Messages and documents of J. Frank Hanly : Governor of Indiana, January 9, 1905-January 11, 1909

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MESSAGES and DOCUMENTS

OF

J. FRANK HANLY

GOVERNOR OF INDIANA

January 9, 1905 — January n, 1909

INDIANAPOLIS :

WM. \\. BUBFORD, CONTRACTOR FOR STATE PRINTING AND BINDING
1909

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Messages to the General Assembly

REGULAR MESSAGES

INAUGURAL ADDRESS TO THE SIXTY-FOURTH GEN-
ERAL ASSEMBLY.

JANUARY 9, 1905.

Gentlemen of the Senate and House of Representatives:

A generously partial and confiding people by a verdict more
nearly approaching unanimity than any ever before rendered by
them, have confided to our care, for a time, the interests of the
State, in so far as government agencies can affect such interests.
Such an unexampled and unprecedented expression of trust and
confidence by them creates, by the inexorable law of compensation,
obligation for us, without example or precedent. Their action
rightly and accurately understood is a demand for the strictest pos-
sible accounting for our every official act — a call to the "better
angels" of our natures, and in no instance is it to be construed into
license to follow selfish or personal purposes either of our own or of
others. Public reasons should underlie and impel every public act.
That much the people demand. Less than that they will not long
abide.

The oath of office which I have just taken here in your presence,
in the presence of this concourse of our fellow citizens, and in the
presence of Almighty God, like unto that so recently taken by each
of you in your respective chambers, is a most solemn and binding
obligation — one well calculated to impel whoever takes it to high
and patriotic service. Cherishing as I do a belief in the existence
of a just God, in the teachings of the Christ, and in the immortality
of my own soul, the words "so help me God" frame the most sacred
pledge my lips can utter or my mind conceive. That oath now lies
upon my conscience, and there it shall continue until the commis-
sion I have received shall be returned to the people who gave it.
If I fail, and in some things I may fail, not one of my countrymen,
including all those who have so generously trusted me, will be so
deeply grieved as I myself shall be.

I congratulate you upon the happy auspices under which we
begin our public service. We are assembled under conditions of

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unsurpassed material wealth and prosperity. Field, mine and fac-
tory have yiefaed rich reward to the efforts and industry of the
wealth producers of the State. Labor is employed and hopeful.
Farmers have witnessed a steady increase in values and in the ac-
cumulation of their savings. Merchants have enjoyed a growing
and profitable trade. Manufacturers have held old markets arid
have gained new ones. Transportation companies have closed a
year of unequaled profit, and the banking and financial institu-
tions, both state and national, that have to do with the savings and
investments of the people, are upon sound and satisfactory footing.
There have been few failures within the lines of legitimate busi-
ness. Mismanagement and speculation in some instances have
brought disaster. Some private banking institutions, for the su-
pervision of which there has been in the law no adequate provision,
and a few national banks have closed their doors, but none of these
have substantially affected general business or financial interests.

KEEPING INSTITUTIONS OUT OF POLITICS.

Usually fortunate in the administration of State affairs, we
have been especially so during the last twelve years. In that time
there has been no malfeasance in any public office of the State.
Governor Matthews set a high standard of executive efficiency and
excellence, and the late Governor Mount raised that standard yet
higher and inaugurated many wise and improved business methods
in the handling and expenditure of the public revenues. Today
Governor Durbin goes out of office after four years of executive
service unexcelled by either of his immediate predecessors. He
carries with him into private life the good-will and kind wishes of
our best citizenship, and he may justly feel that he has earned the
confidence and the gratitude of his countrymen.

During his administration the public debt has been rapidly de-
creased and the annual interest charge materially lessened. Hon-
esty and economy have characterized every department of the gov-
ernment. The correctional, penal, benevolent and charitable insti-
tutions of the State have received from him considerate care and
efficient management. These institutions have been placed upon a
plane far above partisan politics, and there this administration in-
tends to keep them. There shall be no backward step. Above all
personal and party obligations, however sacred and binding they
may be, I hold the good of the State and the welfare of its unfor-
tunate wards. There shall be no removals of persons holding posi-
tions in any of such institutions except for the good of the institu-

tions themselves. Upright and efficient service will guarantee con-
tinued tenure of position. Negligent and incompetent service will
insure immediate removal.

STRICT BUT SANE ECONOMY AT INSTITUTIONS.

The policy of the administration in regard to the institutions of
the State shall involve strict but sane economy. Value received
shall be required for money expended. Necessary improvements
will be insisted upon. Needed repairs will be made. To refuse
actual needs is not economy, but extravagance. This applies to the
educational institutions with the same force that it does to the other
institutions. In the days of hardship and privation our fathers
established these schools. Shall we, their children, in our day of
ease and plenty, refuse to provide for their needs or let them
languish or deteriorate for want of means? Not so. Having
established and maintained them until their usefulness has been
successfully demonstrated and their fame has spread over the land
to such an extent as to fill them to overflowing with an eager and
virile student life, we can not abandon them now, and to refuse to
recognize or provide for their necessities is a step toward abandon-
ment. I do not believe we intend to take that step. And I there-
fore urge full and careful consideration of their wants to the end
that their capacity, equipment and facilities shall correspond to the
growth and development of the State, and shall equal at all times
the demands made upon them.

TUBERCULOSIS INSTITUTE COMMISSION ADVISED.

The proposition to establish a State hospital for the scientific
treatment of tuberculosis promises so much in the way of the im-
provement, the cure and the prevention of that dread disease as to
deserve serious consideration. Experiments in New York, Rhode
Island and Massachusetts have demonstrated the value of such an
institution, and have turned the best thought of our own people to
the consideration of our duty in that behalf. In 1903 one death
out of every four that occurred in the State from preventive causes
was due to consumption. Deaths from that cause that year num-
bered 4,876, and for the year just closed deaths from such cause
have not been fewer in number. There is high authority for the
statement that scientific treatment under the favorable conditions
to be secured in a State hospital will save to useful lives 49 per cent,
of the persons treated, and bring improvement to 43 per cent, of
the others. Such a work appeals to every humanitarian impulse of

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our people. The condition of the finances, however, is such as to
preclude an appropriation by you for the immediate establishment
of such an institution. But something can be done. An initial
step can at least be taken. I recommend that a commission be cre-
ated composed of five members, one of whom shall be a member of
the Senate, two of whom shall be members of the House, and two
of whom shall be practicing physicians of the State. Such com-
mission should be invested with authority to investigate the subject
and report the results of its investigation, together with such recom-
mendations as it shall deem wise, to the next General Assembly for
its consideration.

ADDITIONAL HOSPITAL FOR INSANE ADVOCATED.

The institutions for the insane have become inadequate to house
this most unfortunate class of our population. They arc daily
refused admission to such institutions because of sheer lack of room
to receive and care for them, and arc, therefore, remanded either
to the care of their own friends, or to the poorhouses and jails
of the several counties, where they remain without proper care or
treatment, a charge upon the county in which they live. Under
such conditions the question of cure, or even of improvement, is
practically eliminated from the problem. Irremedial and hopeless
insanity is often the result, when under humane surroundings and
rational scientific treatment, improvement or even recovery might
be assured. Left in the poorhouses and the jails, without medical
treatment or intelligent care, many of them become permanent
charges upon the public, when a short term in a State institution
would effect a cure and enable them to return to their families and
become self-supporting — an asset to the State instead of a liability.
There are said to be 226 of such unfortunates in the State who
have been committed upon inquisition to the hospitals for the in-
sane, but who have not been received for lack of room, and 434 more
who are proper subjects for inquisition and treatment.

In view of these conditions there can scarcely be dispute or de-
bate as to the duty of the State. Its obligation is plain and im-
perative. A new hospital should be constructed. The people
can act only through you, their chosen representatives. It is for
you to say whether this condition shall continue. I can only sug-
gest, but you can act. In behalf of the 660 neglected ones who
sit in mental darkness amid unsanitary conditions and unwholesome
surroundings, without medical or humane treatment, and without
hope in the hearts of the friends who love them, I appeal to you.

And lest you do not hear the appeal, or hearing, you forget, I beg
you to remember the words of the great Teacher, for surely He
must have thought of such unfortunate, stricken ones as these
when He said: "Inasmuch as ye have done it unto one of the
least of these, my brethren, ye have done it unto Me."

It has been suggested, and with some reason, that additions to
existing hospitals should be built, rather than to enter upon the
construction of a new one. The basis for such contention is that
it will cost less money to build additions and afford more imme-
diate relief. I am still of the opinion, however, that it will be
better to establish a new hospital than to undertake to build such
additions. If additions be built to the present institutions it will
be necessary, at least in one instance and possibly in two, to en-
large the lighting and heating plants at such institutions. The
enlargement of such institutions until they will have sufficient
capacity to care for a thousand patients each, will only meet
present necessities. The total number that can be provided for
in that way is 679. There are practically that many now who
ought to be cared for by the State. A new institution will not
only answer present demands, but it will provide for future needs
and its establishment will cost but little, if any more, than the
three proposed additions.

NEED OF AN EPILEPTIC INSTITUTE.

Closely connected with the question of an additional hospital
for the insane is another matter of equally grave importance —
the establishment of an institution for epileptics. Of these there
are said to be 381 who are in the hospitals as insane. There are
many others in the jails and poorhouses, and still others at large;
in all 920 who ought to be receiving the charity of the State in
a properly appointed institution. A number of States have estab-
lished such institutions. In Ohio, New York, Massachusetts and
New Jersey epileptic colonies or villages have been in successful
operation for a considerable time, varying from three to fourteen
years. In such States the matter is no longer an experiment, but
has become a part of the established policy of the State. The
history of these institutions is most interesting. Five to 10 per
cent, of all patients received are cured, and there is marked im-
provement in many others.

Epilepsy is hereditary. Competent authorities estimate that
one-third of those afflicted with the disease have inherited it and
are therefore bearing the "blight of ancestral sins and woes." For

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these there is little or no hope of recovery. They are children of
the State in the fullest possible meaning of the term. In two-
thirds of the cases, however, the disease is said to be due to other
causes than heredity, and in most of such cases there is hope of im-
provement and often of a full return to intellect and strength.
The nature of the malady is such that those who are afflicted with
it must be denied the usual privileges of schools, entertainments,
society and employment, and are compelled to grow up into adult
life, ignorant, idle, isolated and neglected. Outdoor life, consistent
diet, scientific and skilled treatment, congenial occupation and a
sympathetic companionship which lessens the sense of neglect and
isolation that weighs so heavily upon them in the world of normal
men, are essential to their improvement or recovery. These can
best be had in institutional life. A village or farm colony, where
its inmates may find opportunity to turn to useful account such
faculties as have not yet been destroyed or impaired, and which arc
capable of development, and where something of home life and its
sympathies may be had and enjoyed, affords the best plan for such
an institution. The establishment of such an hospital can be jus-
tified also on economic grounds.

The insane and the epileptics in the poorhouses and jails of
the several counties are already public charges, and unless cared
for by the State, are destined to remain so indefinitely. There,
they are costing from 40 to 50 cents a day for maintenance. They
can be maintained in a State institution at a cost of from 17 to 20
cents a day. If the first cost of such an establishment be elim-
inated, State care is much more economical, considered from a
money standpoint alone, than jail or infirmary custody. It is also
more humane and scientific, and it precludes the epileptic from be-
getting his kind, a thing of incalculable future benefit to the race.

I am persuaded that the time has come in Indiana when we
ought to take these worthy and dependent children of the State
out of the poorhouses, the jails and asylums, where they are a
burden to the public and a horror to themselves, and care for
them in a State institution as becomes our wealth and rank among
the great "States of the Union. The first appropriation need not
be large. It is believed that $150,000 will be sufficient to purchase
a farm and start the institution. To this, in the beginning, there
should be sent only that class of epileptics most calculated to re-
spond to treatment and best qualified to assist in the work of the
construction and improvement of the institution.

The law providing for the establishment of an additional hos-

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pital for the insane, or of an epileptic institute, should provide for
the appointment of a commission of not less than five persons
to select and purchase sites for them, under such restrictions as
to cost, area and location as, in your judgment, shall seem wise.

FINANCES OF THE STATE.

For twelve years we have been engaged in debt-paying. The
record of the late administration in that regard is without prece-
dent in the history of the State. There now remains but $1,207,000
of the bonded foreign debt ; $407,000 of that sum is represented
by 3 per cent, school fund refunding bonds of the issue of June,
1889. These bonds arc payable at the pleasure of the State, but
will not be due until June, 1909. The sinking fund tax rate of 3
cents on the $100 will produce this year a fund something more
than sufficient to discharge this issue of bonds in full ; $300,000 of
the bonded foreign debt consists of 3V> per cent, funding bonds
of the temporary loan of the issue of April, 1895. These are
payable at the pleasure of the State after April, 1910, but will
not be due until April, 1915. The remaining $500,000 of such
debt consists of 31/> per cent. State House temporary funding
bonds of the issue of May, 1895, payable at the option of the State
after May, 1910, but not due until May, 1915.

The present sinking fund tax rate of 3 cents on the $100
produces an annual sinking fund income closely approximating
$450,000. This tax should be reduced to a rate sufficient only in
amount to meet the bonded foreign debt when the same becomes
payable in 1910. More than that is not needed and will only ac-
cumulate as idle money in the State treasury unless we go into the
market and purchase bonds before our option to pay matures, a
thing Ave ought not to do, to the extent which the present rate will
make necessary if it be continued. Indeed, the present necessities
of the State which can be met only out of the general fund, are
such as to justify us in reducing the sinking fund tax rate to 1
cent on the $100. Such a rate will produce something like $750,-
000 by 1910, or within $50,000 of enough to redeem the entire
bonded foreign debt the day the option to pay it matures, and five
years before it is actually due. The repeal of the sinking fund
tax in its entirety has been suggested, but that ought not to be
done. Some provision should be left for the payment of the debt,
and it should be sufficient in amount to meet it by the time it be-
comes payable under the terms of the loan.

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DEBT PAYING CAUSKS EMBARRASSMENT.

The estimated expenses for the State government for the fiscal
year ending October 31, 1905, including specific appropriations
now available and the estimated cost of the present session of the
General Assembly, arc $463,000 in excess of the estimated rev-
enues accruing to the State within such fiscal year. This condi-
tion of the finances will become an actual embarrassment to the
treasury before the end of the current year. It can be met only
by borrowing money outright or by anticipating the revenues for
the next fiscal year. It is due to two causes. First, to the large
appropriations made by the last General Assembly; second, to a
substantial invasion of the general fund for the purpose of making
payments on the State debt. The sum of $140,379.45 has been
taken out of the general fund during the last two fiscal years,
$416,703.25 in three years and $521,091.59 in four years, and
applied to the payment of the State's indebtedness not yet due, at
a time, too, when the general fund was already overdrawn, and
when the revenues accruing to such fund were being anticipated far
in advance. Bonds were bought in the market with money from
the general fund in the face of the fact that there was sure to be a
heavy deficit in that fund at the close of each fiscal year. Debt-
paying is commendable, but the present embarrassment could have
been saved by conserving the general fund and applying only the
sinking fund to the payment of the debt, especially so as such fund
would have been ample to meet the entire bonded foreign debt long
before it would have become due. The revenues for the present
year have been anticipated to the extent of $529,649.03.

