continuously be alert to changes which will work for better ment. The pioneer spirit which we praise so much was one of adven ture, and the willingness to orig inate and experiment is as vital for progress today as ever it was. You who are members of this assembly are now In positions of leadership and responsibility. The people look to you to frame laws which will Im prove the structure and the opera tion of government, atnd laws under which the state may go forward to realize in fuller' measure political freedom and economic security. I hope the recommendations in this message will help point the way to sound progress for , Oregon In the years ahead. Aumsville Mr. and Mrs. Jeroma Simkins, formerly of Orchards, Wn., have moved to the Judd place. Their two boys enrolled In school Monday, John In the first grade and Ronald in the fourth. A Three Days' Cough is Your Danger Signal Creomulslon relieves promptly be cause it goes right to the seat of the trouble to help loosen and expel germ laden phlegm, and aid nature to soothe and heal raw, tender, in flamed bronchial mucous, mem branes. Tell your druggist to sell you a bottle of Creomulslon with the un derstanding you must like the way it quickly allays the cough or you are to have your money back. CREOMULSION for Coughs, Chest Colds, Bronchitis text time, try th train THE BEAVER! Southern Pacific's popular Economy Train to California BREAKFAST.... 25 LUNCHEON... . 30 1 PINNER 35t in tht aimnf ttr S-P Tfc rifidly Southern "aetfU C. A. LARSON Fhone 4MI (J 3 9 U
