SHELDON'S FAREWELL MESSAGE
Advice Ho Has to Offer to New Lawmakers Regarding Many Matters
of State Wide Interest.
Governor Shcldon'n farewell mcssago!
read to tho legislature wns a lengthy doc
ument, covering many subjects of state
policy and legislation. Chief among tho
topics touched on which will attract more
than ordinary attention are his recom
mendations relating to taxation, tho re
vision of tho stato primary law and to
liquor legislation. Tho portions of his
messago on these topics aro quoted hcro
vrlth. Other recommendations and com
ments he makes are ns follows.
That the govornor bo given discretion
to refuse to revlow applications for par
don or commutation of sentenco.
That an lndetennlnato sentonoo law bo
passed b ytho legislature and a board of
pardons bo established by nn amendment
to tho constitution.
That a plant bo established at the pen
itentiary to manufacture godos used by
too various state Institutions.
That the atato Institutions are in good
condition and great Improvements have
Jbeen made during tho last fow years.
That tho stato carry Its own Insurance
wherever suitable lire protection has been
provided.
Commending tho National Guard as de
serving of tho most loyal support by tho
citizens of tho stato.
Doplorlng that thero are not better mil
Jtla companies In J-dncoln and Omaha and
(pointing out lack of means Is the cause
ct Inefllclcncy
That tho stato build armories In thoso
Icltdes which are maintaining mllltla com
pantos.
That officers of mllltla companies be
appointed by tho governor nftor n com
petitive examination
Calling attention to tho fact ho has ap
pointed a commission on tho conservation
of natural resources, to servo without pay
find to report to the govornor.
That the legislature make provision so
that Nebraska can bo represented at the
Alaska-Yukon exposition.
That tho stato fair grounds be equipped
as speedily ns posslbla with pormanont
buildings.
Oommondlng tho National Corn cxposl
jtlon as a credit to tho commonwealth and
praising tho Nebraska exhibits.
I ftoporttng that tho silver service donat
d by tho stato to tho battleship Nobras-
ipi had been presented at aSn Francisco
uuno S.
Recommending tho legislature appro
priate $15,000 to apply on the cost of a
monument to Abraham Lincoln on tho
Capitol grounds.
Calling attention to tho necessity of re
pairing and Improving soino portions of
tho capttol, moro particularly tho base
ment.
Concurring In tho recommendation of
tho state veterinarian that a live stock
sanitary commission bo established
Recommending an appropriation sufll-
)clnt to cnablo tho stato authorities to
'maintain a llvo stock qunrnnttno whero
(needed.
Favoring an appropriation to enable
tho experiment station to make Investiga
tions for tho euro and prevention of hog
cholera.
Kavorlng means bo provided for the es
t&bllshmont of a bacteriological labora
tory.
Public Education.
Recommending liberal appropriations
ator tho training of teachers In tho Btate
university and normal schools,
Favoring an appropriation of at least
33Q.O00 to further Junior normal work.
Favoring an appropriation to assist
weak school districts.
Directing attontlon to tho fact that the
Increased valuation of assessment proper
ly will caro for tho normal growth of tho
ptate university and provide means for
increasing tho salaries of some profes
sors
Favoring an lncroaso In the size of tho
junlvorslty campus so that nn athlotlo
field and a place for cadets to drill can bo
provided.
Favoring appropriation for agricultural
experiment work.
The establishment of additional expert-
zne'nt stations, ono to he In tho sand hills
district, nnather in tho oxtromo western
part of tho state and another In tho Irrl
'gated section.
That In grazing counties the county
"board or tho people might rcqulro that
Wrop land bo fenced Instead of grazing
lands.
Reduction In State Debt,
Thero was a greater reduction In this
ctato debt during tho last blennlum thnn
lover boforo. On November ISO, 1006, thorn
hvero warrants outstanding ngntnst the
(general fund umountlng to $l,91G,G7i;n,
(On November 30, 1908, thin had boen ro
iduced to J76S.C80.72. Tho reduction in
'1907 amounted to $5:11,006.03, an.l In 1908
tho, roductton was $016,433.90, making a
'total reduction of J1,H8,010.59.
Tho 1-mlll levy, provided by law to re
jduoe the debt, produced during tho blon
tilum, $636,123.85. Therefore, tho levy
which was made for the general fuiul pro
duccd $511,916.74 moro than was nocos
sary for tho gonornl oxponsos of the stiito
government, and that amount wus up
plied on tho payment of tho debt. The
,levy for general purposes during the blrn
nlum was C mills, the samo us In provious
years. .