The estimated revenues accruing to the general fund for each
of the years 1906 and 1907 from the present levy, such estimate
being based upon last year's receipts, will be $2,971,157, or
$5,942,314 for the two years.

The regular expenditures for the administration of the State
government, including the maintenance of the several State insti-
tutions, and not including specific appropriations for such insti-
tutions, based upon the year just closed, will be $2,364,630 for
each of the years 1906 and 1907, or $4,729,260 for the two years.
This would leave a balance in the treasury to the credit of the
general fund of $1,213,054, from which specific appropriations
for the years 1906 and 1907 might be made were it not for tin*
fact that the expenses of the present vear will exceed the revenues,
as heretofore shown, something like $463,000, which deficit must be
supplied either by borrowing money or by anticipating the rev-

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enues for 1906. Deducting the deficit of '$463,000 from the bal-
ance of $1,213,054, left in the treasury after paying the regular
estimated expenses of the two years, we have a balance of $750,054
from which specific appropriations can be made, whereas the insti-
tutions already established seem to be actually in need of specific
appropriations for the two years of $1,174,596, or $424,542 in
excess of the money that will be available for that purpose.

In addition to the needs of the present State institutions, there
is urgent need, as before suggested, for the construction of an
additional hospital for the insane, and for which, if it be estab-
lished, there will have to be appropriated not less than $500,000
for the two years. There is also a like need for the construction
of an epileptic institute, for which not less than $150,000 should
be appropriated.

If these two institutions are established and appropriations made
as suggested, and we make the provision that the existing State
institutions actually require and make good the deficiency for this
year, it will necessitate specific appropriations for the two years
aggregating $2,287,596, or $1,074,542 in excess of the estimated
revenues available for that purpose within the two years.

WOULD USE PART OF SINKING FUND LEVY.

These facts make it apparent that we must either fail in our
present responsibility to the institutions already established and
refuse to construct either of the new hospitals suggested, or we
must provide additional sources of income for the general fund.
After much thoughtful consideration I am persuaded that we
ought to adopt the last course, rather than the first, and I there-
fore recommend that the sinking fund tax rate be reduced to 1
cent; that the 2 cents taken off of that rate be transferred to the
levy for the general fund and that the tax rate for the general
fund be increased by an additional levy of 1% cents on the $100.
The 2-cent levy transferred from the sinking fund to the general
fund will produce, approximately, $600,000 in two years, and the
additional levy of 1% cents will bring into the treasury substan-
tially $450,000. These sums, together with the $1,213,054 re-
maining to the credit of the general fund after the payment of the
regular expenses of the two years, will aggregate $2,263,054, or
within $24,542 of the total expenses for the"two years, with exist-
ing institutions properly cared for and with two new and much
needed institutions substantially established and the present deficit
made good. I make this recommendation with unfeigned reluct-

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ance, because of the great expenditures involved and of the increase
of the State tax levy which such expenditures make imperative,
but I have been able to devise no other way, as satisfactory, to
meet the confessed institutional needs of the State. While we
have been debt-paying at an unprecedented rate the needs of
the State's institutions have been multiplying and can not longer
be deferred. It will be better to meet these needs now frankly
and boldly than to shirk our responsibility by refusing to recog-
nize them and leaving the helpless and unfortunate wards of the
State in poorhouses and in jails, charges upon the respective coun-
ties where they live. A rich and prosperous people will respond
generously to the one policy, but I am persuaded that they would
be slow to forgive the adoption of the other. Nor will the increased
burden long continue. The 1% cents added to the general levy
may be removed in two years, and in six years the remaining 1 cent
sinking fund levy may also be removed, for at the end of that
period there will remain no bonded debt to be provided for or paid.
For these reasons I most earnestly recommend the adoption of
the plan herein mentioned, and sincerely hope it will meet with your
approval upon full consideration and debate. The deed, if done,
will square itself with the years.

PRISON TRADE SCHOOLS AND STATE WORKHOUSES.

An act of the General Assembly, approved March 11, 1903,
created a prison commission composed of the warden of the State
Prison, the general superintendent of the Indiana Reformatory, the
secretary of the Board of State Charities, and of three members to
be appointed by the Governor. Under that act the commission has
been organized, and its members have given much time to the in-
vestigation of the questions referred to them, and after thoughtful
consideration they have submitted certain conclusions to you in the
form of a report, which I understand has been laid before you.
That report should challenge your attention as a whole, but I
respectfully urge upon your consideration two recommendations
contained therein. The first is the suggestion that a convicted
prisoner who is given a jail sentence is the prisoner of the State,
and should be under direct State control in some institution of the
State where he can be employed at useful labor, instead of being
confined in jail and kept in idleness under county control.

A system of workhouses under State control, in which all
male prisoners convicted of crime, which under existing law is made
punishable by imprisonment in the county jail, shall be confined, is

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proposed. I can not now discuss the details of the report of the
commission in this behalf, but I am impressed with the belief that
the suggestion contains the practical basis of a much needed reform.

The second recommendation involves the abandonment of the
contract labor system in the State Reformatory and the employ-
ment of the prisoners there in a school of letters, in trade schools
and at labor on State account. The existing labor contracts at the
Reformatory will expire in July, 1906, and, in my judgment, ought
not to be renewed. Some employment for the prisoners of the
institution must of necessity be provided, and it should be of a char-
acter that will affect in the slightest degree possible the laboring
and producing classes of the State. The system of contract labor
now in force compels free labor to compete with convict labor and
forces manufacturers into competition with prison-made goods, and
fixes and establishes prices of such articles in a damaging measure.

The employment of prison labor on such account, that is to say,
in the production of articles to be sold by the State or used by the
State in its various institutions, or by the political divisions thereof,
has been demonstrated to be practical and of all methods least ob-
jectionable to free labor and production and most satisfactory to all
the people. Such method of employment, together with trade
schools and the school of letters recommended by the commission, is
in harmony with the humane principles and reformatory methods
already adopted and in use by the State in the care and treatment
of the prisoners under its control. The labor contracts at the
State Prison do not expire until October, 1910. If the method
recommended by the commission be adopted for the Reformatory by
the present General Assembly its value will have been practically
demonstrated before we are called upon to meet the question in the
State Prison. The recommendation represents the best thought of
those most competent to advise upon this most important subject
and deserves your highest consideration.

CONTINUANCE OF CODIFICATION COMMISSION ADVISED.

Pursuant to the provisions of an act of the General Assembly
approved March 9, 1903, a commission was appointed in April of
that year to prepare a compilation, revision and codification of the
-laws of the State concerning public, private and other corporations,
and statutes relating to highways and drainage, and such other
statute laws as such commission should deem proper. The commis-
sion has prepared a report which is already before you, together
with several bills embodying the results of its labors. Its report

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covers a wide field and includes a number of difficult and important
subjects, such as cities and towns, drainage, proceedings in the
exercise of the power of eminent domain, private corporations, high-
ways, and the criminal code. The report and the bills accompany-
ing it deserve the best thought of each of you. The varied and
important subjects treated affect closely many interests of the peo-
ple and the corporations of the State.

Taken as a whole, the work of the commission, as presented to
you, constitutes the most important legislation likely to come before
you. While each of the prepared bills should be scrutinized, ana-
lyzed and debated with care and critical intelligence, the skill, learn-
ing and ability of the members of the commission are so well known
and their work has been done with such zeal and intelligence that
I commend the results of their labors to you with full confidence
that they can, in the main, safely be accepted.

The life of the commission expires by limitation of the law
which created it, with the adjournment of the present General As-
sembly. There are still many important and difficult subjects
affecting many vital interests that have not as yet been considered.
Revision is greatly needed as to them. In fact, the work of the
commission will not be complete, or the purpose of the law creating
it obtained, if the labors of the commission are to end with your
adjournment. A knowledge of this leads me to the conclusion that
the life of the commission should be extended for a period of two
years, to end with the adjournment of the next General Assembly.

The whole subject is of such imperative moment that I venture
to express the hope that you will not fail to enact the several bills
submitted after such amendment and alteration as upon full de-
bate and consideration you may deem wise, and that you will not
fail to continue the commission as suggested.

STATE SUPERVISION OF PRIVATE BANKS.

Sound banking institutions are absolutely essential to stable
financial, commercial or industrial conditions. This is so true that
years are required for a community to recover from the effects of
a single bank failure. The losses occasioned by such failures are
not confined to savings alone. These, of course, are swept away,
but such failures are always attended with a betrayal of trust and
of confidence that does far more to injure the business interests of
the community and society in general than the direct money loss
sustained can possibly accomplish. Men who have known each
other for years and who have had full confidence in each other sud-

17

denly become doubtful and suspicious, with a resultant disturbance
of business and commercial affairs and the embarrassment of other
perfectly solvent and safe institutions.

The number of private bank failures in this State within the last
year constitutes irrefragable proof of the need of legislation which
will give the State authority to inspect and supervise every private
firm, partnership or institution engaged in any manner in the bank-
ing business. In some of the recent failures of private bankers an
investigation of their affairs made after assignment has disclosed
the most flagrant and criminal disregard of the rights of their
depositors. In some instances the savings of patrons of the bank
have been checked out by the proprietors within twenty-four hours
after they were deposited and by them converted to their own use.
In one instance, at least, this was done to an extent of almost $300,-
000, and the fact of such malfeasance concealed and covered up for
years. A trusting and confiding clientele was robbed daily, week
after week, month after month and year after year, in the most
reckless manner, the possibility of which is a reproach to the State.

The people whose earnings have been embezzled and squan-
dered, together with every man engaged in honest private banking,
of whom there are many in the State, rightly demand relief at the
hands of their representatives. The question should be taken up
with considerate care, having due regard for the interests of both
the private banker and the depositor.

No private individual, firm, copartnership or institution of any
kind should be permitted to use the word "bank" in connection with
its business, or to receive the deposits of the people, or to engage in
any manner in the business of banking, without first setting aside a
cash sum as capital to be maintained unimpaired so long as such
business is conducted. The sum required as capital I submit to
your intelligent judgment, but it should be adequate in amount,
taking into consideration the character of the community in which
such bank is located.

There should also be an inhibition against the loaning of money,
either directly or indirectly, to any person, firm, copartnership or
corporation, either as principal or surety, beyond a fixed and rea-
sonable sum, taking into consideration the amount of paid-up capi-
tal of each institution.

In connection with the above requirements the State should be
given full power of inspection and supervision, through an officer to
be appointed for that purpose, and such officer should be required

[2—19891 ]

18

to give bond and should be held liable civilly upon such bond and
be subject to criminal prosecution for the neglect of his duty or for
malfeasance. While these restrictions will not prevent bank fail-
ures, I am persuaded that they will go far, if enacted by you,
toward minimizing their number and extent.

URGENT NEED OF STATE RAILROAD COMMISSION.

Railroads are public highways and the business of operating
them is a public business. Their existence is due wholly to the
fact that they are public utilities. When they cease to serve the
public, the reason of their being ceases. Modern conditions make
the "transportation tax" a most potential factor in the commerce
of the country. It affects every product of the field, shop or mine
and levies tribute on both producer and consumer. Up to the limit
of fairness the tax can be justified; beyond that it cannot. It is
possible for freight rates to determine not only where business shall
be done, but who shall do it. In the absence of legislation those
who pay the tax have no voice whatever in determining what it
shall be. The carrier arbitrarily determines that for itself. Hav-
ing power to make freight rates, and freight rates being the con-
trolling factor in determining where and by whom business shall
be done, the carrier becomes the master, and the people it was
created to serve its servants.

That the common law, the courts and their remedies are inade-
quate to afford any practical relief as between the shipper and the
carrier, or even between carriers themselves, is now quite generally
conceded.

That the competition of carriers, markets and waterways has
ceased to be a sufficient safeguard against the evils that necessarily
grow out of and accompany the country's vast transportation busi-
ness is also a generally accepted truth.

Neither Congress nor the General Assembly of the State has
time to investigate and fix transportation rates, and both are pre-
cluded by constitutional limitations from conferring legislative
functions upon the courts.

Some impartial tribunal to act as arbiter to determine questions
as to rates and collateral subjects, rather than the sellers of trans-
portation, is, therefore, a modern necessity.

These considerations led some years since to the creation of a
Federal Commission by the Congress of the United States, upon
whom both judicial and legislative power was attempted to be con-
ferred— the judicial power to declare an existing rate to be unjust,

19

and the legislative power to determine what the rate should be
thereafter. The purpose of the statute has since been aborted by
a decision of the Supreme Court of the United States holding that
the act. gave no legislative power to the commission to fix rates, but
conferred only judicial power to determine that a specific rate was
unjust. For instance, under the decision of the court the commis-
sion may declare that a SO-cent rate is too high, but it has no
power to say what a just rate is. The transportation company is
left free to impose a 19-cent rate until it in turn may be declared
unjust and set aside, and so on ad infinitum. The effect of the
court's decision is to emasculate the statute and leave little of it
worth preserving.

The power of Congress to confer upon a commission both judi-
cial power to decide what is unjust and the legislative power to
declare what is right, is not open to debate. That has often been
judicially determined. And a like power is vested in the General
Assembly of this State in regard to commerce within its own bor-
ders.

While the Congress of the United States has sole jurisdiction of
all transportation questions relating to interstate commerce, the
State is sovereign in its jurisdiction of all such questions in so far
as they relate to State commerce. The question is a live one, and
is of great importance not only to the shippers and the transporta-
tion companies of the State carrying on interstate commerce, but
to every producer and every consumer in the State.

• The question is a difficult one and deserves our most considerate
care and intelligent judgment. Its consideration should be entered
upon dispassionately and should be continued without prejudice
against or a desire to punish the transportation companies of the
State. On the other hand, the wealth and power of such compa-
nies ought not to be permitted to exclude the people or the needs
of the shippers, the producers or the consumers of the State from
our consideration. As between the two we should hold an even
balance.

Like considerations have led to the establishment of railroad
commissions in thirty-one States of the Union, and in twenty of
these the commissions are given power to establish rates.

The same considerations that led to the creation of the Interstate
Commerce Commission by the Federal Congress and to the estab-
lishment of commissions in other States, now make it imperative
that a State railroad commission be created by this General As-
sembly.

20

POWER TO FIX RATES ESSENTIAL.

Such commission should have power, not only to decide that an
existing rate is illegal and unjust, but it should also be given au-
thority to determine what would be a legal and just rate and to
declare the same. And the rate, when so fixed by the commission,
should stand until reversed by the judgment of some appellate tri-
bunal to which the right of appeal should be provided for.

