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V
SHELDON'S FAREWELL MESSAGE
Advice Ho Has to Offer to New Lawmakers Regarding Many Matters
of State Wide Interest.
Governor Sheldon's farewell message
road to the legislature was u lengthy doc
ument, covering many subjects of Btntc
policy nnd legislation. Chief among the
topics touched on which will attract more
thnn ordinary attention aro his recom
mendations relating to taxation, tho re
vision of the statu primary law nnd to
liquor legislation. Tho portions of his
tntssago on these topics nro quoted here
with. Othor recommendations nnd com
ments hu makes are ns follow h.
That tho Bovornor ho given discretion
to refuse to revlow nppllcatlons for par
don or commutation of sentence
That nn Indeterminate sentence law he
passed It y tho legislature and a hoard of
pardons ho established by mi amendment
to the constitution.
That a jrtant be established nt tho pen
itentiary to manufacture godoa used by
tho various stnto Institutions.
That tho stato Institutions uro In Rood
condition nnd Kroat improvements havo
been mado during the last few years.
Thnt tho state carry Us own Insurance
whrrcvor suitable flro protection has been
ptoylded.
Commending the National Ouanl ns de
serving of Uie most loyal support by tho
citizens of the stnto.
Deploring tliat there arc not hotter mil
It In compatrtcs In Lincoln and Omaha and
pointing out lack of means Is tho cause
ef inefficiency.
Chat the stato build armories In thn3o
cities which arc maintaining militia com
panies. That ofllccrs of mllltla eompnnlcs b
appointed by the governor after a com
rrtltlvo examination.
Culling attention to the fact ho has ap
pointed u commission on tho conservation
of natural resources, to servo without pay
and to report U tho governor.
Thnt tho legislature make provision so
that Nohrruda can he represented ut the
'.Alaska-Yukon exposition,
i That tho Btuto fair grounds bo equipped
'ns speedily as posslblo with permanent
ifcutldlng.
I Commending tho National Corn exposi
tion as a credit to tho commonwealth and
(praising tho Nebraska exhibits.
I lluportlng that' the silver service donat
ed by tho stato to the battleship Nebras
jlca had boon proscutcd nt nSn Francisco
Juno 8.
ltecomtnondlng the legislature nppro
prlato J 1 5,000 to apply on tho cost of n
'monument to Abraham Lincoln on tho
cnpltol grounds.
Calling attention to tho necessity of re
pairing nnd Improving tome portions of
tho capital, mora particularly tho base
ment. Concurring In the recommendation of
tho stato veterinarian that a live stock
sanitary commission ho established.
Kecomtnendlng on appropriation suffi
cient U cnabla tho stato authorities to
mnlntnln a live stock quarantine where
needed.
Favoring on appropriation to cnablo
tho experiment station to mako Investiga
tions for Uto euro nnd prevention of hog
cholera.
Favoring, means bo provided for tho es
tablishment of & bacteriological laboia
tccy. Public Education.
Recommending liberal appropriations
for tho training of tenchem In tho state
university and normal schools.
Favoring on appropriation of at least
$20,000 to further junior normal work.
Favoring nn appropriation to nsslnt
weak school districts.
Dlroctlng attention to the fact that the
.Increased valuation of assessment proper
ty will care for tho normal growth of the
stato university and provldo means for
.Increasing tho salaries of somo profes
sors. Favoring an Increase In the slzo of tho
university campus so that nn nthlotlo
'field and a place for cadets to drill can ho
provided.
Favoring appropriation for agricultural
experiment wark.
The establishment of additional experi
ment stations, ono to ho In tho sand hills
district, n not Ivor In tho extreme westorn
purt of tho state and another In tho Irri
tated section.
That In grazing counties the county
hoard or tho pcoplo might rcqulro that
crop land bo fenced Instead of grazing
lands.
Reduction In State Debt.
Thero was a greater reduction In tho
stato dobt during tho last blonnlum than
ever boforc. On November SO, 190G, thero
wero warrants outstanding against the
.general fund amounting to $1,910,071.13,
On Nevembor 30, 1908, this had been re
duced to $7GS,G30.72. Tha reduction In
1907 amounted to $531,C06.G9, and In 1908
tho reduction was 3616,433.90, making n
total reduction of $1,148,010,59.
Tho 1-mlll levy, provided by law to re
duce tho debt, produced during the blcn
nlum, KX6.123.85. Thoreforo, tho levy
which was made for the general fund pro
duced $511,918.74 moro than was noccs
enry for tho General expenses of tho stato
government, nnd that amount was ap
plied on tho payment of tho debt. Tho
levy for gcnorul purposes during tho blon
nlum was S mills, tho samo as In provious
years.