Calling attontlon to the report of tho
commissioner of public lands and but.
finga to tho oITnct the permanent school
fund should bo rolmburcd $525,587.60 unri
Showing thero Is in all nbout $8,290,000 o
itrust funds In tho pormanont school
tfund.
Recommending n change In tho law for
tho securing of public funds, ho that lira
mortgages on real ostuto or other securl
ties of equal vnluo may bo used ns so
curlty.
New Savings Dank Law.
Colling attention to tho need in this
atnto for a law that will encourage th
establishment of private savings banks,
Tho conditions are such in most of tho
smaller towns of tho atato Unit u savings
bank of ltsolf wll not pay, and conso
quently none aro established. Two plan
are suggested; Either the enactment o
mutual savings banks with tho prlvlloge
of having branches In various parts of the
State, or a law authorizing and provid
ing for the establishment In commercial
banks of a savings department, mit ro
culring tho business to be kept separate
and distinct.
What legislation be enictcd providing
for publicity of county funds and the In
terest paid tlnreon.
Taxation.
Tho state board of equalization unJcr
this administration has endeavored, so
far as It was possible, to mako the nsses
mentn of property uniform, so that each
class of property should bear its Just
proportion of the burdens bf taxation,
To this end. the Union I'nclllo railroad
property, In 1907, was Increased 25 per
cent. Increases were made on other rail
road property. Altogether tho nsscsscd
value of railroad property In 1907 and
lt'OS was Increased by tho board, $5,651,
411. Any one who has given the question of
railroad assessment much consideration,
and has familial Ized himself with the
fuels, muHt realize that the railroad com
panion nro, comparatively speaking, not
equitably assessed. Some of tho roads
whoso earnings are small are probably
assessed at a higher value than somo of
the other nnd greater railroads whose
earnings are much larger. However, these
Inequalities must necessarily contlnuo to
exist until the railroad compiinles rail out
with each other. At present thero Is nn
apparent disposition among tho railroad
compnnles to stand togethor nnd not give
Information concerning another company
that would bo helpful to tho board of
equalization.
In 1907 tho lsnfis of this state wcro as-
sescd at approximately $146,000,000, an
Increase of $53,700,000. This Increase was
brought about from tho fact that lands
had not been nssesed since tho year 1004,
and becuuso since that time thero has
boen a great Increase In tho valuo of
lands throughout tho state.
Difference In Valuation.
When tho assessment of lands was re
turned to the state board of equalization,
this your, It was apparent that county
nssessoro hnd not used tho samo meaauro
of value. Tho board endeavored to cor
rect that condition nnd perform its duty
ns tho law requires.
It Is the duty of the board of equaliza
tion to equalize all classes of property no
that tho burden of taxation may bo
equally shared.
The first ossontlnl In n Just system of
taxation Is to provldo means for u uni
form assessment. No class of tax payers
will complain of their assessment If tho
property Is assessed unlformlly through
out tho state.
The question of taxation is not nn ensy
one. But anyono fnmlllar with tho his
tory of tho assessment of property of this
stato during tho last ten yenrs known
thnt tho proporty at tho present tlmo Is
by far moro uniformly assessed than It
wn under tho old revenuo act.
It Is true that It Is difficult for tho
board of equalization to do Justice In all
Instances, because no ono can havo
knowledgo of tho actual valuo of all tho
property In all parts of tho state.
Tho board of equalization Is composed
of officers elected by tho peoplo of the
state. Thero need bo no fear that such n.
board will deliberately and Intcntolnnlly
do on Injustice to the taxpayers In any
portion of tho state.
Powers of State Board.
Tho board should not bo doprlved'of the
right to lower any class of property or
all classes of property returned for a
county. Neither hIiouUI tho board bo de
prived of tho right to tsfso all tho prop
erty or any class of property of a county
when, compared with other counties, such
proporty hn3 been under-valued.
Wben tho revenue law wns first en
acted that board could raise or lower nil
of the property within a county, but It
did not linvo tho right to raiso or lower
any particular class. ICxporlenco demon
strated that It was necessary to change
tho law, and experience has also demon
strated that tho change was a wiso one.
Tho law In this respect should bo left
aione. xncro is no necessity for any
change in tho law In this particular.