Without the power to fix rates, the commission would not be
effective. If the evils sought to be reformed are to be reached, the
power mentioned is essential. The law should also be so framed
as to prevent unreasonable and inexcusable delay in the transporta-
tion of freight or cars, or unjust discrimination in rates, either by
way of rebates or otherwise. It should also prohibit discrimination
against localities in furnishing cars and should have some provi-
sion relative to the transfer and switching of cars. Bills of lading,
releasing or limiting the common law liability of carriers with ref-
erence to property covered by such bills while in the custody of
such carrier, should be prohibited, and the commission should have
power to hear and determine differences affecting any of the mat-
ters suggested, whether arising between shippers and carriers, or
between the carriers themselves.

The recent and growing desire for national ownership of rail-
roads is due very largely to the unjust rates, rebates, discrimina-
tions and arbitrary conduct and management of the great transpor-
tation companies in their relations with the public. I am sure such
a policy is a mistaken one. And I am equally sure that the enact-
ment of a just and fair law, creating a railroad commission and
clothing it with power to correct the abuses that have grown up in
connection with the transportation business of the country, ought
not to be opposed by the managements of such corporations. In-
deed, they ought to consent to the enactment of a law which shall
provide for fair and just supervision through a properly consti-
tuted commission. By consenting to the correction of such abuses
they will do much to stay, and perhaps to avert, the more radical
sentiment of the country just now crystallizing in the demand for
public ownership.

GROWING RESPECT FOR THE L.AW.

There are multiplying signs throughout the country of a grow-
ing respect and regard for the sacredness of the law thai are re-
assuring and hopeful, and nowhere is this sentiment more pro-
nounced than in Indiana.. While lawless assemblages, riots and

21

lynchings have decreased within the last year in all the States
taken as a whole, there have been none in Indiana. It is my most
sincere wish and hope that this condition may continue; that re-
spect for the law may increase, and that the sentiment for its en-
forcement may intensify throughout the borders of the State until
all shall recognize its majesty and give willing obedience to its
mandates. The law is freedom's only safeguard ; without it there
can be no such thing as liberty.

Whoever wilfully disregards or violates it pulls down the pillars
of his own house and sins against his country, its institutions and
his kind. And this applies with equal force to all men — to the
rich and the poor, to the great and the small, to the capitalist and
the laborer, to the public official and to the private citizen. Be-
fore the law all these must be equal, and they shall be so consid-
ered by this administration. The law shall be enforced without
fear or favor, in the cities, in the country and everywhere, in so
far as the administration can control its enforcement either by pre-
cept, example or mandate.

FREE PASS EVIL A FORM OF BRIBERY.

A custom of giving and receiving free transportation has grown
up, on the part of transportation companies on the one side, and
of public officials on the other. These favors are not bestowed
upon the same men in private life, but are extended to them only
upon their elevation to public place. They are given as compli-
mentary, and are bestowed quite generally, with here and there
an exception, upon the officers of every department of the govern-
ment, municipal, county or state. Indeed, it is not unusual for
officers whose duties do or may affect the interests of such com-
panies, as against the interests of the public, to accept not only
free transportation from the railroad companies, but free telegraph
and express franks from telegraph and express companies as well.

It is said in defense of the custom that such favors are mere
gratuities or courtesies, the acceptance of which creates no obliga-
tion to the donor on the part of the officer receiving them, and that
many honest men accept these favors and are not improperly in-
fluenced by them. It scarcely can be urged, however, that such
favors are either given or accepted from a sense of civic pride or
righteousness. Tlir fact that some men receive them without any
recognition of the favor implied by such acceptance and arc not
improperly influenced thereby is an imperfect defense, for it is of
itself a confession that some men who accept them are improperly

99

influenced. There are no more practical business men in the world
than the managers of the great railway, telegraph and express
corporations of the country, and these men would not annually
give away to public officials in Indiana thousands of dollars in value
of such favors if the net aggregate results of the custom were not
beneficial to them. If the resultant benefits were not worth more
to them than the value of the transportation or franks given, none
would be issued.

The fact that the custom is continued year after year is strong
evidence that it pays to continue it. No lawyer would permit a
juror to remain upon a jury where high interests of his client were
involved if he knew such juror had received and accepted substan-
tial favors from the adverse party to the suit, and he would most
certainly insist upon the discharge of such juror from the panel
if he were to receive and accept such favors after he had been
sworn as a juror in the cause. If, in any such case, the verdict
went against his client, and after verdict he learned the fact of
the juror's acceptance of such favors from the hands of the suc-
cessful party to the suit, there is no lawyer who would hesitate
to make such fact the basis of a motion for a new trial, and there
is no 'court that would not grant the motion upon proof of the
charge made. The plea on the part of the offending litigant and
juror that the favors given and received were mere courtesies and
did not influence the verdict would be neither considered nor re-
ceived as a sufficient answer.

The officials of the various municipalities and counties, and the
officials of the State, constitute the jury before whom are brought
countless grave and important interests, upon the one side of which
are the corporations and upon the other side of which are the peo-
ple. For this reason such officials have no right to use or accept
substantial and continuing favors from the corporations during
their terms of service. Where the whole jury accepts them there
need be no surprise if the people complain that the jury is packed
against their interests. Right or wrong, ill or well-founded, such
a feeling is an unwholesome one. The simple truth is that the
custom is wrong and indefensible and often leads to abuses little
short of scandal. Reduced to their last analysis, such favors are
petty bribes. The fact that they sometimes fall short of their pur-
pose is not a sufficient answer. The tendency of the custom is to
make men — not all men by any means, but some men — servile to
those from whom they are received. An end should be put to the
custom. The abuse of free transportation and free franking privi-
leges should stop.

The time to reform is now. In recognition of tke plainest prin-
ciples of right, in common honesty, in answer to the people's just
demand and out of protection to themselves, public officials should
discontinue the use or acceptance of such favors. I submit for
your consideration the enactment of a statute that will prohibit
the giving of free transportation or of the franking privilege to
any official, municipal, county or state, by any person or corpora-
tion, or the acceptance of any such favor by any such officer, either
directly or indirectly, under such penalties as shall insure its ob-
servance. The inhibition should also include telegraph and ex-
press company franks. Such an act will purify and strengthen
the public service and, in my judgment, will meet with the hearty
approval of the people of the State.

LOBBYISTS NOT SAFE COUNSELORS.

The character of the legislation coining before you for your
consideration is such as to bring to your respective chambers the
representatives of many great corporations. It is right that they
should be heard, but it is wrong that they should exclude from
your consideration the varied and important interests of the public
or the great masses of the people who, of necessity? cannot have
paid agents to voice their interest to you. All lobbyists are not
corrupt, and it may be that they sometimes perform useful public
service, but the paid agent of any special interest is not, as a rule,
a safe counselor. He is wont to look only to the interests of those
who employ him, and in his zeal to "make good" with them, to
forget the greater and more important interests of the public.

Corporate interests of late have become far too powerful in
legislative assemblies. This is true in most of the States, and it
has been true in ours. There have been instances in the not far
distant past when the paid agents of such corporations invaded
the sacred precincts of the General Assembly, and with unseemly
and arrogant assumption took their place upon the floor during a
session of that body, and on a roll call upon a measure involving
matters of the gravest concern to the people, sought to dictate the
votes of some of the members upon such measure. And, yet, they
were not removed nor denied the privileges of the floor, but con-
tinued to enjoy them until the end of the session. It is difficult
for the people to believe that such conduct would have been tol-
erated, much less condoned, by men who owed no favors to the cor-
porations represented by the offending agents. You can end the
reign of the lobbyist in Indiana if you will, a»d I venture to express
the Jiope that you will do so.

24

NICHOLSON LAW AMENDMENT.

The act of the General Assembly of 1895, commonly known
as the "Nicholson law," was enacted in answer to the demands of
an aroused and enlightened and righteous public sentiment. In
the main it is a good law and ought to be permitted to stand. It
provides for, and legalizes the right of petition on the part of the
legal voters of any township, or of any ward in any city, against
the granting of license to any applicant to retail intoxicating
liquors in such township or ward, and that right ought not to be
given up or surrendered.

Rules of practice under the present statute and many questions
of law relating to its enforcement have been settled by the courts,
and are now established and well understood. The several sec-
tions of the act have been so frequently interpreted by the courts
that the law, taken in connection with the decisions touching its
meaning, constitutes a system for the control of the retail liquor
traffic of such importance that the friends of law and order ought
to stand by it as it is, rather than consent to its repeal, or to the
substitution of any new or untried system. An entirely new act
would require years of vexatious litigation before a judicial inter-
pretation of it could be had, or its meaning be established or under-
stood.

There is, however, a grave defect in the present statute. It
can be remedied by an amendment, which will add greatly to its
effectiveness, without impairing its value or destroying the decisions
of the courts which have upheld it.

The aroused, enlightened and righteous public sentiment which
made essential the enactment of the law ten years ago, now makes
imperative its amendment. That sentiment is today stronger, more
enlightened and more powerful than ever, and deserves quick and
satisfying response at our hands.

The defect to which I direct your attention is found in Section
9 of said act. This section grants to a majority of the legal voters
of any township, or of any ward in any city, the right to remon-
strate in writing against the granting of a license to any applicant
for license to sell in any such township or ward, and provides that
after the filing of such remonstrance, it shall be unlawful for the
Board of County Commissioners to grant a license to such applicant
during a period of two years from the date of the filing of such
remonstrance. By this statute the right of remonstrance is vested
in the majority of the legal voters of any township, or of any ward

25

in any city. But the right is limited in its application to a remon-
strance against the individual seeking the license and not against
the trade, whereas the business of retailing liquors is the evil sought
to be excluded or prohibited by the people who remonstrate against
an applicant. Their objections are not personal, nor are they di-
rected against the applicant as an individual. They are based
upon moral, economic and public grounds, which affect the order,
peace and repose of society within such territory, and are against
the traffic itself. To the people within such territory the prohibi-
tion of the business is everything, and the individual applying for
license is nothing.

PRESENT NEED OF REPEATED REMONSTRANCES.

When the statute under consideration was enacted, the boards
of commissioners of the several counties in the State could hold
regular sessions of their respective boards but once in three months.
An application for license could be filed only at a regular session.
Thus applications were limited to the four quarterly sessions of
such boards held within each year. This brought the question of
remonstrance before the people but four times a year. Since the
enactment of the "Nicholson law" there has been a change in the
statute relative to the time of the regular meetings of boards of
commissioners. Such boards are now required to meet in regular
session once each month. The effect of this change in the law has
been to make it possible for an application from any township, or
any ward in any city, to be filed every thirty days. This brings
the question of remonstrance before the people twelve times a year.
Those who desire to engage in the retail liquor traffic make use of
the present provision of the law, to the annoyance and harassment
of the people of many townships and city wards. In some of them
"eternal vigilance" has ceased to be the price of liberty and has
become ineffectual to preserve the rights of the people. A remon-
strance carrying the necessary majority to prevent the granting of
license is filed today and the license is defeated, but tomorrow some
other applicant, in the pay of the wholesale liquor interests, gives
notice of his intention to apply at the next session of the board of
commissioners, which session is only four weeks away.

If a new remonstrance is filed and the second applicant is de-
feated, the same performance is enacted by some one else, and
so on, month after month and year after year, until, worn out and
discouraged by constant effort and expensive litigation that never
ends, and from which there is no respite, the people are defeated

26

and the will of the majority is overborne and trampled upon by
the agents of a traffic, the unholiness of which all men, save those
engaged in it, confess.

This condition is intolerable, and ought not to continue beyond
the day of your adjournment and the publication of your enact-
ments. It destroys the peace and disturbs the order and tran-
quillity of society, creates constant and unceasing turmoil among
the people, subjects them to frequent trials and constant expense,"
and finally ends in the defeat of their often and solemnly expressed
will.

The statute should be so amended that the remonstrance pro-
vided for shall be against the granting of license to any and all
applicants, and where successful, that it shall be unlawful there-
after for the board of commissioners to grant a license to any
applicant therefor during a period of two years from the filing of
said remonstrance. Such a remonstrance will strike directly at the
traffic, and not at the individual. If successful, it will exclude the
business from a township or ward for a period of two years, and
give peace, order and repose to the community.

PROPOSED CHANGE WOULD NOT IMPAIR SYSTHM.

It will give the right of petition a practical and an efficient
application, and will go far toward satisfying public sentiment
upon this most difficult question. Such an amendment will not
impair the system created by the Nicholson law for the control of
the traffic, nor the judicial interpretation it has received. On the
contrary, it will strengthen and give vitality to its provisions. The
precedents already established will remain precedents still.

I have given much thought and consideration to this subject,
because of its importance, because I have been and am conscious
that many of my fellow-citizens, whose judgment and good will I
greatly value, have been and are profoundly interested in the ques-
tion, and have been and are giving it their most sincere attention,
and because many members of your respective bodies have been
and are considering remedial legislation affecting the existing
statute.

Public sentiment relative to such legislation never was as strong
nor as purposeful as it is today, and I would, if I could, direct that
sentiment along safe and practical lines. I therefore appeal to
you, and to the great body of the people of Indiana, without regard
to party affiliations, to join in an effort to secure the amendment

27

suggested. The question is not a party question. It is at>ove and
beyond all parties and is as broad as our common citizenship, as
deep as our free institutions, and as abiding as righteousness itself.

IN CONCLUSION.

This address has already grown too long, but there are so many
important questions upon which I have not touched that I close
with reluctance. I do not forget that all my predecessors in the
high office to which I am called were capable and efficient executives ;
that many of them were much more than that, and that one, at
least, was supremely great, or that I must in some degree measure
up to them. I am conscious that in the discharge of the grave
duties that await me I cannot stand alone and I shall not try to do
so. I therefore turn to you and to the people of the State for
assistance and support. To you and to them I shall often come,
and were it not for the confidence I have of your forbearance and
of their partiality, I should have little hope of succeeding amid the
multiplying and perplexing difficulties of the coming four years.

But your strength shall be my strength, and their will shall be
my will. I believe in you, and they, I am sure, will not go far
astray nor long remain away from the path of truth. Both you
and I can safely trust them. They did not fail either Lincoln or
Morton in their day, and they will not fail us in ours if we do but
prove worthy and fitly bear their high commission.

Humbled and chastened by the responsibilities of this hour, by
those yet to come, and by the memory of the great men who have
preceded me; sustained by an abiding faith in my fellow-citizens
and by an unfaltering trust in the goodness, the mercy and the
guiding care and wisdom of Almighty God, I now assume the office
of chief executive of this, to me, the dearest State in the great
republic.

J. FRANK HANLY.

28
TO THE SIXTY-FIFTH GENERAL ASSEMBLY.

JANUARY 10, 1907.
Gentlemen of the Senate and House of Representatives :

The people have spoken, and you are here bearing their com-
mission to act. You are convened in an auspicious hour of our
history, — the beginning of the last decade of the first century of
statehood, — and under circumstances calculated to inspire efficient
and high service. Material prosperity outruns comparison.
Wealth surpasses precedent. Labor, agriculture, manufacturing,
mining and commerce have touched and passed high tide and the
ebb is not yet begun. Monetary conditions arc at their best. Dur-
ing the last year there was no failure of any financial institution
within the State. Taken all in all conditions are indeed unusual.
They present to you a problem unlike that which usually confronts
legislative assemblies. Where others have been called to consider
legislation providing the means and opportunity for the acquire-
ment of wealth, you are compelled to devise enactments requiring
the just and wise administration of wealth. Your problem is not
how to create new industrial and commercial opportunity, but how
to save the industrial and commercial opportunity which already is.
It is not how to make possible the further organization of mighty
aggregations of capital and powerful corporations equipped to
transact great affairs and to conduct gigantic enterprises, but how
to direct the purposes and limit the operations of those which the
industry and genius of the age have called into being under exist-
ing laws, so that their benefits shall be diffused among the people.