Calling attention to tho report of tho
commissioner of public lands and huh
eng.i to tho effoct tho permanent school
fund should to rclmburcd J525.0S7.5O nnr
showing Wioro Is In all about $8,290,000 of
trust funds In tho permanent school
fund.
Recommending a change In tho law for
tho semiring of public funJs, so that first
mortgnges on real estate or other securi
ties of equal valuo may be used as so
curlty. New Savlnns Dank Law.
Calling attention to tho need In this
stato for a law that will encourngo the
establishment f private savings hanks.
Tho conditions nre such In most of tho
emnllor towns of tho utate that n savings
bank of Itsotf wll not pay, nnd conse
quently none nro established. Two plans
are suggested: Klther tho enactment of
mutual savings banks with tho prlvllega
of having braohes In various parts of the
stale, or a law authorizing and provid
ing far the establishment In commercial
hanks of a savings department, but re
quiring tUo business to bo kept separate
and tllsUoot ft
Tlt legislation bo enacted pffovldlng
for publicity of county funds nnd the In
terest paid thereon.
Taxation.
Tho state board of equalization under
this administration has endeavored, so
far ns It wns possible, to muko tho nsses
ments of property uniform, so that each
class of property should hear Its Just
ptoportlon of tho burdens of taxation.
To thlB end, the Union Pacific railroad
property, In 1907, was Increased 25 per
cent. Increases wero mado on other rail
road property. Altogether tho assessed
value of railroad property In 1907 and
It-OS was luoretwud by the board, $G,6j1,
111. Any one who has given the question of
tnllrond assessment much consideration,
and lias famlllat Izcd himself with tho
fuels, must realizo that tho railroad com
tpanles nre, comparatively spoaklng, tint
equitably ussossed. Somo f tho roads
whose earnings nro small ate probably
assessed at a higher valuo than soma of
the other and greater railroads whoso
earnings nro much larger. However, these
Inequalities must necessarily continue to
exist until tho railroad companies fall out
with each other. At present thero Is an
nppnrent disposition among tho railroad
companies to stand togother nnd not glvo
Information concerning nnothcr company
that would bo helpful to thu board of
equalization.
In 1907 tho lands of this ntntc were ns
sesed tit approximately $116,000,000, an
Increase of($5.",700,000. Thin Increaso wns
brought about from tho fact that lands
hod not been nsscsod slnco tho year 1901,
and bceauso nlnco that time thero has
been a great Incrcnse In tho valuo of
lands throughout tho stale.
Difference In Valuation.
When the nsEcssmcnt of lands wns re
turned to tho stato hoard nf equalization,
this year, It was apparent that county
assessors had not used tho samo measure
of vuluo. The hoard endeavored to cor
n.Tt thnt condition nnd perform its duty
as tho law requires.
It Is the duty of tho board of equaliza
tion to equalize all classes of property so
that the burden of taxation may bo
equally shared.
Tho first essential In a Just system of
taxation is to provldu menus for a uni
form assessment. No class of tax payers
will complain of their assessment If tho
property Is assessed uniformity through
out tho state.
Tho question of taxation Is not nn easy
one. Rut anyone fnmlliar with tho his
tory of tha assessment of property of this
stato during tho last ten years knows
that tho property nt tho present tlmo Is
by far more uniformly assessed than It
was under tho old revenuo net.
It is true that It Is difficult for the
board of equalization to do justice In nil
Instances, because no ono can havo
knowledge of tho nctual valuo of all tho
property In all parts of the state.
'Tho board of equalization Is composed
of officers elected by tho pcoplo of tho
state. There need bo no f.cnr thnt such a
board will deliberately nnd intentolnnlly
do an lnjustlco to the taxpayers In any
portion of the state.
Powers of State Doard.
Tho board should not bo deprived of tho
right to lower any class of property or
all classes of property returned for a
county. Neither should tho board be do
prlved of tho right to rvfso all tho prop
erty or any class of property of a county
when, compared with other counties, such
proporty has been under-valued.
"When tho ravenuo law was first en
acted thnt board could rnlse or lower all
of tho proporty within n county, hut It
did not havo tho right to ralso or lower
any particular class. Experience demon
strated that It was necessary to changa
the law, and experience hns nlso demon
strated that tho change was u wise ono.
Tho Uw In this respect should bo left
alone. Thero Is no necessity for any
change In tho law In this particular.