So fnr as tho assessment of land Is
concerned, it Is a matter of common
knowledge that the per cent of Incronso
In tho assessment of land values In 1908,
with tho exception of somo parts of tho
pond hills district, lncreuced from tho
oast to tho west. It Is also a mntter of
common knowledge that the kinds In tho
eastern part arc nsbessed ut more nenrly
their actual .value than they are In tho
western part of the stato. There should
be no complulut that such Is the caso
because tho people In tho western part of
the stnte nro still In that period of de
velopment when many sacrifices must
npccsiarlly bo made, n good many of
which nro for tho welfare of tho whole
slate. '
Assessment of Railroads.
So far in tho lands and tho nillronds
an concerned, I am firmly of tho opinion
that the railroads, with tho exception of
tho Union Pacific Kullrond company, are
assessed an high In proportion to their
actual valuo as nro the farm lands of this
stnto. I believe tho assessment of tho
Union Pacific Itnllrond company should be
still further Increased, In Justice to the
other taxpayers of this stnte, and have so
maintained while acting as a member of
the assessment board.
So far as the election of assessors by
precinct Is concerned, that Is a different
matter, and to that I havo no objection If
you doom It wise to muko tho change
If any amendments to tho revenue law
nro inude, the object should bo to secure,
If possible, u moro Just nnd equitable sys
tem of taxation.
A glance at tho grand assessment rolls
of this state will convince anyono that It
Is more necessary to devise ways nnd
means wheroby the owners of personal
property may pay more nenrly their pro
portion of the taxes t li tin to mnko amend
nientH which will restrict and tie tho
I in lulu of the board of equalization.
In 1906 the personal property or thin
state, other thun railroad nnd private car
service, was 576,053,000; In 1907, $83,186,-
000, and In 1908, $$2,593,000,
Anyone who Is familiar with tho condl-
tionu In this state knows that tho actual
vnluo of personal ptoperty in 1908 was
greater than It ws In 1907, yet the grand
assessment rolls shows u decrease of
$598,000.
The holder of tho Invisible personal
pioporty u.ldtmtly havo discovered vnrb
i ouh ways of concealing their property
! When the now ivvenue net was passed In
1 1503, and llrst put into force, thero was
a great Increase In the assessment of
personal property. It Is well worth your
white and attention to find out what
manner nnd methods the personal prop
erty owners nro employing to conceal
their property from assessment, and to
nmond tho law, if need be, so that such
action can be prevented,
Record of Legislation of 1907.
1 am pleated to Inform yon the, railway
commission estimates that shlppors nnd
paFsengrrs of this stnte have been saved
$6,000,000 as a result of legislation passed
by tho lust legislature, reducing passen
ger fares to 2 cents n mile; express rntos
25 per cent; and freight rates, on grain,
llvo stock, fruit, lumber and coal, nnd
other commodities In carload lots, 15 per
cent.
Experience has demonstrated thnt tho
terminal taxation law which wns pawned
by tho hist legislature has provided n
more equitable system of luxation, nnd on
tho whole has been beneficial to the tax
payers residing In the cities and villages,
Tho lust legislature also passed un net
to control lobbying nnd to prevent corrupt
practices nftectlng legislation; abolished
the free pnsH evil by enacting nn nntl
pass law; enucted u stutc-wldo primary
law, requiring political parties to nomlii
nto their candidates by direct voto of tha
people, nnd gave tho railway commission
power to put nn end to rebates nnd dis
criminations In transportation, to muko
and to tlx rates, ntut to control them
ptopcrly In nil particulars. Telephone,
telegraph, express nnd street railway
companies were nlso placed under the
control of tho railway commission.
That legislature passed u puro food
law and on employes' liability act. It
enacted laws providing for neglected chil
dren; provldod for froo high school privil
eges for normal training In high schools
and assistance for weak school districts;
prohibited pooling by brldgo contractors!
and provided a way to removo officers for
willful neglect of duty and falluro to en
forco laws.
Primary law.
The primary law should not bo repealed
but in some particulars should bo amend
ed. Provisions should bo made for a ro
tuled ballot. Tho preclnct-commlttcomen
should bo selected by tho votors nt the
primaries Instead of being nppolnted by
tho county candidates, as now provided
There, should bo a different provision
thnn that now continued In tho law re
gnrdlng platform conventions. Now, each
county Is entiled to ono delegate. This Is
not representative. Another objection is
that tho platform convention is not held
until after tho primaries. A party plat
form should bo promulgated boforo tho
candidates are nomlnnted. Provisions
Bhould bo mado so that tho platform con
vcntlon shall bo held before tho primaries
or tho matter of platform-making left to
tho candidates nominated by tho respec
tive parties.