The challenge is not, "Can you create?" but, "Can you admin-
ister?" It came to the people before it came to you. They heard
and understood, and have made heroic answer. They have risen
to new ideals, and have caught visions of better things. In them
moral conviction is triumphant. Civic duty and public obligation
have taken on a new and more sacred meaning. They know again
what, for a time, they did not seem to remember, — that their rights
—the rights of the masses — are superior to the claims or demands
of any special interest, natural or corporate. They are conscious
again that this is their government, and they intend that it shall
be administered in all its departments in their behalf. Stirred by
the rediscovery of old but half-forgotten power, they mean that

29

whosoever holds their commission shall answer the challenge of the
hour even as they have answered it. They will be impatient of
delay, and swift to avenge failure.

To serve at such a time and under such conditions is an unusual
and an exalted privilege. Of time and circumstance such as these
opportunity is born. He who meets it as becomes a man, measur-
ing up to its height and breadth, is to be extolled and honored. He
who fails to meet it for lack of capacity is to be pitied and forgiven.
But he who possesses the ability and fails from lack of moral worth
is to be condemned and despised. For him there is no defense in
any form. I congratulate you that such time and circumstance
both are yours.

The Constitution imposes upon the executive a share in your
deliberations. It devolves upon him the duty of giving you "in-
formation touching the conditions of the State," of recommending
for your consideration such legislation "as he shall judge" the wel-
fare of the State demands, and of approving or disapproving your
every enactment. To this extent he shares your responsibility and
becomes a part of the legislative department. It is therefore im-
portant that relations of confidence and mutual helpfulness exist
between you and him and that he have your counsel and good-will.
Impressed with the belief that nothing short of this will enable
either you or myself to discharge in full measure our duty to the
people whose servants we are, I tender you my confidence and good-
will without reserve or qualification, and pledge you the limit of
my power in every matter of public concern which may engage your
efforts.

FINANCES.

The State's finances are especially satisfactory. The revenues
accruing to the general fund for the fiscal year ending October 31,
1905, exclusive of transfer funds, aggregated $3,615,844.38.
During the same year the expenditures were $3,465,250.91, leav-
ing an excess of receipts of $150,593.47, and a treasury balance
of $283,998.84. In this balance no advanced payments from
county treasurers is included.

On the 31st day of October, 1904, the balance in the treasury
was $60,601.93, but to obtain this balance advanced payments from
county treasurers had been called, and the revenue for 1905 antici-
pated in the sum of $154,740. But for these advanced payments
there would have been no treasury balance, but, instead, a deficit
of $94,138.07.

30

It is gratifying to know that at the close of the fiscal year this
deficit was recouped and a clear balance of $283,998.84 left in the
treasury, and that this was done without calling a single advanced
payment or anticipating the revenue of the next year a single
dollar.

For the fiscal year ending October 31, 1906, the revenues of
the general fund, exclusive of transfer funds, aggregated $4,200,-
164.83. The disbursements were $3,800,037.91, leaving an excess
of receipts over disbursements of $400,126.92, and a treasury bal-
ance of $507,654.60, in which there were no advanced payments
whatever and to obtain which the revenues of the present year were
neither impaired nor anticipated.

The revenues accruing to the general fund last year were in-
creased, however, not only from natural causes due to the increase
in the value of taxables in the State, but from the transfer of the
3-cent sinking fund levy to the general levy ; also from covering
back into the treasury several substantial sums which had been
theretofore unlawfully withheld therefrom by delinquent officials.

Neither the revenues accruing to the general fund for the pres-
ent fiscal year, nor for the year 1908 nor 1909, will equal those of
last year. Those of this year, however, have been already aug-
mented by the payment of $22,356.40 of insurance taxes by insur-
ance companies which have been due the State since the expiration
of the term of James H. Rice as Auditor of State — more than
twenty years. A conservative estimate of the revenues of the gen-
eral fund for each of the three years named, is $3,726,650. Ap-
propriations already made and available for the present fiscal year
will leave a treasury balance of $266,309.29 at the end of the year.
This sum, therefore, measures the limit of additional appropria-
tions which may be made available for the present fiscal year with-
out necessitating the collection of advanced payments from county
treasurers and a consequent impairment of next year's revenues, a
result which, in my judgment, should be avoided with scrupulous*
care.

If the income of the general fund for the fiscal year ending Oc-
tober 31, 1908, meets the estimate made and the regular appropria-
tions for the year are not increased beyond what now seems to be
a necessary aggregate for the transaction of the State's business,
there will be $1,010,000 available for specific appropriations for
said year.

For the fiscal year ending October 31, 1909, there will be sub-
stantially a like balance available for specific appropriations, ex-

31

cept as it may be impaired by the expenses of the Sixty-sixth Gen-
eral Assembly, now estimated at $125,000. It seems, therefore,
that, in round numbers, $2,000,000 must be the limit of specific
appropriations for the coming biennial period, if we are to keep
within the revenues of the State and are to avoid the impairment
of the revenues of the next biennial period. To do this it will be
necessary to transfer the 3-cent sinking fund levy from the sinking
fund to the general fund for the year 1908, as was done for each
of the years 1905, 1906 and 1907. Within the last two years
we have paid $407,000 on the principal of the State debt, thereby
cancelling all of the debt that is now payable. This leaves but
$800,000 of foreign bonded indebtedness, none of which will be
payable until January, 1910, and none of which will be due until
1915. To meet this debt within the first year after the State's op-
tion to pay matures, it would be necessary to restore the 3-cent sink-
ing fund levy to the sinking fund for 1908 and 1909. The fund
derived from this levy would be more than sufficient, however, to
retire the whole of the debt, as such a levy would by that time pro-
duce an annual revenue of something more than $500,000. I have
been anxious that the debt should be paid at the earliest possible
date and have hoped that it could be done in January, 1910, but
necessity compels the completion of the institutions now under con-
tract. The demand that they be completed is so imperative that
I have been compelled to yield thereto, and I therefore recommend
that the sinking fund levy of 3 cents be retained for the benefit of
the general fund for the year 1908, and that it be restored to the
sinking fund for 1909 and 1910. This will enable the State to re-
tire $500,000 of the debt within a year after its option to pay ma-
tures, and the remaining $300,000 within six months thereafter.
The necessities of the State absolutely require the completion of the
institutions now under construction within the coming biennial pe-
riod. The emergency is so great that I cannot urge upon you too
strongly the importance of making adequate provision therefor. I
know of no way this can be done with as little inconvenience as it
can be along the lines suggested. Posterity will certainly have no
just cause of complaint of us if we construct and pay for these
great public improvements and retire the last dollar of foreign-held
indebtedness within nineteen months after the privilege to pay ob-
tains, and three and a half years before the obligations evidencing
such debt mature. The step, if taken, will rest upon so many sub-
stantial reasons that it will bear analysis and debate with certainty
of justification in the end.

32

CONTINGENT FUNDS.

For the fiscal year ending October 31, 1905, the sum of $10,000
was appropriated for the Governor's Civil and Military Contingent
fund. The sum of $619.25 was expended, of which $139.75 were
expended by my predecessor in the investigation of the Southern
Indiana Hospital for the Insane and in the matter of the claim of
Vincennes University. The remainder, or $479.50, was expended
by the present Executive. The unexpended balance of the appro-
priation, amounting to $9,380.75, was covered back into the gen-
eral fund.

For the fiscal year ending October 31, 1906, $10,000 were ap-
propriated for this fund, $5,453 of which were expended and
$4,547 covered back into the treasury. The expenditures were all
on account of expense incurred in the investigation of the office of
the Auditor of State.

The appropriation for the Governor's Emergency Contingent
Fund for the fiscal year ending October 31, 1905, was $30,000, of
which $2,206.05 were expended by my predecessor, and the sum
of $116.65 by the present Executive on account of expenses of the
tuberculosis commission, authorized by the Sixty-fourth General
Assembly. The total expenditures were $2,322.70. The unex-
pended balance, amounting to $27,677.30, was covered back into
the general fund.

The appropriation for this fund for the fiscal year ending Oc-
tober 31, 1906, was $30,000, all of which was expended except the
sum of $1,123.26, which balance was covered back into the treasury.
The total expenditures from this fund were $28,876.74. Of this
amount $524.22 were expended to defray the expenses of the tuber-
culosis commission; $2,385.05 were expended in behalf of the
maintenance account of the State Prison, because of the failure of
the Sixty-fourth General Assembly to make a per capita appro-
priation for that institution; $4,000 were also expended in the
completion of the dining-room for the State Prison, occasioned by
a clerical error in the appropriation act of the Sixty-fourth Gen-
eral Assembly, appropriating $19,500 for a storeroom which cost
but $15,500, and appropriating $15,500 for a dining-room which
cost $19,500 (the transposition of the amounts was not discovered
until after the buildings were nearing completion. The excess of
one specific appropriation could not be used to make up the de-
ficiency of the other) ; $2,892.01 on account of the replacing of a
boiler at the School for Feeble-Minded Youth ; $241.50 on account

33

of expenses incurred in the case of the State of Indiana v. David E.
Sherrick; $1,200 on account of fees of special counsel in the case
of the State of Indiana v. Daniel E. Storms ; $7,805.29 on account
of expense incurred in the invetigation of the office of the Auditor
of State; $100 in connection with the stopping of pool selling at
the State fair grounds in the summer of 1905, and $1,175.89 on
account of expenses incurred in connection with the closing of the
gambling resorts at French Lick and West Baden, of which
$119.82 has subsequently been returned to the treasury of the
State; $7,025.89 for maintenance at the Girls' Industrial School,
because of the failure of the Sixty-fourth General Assembly to
make a per capita appropriation for that institution and the great
increase in the number of inmates during the past year; $280.55
on account of expense incurred in the case of the State of Indiana
v. McCaslin, for the recovery of eighty acres of land belonging to
the State ; $229.80 on account of expense incurred in the investiga-
tion of the State Agency Company, and $1,067.04 on account of
expense incurred in the investigation of the State Life Insurance
Company.

The total cost of the proceedings for the closing of the gam-
bling resorts at French Lick and West Baden was $1,374.72; the
aggregate cost of the tuberculosis commission up to the close of
the last fiscal year was $640.87 ; the investigation of the offices of
the Auditor and Secretary of State cost, in the aggregate, $13,-
258.29.

DEFALCATION IN STATE OFFICES.

In the latter part of August, 1905, the Executive was advised
that the Auditor of State had failed to make the semi-annual set-
tlement with the Treasurer of State due July 1, 1905. Upon in-
vestigation it was learned, through the admissions of the Auditor
himself, that he was short in his accounts to the extent of $145,000.
Settlement was demanded, and later the Auditor's resignation.
September 14, 1905, he resigned. Hon. Warren Bigler was imme-
diately appointed to fill the vacancy, and suit was promptly begun
upon the official bond of the ex- Auditor.

The amount of the admitted defalcation, the magnitude of the
public business passing through the office and the lack and ne-
cessity of accurate information touching the condition of the office
impelled the Executive to appoint a commission to examine and
investigate its affairs. Accordingly, Hon. W. B. Durborow and
Hon. James W. Noel, representing the two dominant political par-

[8—19891]

34

ties in the State, were appointed, together with Hon. Warren Big-
ler, Auditor of State, by executive order, and instructed to "pursue
the investigation and make examination of said office and its sev-
eral departments, uninfluenced by fear, favor or affection, and
without any purpose to shield any person or party or to advance
the interest of any person or party, to the end that the whole truth
touching the affairs of the office for said term may appear in your
report, and that the guilty may be exposed and the innocent vin-
dicated."

The members of the committee immediately entered upon the
discharge of their duties, under this order of appointment, and
after almost a year of substantially continuous labor they filed a
report of their investigations, which I have caused to be printed
and laid upon your desks, and to which I invite your most careful
and earnest consideration. It is a clear, accurate and convincing
report, prepared by able, sincere and fearless men in literal com-
pliance with the instructions under which their investigations were
conducted, covering both the auditing and insurance department of
the Auditor's office.

The facts touching the financial interests of the State, as dis-
closed by the investigations of the committee, were laid from time
to time before the Governor for executive consideration and action.
From this report it appears that Mr. Sherrick's defalcation, prin-
cipal and interest, aggregated on the 14th da}7 of September, 1905,
the day of his resignation, $154,896.78. On March 1, 1906, final
payment was received, with interest to that date, the total amount
returned to the State treasury, principal and interest, being $156,-
367.31.

In this connection I submit the following paragraph from the
committee's report:

"The State has the remarkable record of a shortage of $154,896.78 hav-
ing been entirely recovered to the State without the loss of a dollar of prin-
cipal and with the addition thereto of legal interest and with no expense ex-
cept the sum of $37.00 paid to a shorthand reporter for taking evidence."

The expense referred to refers, of course, to that incurred in
the suit upon the Auditor's bond and not to the investigation of
the affairs of the office.

A large part of the sum recovered consisted of certain taxes
collected by Mr. Sherrick, as Auditor, "which he had no right to
receive, as the law in plain terms required these taxes to be paid
by the insurance companies "into the treasury of the State." A
considerable portion of the sum recovered consisted of insurance

35

fees which were properly collected by the Auditor. Six thousand
nine hundred and eighty-seven dollars and seven cents consisted of
miscellaneous fees which the Auditor never reported to the State,
no part of which he had paid, and which he had treated as his own,
appropriating them to his own use and directing his subordinates to
make no report of them.

Subsequent to his resignation Mr. Sherrick was indicted, tried
and found guilty of embezzlement and sentenced and committed to
the State Prison. On the 16th day of November, 1906, the Su-
preme Court of the State reversed the judgment of the Marion
Criminal Court, in which the case was tried, for error of law oc-
curring at the trial. Mr. Sherrick is now at liberty on bond pend-
ing a retrial of the charge against him. During his term as Aud-
itor Mr. Sherrick collected $854,798.89 of insurance taxes, which,
as I have indicated, he had no right to collect under the law. He
misappropriated and embezzled a large portion of these funds.

In its decision the Supreme Court held that these taxes were not
the property of the State; that they were collected without war-
rant of law; that in receiving them Mr. Sherrick acted as the
agent of the insurance companies and not as the representative of
the State, and that as to these funds he was therefore not guilty
of embezzling public funds.

The fact that he embezzled the funds is without dispute. The
moral turpitude of the offense is not lessened by the fact that the
court has held that the technical title to them was in the insurance
companies and not in the State.