So far as tho assessment of land Is
concerned, It Is a matter of common
knowledge that tho per cent of Increaso
In the assessment of land values In 190S,
with the exception of somo parts of tho
sand hills district, Increased from tho
east to tho west. It Is also a matter of
common knowlcdgo that tho lands In tho
eastern part nro assessed nt moro nearly
their actual valuo than they nro In tho
western part of tho state. Thero should
bo no complaint thnt such Is the caso
because the people In tho western part of
tho stato uro still In that period of de
velopment when mnny sacrifices must
necessarily bo made, n good many of
which aro for tho welfare of tho whole
stato.
Assessment of Railroads.
So far aa tho lands nnd tho railroads
nro concerned, I am firmly of tho opinion
that tho railroads, with tho exception of
tho Union Pacific Railroad company, nro
assessed us high In proportion to their
actual valuo ns aro tho farm lands of this
state. I bellevo tho assessment of tho
Union Pacific Railroad company should be
still further Increased, In Justice to tho
other taxpayers of this stato, and havo so
maintained while nctlng ns a member of
tho asHcssment board.
So far ns tho election of assessors by
precinct Is concerned, thnt Is a different
matter, and to thnt I havo no objection if
you deem It wlso to muko tho change
If any amendments to tho revenuo law
nro made, tho object should bo1 to secure,
If possible, a moro Just and cqultnblo sys
tem of tnxntlon.
A glanco at tho grand assessment rolls
of this stato will convince anyone thnt It
Is more noccsaary to Uovlso ways and
menus whereby tho owners of personal
property may pay moro nearly tholr pro
portion of thu taxes than to make nmend
mentH which will restrict nnd tlo tho
hands of the board of equalization.
In 1900 tho pcrsonnl property of this
state, othor than railroad and prlvuto car
servlco, was $75,053,000; in 1907, $83,180,
000, nnd In 1908, $82,593,000.
Anyone who is famillur with tho condi
tions in this stnto knows that tho actual
valuo of personul property In 1908 was
greater than It ws In 1907, yet tho grand
assessment rolls shows a decrease of
$592,000.
Tho holders or tho Invisible personal
property evidently havo discovered vari
ous wuys of concealing tholr property.
When tho new revenue act was passed In
1C03, and first put Into force, thero watf
n great Increase In the nssessmont ol
personal property. It Is well worth youi
while and nttentlon to find out whal
manner and methods tha personal prop
erty owners uro employing to conceal
their property from assessment, and to
I nmend the taw, If need bo, so that such
action can bo prevented.
Record of Legislation of 1907.
I nm pleased to Inform you the railway
commission estimates that shippers and
imssengers of this state have been saved
$6,000,000 as a result of legislation passed
by tho last legislature, reducing passon
gor fares to 2 cents a mile; express rates'
23 por cent; and freight rates, on grain,
llvo stock, fruit, lumber and coal, nnd
other commodities In cm load lots, 15 vc
cent.
12xpc"lenec has demonstrated that tha
terminal taxation law which was passed
by tho last legislature has provided il
more equltahlo system of taxation, nnd on
tho whole Iiuh been bonellclnl to the tax
payers residing In the cities and villages.
The last legislature nlso passed an net
to control lobbying nnd to prevent corrupt
practices affecting legislation; ubollshuJ
tho free pass evil by enacting un nntl
pa3 law; enacted u stnto-wldo primary
Inw, requiring pollllc.il partleH to nomln
nto their candidates by direct voto or tho
people, nnd gnvo the railway commission
power to put nn end to rebates nnd dis
criminations In transportation, to mnko
and to tlx rnteii, nnd to control them
properly In nil particulars. Telephone
telegraph, oxpiess nnd sheet tnllway
companies were nlso placed under the
control of tho inllwny commission.
That leglrlaturo passed a puro food
law nnd un employs' liability net. It
enacted lawn providing for neglected chili
drcn; provided for fiee high school privil
eges for normal training In high schools'
and nsststnnco for weak school districts;
prohibited pooling by hrhlgo contractors,
nnd provided a way to remove officers fof
willful neglect of duty and falluro to en
force laws.
Primary law.
The primary law should not bo repealed
but In somo particulars should ho amend
ed. Provisions should bo made for a ro
tated ballot. Tho preclnct-commlttcemcti
ehpuld bo selected by the voters nt tho
primaries Instead of being nppolnted bjf
the county candidates, ns now provided.