Sterllzatlon of Delinquents.
Thoso dependent upon tho stato havo
been Increasing year by year, and moro
particularly tho Insane and convicts. Till
Is a mntter for exceedingly Borlous con
sideration.
Society Is Justified In adopting such
pollclos, and In carrying them out ngalnst
Individuals, ns will In tho long run tend
to help elevate and pcrpotuato tho hu
man race. Careless and Ill-advised mar
riages have had a great deal to do In In
crcnslng tho dependent classes and In
producing untold misery. I therefore
recommend for your earnest consideration
a change In our marriage laws so that, It
will be Impossible for any man or woman
to marry until a ccrtlllcato from a physl-
clnn licensed to practice In this stato has
been presented, containing a statement
that their health Is good and that they
ure capable of producing healthy off
spring. Those who aro a burden upon
society should not be permitted to repro
duce themselves.
In order tojirevent tho confirmed crim
inal and tho incurnblo Insane from pro
ducing offspring I suggest thnt you give
careful consideration to tho noccsslty of
passing a law providing for tho steriliza
tion of that class of people.
Regulation of Liquor Traffic.
In my opinion tho tlmo hns come for
advanced legislation to better rogulato
nnd control tho liquor truffle. At tho pros
cnt time thero Is no polltlcnl party which
l ubllcly will "stand pat" on tho Hlocumb
law. Tho demands of tho hour call for
legislation to control nnd regulate this
traffic In accordance with the present
conditions and needs of tho stnte. This
question should not be pormlttod to drag
along until legislation Is enncted that
will satisfy only the the extremists. In
that event tho legislation will probably
be thnt which a minority rather than a
mujorlty approve. Experience in tho en
forcement of tho liquor laws demon
strates thnt It Is difficult to enforce
these laws In any community whom pub
lic sentiment Is against such action.
The saloon as It now exists Is Inde
fenslble. It brenks our laws, corrupts our
politics, degrades our men nnd fills ou
prisons nnd asylums.
This question must be met In a prnctl
cnl way. Aftor carofut consideration I
havo conio to the conclusion that tho pro
per thing to do nt thlH tlmo Ib to puss a
Htnle-wldo prohibition net, making pro
vision so thut uny municipality muy aus
pend such nn act by a three-fifths vote
and In such Instances to havo liquor dls
ponsed ns may be provided by law. ThlB
will put the burden upon thoso who de
slro of make a profit nut of tho saloon
business, rather than upon tha peoplo of
the stato who desire tho saloons nbol
Ished. I therefore recommend thut you
puss such an net and thnt you ulso sub
mlt to tho peoplo of thlu stato a constl
tutlonal amendment embodying such pro
visions.
The Anti-Treat Law.
In the early part of my administration
I wns requested by numerous petitions to
enforce tho untl-treat law. To such I
replied that I stood ready to do all In my
power to onforco that law, but that noth
Ing could bo dono unless thoso who had
knowledgo of Its violation would them
selves tuko the Initiative In securing tho
evidence, presenting It to the prosecuting
attorney ;ml standing behind tho com
plaint. This particular section of tho tSlocumh
law has become obsolcto ami is a dead
letter. If It could bo enforced It would
be one of the best possible measures to
prevent intemporunco that could bo pro
posed. Theicfore, I recommend that you amend
this particular section, known ns Section
31 of tho Compiled Statutes, so that tho
authorities who grant tho saloon licenses
will be compelled to revoke u llcomio
whenever any person dinks liquor In u
saloon that ho has not liimsolf paid. (or.
SHALLENBERGER'S FIRST MESSAGE
Urges Passage of Bank Guarantee Law and Makes Other Recom
mendations and Suggestions.
Following In the principal subjects
touchod upon by Oovomor Shnllonber-
gcr In his first mossago to tho Nobrnu
ltn legislature:
To tho senate und house of representa
tives of tho thirty-first session of tho No-
braslm. legislation: I congratulato you
upon being called to servo In your legis
lative capacity nt n time when the stnte
Is enjoying general prosperity. Nature
ins been kind and her yield bountiful.