It is an unconscionable miscarriage of justice that a public offi-
cer charged by the law with the duty of receiving reports showing
the amount of taxes due from the insurance companies to the State
and of auditing them, and with the further duty of bringing suit
to recover from the companies the taxes so reported where they fail
to pay them into the treasury, and who issues written notices to
the representatives of such companies containing a garbled state-
ment of the law made to read so as to require the payment of the
taxes to him, and who, pursuant to such notice, receives such taxes
from the companies over the counter of his office, receipting for
them as Auditor of State, should go acquit on account of a technical
if not fictitious ownership. And that it may never occur again in
the State of Indiana, I recommend that you enact a statute the
terms of which shall clearly make it embezzlement for any public
officer to convert to his own use money received under color of his
office, while acting under claim of official authority, no matter in
whom the technical legal title thereto may be held to vest.

36

A portion of the funds embezzled by Mr. Sherrick consisted of
fees which he had a legal right to collect. It is upon this charge
that he is now awaiting retrial.

In its investigation the committee found inaccuracies, in the
way of overdrafts, in the accounts of the Adjutant-General, John
R. Ward, running from May 19, 1903, to January 6, 1905, and
aggregating $976.75. The overdrafts were due to incorrect foot-
ings in the column containing a summary of the totals of the pay
rolls of the several National Guard companies appearing on the
last page of the voucher prepared for the approval of the Governor
and for presentation to the Auditor. The company totals in each
instance were made up from the bills filed with the voucher, and
were correct. They were also properly entered on the last sheet in
the summary column. The footings or totals in this last column
were found to be excessive in sixteen instances. Upon receipt of
the evidence in the case I demanded the immediate resignation of
Mr. Ward and the payment of the sum of the overdrafts. The
demand for his resignation was promptly complied with, and the
overdrafts were paid within a few days thereafter. General Oran
Perry was appointed to the vacancy occasioned by the resignation
of General Ward. Acting under executive direction he made a care-
ful examination of the accounts and books of the Adjutant-Gen-
eral's office, with the result that an additional shortage was discov-
ered aggregating $533.69. This also has been repaid and re-
turned to the proper funds in the hands of the Adjutant-General.
The sum of money returned to the State by General Ward is
$1,510.44.

Inaccuracies in the reports made to the Auditor of State by Sec-
retary of State Daniel E. Storms, discovered by the committee, led
subsequently to the disclosure of. the fact that the Secretary had
sequestered fees due to the State and misapplied certain funds ap-
propriated to the office of Secretary of State for public purposes,
by converting them to his own use. The committee was imme-
diately directed to examine the books and accounts of the office of
Secretary of State, but upon appearing at the office to take up the
work they were refused permission to examine or see any of the
books or accounts of the office. The Executive then addressed to
the Secretary a demand in writing for full information touching
the condition of the affairs of the office of the Secretary of State.
This the Secretary declined to give. Thereupon the Attorney-Gen-
eral, assisted by eminent counsel employed by the Governor for that
purpose, brought suit in the Superior Court of Marion County to

37

remove the Secretary from office, charging him, under the oath of
the Executive, with the embezzlement of public funds and malfeas-
ance in office.

The statute under which the proceeding was brought was held
invalid by the court. Having failed in the courts to secure the
removal of the Secretary, the Executive was about to convene the
Sixty-fourth General Assembly in special session, for the purpose
of asking his impeachment, when he resigned. The committee
immediately took possession of the books and accounts in the office
and made a careful examination of the same for the period of Mr.
Storms' incumbency. The report of the committee shows in detail
the condition found.

The misappropriation of funds, conversion of fees and appro-
priations made by the General Assembly amounted to $4,583.50,
interest upon which at the time of the retirement of Mr. Storms
amounted to $3,556.35, a total, principal and interest, of
$8,139.85. The sum was paid in full to the Treasurer of State
April 1, 1906, the date of the Secretary's retirement.

Errors in computing the tax statements of certain foreign in-
surance companies occurring during the administration of Mr.
Sherrick were discovered, amounting to $689.79. Upon demand
this sum was paid into the treasury by the companies owing the
same.

Conditions discovered in the Auditor's office led the Executive to
instruct the committee to examine the accounts and books of the
office back to 1872. The results of the investigation are set forth
in the committee's report and are such as to abundantly justify the
executive direction under which they acted.

A discrepancy in the accounts of General M. D. Manson as
Auditor of State was discovered, amounting to $347.50, which was
evidently due to errors inadvertently made.

James H. Rice, while Auditor of State, collected and retained
insurance taxes in the sum of $11,418.50 and reciprocal fees due
the State in the sum of $36,650.24. These sums, together with
interest thereon to April 1, 1906, amount to $108,877.74. This
sum represents the claim of the State against Mr. Rice, exclusive
of statutory penalties. The ex- Auditor is dead. I am advised
that his estate is insolvent. The statute of limitations bars a suit
upon his bond. So far as he, his estate or his bondsmen are con-
cerned, this entire sum is lost to the State.

The law, however, required foreign insurance companies doing
business in the State of Indiana to pay into the treasury of the

State the taxes they erroneous1 •, paid Mr. Rice, amounting, princi-
pal and interest, to $26,091.27. Payment to him in defiance of the
provisions of the law was not payment to the State. Proceed in <>;
upon this theory, investigation was made and the names of the com-
panies making the erroneous payments and the amount due from
each were ascertained and notice served upon them that payment
must be made by the 10th day of November, 1906, together with 6
per cent, interest thereon, or their license to do business in the State
would be revoked and suit instituted to collect the amounts due.
On November 11, 1906, settlement was made by all but two or three
of the companies. The amount paid into the State treasury was,
principal, $9,755.78^interest, $12,997.24, total, $22,753.02. This
leaves a balance of $3,388.25. Some of the companies owing this
balance ceased years ago to do business in the State and others are
insolvent.

It appears from the report of the committee that Bruce Carr,
while Auditor of the State of Indiana, unlawfully retained $34,-
259 of regular fees and $40,040 of reciprocal fees which lawfully
belonged to the State, a total of $74,569. Interest thereon to
April 1, 1906, at 6 per cent., aggregates $75,998.24, making the
total claim of the State $151,470.92. None of the funds misap-
propriated by Mr. Carr were insurance taxes. Mr. Carr is dead.
His estate, as I am advised,, is insolvent, and the statute of limita-
tions bars suit upon his bond. This sum is, therefore, lost to the
State.

J. O. Henderson, as Auditor of the State of Indiana, collected
and retained insurance taxes, regular fees and reciprocal insurance
fees aggregating $49,616.45. Interest thereon to March 1, 1906.
aggregates $42,345.96, which, with the penalty of 10 per cent,
imposed by the statute, equals $101,158.65. This, in the judg-
ment of the Executive, constitutes a valid claim against Mr. Hen-
derson. Acting upon that assumption the Attorney-General has
brought suit in the Superior Court of Marion County to recover
the same.

The report also shows that A. C. Daily, as Auditor of the State
of Indiana, collected and retained insurance taxes amounting to
$13,511.57. Interest thereon to March 6, 1906, aggregates
$8,054.33. Mr. Daily also failed to pay into the treasury of the
State other moneys due the State at the time specified by the law.
Interest upon such deferred payments to March 6, 1906, aggre-
gates $2,101.84. These sums, together with the penalty of 10
per cent, imposed by law, amount to $26,034.51. Believing this

39

sum claimed against Mr. Daily to be a valid claim in favor of the
State, the Executive instructed the Attorney-General to proceed to
collect it. He accordingly brought suit in the Boone Circuit Court
and recovered therein a judgment in the sum of $25,435.50. Mr.
Daily appealed from this judgment, and the case is now pending in
the Appellate Court.

The aggregate collections already made from delinquent offi-
cers and insurance companies is shown in the following statement :

David E. Sherrick, Auditor of State $156,367 31

Daniel E. Storms, Secretary of State 8,139 85

John R. Ward, Adjutant-General 1,510 44

Insurance companies 689 79

Insurance companies 22,753 03

Total $189,460 41

Valid claims still pending:

A. C. Daily, Auditor of State (judgment) $25,435 50

J. O. Henderson, Auditor of State 101,158 65

Total $126,594 15

The entire cost of the investigation, including the insurance de-
partment, was $13,258.29.

From a money standpoint alone no better expenditure of public
funds, viewed from the amount actually recovered and returned to
the treasury, has been made in Indiana for many years. But the
commission's work did not stop with the recovery of these funds.
The moral effect of the investigation it made and of the facts which
have become public will continue to be of value for years to come.

There is now, and there has been for years, a lack of check
upon, supervision of and examination into the accounts and the
affairs of the administrative offices of the State without parallel or
precedent in private business of like magnitude. The lack of this
has made it possible for men in high offices to abuse their trust, to
sequester and appropriate to their own use fees belonging to the
public, without the facts thereof coming to the knowledge of the
public. This was true for months in the case of the Auditor and
Secretary who were removed, and with a single exception it has been-
long true in the administration of the office of Auditor of State.
Through the commission the administration has uncovered the sys-
tem, exposed its weakness and laid bare its corrupting and ruinous
effects.

The law requires an official making a demand for compensation

40

for services rendered to point to some statute which clearly author-
izes both the service and the compensation claimed. Under the sys-
tem so long in vogue this just and wholesome rule of law has been
reversed. Every doubt has been solved against the State and in
favor of the official, and in some instances fees have been sequestered
and appropriated to private use in violation of the positive letter
of the statute. Both the system and the corrupting practices un-
der it have been nonpartisan from the beginning. With a single
exception, change of administration from one party to the other
did not interrupt either the system or its abuses. Honest officials
of either party were not harmed, but weak men of both parties fell
before the temptations to private gain which the system presented
and dishonest ones reveled in the opportunities it offered for pecula-
tion and plunder. The effect has been as nonpartisan as the sys-
tem. Thousands of dollars of public revenue have gone into the
pockets of officials, republican and democratic, and the people have
paid without regard to party affiliation. Some of these misappro-
priations of public revenues were permitted to sleep for years with-
out exposure.

The facts I bring to your attention have convinced me of the
necessity of a law authorizing the Governor to appoint an executive
accountant, whose duty it shall be to make frequent examinations
of the accounts and books of the several administrative offices of
the State and of the several State institutions under executive direc-
tion. The salary ought to be such as to command the services of
a competent accountant. Such a law would have saved to the
State many thousands of dollars in the past and will save to it many
thousands of dollars in the future. It is not enough to expose the
system and lay bare its evils. We must put an end to it abso-
lutely.

The general statute covering the several administrative offices
of the State requires some of them to make annual and some semi-
annual settlements with the Auditor and to pay into the treasury the
moneys in their hands belonging to the State. For a number of
years each appropriation act passed by successive General Assem-
blies has provided for quarterly settlements with the Auditor and the
payment of the money in the hands of the several officers due the
State, into the treasury, and that the salary of no officer who failed
to comply with such provision should be paid until settlement with
the Auditor and payment to the treasury of the moneys in his
hands. This requirement of the law had been ignored by all the
officers until the present Executive required compliance therewith.

41

Since October, 1905, all such settlements and payments have been
made quarterly.

The recommendations of the committee relating to the auditing
department of the office of Auditor of State and the general fiscal
affairs of the State contain many thoughtful and timely sugges-
tions which I commend to your consideration with the hope that
legislation may be enacted to meet the needs suggested.

SEPARATE DEPARTMENT FOR INSURANCE.

The need of a separate department for the supervision of in-
surance is so apparent and of such urgent character as to preclude
debate or delay. The department, as now organized, is no more
than a neglected adjunct of the Auditor's office. This office is over-
whelmed by the multitude of duties and demands, infinite in nature
and variety, devolved upon it. The Legislature and not the Auditor,
however, is to be criticised. With the means now provided the
Auditor cannot make it other than it is — a neglected adjunct.
With a beggarly allowance of $5,920 for the entire department,
he is expected to administer a department having supervision of
18 legal reserve life insurance companies, 16 assessment life in-
surance companies, 9 fraternal life insurance companies, 7 fire in-
surance companies and 3 casualty companies, a total of 53, organ-
ized under the laws of and domiciled in Indiana and carrying hun-
dreds of millions of dollars of insurance. To the supervision of
these is to be added the supervision of 49 legal reserve life insur-
ance companies, 125 fire insurance companies, 41 casualty com-
panies, 37 fraternal insurance companies and 19 assessment com-
panies, a total of 271, organized under the laws of other States and
doing business in the State of Indiana — a grand total of 324.

These 324 companies last year collected in premiums from the
people of Indiana the sum of $23,073,815.41. The securities en-
trusted to the care of the department, under the law, have a face
value of $8,963,000. They are subject to frequent change and
substitution. Their acceptance and care require skill and legal
knowledge and unqualified integrity as well.

The fees collected by this department for the year 1905 aggre-
gated $66,553.21, and for this year $72,660. The insurance
taxes collected for the year 1905 aggregated $303,786.16.

It is simply impossible to secure effective administration of such
a department with the allowance made. The department is entitled
to stand, and, if properly organized, will stand as a barrier between
the people of the Commonwealth and the horde of graveyard insur-

42

ance companies, funeral benefit societies and various wild, visioii-
arj concerns and criminal speculative organizations that are con-
tinuously organizing and storming the department for the privi-
lege of duping the citizens of the State and preying upon civdulil v«
sorrows and misfortune.

In this connection, I cannot do better than to quote from the
report of the investigating committee relative to the insurance
department, heretofore adverted to:

"The intricate character of insurance business demands that a strong de-
partment should stand between the companies and the insuring public. The
agent goes to the prospective insurer with a contract which has been carefully
worked out by experts, and in which the rates and guaranteed values have been
prepared by educated actuaries, looking alone to the value and safety of the
contract to the company. The proposition in its simplest form involves many
matters with which the average policy holder cannot become familiar. He is
at a serious disadvantage. He appreciates the need and importance of insur-
ance, but cannot work out its intricate details. There should be a strong de-
partment to stand between him and the company so as to insure the public
that any contracts offered by companies doing business in the State of In-
diana are honest and fair. The policy holder should know that he is pro-
tected by the State against deception, subterfuge and trickery when he appro-
priates his money to this sacred sort of use. The policy holder should be able
to feel that any contract offered him by an agent licensed by the State of
Indiana will afford him and his beneficiaries a square deal.

The rapidity of the growth of the business of insurance companies *
in the State of Indiana within the last ten years is so remarkable in volume
and in income to the State that it warrants preparation on the part of the
State for its careful regulation in order that far-reaching disasters may be
averted as fully as can be done by governmental regulation. It means protec-
tion to the family and fireside in nearly as important a sense as do police and
fire protection or the regulation of banking by the State or national govern-
ments."