There, should bo n different provision
than that now continued In tho law re
gaidlng platform conventions. Now, each
county Is entiled to one delegate. This !
not representative. Another objection H
that the platform convention Is not held
until after the primaries. A party plat
form should he promulgated beroro tho
candidates nro nominated. Provisions
should be mn.lc so that the platform con
vention shall be held before tho primaries
or tho matter of platform-making left to
tho candidates nominated by tho respec
tive pnrtlcs.
Stcrllxstlon of Delinquents.
Those dependent upon tho stato havo
been Increasing' year by year, nnd moro
particularly tho Insane nnd convicts. Thin
Is a matter for exceedingly serious con
sideration. Society Is Justified In ndoptlng such
policies, nnd In carrying them out ngalnst
Individuals, ns will In the long run tend
to help elevate and perpetuato tho hu
man race. Careless and lll-ndvlscd mar
riages have had n great deal to do In In
creasing the dependent classes nnd In
producing untold misery. I thercforo
recommend for your earnest consideration
a change In our marriage laws so thu It
will be Impossible for nny man or woman
to marry until n ccrtlllcato from a physi
cian licensed to pruetlco In this stnto has
been presented, containing a statement
that their health Is good and that they
aro capable of producing healthy oiT
uprlng. Those who ate a burden upon
society should not be permitted to repio
duco thomselves.
In order to prevent the confirmed crim
inal and the Incurable Insane from pro
ducing offspring I suggest thnt you glvo
careful consideration to tho necessity of
passing a. law providing for tho stoilllia.
tlon of that class of people.
Regulation of Liquor Traffic.
In my opinion tho tlmo has come foe
advanced legislation to better rcgulato
nnd control tho liquor traffic. At tho pres
ent tlmo thero Is no political party which
publicly will "stand pat" on tho Blocumb
law. Tho demands of tho hou,r call for1
legislation to control and regulato this,
traffic in accordance with the present
conditions nnd needs of tho stnto. This
riuestlon should not be permitted to drag
along until legislation Is enacted that
will satisfy only the tho extremists. In
thnt event tho legislation will probably;
bo that which a, minority rather than q
majority approve. Experience In tho cn
rorcumunt or tho liquor laws demon
strates that It Is difficult to enforcq
these laws In any community whom pub.
llu sentiment Is ngalnst such action.
Tho saloon ns It now exists Is lndc
fenslble. It breaks our laws, corrupts our
politics, degrades our muu and fills out
prisons nnd nBylums.
This question must bo met In a prnctl.
cal way. After careful consideration J
havo come to the conclusion that tho pro.
per thing to do nt this tlmo In to pnsa a
utata-wldo prohibition act, making pro.
vision so that any municipality may bus.
pend such an net by a throo-flfths voto,
and In such Instances to havo liquor dis
pensed as may bo provided by law. Thlt
will put tho burden upon those who dc
slro of mako a profit out of tho saloon
business, rather than upon tho pcoplo ol
tho stato who dcslro tho saloons abo.
Ishcd. I therefore recommend that yoi)
pass nuch an act and that you also sub.
mlt to tho pcoplo of this state a' coristh
tutlonal amendment embodying audi pro.
visions.
The Anti-Treat Law.
"Tn""lliQ early part-of my administration
I wns requested by numerous petitions to
enforce tho nntl-trent law. To such 1
replied that I stood ready to do all In my
power to enforce thnt law, hut that noth
lng could bo done unless those who had
knowledgo of its violation would them
selves tuko tho Initiative In securing th
evidence, presenting It to the prosecuting
attorney and standing behind tho com
plaints. This particular section of the Slocumt
law has become obsoloto nnd Is n vlead
totter. If It could bo enforced it would
be ono of tho best posslblo measures to
prevent lntompc.anco that could bo pro
posed. Therefore, I recommend that you amend
this particular section, known ns Hcctlon
31 of the Compiled Htatutos, so that th
nuthorltlos who grant tho saloon license
will bo compelled to revoko a license
whonovcr any person dinks liquor In a
saloon that ho lias not himself paid for,
SHALLENBERGEiTSMST MESSAGE
Urges Passage of Dank Guarantco Law and Makes Other Rccom
mendations'and Suggestions.
Follov.MtiK Is tlio nrlnelrml Rtibjcrtn
touched upon by Governor Shnllcnber
gor In ltlH ilrst mess,tiiit) to tho Nebras
ka legislature:
To the senate and house of lepresentn
llves of the tlili ty-llrst vesslou nf tho Ne
braska leglslutlou: 1 congiatulato you
upon being called to serve In jour legis
lative capacity nt a tlmo when the statu
Is enjoying general ptusperlly. Nature
has been kind nnd her jleld bountiful.