Our peoplo nre Industrious nnd the de
mand nnd prices for their products sails-
factory. Our population Is not douse,
probably less than ono and one-halt mil
lions of peoplo dwell vvllhln our borders.
,V study of tho records of our burenu of
statistics will show how marvelous have
been the achievements of these l:Uer
yenrs. So rich our soil, so matchless our
climate, so wonderful the Industry of our
people that hero upon Nebraska soil,
Amerlcun civilization In Its highest devel
opment piles up each year a larger sur
plus of useful products than n llko num
ber of peoplo can produce upon uny
other spot on earth.
With a clearness of vision and under
standing ns to tho purposes and possibili
ties of legislative onactment, a slcndfast
and successful people will not expect of
you Impossible things or unreasonable
laws. Having wrung year nftor year,
great rlchc3 from u generous soil, they
now know that they can compel prosper
ity to abldo with them ulwnys. They will
however, expect of the party, whoso
inmnhoru control this sonata and the
house, the specific legislation pledged In
Mm nlntforin uoon which you were
elected.
Governor Sholdon hns dtalled to you
the result of his administration of state
uffalrs. nnd you havo listened to his roc
ommendntlonB. I urgo that you give
earnest and careful consideration to nil
that he has said.
1 shall brloflv call your attention io
incriatntinti. iim iirosocct and nopo or
which, in my opinion, has brought about
this ohango In the control of the execu
tive and legislative departments of state
government. It Is first to be noted that
no now or radical legislation is asked for,
12verv suggestion Is but to amend, cor-
reet. or lmDrovo some oxlsiing law,
An n irrnornl rule, wo alrcnay imvn iua
i ... i atntllfn
books. Many nro good, some Imperfect,
a few bad. Tho good should be let alono,
iho imnorfcctlons cured, tho bad repealed.
What Is needed, In my judgment, is un
linnoRt and fcnriesB eiuorceinein. u
. I . ....... r.. im rntlinr than n
constant cry for now laws, and now laws
IRWB Ullll '!
. r,n .vrriiaa for Inaction and delay.
The matters to which i wisn io can
your especial attention are not numerous,
hut T bellevo them to be Important.
I shall present them to you unuer sepa
rata heads.
Sugoottlons as to Improvements In our
Banking Law
Cnrneclo has said, "America
I. n n 1ia U'ft rtt t Imnklntr BVBtcm in the
world." I scarcely think the facts war
rant such a statement, but will venture
tho opinion thnt we have not tho best
system that it is posslblo for us Co obtnln
and nothing but tho best should bo good
enough for tho peoplo of Nebraska, uur
present law Is very much In ndvanco In
nil that nertalns to safo und propor bnnk-
ir tr tlm inw which nrocceded It. Ino
one will venture trf'mnlntnln that tho one
now In force. Is perftct, therefore, we
nro wurrantcd In nskltig for still further
improvement. Tho primary purpose ror
tho establishment of banks so far as tho
nu'bllo Is concerned, Is llrst that the peo
plo shall have a nufo pluco to deposit
their money, and second thnt those who
need them may conveniently obtain fundf
upon proper security nfter th monoy
shall havo boen gathered together by the
banking corporation.
Tho Ideul system of banking will guar
antee to depositors tho absolute certain
ty of tho return of every dollar deposit
ed, nnd this will lnsuro tho greatest pos
slblo volumo of lonnablo funds In bnnks
for tho nocds of business, The stnto and
nntlon should see to It thnt every safo
guard shall bo provided for the security
of the depositor since they permit and
authorlzo tho receiving of deposits under
tho sanction of a chnrter granted by the
state.
From time to time, these guaranties
hav'o been Increased until lossss to de
posltors nre rare Indeed, Tho report of
tho comptroller of tho currency for 1908
shows that n tnx of one twenty-sixth of
one per cent levied upon tho doposlts In
national banks during tho forty-flvo years
thnt thnt system has boon in existence
would havo rnlsed n sufficient sum so that
no person, who had trusted his money to
a national bank, would have lost a cent
A study of tho figures of our own stato
banking department shows oven a moro
satisfactory condition. Only during tho
last eight years, has tho law provided for
a comploto report from receivers of failed
banks. During this period a tnx of less
thun one-thirtieth of ono per cent lovled
upon tho deposits in our stato banks
would huvo raised a sum sufTVsJent to
hnvo Insured every doposltor ngulnst any
posslblo loss.