Speaking in relation to the insurance revenues accruing to the
State, the committee well says:

"The people of the State are entitled to have an efficient department main-
tained out of this money that is raised especially for the purpose of supervis-
ing the business of insurance. There is no reason that so large a proportion
should be diverted to the general fund of the State, and at the same time per-
mit the work for which such fund is provided to go undone or poorly done.
The companies themselves have a right to demand that the moneys paid for
supervision of the department shall be applied in large part to that purpose,
and not diverted at the expense of good management of the department. They
have a right to require that such supervision should be given to the business
of insurance as to exclude illegal or fraudulent competition in the field of their
business, and to know that an efficient department is protecting the insuring
public from deception and fraudulent devices and representations which permit
wild-catting concerns to secure business that would legitimately go to com-
panies who would treat their patrons fairly and honestly."

In this connection, I quote further from the committee's report:

"It is needless to say that the office force above indicated is inadequate
to such a degree as to warrant our saying that the business of the office cannot
be performed in a safe and creditable manner. The supervision of the business
of insurance involves a high degree of expert knowledge, and in addition calls
for the most careful mathematical work and voluminous records which should
be kept with great detail. The department is called upon to keep itself in-
formed of the solvency and methods of business, not only of the 53 companies
operating under Indiana laws, but of the 271 foreign companies doing business
of insurance in this State."

Continuing, the report declares :

"We find the Department of Insurance without an appropriation of a" sin-
gle dollar, outside of salaries, except as it shares in the small appropriation
for office expense. There is not a dollar available for the examination or in-
vestigation of companies which may be doing business without assets with
which to pay the expense of such investigation. Nor is there any provision
for the examination of companies which, after such examination, may retire
from the State and refuse to pay the expense of an investigation which, at the
same time, inures to the benefit of the State. There is absolutely no provision
for any additional clerical help in times of great emergency or of unusual work.
The statutes fail to require certain classes of Indiana insurance companies
to pay the expenses of examinations, except when such examinations are made
upon the motion of the company itself. The department would have been
unable to have made its examination of The State Life Insurance Company,
The State Agency Company, and other such associations, and would have
been utterly unable to have engaged in this investigation, except that the
Governor provided for the expense thereof out of his emergency contingent
fund. Neither could the Auditor have made examination of such voluntary
associations as The French Lick and West Baden Hotel Companies without
the aid of the Governor's fund. Such neglect of the department has gone far
toward making it impotent and helpless.

"We would here call attention to the fact that the actuary of the depart-
ment is paid the very small salary of $2,000 per annum. No competent
actuary will give his exclusive service for any such compensation, and the
actuary of this department admits, and it is publicly known, that he has been
frequently in the employment of companies doing business in Indiana, as con-
sulting actuary, a relation which no official should be permitted to maintain
with the companies whose business he is expected to examine critically and
to reform if necessary. It is our belief that Actuary Buttolph is a gentleman
of fine integrity and much ability, but we believe that the continuance of such
relations with the companies by the actuary of the department is absolutely
inconsistent with his official duties, and while no wrong may have been com-
mitted, the relation itself is subject to severe criticism.

"We are reliably informed that the actuaries appointed by the depart-
ments of some other States engage in outside business as consulting actuary,
and are often employed by the companies whose business they are required to
inspect in the course of their official duties. The fact that the relation exists
elsewhere cannot justify it here. The State of Indiana can afford to maintain
an independent department. A competent actuary cannot give his exclusive

44

services to the State for the salary that is now paid. The State, if it continues
the present appropriation for the payment of an actuary, must be satisfied
with an incompetent actuary or permit him to engage in employment which
is calculated to mitigate his alertness and zeal when engaged in the critical
inspection of the business reported to the department by companies who, at
other times, consult him in the relation of client.

"As a result of the inadequate care of this department the growing In-
diana companies have not received the restraint of a well-organized insurance
department which would have undoubtedly prevented some of the abuses which
have grown up in their business and which, while not destroying them, have
encumbered some of the companies with assets of a character which will many
times embarrass them in the future, and a class of liabilities which for many
years will be an illegitimate drain on the expense fund of the company. *

"The lack of inspection of the mortgage loans on deposit was apparent
from the fact that in many cases hereafter described no abstracts were present,
insurance policies were often missing in cases which required their presence,
abstracts often showed prior mortgages and liens, and in many other respects
the mortgage papers were deficient in matters which would have been dis-
covered by the most careless inspection. There was no attempt on the part of
the department to keep informed as to whether interest on mortgage loans was
being met or whether the same was in default.

"The care of what are known as policy loans has, of necessity, been negli-
gent in the extreme. These so-called securities have been kept in files accessible
to anybody and everybody, and it has come under the observation of the com-
mittee that messengers from the insurance companies have gone to the files
of these securities and made such changes as they pleased, removing or re-
placing instruments and perhaps doing no more than to leave a memorandum
on the desk of the clerk. A mischievous person could remove enough of such
securities in his coat pocket to seriously embarrass the department and work
injury to the company. The displacement of a handful of policy cards or loan
cards would change the showing of assets and liabilities of a company by
many thousands of dollars. The clerk has neither the data nor the knowledge
from which to test the validity of the loans and, consequently, the companies
offer for deposit many loans which lack the legal requirements, as evidenced
by the fact that this committee caused to be rejected nearly $125,000 of securi-
ties for which the companies were given credit without the securities having
had such inspection as would determine their right to be deposited. The fact
that the securities on deposit with the Auditor are found in as good condi-
tion as the committee found them is due to the fact that the companies have
shown unusual fairness in dealing with the office, and not to the fact that
there has been any kind of efficient inspection. The organization of the office
has been such as to render it impossible."

Consideration of these facts lead inevitably to the conclusion
that a law should be enacted separating the insurance department
from the Auditor's office and creating an independent department
to take over the supervision of the business of insurance.

The department shottld be known as "The Department of In-
surance" and its head as "The Commissioner of Insurance." He

45

should be appointed by the Governor for a term of four years.
The supervision of such a department calls for a high order of ex-
ecutive ability. He should be a man of large experience, possessed
of courage and moral fibre. His salary should be substantial, not
less than $5,000 nor more than $7,500 per annum. He should be
given a competent actuary, whose salary should be not less than
$4,000 per annum, and who should be precluded by law from ta-
king outside employment. There should also be a clerk, having
charge of the business of collecting fees and issuing licenses.
There should be provided a special examiner, whose business it
should be to examine the financial statements made by the insurance
companies. He should be a man of sagacity and experience, ca-
pable of detecting questionable items in the statements filed, wrong
classifications of business, or subterfuge of any kind. This is ab-
solutely essential if the public is not to be imposed upon. The
salary should be not less than $3,000. There should be, also, a
clerk possessed of legal training, whose business it should be to take
charge of the securities on deposit with the Auditor, to keep the
records of the same, to examine each and every security as to its
value, correctness of form and compliance with legal requirements.
He should be acquainted with the ordinary requisites of mortgages
and municipal bonds and should have legal capacity to pass upon
the validity of securities known as policy loans. The commissioner
should be given a stenographer, and a special appropriation should
be made for the making of examinations in cases in which the ex-
pense thereof cannot be collected from the company.

The report of the committee investigating the affairs of the in-
surance department of the Auditor's office has been prepared with
rare skill and great ability, and I commend it to your most thought-
ful consideration in connection with this subject.

The newr department is absolutely essential to the public wel-
fare, and I sincerely trust this recommendation will receive your
early approval. The form of other insurance legislation will neces-
sarily depend to some extent upon the creation of this department,
and for that reason whatever legislation you enact providing for
its establishment should be among your first enactments.

FRENCH LICK AND WEST BADEN.

For a number of years an incorporated company known as the
French Lick Hotel Company, and a similar company known as the
West Baden Hotel Company, have, respectively, owned and oper-
ated large hotels at French Lick and West Baden. In connection

4(5

with the hotels, buildings have been erected and devoted to use as
casinos. These casinos have been equipped with many elaborate
and expensive gambling devices. Gambling has been carried on
therein to such an extent as to constitute them veritable Monte
Carlos. This has been done directly by the companies, or, under
lease from them, with their knowledge and connivance. Conditions
became such as to shame the State. Many of its citizens were de-
spoiled in purse and debauched in habit. Public officials holding
high positions and having the custody of public funds gambled
them away. Women and children were nightly attendants. Local
authorities were corrupted until they would not interfere. It
seemed to me the condition warranted executive action. The At-
torney-General, in connection with the prosecuting attorney of the
local judicial circuit, were directed to raid the casinos and seize the
gambling paraphernalia, and to institute suit against the hotel
companies to enjoin the further operation of the casinos. These in-
structions were carried out with vigor and ability. The casinos
were raided and thousands of dollars of gambling paraphernalia
seized and a suit instituted for injunctive relief. The Circuit Court
of Orange County held that the State had no authority to inter-
vene in the premises and sustained a demurrer to its complaint.
Appeal has been taken from the decision of the court, and the
case is now pending in the Supreme Court of the State. If, in
the decision of this case, the Supreme Court sustains the action of
the lower court, the welfare of the State will require such legisla-
tion at your hands as will clothe the State with effective powers in
such cases.

Under the present statute the gambling paraphernalia seized
by the State cannot be destroyed until there is a conviction of the
persons in whose possession it was found. Criminal proceedings
have been instituted and are still pending in the local courts of
Orange County, but, so far, the State has been unable to bring
these cases to trial. The statute ought to be amended so as to
authorize the destruction by five of all such paraphernalia wherever
found, summarily and without trial.

REMOVAL, OF PUBLIC OFFICERS.

The French Lick and West Baden cases, and the experience of
the State in its effort to remove the late Secretary of State, disclose
the need of a well-considered and effective statute for the removal
of public officials who wilfully fail in the performance of the
duties of their office, or who are guilty of misfeasance or mal-
feasance therein. The present statute is believed to be invalid.

47

The Governor of the State is charged by the Constitution with
the faithful enforcement of the laws of the State. Under the law
he cannot act effectively except through local officials. He has
no authority to direct the action of any county sheriff or prose-
cuting attorney in any case. It is not clear that the Attomey-
General has authority to proceed in any such case as that presented
at French Lick and West Baden without the approval and assist-
ance of the prosecuting attorney. It is unjust as it is idle to
charge the Executive with the enforcement of the law, and then
leave him without effective means to discharge the duty imposed.

RAILROAD COMMISSION.

The act of the Sixty-fourth General Assembly creating a State
Railroad Commission has more than justified its enactment. Some
of its provisions are imperfect and others almost wholly inefficient,
but the commission has been able to render signal service to the
people in many cases, notwithstanding the weakness of the law
under which it has worked. In some instances of flagrant wrong,
it has had no power to enforce its findings, but it has been
able, even in such cases, to do something. It has exposed the
abuse to the public eye, fixed the responsibility and laid bare the
need of a more effective statute. If the present act is upheld by
the courts changes in the law should be made by amendment and
not by ne\v and independent legislation.

The law should be strengthened in many particulars, giving the
commission additional powers in cases of railroad and interurban
crossings, interlocking switches, physical defects of ways and
means, the requirement of safety appliances in intra-state traffic,
the removal of blockades upon proper notice by orders concerning
rates, routes of shipment and the movement of traffic.

The provisions of the law authorizing an appeal from the find-
ing of the commission to the Appellate Court, should be amended
by substituting a provision for the bringing of suit in some nisi
prius court by any person aggrieved by the action of the commis-
sion, with the right of appeal from the decision of such court.
Provision should also be made for the institution by the commission
of suits in its own name for the enforcement of the law whenever
the public welfare shall require.

That defects, such as have been pointed out by the commission,
in the ways of some of the railroads of the State, should be con-
tinued by the companies operating such roads, in defiance of the
commission and in brutal disregard of the lives of its employes, is
an intolerable offense against society and the State.

48

My attention has been called by the commission to an instance
where a bridge constructed by a railroad company over its tracks
is in such condition as to constantly imperil the lives of its brake-
men, and at which no less than twenty trainmen have been injured
or killed. This structure is still being maintained, although it
could be readily made safe, if the management of the company was
disposed to do it. Such conduct is little short of criminal. Power
should be given the commission in all such cases to intervene and
compel the removal of the defects.

The coal blockade now existing in this State is of such magni-
tude and has been of such duration as to seriously affect many in-
dustries, discommode many manufacturers and entail financial loss
and physical suffering upon many people. Thousands of loaded
cars are permitted to stand unmoved for weeks. Producers and
consumers alike are helpless. The commission is impotent, and the
State itself is powerless to act. The situation, taken in its en-
tirety, is so disastrous and so overwhelming in its results as to call
for immedate and effective action upon your part.

While care should be exercised that the rights of the railroad
companies doing business in Indiana shall not be impaired, too
much time ought not to be given, in the presence of such an emer-
gency as that now presented to you, to the hearing of the special
interests which are so deeply injuring the welfare of the State.

The particulars of the commission's work, the weaknesses of the
present law, and the need of remedial legislation are so ably and so
cogently set forth in the report of the commission, filed with the
Executive, copies of which I have caused to be transmitted to you,
that I bespeak for the report your most careful consideration. So
far as I am advised I am in entire sympathy with the recommenda-
tions made by the commission, and stand ready to give them in-
stant executive sanction upon receipt of measures from you in
which they are embodied.

STATE BOARD OF TAX COMMISSIONERS.

The work coming before the State Board of Tax Commissioners
has grown so rapidly and has been added to so greatly that the
amendment of the law relating thereto has become an imperative
necessity. Last year this board considered and assessed property
of the aggregate value of $224,377,446. This property is scat-
tered throughout the State, and consists of the most difficult class
of property to value and assess known to the law, such as railroads,
express companies, telegraph companies, telephone companies,
transportation companies, pipe line companies, etc. The board

49

also has jurisdiction over appeals from local boards of review and
of appeals from its own original assessments, and once in four
years the responsibility of equalizing real estate values through-
out the State is devolved upon it. Under the present law it has but
forty-five days in which to perform its work. I earnestly recommend
an amendment of the statute, requiring the board to begin its first
session on the first Monday of April of each year and providing
that it continue in session for a period of forty days, if the busi-
ness before it shall so warrant. This session should be for the pur-
pose of making all original or first instance assessments within the
jurisdiction of the board. The second session should begin the
second Monday in July and continue for a period of fifteen days.
This session should be limited to the hearing of appeals from the
assessments made by the board at its first session. The third ses-
sion should begin on the Thursday following the close of the second
session, and should continue for a period of twenty days, if the
business before the board shall warrant. This session should be
devoted to the hearing of appeals from local boards of review and
to the equalization of the values of real estate.

The work of the tax commissioners, apart from that of the
board, has become of so much importance and has resulted in so
much benefit to the State, in the way of improved assessments, and
their pay is so meager, that I believe it my duty to recommend the
appointment of a third commissioner and that the salaries of the
commissioners be substantially increased. The increase in taxablcs,
of $350,000,000, in eight years, is very largely due to the efforts
of the commissioners. In my judgment it would not be unfair to
say that $150,000,000 of the increase is due alone to the improved
methods of valuation and the discovery of sequestered property
made possible by them. Their services have been equally valuable
in bringing about uniformity of valuation. With three commis-
sioners the work could be divided in such manner as to place a sec-
tion of the State under the supervision of each commissioner, and
the work, if properly done, would require all the time of each.