Our people nte Iniluitrlom nnd the dn
mnud and prices for their products satis
factory. Our population Is not dense,
probably less than one nnd one-half mil
lions of pcoplo dwell wtlhln our holders.
A study of tho tecntds of our buieau of
Mat Nt leu will show how marvelous have
been tho achievements of these later
jinri So tlch our roll, so mntchless our
climate, so wonderful the Industry of our
people that hero upon Nebraska soil,
American civilization In Un hlnhest devel
opment piles up each cur a larger sur
plus of useful products than a like num
ber of people can produce upon nny
other spot on eaith.
With n clearness of vision and under
standing ut" to tho put pores and possibili
ties of legist ttlve etinctmunt, n steadfast
nnd sueeeirful people will not expect of
you lmpnrslbli things or unreasonable
laws. Having wrung year lifter year,
great riches from u gjneious soil, they
now know that they can compel prosper
ity to abide with them always. They will
how-over, expect of tho party, whose
ineniberH cuntrol this senate nnd the
hiiuse. tho Kpecllle IcitUlulloit pledged III
the platfoim upon which you woio
elected.
Ciovcilinr Sheldon hns detailed to you
the result of hli administration of stntr
nffulrH, and you have listened to his tee
omrnondntloiiM. 1 uigo that you Rive
i-fiiuvKt nnd careful consideration to nil
that he has said.
I tshnll briefly call nur nttentlon to
legislation, the pmspeet nnd hopo of
which. In my opinion, hns brought about
this change In the conliol of tho execu
tive nnd legislative departments of stnle
government. It Is Unit to lie noted that
nn new or radical legislation Is asked for.
Uery suggestion Is but to amend, cor
rect, or Improve some existing law.
As n general rule, wo already have too
inn ii v laws Incumbering our stntuto
books. Many are goo.l, some Imperfect,
n few bad. The good Miould bo let alone,
tho Impel fectlons cured, the bad repealed.
What Is needed, in my Judgment, Is nn
honest and fearless enforcement of tho
laws that we now have, rather than a
censtant cry for new laws, nnd new lawt
es nn excuse for Inaction nnd delay.
Tho matters to which I wIhIi to call
your especial nttentlon nre not numerous,
but I bellevo them to ho Important.
I shall present them to you under sepa
rata heads.
6unneUn ns to Improvements In our
Danklna Law.
Andrew Cumcgln hits cold, "America
i...u ii, u.,irgi iiMiiklin; svstcm In the
world." I scarcely think tho facts war
rant such n rtntcrncnt. but will venluro
tho opinion that we havo not tho bent
system that It Is pofslble for us to obtain
nnd nothing hut the best should bo good
enough for tho pcoplo of Nebraska. Our
present law Is very much In advance In
nil thnt pertains to snfn nnd proper bank
ing to the law which proceeded It. No
one will venture) to maintain that tho one
now In force, is perfect, therefore, wo
are warranted In asking for still further
Improvement. Tho primary purpose for
tho establishment of banks so far ns tho
public Is concerned, Is first that the pco
plo chnll havo a safo plnco to deposit
their money, nnd second that those who
need them may conveniently obtain fund
upon proper security nfter tho money
shall have been gathered together by the
banking corporation.
The Ideal Hystem of bnnklng will gu.ir
nnteo to depositors tho absolute certain
ty of the roturn of every dollar deposit
ed, nnd this will Insure the greatest pos
sible volume nf lnnnnhlti funds In hanks
for tho needs of business. Tho state and
nation should boo to it that ovory safe
guard shall bo provided for tho security
of tho depositor since they permit nnd
iiuthorlzo tho receiving of deposits under
tho sanction of u charter grunted by tho
state.
Prom tlmo to tlmo, these guaranties
havo been Increased until losses to de
positors are raro Indeed, Tho report of
tho comptroller of tho currency for 1908
shows thnt a tax of one twenty-sixth of
ono per cent luvlcd upon tho deposits In
nntlonnl hanks during tho forty-tlvo yenrs
that that hystom has. been In existence
would havo rnlsed n sufficient sum ho that
no person, who had trusted his money to
a national hank, would havo lost a cent,
A study of the flgtiien of our own stato
bnnklng department ehnws oven a more
satisfactory condition. Only during tho
Inst eight yeni s, has tho law provided for
a complete report from receivers of failed
banks. During this period a tax of less
thnn one-thlrtleth of ono per cent lovlcd
upon tho deposits In 'our stato banks
would havo raised a sum sufficient to
hnvo Insured every depositor against any
potrslblo loss.