With thoso facts before us, I do not
hesitate to nay thnt It Is a reflection
upon our American civilization nnd busi
ness methods to longer fall to provide nn
Insurance guaranty fund und bnnklng
law. which will mako every dollar de
posited In a Nebraska bank absolutely
sure of being returned to Its lawful
owner upon demand. Certain deposits nro
now secured In state nnd national banks
by safo guards In uddltlon to tho guar
anties which the law exacts of tho bank
er to piotect his Individual depositor,
The county, the stale and tho nation hav
ing found by oxperlenco thnt tho secur
ities which the Inw provides for the or
dinary depositor nro at times Insufficient
and thi'iefore required that tho bnnks
shall nt tholr own expense dcpoBlt bonds
uj additional security to protect them
i.Kulimt uny possibility of loss,
1 bellevo thut tho desired security can
be obtained by levying a light tax upon
i lit- cupltnl stock of tiucli bank tiansucting
;UhliieAt under our laws, thus providing
u guaranty fur i . ( ,i .nomptly uny
possible loss to . -1 . by reason of i additional amount that would be contrl
Uiu failure of a slulu bank, Tho amount buted to such a guaranty fund during the
of such tax to be n certain per cent of
the average deposits ns shown by tho re
ports of the department of banking nnd
payment to bo mndo nt stnted periods
and for a fixed amount,
Our stato department of banking has a
complete record for tho past eight years
g),0vjng tho result of receiverships of In-
solvent state banks. This record shows
that since 1000 a total deposit of $615,
164.24 has been placed In Jeopardy by
reason of the failure of state banks. From
the assets of these Insolvent institutions
depositors claims have been liquidated
until tho balance unpaid for the entire
period of eight yenrs Is $108,255.23 or nn
average annual loss of about $26,000.00 to
depositors. Creditable as this showing is,
t feel quite certain that with a number
of Improvements which can bo mado in
our present law, tho percentage of loss
can still be materially reduced. The
minimum cupltal required for tho Incor
poration of n state bank should bo In
creased to at least $15,000.00. Hank ex
aminations should bo mado twlco n year
Instead of once ns now required, Ex
aminers should be unsigned to u certain
territory and thus eventually would bo-
como familiar with conditions and secur
ities In thnt locality and would ncqulro
the necessary knowledgo ns to tho worth
of tho bills receivable of tho banks which
they would examine, which Is tho essen
tial thing In dotormlnlug tho solvency of
any banking corporation.
Under u guaranty plan which would
make tho bunks of the ntuto sustain the
losses of tho entire system, tho bankers
should bo given a share In tho control of
the department. Tllo present bnnkmg
board, which Is composed of three officers
elected for un entirely different purpose,
should bo abolished nnd n non-pnrtlsun
board established to bo composed of three
members nppolnted by the governor each
of Its members to have had at least five
years' practical experience In banking and
it lenst two of them to bo nctlvelv en
gaged In thut business at the time of
their appointment. A bunk commissioner
should bo appointed by the governor with
tho npprovnl of tho banking bonrd, who
should havo had nil experience In tho
bunking business equivalent to thnt re
quired of a member of tho bonrd, and he
Bhould select tho necessary numbor of
examiners with tho npprovnl of tho board
of control. Tho banking board should sit
In session ut Lincoln nt stnted periods
and bo paid for tho uctuul tlmo In ses
sion. Thoy should havo comploto con
trol of the Issunnca of charters and tho
general administration of the banking
laws. It has been urged by critics of tho
guaranty of deposits plan that It would
lead to the establishment of too many
lanks. This would bo a nerlous objec
tlon If such were tho result. It would
greatly strengthen our bnnklng systom if
tho bnnklng bonrd woro empowered to ex
erclse n. proper censorship over the Issu-
Unco of bank chnrters.