While I am personally willing to continue to serve the State
as a member of this board, my judgment is that the Governor
ought to be relieved from membership on the board. In the event
of the appointment of a third commissioner, the board will consist
of the Secretary of State, the Auditor of State and three commis-
sioners. There is no more important function of the State govern-
ment than that devolved upon this board, and it is quite impossible

[4—19891 ]

50

for the Governor, in the midst of the ever-increasing executive
duties imposed upon him, to perform the character of service as a
member of the board to which the State is entitled.

ASSESSMENT OF BANKS.

Equality of valuation for purposes of assessment is essential
to just taxation. Without equality of valuation the burden of
taxation falls unequally upon those upon whose property the tax
is levied. This is unjust and in clear contravention of the intent
of the Constitution.

Under the present law the valuation of banks, state and na-
tional, and of trust companies is made by local authorities. From
wide observation and information I am prepared to say to you that
there is no other class of property in the State so unequally valued.
In some counties these institutions are assessed as low as 60 per cent,
of the amount of their capital, surplus or undivided profits. Hav-
ing in view the equality of valuation as a fundamental principle of
just taxation, I recommend that all banks, state, national and
private, and all trust companies be required to file their reports for
taxation with the Auditor of State and that the State Board of
Tax Commissioners be authorized to make the valuation of all
such institutions. Assessment by this board would give uniformity
of assessment of this class of property wherever situate.

The act of February 28, 1905, providing for the taxation of
the stock of banks organized under the laws of the United States
(Acts 1905, page 104), provides a method for determining the
value of the stock of national banks different from the method
provided for determining the value of the stock of state banks, and
for that reason it is probably invalid. It should be repealed. The
present law providing for the assessment of private banks is also
believed to be unconstitutional. It, too, should be repealed. Pri-
vate banks are now required by law to have a fixed and definite
capital invested in the business. There should be legislation pro-
viding that the capital invested in any private bank shall be di-
vided into shares of $100 each, and that such shares be returned for
valuation and assessment in the same manner the shares of stock of
incorporated banks are returned for valuation and assessment. An
act providing for the valuation and assessment of the shares of
capital or capital stock of all banks, private, state and national,
and of all trust companies, should receive your early consideration.
Such legislation should provide a method of ascertaining the actual
value of the shares of capital invested, or of the shares of capital

51

stock, by taking into consideration the market value thereof, as dis-
closed by the usual selling price at private sale in the place where
the institution is located ; the dividends paid, if any ; the surplus
or individual or undivided profits, if any ; the same as is done with
respect to other moneyed capital in the hands of individual citizens
of the State. If this is done, all banking institutions will be valued
and assessed by the same method and all doubt as to the validity
of the law applying to their assessment will be removed.

Section 27 of an act concerning taxation, approved March 6,
1891, being Section 8437, Burns' R. S. 1901, has become subject
to great abuse and should be repealed. It provides for the taxa-
tion of personal property, mortgaged or pledged, as the property
of the person who has the same in possession. The intent of the
law is entirely proper, but in practice it results in the sequestration
of substantially all notes, bonds, stocks and other securities mort-
gaged to or placed as collateral with the banks and trust companies
of the State. Securities so mortgaged or placed are not taxable
under the statute to the equitable owner thereof; they are only
taxable to the bank or trust company holding them. But banks
and trust companies are assessed only upon their capital stock, sur-
plus or undivided profits. Collateral held by them is never re-
ported, and therefore never assessed. The abuse can be ended by
the simple repeal of this section, the effect of which will be to leave
such property to be assessed to its equitable owner.

The law relating to mortgage exemptions in the assessment of
mortgaged real estate has also become the subject of no inconsider-
able abuse. Mortgages, fictitious and fraudulent, are made the
basis of claims for exemption in many instances. Local boards of
review now have no authority to examine into or pass upon these
claims. The mere filing of the affidavit with the Auditor, setting
forth the claim, is sufficient to secure the exemption. The law
should be amended so as to require the reference of all such affi-
davits filed with the Auditor to the county assessor, who should be
required to examine the same and to refer them, with such recom-
mendation as he may think their merits warrant, to the county
board of review, which board should be given full authority to
pass upon them and to allow or disallow the claims made by them
according as their merits or the good faith of the instruments in
question shall require. This can be done by the amendment of Sec-
tion 2 of the act providing for mortgage exemptions.

The schedule of personal property provided in the present tax
law should be so amended as to require every person owning or

52

holding taxable notes, mortgages, bonds, or other securities to write
into his return an itemized statement, giving each note, mortgage,
bond or other security, with the amount of the claim it evidences
and the name of the obligor. Each citizen should also be required
to particularly specify in his return all stock he holds in any for-
eign corporation, giving the amount of each certificate. A large
portion of this class of wealth is regularly escaping taxation. Un-
der the form of the present schedule the citizen is simply required
to give the gross valuation of all such securities. His statement
is usually accepted. If he were required to give the items, with
the face value and character of each, the assessing officer would be
in a position to intelligently declare their value. Such property
represents a form of wealth which has reached enormous propor-
tions, and in fairness and common honesty it should be compelled to
bear its share of the cost of administering the government that
protects it.

STATE BOARD OF PARDONS.

The clemency power of the State is vested by the Constitution
in the Executive. While it adds greatly to the burden of the in-
cumbent of the executive office, I believe the power is wisely lodged.
By an act of the Sixt3^-third General Assembly a "State Board
of Pardons" was created, composed of three members, with an an-
nual salary of $300.00, providing for clerk hire and other ex-
penses. This law makes it the duty of the members of this board
"to examine thoroughly and carefully into the merits of all peti-
tions which may be presented to the Governor for the pardon of
any persons convicted by an}^ court of the State of Indiana,
* * * and to report to the Governor in writing their con-
clusions and recommendations in each case." Immediately after
this act became effective my predecessor appointed the members of
this board, two of whom are still members of the board. One of
these two members is now holding under reappointment made by
the present Executive. The object of the law evidently was to
lighten the executive burden in matters relating to clemency. If
so, its object has not been attained. It is absolutely impracticable
to refer all petitions coming before the Executive to the board for
consideration, and if this were done it would be equally imprac-
ticable for the Executive to await the board's recommendations.
The salary of $300.00 per annum precludes the members of the
board giving their whole time to the duties of this position. It
cannot be expected and evidently was not intended that they should.

53

Under the Constitution the board has no power to do more than
recommend. The Executive cannot conscientiously follow blindly
the recommendation of the board. Its findings are only advisory.
The responsibility of the exercise of the clemency power rests, in
the last analysis, upon the Executive alone. The deed when done
is his act, and his only. This fact compels him to examine each
case for himself and this leads to the performance of the same labor
that would have devolved upon him if the case had never been con-
sidered by the board at all. In fully 50 per cent, of the cases in
which clemency is recommended, the present Executive has been
compelled by what seemed to him to be his imperative duty, to over-
rule the board's recommendation. The board is not and has never
been an expensive board. On the contrary, the closest economy has
characterized its administration from the beginning. The total
cost of the board last year was $2,057.00. Of this sum $862.00
was paid for clerk hire, $97*5 was paid in salaries to members, and
the expense incurred aggregated but $220.00. The clerk of the
board is an efficient stenographer and when not employed in the
active service of the board, she has assisted the clerks in the Execu-
tive office, taking charge of the clemency cases and the correspond-
ence relating thereto. While the expense of the board is not great,
it is needless. Its work is so nearly nominal and of so little assist-
ance to the Executive, or of value to the State, that it may be dis-
pensed with without injury to the public interests. During the en-
tire year of 1906 but 26 cases were considered by the board. These
cases were disposed of as follows : Recommendations of clemency,
9 ; clemency rejected, 7 ; cases in which the boards of parole acted
while they were pending before the Board of Pardons, 5 ; cases
still pending, 5. Actual decision was rendered in but 16 cases.
Of the 9 cases in which clemency was recommended, 4 were ap-
proved by the Executive, 2 are still under advisement, and 3 were
overruled.

I do not mean to reflect in any way upon the character, ability
or work of the gentlemen constituting this board. They have my
confidence and my respect. They are my personal friends. Our
relations have been and are of the most friendly character, but I
am thoroughly convinced that the law creating the board ought to
be repealed in its entirety. The facts to which I have called your
attention seem to me to abundantly justify its repeal. If you will
provide the Executive with a pardon clerk at $900.00 per year, the
same salary that is now being paid the clerk of the board, the
work can be done by the Executive without other expense, at a

54

saving of more than $1,100.00 a year, and with as much certainty
of just decision, and less embarrassment, than under the provisions
of the present law. While the board has examined and decided
but 16 cases within the last year, the Executive in two years has
examined and made personal investigation of and has decided 258
petitions, an average of 1 every 3 days since the beginning of his
term. Two hundred and twenty of the cases receiving executive
investigation have been rejected. Clemency has been -extended in
38. Every application for clemency presents a difficult and deli-
cate problem. Where and when to extend it, and when and where
to withhold it, are questions which can rarely be satisfactorily
answered, even when the greatest care is exercised. Fear that the
power might be abused through sympathy, pity or favoritism, or
through yielding to the entreaties of influential and powerful
friends in some instances, or in response to what has seemed to be
popular demand in others, has led me to exercise the power with
the utmost care and caution.

In one respect I have departed from the custom of the office.
I have heard the case of the unfortunate inmate of jail or work-
house as patiently and willingly and examined into it with the
same care that I have that of the inmate of the State Reformatory
or the State Prison. I have acted favorably in 18 jail or work-
house cases within the last two years, and yet the total number of
cases in which clemency has been extended within that time is much
less than the number in which clemency was extended during the
last two years of my predecessor. For the years 1903 and 1904
favorable action was taken in 62 cases, none of which were jail or
workhouse cases. In the two years 1905 and 1906, only a total of
38 cases have been favorably acted upon, and of these 18 were jail
or workhouse cases, 9 were State Prison, 8 were State Reformatory,
and 2 Women's Prison cases. One of the 38 cases involved only
the remission of the forfeiture of a recognizance bond in a case
where the defendant had been acquitted upon trial and was there-
fore not in any institution. These 38 cases of clemency consisted
of 10 paroles, 2 paroles with the remission of fines, 6 remissions of
fines, 18 pardons and 1 commutation of death penalty to life im-
prisonment. In one instance pardon was granted that a prisoner
might be tried for murder, the commission of which he had con-
fessed. Full details of each of these cases will be found in an ad-
denda attached to and filed herewith. In all cases where the law
imposes a minimum and a maximum sentence, its decree should
stand until at least the minimum sentence has been served, The

55

lightest punishment the law imposes for the commission of a crime
is the minimum sentence it names, and until that is served execu-
tive clemency should be withheld, except where some special and un-
usual reason obtains. I have adhered closely to the rule as here
stated, seeking to exercise the pardon power in such manner as to
interfere in the smallest degree possible with the certainty of pun-
ishment the law provides.

PUBLIC PRINTING.

The law relating to the public printing of the State should be
revised. The importance of the subject is made apparent by the
statement of the annual cost of the public printing account. For
the fiscal year 1905 the institutional printing cost $27,110.64, that
for the several departments and the State generally $79,735.62, an
aggregate of $106,846.26. For the fiscal year 1906 the institu-
tional printing cost $27,002.29, that for the several departments
and the State generally $59,994.80, an aggregate of $86,997.09.

The minimum and the maximum number of reports from the
several departments required to be printed should be fixed by stat-
ute and the number actually printed left to the discretion of the
Printing Board within the maximum and minimum number named.
The statute should clearly state what reports are to be published
annually and what biennially. All reports required to be published
should be filed with the Governor within thirty days from the close
of the period for which such report is made, unless for cause shown
'the Printing Board shall grant additional time.

The printing of the documentary journal should be discon-
tinued, as it is nothing more than a compilation of the several re-
ports published in other forms in which they are easily obtainable.
It is therefore an extravagant and useless duplication.

Under the present law the number of ballots required to be
printed by the State Board of Election Commissioners is greatly in
excess of the number used or needed. The number printed may
be greatly reduced without endangering the public interests, and a
substantial saving thereby made to the State.

The portion of the Auditor's report relating to the question of
insurance should be eliminated from the report and printed as a
separate report. The demand for this phase of the report is so
great as to compel the printing of a larger number of the Auditor's
report than otherwise would be necessary. The report as now
printed contains much expensive matter for which persons who
desire only the insurance report have no practical use. The cost

56

of printing the report could be materially lessened in this way
without injury to the report. If a separate department of insur-
ance is created, the insurance report, of course, would necessarily
be separate from that of the Auditor.

All printing and supplies should be required to be delivered to
the clerk of the Printing Board, inspected and receipted for by
him and delivered to the various departments and institutions,
under the supervision and direction of the board. No officer, head
of department or institution nor any subordinate in any office or of
any department or institution should be permitted to negotiate
with the State printer for either printing or supplies. All print-
ing and all supplies should be ordered by requisition through the
board. This will work no hardship anywhere and will be inducive
to economy in all departments. Provision should be made for an
assistant to the clerk of the board. Close supervision of supplies
and of the public printing will enable the State to get what it
buys, and is clearly in the interest of economy.

The law should also provide for an increase in the number of
Supreme Court reports originally printed to 1,800 and the number
of Appellate reports to 1,600. This number printed in the first
instance will obviate early reprints of the different volumes of these
reports and will be cheaper in the end. The number of reprints of
any volume should be left to the decision of the board, not to ex-
ceed 250.

The classifying of the public printing for the purpose of ac-
cepting bids and letting the contract therefor, should be changed.
It is a matter of more than passing importance that this be done.
Under the present classification it is quite impossible to obtain the
competition in letting the contract to which the State is entitled.
The person bidding for general supplies and stationery must bid
for and be equipped to do the important and difficult legislative
printing. As a result there is little or no competition in bidding
for general supplies and stationery because of the inability of
many persons to do the printing with which such supplies and sta-
tionery are included. The statute should provide at least six classes,
each of which may be bid for and awarded separately. The fol-
lowing classification is suggested as an advantageous one for the
State:

The first class should comprise the printing and binding of the
laws, journals, reports of officers and public institutions, and all
book and pamphlet work to be printed on book or pamphlet paper,
except the reports of the Appellate and Supreme Courts ;

57

The second class should comprise the folding, stitching, cover-
ing and binding, and all work belonging to the binding business
not included in the first class ;

The third class should comprise all legislative bills ;

The fourth class should comprise all commissions, letter-heads,
circulars, blanks and other work usually executed on writing pa-
per;

The fifth class should include all office supplies and articles of
stationery ;

And the sixth class should include the printing and binding of
the Appellate and Supreme Court reports.

This classification will result in the saving annually of large
sums. The revision of the law along the line suggested is there-
fore most earnestly urged upon your consideration.

STATE LIBRARY.