With theso facts before us, I do not
hcsltata to say that It Is a reflection
upon our American civilization nnd bus!
ness methods to longer fall to provldo nn
Insuranco guaranty fund nnd bnnklng
law, which will mako ovory dollar do
posited In a Nebraska bank absolutely
suro or being returned to Its lawful
owner upon domnnd. Ccrtniu deposits nro
now secured In stato and national banks
by safo guards In addition to tho guar
anties which tho law exacts nf tho bank
or to protect his Individual depositor.
The county, tho slate and tha nation hav
lng found by cxperlonco thnt tho secur
ities which tho law provides for tho or
dinary depositor uro ut times ImiuiTlclcnt
und thoreforo required thnt tho bankj
shull at their own cxpenso deposit bom's
as additional security to protect thci.i
agalnat any possibility of loss.
I bellevo that tho desired security can
ba obtained by levying a light tax upon
tho capital stock of each hank transacting
business under our laws, thus providing
a guaranty fund to pay promptly nny
posslblo loss to a depositor by roason of
tho failure of a state bank. Tho amount
of such tax to be a certain per cent of
the average deposits ns shown by tho re
ports of the dopiutment of banking nnd
payment to be mado nt stated periods
and for a fixed amount.
Our state department of bnnklng hns n
complete recotd for tho past eight years
showing tho result of receiverships of In
sohent state luiuktt. Thin lecnrd shows
that slnco 1900 a lotnl deposit of $515,
201.21 bus been placed In Jeopardy by
reason of tho fnlltito of state banks, Prom
the nssets of these Insolvent Institutions
depositors claims have been liquidated
until tho Iml.mco unpaid for tho etitlro
period of eight yeais Is $198,235.2.1 or nn
nveiago annual loss of about $20,000.00 to
depositors. C'ledltablo ns this showing Is,
1 feel quite certain thnt with a number
of Impiovcments which can ho made in
our present law, the pcreontugo of loss
ran still bo materially reduced. Tho
minimum capital tequhd for the Incor
poration of n stale bank should ho In
creased to ut least $15,000.00. Hank ex
aminations should bo mudo twlro a year
Instead of otiee un now required. Kx
umliierH should bo nsHlgnod to a certain
territory nnd thus eventually would lm
Lomu familiar with conditions nnd secur
ities In that locality and would acquire
the nieefsnry knowlcdgo ns to the worth
nf tho bills receivable of tho banks which
thev would examine, which Is the essen
tial thing In determining thu solvency of
nny banking corporation.
Under n guaranty plan which would
mnko tho hanks of the statu sustain the
lapses of tho entire system, thu bankers
should bo given a sharo In tho control of
the department. Tho present banking
board, which Is composed of three officers
elected ror an entirely different purpose,
should be nholMu'd und n non-partisan
loan! established to he composed of three
meniherH nppolnted by tho governor each
of Its members to have had ut least tlvu
years' practical experience In banking nnd
it least two of them to bo nctlvelv en-1
gaged In that business ut tho tlmo of
their appointment. A bank commissioner
should ho appointed by tho governor with
tho approval of tho banking board, who
should havo had un cxperlonco In tho
banking huducsn equivalent to that re-
(lulled of u member of thu board, und he
should rolcct thu necerisary number of
examiners with the upptovnl of thu hoard
er control. The banking board should sit
In i.esslon nt Lincoln ut stated periods
and bo paid ror the nctual time In ses
sion. ' They should havo romplcto con-ti-ol
ol tho Issuance or charters and the
general administration or tho bnnklng
lnws. It has been urged by critics or tho
guaranty or deposits plan that It would
lead to tho establishment or too mnny
banks. This would bo a serious objec
tion lr such wero thu result. It would
greatly strengthen our banking system If
tho bnnklng board wero empowered to tx
ciclso a proper censorship over tho Issu
ance of bank charters.