The possibilities of profit to be mado in
taking other people's money on deposit,
loaning It to tho public ana Keeping tho
interest thereon Is so nl urine that nt
times tho number of banks Incronso moro
rapidly than tho need of busbies rcqulro
with consequent ovcrloanlng, hazardous
risks, extravagance In buildings nnd ox-
penses with tho result that In loan years 1
failures occur nnd Innocent peoplo suf
fer. Tho oveilasuuuco of charters can bo
In u great meaauro ovcrcomo by Increased
requirements us to tho amount of cnpltnl
stock nccessnry to bo paid In by tho
stock holders beforo a charter shall Is
sue. The amount required In each In
iituucA should bear u propor proportion to
the population of the town or city In
which the bank In to bo established. As
an example, showing tho ninnner In
which requirements us to capital affect
the number of bank churtcrs Issued, .1,942
national bunks hnve been orgnnlzc.l slnco
1900 when tho requirements or capital
stock wns reduced to $25,000.00 ns the
minimum. This Is 382 moro banks than
the entire number In existence, when tho
law wns chnnged lit that respect. The re
duction of the minimum capital titock re
quirement to $25,000,00 hns doubled tho
number of national bui)ks In eight yenrs,
A substantial Increase In thn amount re
quired ns a minimum cnpltnl for the cs-
tnbllshment of stnto banks would havo
a salutuury effect In keeping tho number
of banks within a satisfactory limit and
also provldo greater security to tho de
positors.
As to the amount of nssessment to be
levied In order to provide nn n.lcquuto
fund for tho prompt payment of deposit
ors of Insolvent batiks, 1 would suggest
thut one-fourth of ono per cent bo levied
upon the doposlts ns shown nt tho last
statement published prior tp tho com
mencement of tho operation of the law,
nnd this assessment to be followed with
additional lovles In llko amount nt periods
of Blx, twelve, nnd eighteen months
thereafter. After the accumulation of n
guaranty fund eqnnl to ono per cent of
tho average deposits In the guaranteed
bnnks, un nnnual tnx of one-tonth of ono
per cent should bo lovicd, becauso It Is
necessary under n proper system of Insur
ance that tho prosperous years should
pllo up a surplus fund to provide for tho
Inevitable demands of less fortunate
times, As un nddltlouul security ngulnst
nny posslblo emergency, such ns extra
ordlnnry demands upon tho fund the
bonrd should bo empowered to levy nn
itfseHsment of not to exceed two per
cent of tho nverugu deposits In nny one
year. While this assessment might never
tn levied, tho power to use it would have
a sustaining effect In times of possible
panics. Huch provisions would result In
accumulating In eighteen months with
the average of deposits remaining In stnte
banks us nt present a guaranty fund of
$M2,S5i.0O, This would bo $127,097.00
morn thun tho entire amount of ilcpooslts
Involved In bank failures In this stale
In tho Inst nine years, It Is thrcu times
the amount thnt would have been neces
sary to havo pal. I upon demand nil tlw
monoy duo depositors In failed banks dur
ing tho years with the heaviest failures
of any In the past decade. It is seven
times ns much ns would luivo been r.
r.ulrod to puy Immediately all of the do
poslts tied up In state bunks during any
ono i f the Inst seven years. With the
years when rio failures Would oocUr and
added to this tho powor to raiso In any
one year by extraordinary asjdssmont six
times as much as has boon placed In
Jeopardy during th worst year that wo
have cxperlencod sinco tha present law
Wns established. It Is my Judfmorit that
such a Hystem would bo a rock of rcfugo
for tho banks And for tho peoplo In tho
fiercest financial storms that may como.
I deslro nt this tlmo to congratulato and
commend tho management of our pros-
nt bunking department for tho splendid
results It hns secured under tho present
law. It Is tho showing of exceedingly
smnll losios sustained under our present
management and system which gives ua
confidence to'bellovo that with Improve
ments In our laws ns to capitalization.
management nnd control n. still hotter
showing can be accomplished. Tha pro
posed guaranty fund Under such a sys
tem ua has been suggostcd should b de
posited with tho stnto banks under regu
lations similar to our present Btato de
pository law or with such additional se
curity ns tho legislature may require. The
proposed taw should provldo that na
tional banks may avail themselves of tha
advantages nnd protection of the guar
anty fund undor sultnblo provisions nnd
satisfactory showing as to tho condition
of such banks to tho bnnklng board.
The, banking board should bo empow
ered to llx tho rnto of Interest to bo
paid depositors by banking corporations
operating under tho guaranty of deposits
law, or If this bo thought too groat a
powor to confer upon them, tho rato
should bo flxod In tho matuto by tho
legislature.
Revenue Law.