The possibilities or profit to bo rnndo in
taking other people's money on deposit,
loaning It to tho public nnu '.eeplng tho
Interest thctcon Is so nlurlnir thnt nt
tlineiutho number of banks Increaso moro
rapidly than thu needs or buslnes require
with consequent overlnnnlng, hazardous
rlsks, extrnvnganco In buildings and ex
penses with thu result that In lean years
failures occur nnd Innocent pcoplo suf
ror. Tho ovcrlssiiuncc or charters can be
In a great meunurc overcome by Increased
rcqultcments ns to tho amount or capital
stock necessary to bo paid In by tho
stock holders before a charter shall Is
rue. The amount required in each In
rtanco should bear a proper proportion to
tho population or the town or city in
which the hunk Is to bo established. An
nn example, showing tho manner In
which requirements us to capital affect
the nombcr or bank chnrtcrs Issued, 3,912
national banks havo been organized nlnco
1900 when tho requirements of cnpltal
stock wns reduced to $2.1,000.00 ns tho
minimum. This Is 3S2 moro hanks than
the entlro number In existence, when tho
law was changed In thnt respect. The ro
duetlon or the minimum capital stock re
quirement to $25,000.00 hns doubled tho
number or nntlonnl hanks In elglut years.
A substantial Incrcnse In tho amount re
quired us n minimum capital ror tho es
tablishment or stato hanks would havo
n 8alutuury effect In keeping tho number
of bnnkH within n satisfactory limit nnd
nlso provldo grcnter security to tho de
positors. As to thn amount of assessment to be
levied In order to provldo an ndequnto
rund ror tho prompt payment or deposit
ors or Insolvent hanks, I would suggest
that one-fourth of ono per cent ho lovlcd
upon tho deposits us shown nt tho last
stittoment published prior to thn com
mencement or tho operation or tho Inw,
nnd this assessment to bo rollnwed with
nddltlonnl levies In llko nrnounl nt periods
or six, twelve, and eighteen months
thercarter. AHer tho accumulation or n
guaranty fund eqnnl to ono per cent of
tho average deposltH In tho guaranteed
banks, nil annual tax or one-tenth or ono
per cent should bo levied, because It Is
necessary under a proper system or Insur
anco thnt tho prosperous yenrs should
pllo up a surplus rund to provldo ror tho
luevltahlo demands or less fortunato
times. As un nddltlonnl security against
any posslblo emergency, such ns extra
ordlnnry -demands upon tho fund tho
hoard should bo empowered to lovy an
assessment of not to exceed two -or
cent of the average deposits In any ono
year. Whllo this assessment might never
lio levied, tho power to use It would have
n sustaining effect In times or possible
panics. Such provisions would result In
accumulating In clghteon months with
tho averngo or deposits remaining In state
banks ns nt present n guaranty rund or
1642,351.00. This would bo $127,097.00
moro than tho entlro amount or depooslts
Involved In hank fullurcs in this statu
In tho Inst nine years. It Is thrco timet
tin umouut that would havo been neces
sary to havo paid upon demand nil tho
inonoy duo depositors in failed banks dur
ing tho years with the heaviest failures
of any In tho past decade. It Is seven
times as much as would have been re
quired to pay Immediately all of tho do
posits tied up in Htajo banks during any
ono of the last seven years. With the
additional nmount that would bo contri
buted to ouch a guaranty fund during the
years when no failures would occur nrjd
added to this tho power to ralso In any
ono year by extraordinary assessment six
times ns much ns has been placed In
Jeopnrdy during tho worst year thnt wo
havo experienced slnco tho present law
wn.i established. It Is hiy Judgment that
such a system would bo a rock of rcfugo
for tho banks nnd for thn pcoplo In tho
fiercest financial storms that may come.
I deslro ut this tlmo to congratulate and
commend thn management of our pren
fnt banking department for tho splendid
results It haw secured under the presont
law. II Is tho showing or exceedingly
small losses sustained under our present
managamont und system which gives ua
confidence) to bellevo that with Improve
ments In our laws ns to capitalization,
management nnd control a still better
showing ran bo accomplished. Tho pro
posed gunmnty fund under such a sys
tem ns hns been suggested should bo do
posited with tho slate banks under regu
lations similar to our present iitato de
pository law or with such additional se
curity as tho legislature may require. Tho
proposed law should provide that na
tional bunks nmy nvall themselves of tha
advantages und protection of the guni
uuty fund under suitable provisions und
satisfactory showing ns to tho condition
or such banks to the banking board.
Tho hanking hoard should bo empow
ered to fix tho into of Interest to ho
paid dcposltoiH by banking corporations
operating under tho guaranty of deposits
law, or if this ho thought too great a
power to confer upon thorn, tho rato
should bo fixed In thu ctuttlto by tho
legislature.