Our prosent revenuo law should bo
amended In so far as Is necessary to ro-
store to tho people tho right to loot tho
precinct nsxessors nnd to limit In part
ut least tho arbitrary powers which tho
ptoscnt law gives to tho stnto board of
equalization nnd assessment, so that tho
people shall have restored to thorn soma
voice In determining tho amount of
taxes they shall bo compelled to pay to
support tho stuto government. It appears
to mo too great a gift of powor to give
to tho stnto and oonuty boards the right
to dotormlno tho amount of tha levy
which shall bo laid upon tho proporty of
tho citizen nnd nt tho same tlmo empower
tho state board to dotormlno through Its
mandates to the county assesors and his
deputies tha valuation that shall bo
plucod upon tho proporty of tho tax pay
ors. When wo consider that tho mombors
of this nil powerful board of assessment
acting In their official capacity ns tho
bonds of different state departments aro
authorized to spend tho money taken
from tho pockets of tho peoplo by tho
foroo of this same revenuo law, tho dan
ger lurking In this excess of power be
comes moro npparcnt. It Is to bo ro
marked that different stnto departments
hnve commended tho present law becauso
it provides much money for tholr use. It
Is generally to be noted that thoso who
pay out monoy which others must pay
In, view the magnitude of tho amount to
bo expended with greater equanmlty than
those who havo to provldo It. Tho cost
of our state government has increasod
enormously In recent years. I wish to
Impress upon you that funds should be
provided to meat every legitimate demand
of tho government, our different stato In
stitutions nnd our school, but every dol
lar thnt comes out of tho treasury must
havo been pnld In by somo tax payer
nnd tho great bulk of tha state's Incomo
Is dug out of tho soil by tho unremitting
toll of thoBo who can 111 afford to pay
for extravanganco or unnecessary cx-
penso.
Tho Primary Law.
Our present primary law Is unsatlsfao
tory and unfair in many of Its provisions.
Tllo expenso to tho stnto In holding a
state wldo primary Is enormous, and un.
less tho election results In registering
tho will of tho party majority of thoso
voting und placing hotter candidates bo
foro tho peoplo than the convention motli
od, tho benefits of tho Inw cannot bo said
to warrant Its cost, Undor Uio prosont
Inw, the accidental alphabetical position
of thn candidates named upon tho ballot
Is at times moro potent in obtaining nom
inations than merit or nblllty. Tho num
ber of names required upon tho petition
of a cnndldato for a stuto office, 1b gross
ly Insufficient, The cost of elections
both to thn candidates and tho state is
greatly Increased. It Is doubtful if tha
average olector will over" havo tho re
quired acquaintance with tho long list ot
candidates for tho different offices upon
tho ballot In u stato wldo primary to ln
suro Intelligent selection. I would sug
gest to you a county primary to nomtnat
county officers nnd delegates to a Btata
convention. Tho stato convention to so
Icct two or more names for each offlca
to go upon tho prlmnry ballot nnd to
make tho party platform, which ought to
hi Issued In ndvnneo of tho primary, in
stead of subsequent to It, lis nt present.
Administration of State Institutions.
I would Suggest that the constitution
b so amended that n non-partisan board
of control could be created to ba ap
pointed by tho govornor and have con
ferred upon It the entlro management of
our various stnto Institutions. Tho state
Institutions should bo removed from pol
itics us far iib may bo dono nnd merit
iilono should detcrmlno the right of nny
person to servo tho stnto In tho dif
ferent departments 'mado subject to tho
board of control. This bonrd, In my opin
ion, should consist of thrco members and
hnvo nt Its command the state account
and a qualified purchasing or business
ngont, who should havo a general knowl
edge ns to machinery, material and con
struction contracts and of nil mnttors ot
business coming before tho board. This
board of control should purchase the
supplies for all the stuto Institutions by
open competition among thoso desiring
sell to tho state, The practice of main
taining a cush fund ut the various state
Institutions should bo abolished and the
business of tho stnto so fur ns It applies
to the general conduct und administration
of the different stuto Institutions should
be thoroughly systematized.
It Is my most conlldent belief
thut If yon provide Eutlsfuclory legisla
tion relating to tho question to which 1
have icfened, you can go homo with tho
certainty thut you will meet a satlsflod
constituency. With a linn lellnnco upon
Ilic wUdom and Judgment of this legisla
ture and hopa thut with your assistance,
wo may togotlior In somo fulr measure
fulfill the hopes and meet tho expecta
tions of the citizens of Nebraska, who
have trusted us with powor, I submit
these questions to yvu, gentlemen it tho
house nnd senate