Revenue Law,
Our present revenuo law shoul 1 ho
emended In ko far nt It necessary to ro-
storo to tho people the tight to olect tho
precinct nssenrora und to limit in part
at least the arbitrary powers which tho
prevent law gives to tho stato hoard of
equalization und assessment, so thnt tho
people shall havo restored to them somo
volro In detei mining tho amount of
tnxeto they shall ho compelled to pay to
support tho Htutn go eminent. It nppoorn
to mo too great a gift of power to glvo
to tho stdto and comity boards tho right
to determine tho amounti of tho lovy
which shall bo laid upon tho property of
thn citizen nod at tho sumo tlmu empower
flic stno board to determine! through Un
mandates to thn county assesors nnd hln
deputies tho valuation thnt shall bo
placed upon the propeity or tho tax pay
ers. When wo consider that tho niembcrn
or this nil powerful bonrd of assessment
nctlng In their olTlclal capacity oh tho
heads of different stato deportments nro
authorized to spend tho money taken
from thu pockets or the pcoplo by tho
force of this samo revenue law, tho dan
ger lurking In this excess of power bo
comes more nppnrent. It Is to bo re
marked that vllffciont stnto departments
havo commended tho present law becauso
It provides much money ror their use. It
Is generally tn hi) noted that those who
pay out money which others must pay
In, view tho magnitude or tho amount to
bo expended with greater cquanmlty than
those who havo to provldo It. Tho cost
or our state government hns Increased
enormously In recent years. I wish to
Impress upon you thnt funds should bo
provided to meet every legitimate demand
of the government, our different otnto In
stitutions nnd our school, but every dol
lar that conies out of tho treasury must
have been paid In by somo tax payor
nnd thn great bulk of tho state's Incomo
' Is dug out or tho soil by tho unremitting
toll or thoso who can III afford to pay
for extruvnnganco or unnccesr.ary cx-
pensc.
The Primary Law.
Our present prlmnry law(ls unsatisfac
tory and unfair tn many of Its provisions.
Tho expense to tho stnto In holding a
stnto wldu prlmnry Is enormous, nnd un
less thn election results In registering
tho will or thn party mnjorlty or thoso
voting nnd placing better candidates bo
foro tho pcoplo than tho convention meth
od, the benefits or tho law cannot ho said
to warrant Its cost. Under tho presont
law, the nccldentul alphabetical position
or the candidates named upon tho ballot
Is nt times moro potent In obtaining nom
inations than merit or ability. Tho num
ber or mimes required upon tho petition
nf a candidate ror a stato office, Is gross
ly Insufficient. Thn cost of elections
both to tho candidates and thn stnto Is
grcntly Increased. It Is doubtful If tho
averngo elector will ever havo tho re
quired ncqunlritnncn with tho long list of
candidates for tho different offices upon
the ballot In a statu wide primary to In
suro Intelligent selection. I would sug
gest to you a county primary to nomlnntn
county officers and delegates to a stato
convention. Tho stato convention to so
lect two or moro name.'i for each ofllco
to go upon tho primary ballot and to
mako tho party platrorm, which ought to
bo Issued In ndvunco or tho primary, In
stead or subsequent to it, us at present.
Administration or State Institutions.
I would suggest that the constitution
ho so amended that a non-partisan hoard
or control could ho created to bo ap
pointed by tho governor und havo con
ferred upon It tho entlro management of
our vnrloim stato Institutions. Tho stato
Institutions should ho removed fiorn pol
itics ns rnr as may ho done nnd merit
alone should determine the right or nny
person to servo tho stato In tho dif
ferent departments mado subject to tho
board of control. This board, in my opin
ion, should consist or thrco members nnd
havo at Its command tha stato account
nnd n qualified purchasing or business
agent, who should have n general knowl
edgo ns to mnchlnery, material nnd con
struction contracts and or nil matters of
business coming before the board. This
board of control should purchase tho
supplies for nil tho stato Institutions by
open competition nmong thoso desiring
sell to tho state. Tho practice of main
taining a cash rund nt tho various stato
institutions should ho abolished nnd tho
business or tho stnto so far as it nppllos
to tho general conduct nnd administration
of tho different stato Institutions should
bo thoroughly systematized.
It is my most confident belief
that if you provldo satisfactory legisla
tion relating to tho question to which 1
havo referred, you can go homo with tho
certainty that you will meet a satisfied
constituency. With a firm rcllnnco upon
the wisdom and Judgment of this legisla
ture and hopo that with your assistance,
we may together In eomo fair mcasuro
fulfill tho hopes and meet tho expecta
tions of tho citizens of Nebraska, who
havo trusted ua with power, I submit
theso questions to you, gontlomon of th
house and senate.
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