An act approved March 11, 1895, constituting the State Board
of Education, a State Library Board, and vesting in such library
board the management and control of the State Library, and an
act approved February 24, 1899, creating a Public Library Com-
mission, to be composed of tliree members appointed by the Gov-
ernor, to have the control and management of the traveling libra-
ries provided for therein, should both be repealed, and a new statute
enacted creating a State Library Commission, to be composed of
the Superintendent of Public Instruction, ex officio, and four mem-
bers to be appointed by the Governor, vesting in such commission
the management and control of the State Library and such other
duties as are now devolved upon the State Library Board, together
with all the duties now devolved upon the Public Library Commis-
sion. Such an act will unite the library interests of the State,
place them under the control and management of a single board,
and make greatly for efficiency of service in both departments.

The State Board of Education is composed of able and efficient
men, but their time is greatly taken by duties devolved upon the
State Board of Education. They are men of busy lives, and it is
not possible for them to give to the library interests of the State
such service as these interests require.

Under the acts named the library interests are controlled by
dual and independent authority. The unity of purpose essential to
effective administration and progressive work is impossible. By
this recommendation I mean no reflection upon the personnel of
either of these boards. My criticism is of the separate, independent

58

and conflicting departments created by the two acts in question and
not of the persons who are administering them.

The members of the new board should serve without pay, other
than their actual traveling expenses. No attempt should be made
to amend either of the present statutes, but a new and independent
act should be passed devolving upon the board created full control
of both departments.

CHANGE IN FISCAL YEAR.

The present law provides that the fiscal year shall begin on the
1st day of November and end on the 31st day of October of each
year, and that all official salaries shall be paid quarterly, beginning
with the 81st day of January.

For some reason the provision of the law as to the time of pay-
ment of official salaries has been disregarded for many years. On
the 31st day of January last, it was thought best to return to the
time of payment fixed by the law. This occasioned the payment of
salaries for thirteen months in the last fiscal year, while the appro-
priations therefor were for but twelve months. The return to the
time of payment required by the law necessitated the payments
made. Payments for the additional month should be legalized.

I recommend, also, a change in the beginning and the end of
the fiscal year. The year should begin on the 1st day of October
and end with the 30th day of September of each year. All an-
nual and biennial reports required of the several departments and
officers of the State relate to fiscal years. The law provides that
these reports be printed and filed with the members of the General
Assembly for their information. These reports cannot be made up
until the close of the fiscal year they cover. This gives but sixty
days in which to prepare the reports and to secure their publication.
As a result many of the reports are not filed with the Governor un-
til the eve of the assembling of the General Assembly and are not
printed until after the adjournment thereof. By closing the fiscal
year on the 30th of September, an additional month will be given
and it will become possible to secure the publication of the reports
in time for distribution at the beginning of the session. This
change will also cause the fiscal quarter to correspond to and end
with the calendar quarter. If the change is made, a clause should
be inserted in the law providing for the use of but eleven- twelfths
of the general appropriation made for the fiscal year of 1907.

59

CLAIM OF ONE HUNDRED SIXTY-FIRST REGIMENT.

The officers and men of the 161st Regiment of Indiana Volun-
teer Infantry and Companies A and B, Colored Infantry, held at
the time they were mustered out of service what was believed to be a
valid claim against the United States Government for back pay due
them on account of services rendered the government during the
Spanish-American War. These claims, while large in the aggre-
gate, were small in individual amount, so small in fact that no mem-
ber of the organizations could afford to incur the expense of prose-
cuting his claim. This led my predecessor to make a contract as
Governor, on behalf of the officers and men of said organizations,
with Honorable A. W. Wishard and others, for the prosecution of
all such claims. The compensation was fixed at a sum equal to 25
per cent, of any recovery which might be made, and provided that
the claim should be prosecuted at the expense of counsel and that
no compensation should be paid in the event of the failure of re-
covery.

Claims were made aggregating $82,883.95 and prosecuted with
such vigor and success that $46,698.47 was finally allowed upon
appeal, by the Comptroller of the Treasury. The claims were
prosecuted in the name of the Governor of the State for the use
and benefit of the officers and men named. The allowance was
made in the name of the present Executive. The compensation of
counsel provided by the contract, $11,674.61, was paid them, and
the balance amounting to $35,023.86 was placed in the bank in the
name of the Governor, for distribution to the members of said or-
ganizations. This distribution is being made through the office of
the Adjutant-General of the State, as rapidly as the claimants can
be located and proof of their claims obtained. On the 31st day of
December, 1906, the disbursements aggregated $23,669.32. Hav-
ing rendered the service, the members of these organizations ought
to be paid in full. I believe it to be the duty of the State to reim-
burse them for the expense incurred in the prosecution of their
claims, and I therefore recommend that the sum of $11,674.61 be
appropriated for that purpose, to be drawn by the Governor upon
his voucher and distributed through the office of the Adjutant-Gen-
eral, in the same manner and upon the same basis that the present
fund is being disbursed.

A number of claimants have died since their discharge from the
service, and payment can be made now only to their administrators.
In many instances the expense of letters of administration would

60

exceed the amount of the claim. For this reason I recommend the
passage of a special act authorizing the Governor to pay the sums
thus involved to the next of kin of all deceased claimants upon
proof of kinship, without additional formality or expense.

BAKER BRIBERY CASE.

The last General Assembly appropriated $5,000 for executive
use for the apprehension, return and prosecution of one Oscar A.
Baker, charged with the bribery of a member of that body. At
the time the appropriation was made Mr. Baker was a fugutive
from justice, having fled the State and gone to the Dominion of
Canada, according to the best information the Executive could ob-
tain. Upon inquiry of the State Department of the Federal Gov-
ernment I was advised that the crime of bribery was not extradita-
ble under the existing treaty between the United States and Great
Britain, and that Mr. Baker could not be compelled to depart from
Canada even though apprehended. Believing that his return and
apprehension under such circumstances would be more probable if
no public reward was offered for his arrest, I contracted with dif-
ferent sheriffs and officials and detectives for his apprehension and
return, agreeing to pay therefor $2,000, reserving the right to ter-
minate such employment at any time when in the judgment of the
Executive, public reward should be offered. None of these persons
was able to apprehend Mr. Baker. Later I cancelled all such agree-
ments and offered a public reward of $3,000 for his capture and
return to the custody of the sheriff of Marion County. Nothing,
however, has come of the offer, further than the receipt of informa-
tion through the late sheriff of Marion County that Mr. Baker is
still in the Dominion of Canada and refuses to return to Indiana.

The offense with which he is charged is a grave one. It in-
volves the integrity of the Sixty-fourth General Assembly. I
therefore ask that the appropriation heretofore made be renewed.

STATE INSTITUTIONS.

The State institutions, taken as a whole, never were in better
condition than they have been during the past biennial period.
Political considerations never affected them as little. Their man-
agement has been characterized by economy and efficiency. In a
number of instances the cost of maintenance per capita has been
reduced, notwithstanding the increase in the cost of supplies.

There is, however, still room for improvement in the administra-
tion of these institutions. I suggest for your consideration the
propriety of revising the laws relating to all such institutions other

61

than the institutions for higher education, that uniformity may be
had in their administration. At the present time the number of
members of the several boards differs. Some of them are not re-
quired by law to be nonpartisan and are so now from executive
choice alone. The salaries of members of these boards vary from
$300 to $500 per year and necessary traveling expenses. In some
institutions the boards choose not only the superintendent but the
subordinates as well. Qualifications are specified for membership
on some of the boards which greatly hamper the Executive in the
selection of such members. Reports are to be made at different
times and in different forms. Better service can be had if these
boards are composed of four members, not more than two of whom
shall be of the same political party. There should be at least one
woman on the board of every institution in which women are in-
mates. All salaries should be fixed at $300.00 per annum and
necessary traveling expenses not to exceed $125.00 per year. The
duty of selecting superintendents should be devolved upon the
boards, but their authority in this direction should end there. Each
superintendent should have the right to select his own subordinates
and be held responsible to the board for their conduct.

STATE REFORMATORY.

Acting under authority of a statute enacted by the Sixty-
fourth General Assembly, trade schools and a school of letters have
been established and put in operation in the State Reformatory, the
particulars of which are set forth with clearness and accuracy in the
fifth biennial report of the institution. Their development has been
such as to bring results beyond the hope even of those most favor-
able to the legislation which authorized them.

On the 1st of July, last year, all labor contracts ceased and the
industries retained became an integral part of the trade school sys-
tem of the institution.

I cannot commend too highly the work being done and the
progress being made. The report referred to will be laid upon
your desks. It will bear inspection and analysis. I trust it will
receive the consideration to which the great importance of the sub-
ject it covers is entitled.

STATE PRISON.

The labor contracts at the State Prison will expire in 1910. If
they are to be discontinued it is of the utmost importance that pro-
vision be made prior to that time for the employment of the in-
mates. I believe this can best be done by finding employment for

62

them on State account. With this purpose in view, the Board of
Control of the Prison, with executive approval, purchased and in-
stalled a plant for the manufacture of binder twine, at a cost of
$32,174.40. The plant was not ready for operation until March,
1906. From that time to the 31st day of October, 1906, an aver-
age of 64 men were employed in the manufacture of twine. A!
though the season was far advanced when the operation was begun,
a ready sale was found for the manufactured product. A careful
analysis of the accounts of the plant indicates that the enterprise
can be successfully developed with substantial profit to the State.
An excellent quality of twine is being manufactured. It can be
placed upon the market at a less price than the trust product. I
am convinced if the plant is properly developed and carefully man-
aged that it will result in the regular employment of perhaps 100
of the inmates, in a profit to the State, and in a saving to the
farmers of the State in the cost of twine used by them. The State
account fund provided by the present statute is insufficient. A
new statute should be enacted having particular reference to the
management and control of this industry, and making provision
for a larger revolving fund for its use. The subject is covered by
a measure prepared by the late Attorney-General, which will be in-
troduced, and which I hope will have your early consideration.

I am advised by the warden of the Prison that a fund made up
of many small items of earnings by certain inmates under the rules
of the Prison, who have died, been executed or have violated their
paroles, has accumulated under his administration. This fund now
aggregates $522.22. Some provision should be made concerning
it. It has been suggested to the warden that legislation should be
had providing for its transfer to the library fund of the institu-
tion.

HOUSE OF CORRECTION FOR WOMEN.

Within the next few months the Industrial School for Girls will
be separated from the Women's Prison. The lack of proper sep-
aration in our jails, the scandals that have developed in some of
them on account of the confinement of women therein and the fre-
quent unsatisfactory treatment there accorded to women, together
with the lack of employment for them, lead me to recommend what
seems to me a satisfactory solution of the problem of their care and
confinement. That is, the ulitization of the vacated parts of the
girls' side of the Women's Prison as a workhouse for women. Long
term prisoners can be sentenced to the Women's Prison as they now

G3

are. Those sentenced for a short term may be sentenced to the
Workhouse for Women. If the change is made no convicted wo-
man should thereafter be confined in any jail or workhouse in the
State. The expense of the change will not be great. The two in-
stitutions can be operated by the same board, with the same organi-
zation, and at a less cost per capita than women are now maintained
in the county jails.

INDIANA INDUSTRIAL SCHOOL FOR GIRLS.

The commission having in charge the location and erection of
the Indiana Industrial School for Girls has made substantial prog-
ress in the work committed to its care. Contracts for the construc-
tion of seven cottages, a schoolhouse and a service plant have been
executed, and the buildings are now nearing completion. The
buildings are modern and substantial. The total appropriation by
the Sixty-fourth General Assembly was $235,000. The total cost
of constructing the buildings named, including the expenses of the
commission incident thereto, will practically equal the appropria-
tion. This will leave the commission without funds to furnish and
equip the institution. This should be provided for by an emergency
appropriation, to be made immediately available.

The population of the institution has increased to such an ex-
tent as to require the construction of at least one new cottage and
two if the finances of the State will justify. Provision should also
be made for two cottages for male employes and for an adminis-
tration building. Also for a cow barn, horse barn, storehouse and
cold storage building. Appropriations for these buildings need
not be included in the emergency appropriation for furnishings and
equipment, but should be made available early in the present year.
The cost of furnishing nine cottages and equipping the school-
house it is estimated will aggregate $25,000. A total of not less
than $120,000 is necessary to the completion of the institution, and
I therefore recommend the appropriation of that sum.

I believe it important that the furnishing and equipment of the
institution and the construction of the new buildings that may be
authorized, be referred to the board of trustees to be appointed by
the terms of the present statute upon the completion of the institu-
tion. The separation of the School from the Women's Prison and
the transfer of the inmates to the new institution involves much
detail and will require much time and should be made under the
immediate supervision of the board of trustees. I therefore urge
the passage of a special act authorizing the immediate appointment

64

of a board of trustees and referring to them the furnishing and
equipment of the institution and the removal of the inmates to the
new location.

The name of the institution should be changed to the "Indiana
Girls' School."

INSTITUTION FOR THE INSTRUCTION OF THE DEAF.

The commission having in charge the construction of the new
institution for the instruction of the deaf has selected and pur-
chased a site consisting of 76-93 acres lying immediately north of
the State Fair Grounds, fronting 42nd street, and lying east of the
right of way of the Chicago, Indianapolis & Louisville Railway,
4% miles distant from the center of the city of Indianapolis. The
purchase price of the land was $32,000. Under the limitation of
the law all the commission could pay was $30,771. The difference
was contributed by private persons. The site selected and the price
paid are both such as to commend the action of the commission to
your approval.

On the 31st day of October, the commission had received :

From sales of land made under the late administration $158,280 56

From sales of products 60 00

From rent 200 00

From interest on bonds . 572 18

A total of $159,112 74

Amount then unpaid on purchase price of land, principal and in-
terest 43,884 00

Interest accrued on deposits in bank 1,200 70

Total from sales of lands account, sale of products, rent

and interest $204,197 44

The total appropriation made by the Sixty-fourth General As-
sembly was $315,000, which includes the $204,197.44 named above.
Of this sum the commission had expended on account of purchase of
real estate and expenses incident thereto and to the selection of a
site, the sum of $40,771.77, leaving a balance unexpended of
$274,228.23.

Plans have been prepared providing for the construction and
equipment of a modern institution having a population of 500,
upon a modified cottage plan. When completed in accordance with
the plans the institution will consist of 22 buildings, as follows : A
schoolhouse, dining hall and kitchen bakery, power house, boys'

65

dormitory (4 buildings), girls' dormitory (4 buildings), hospital,
boys' industrial building, girls' industrial building, administration
building, residence, laundry, propagating house, cow barn, horse
barn, contagion hospital and storehouse.

The appropriation made is wholly inadequate. In fact, no more
than sufficient to make a substantial beginning. The matter has
been so long delayed that after full consideration it was believed
best to proceed with the construction of such buildings as will come
within the appropriation in cost of construction. Accordingly a
contract was entered into for the construction of the schoolhouse,
dining hall and kitchen bakery, and a power house, for the sum of
$268,477. In addition to this a provisional contract was entered
into for the construction of all the other buildings named, at a cost
of $647,737.50, making the total cost of the institution for build-
ings when completed, $916,214.50. The expenditure is large, but
the institution for the instruction of the deaf is not a charitable in-
stitution. It is an educational institution and should be built upon
a plan in keeping with its purpose. It is estimated that it will re-
quire $128,500 for the improvement of the grounds, and for fur-
nishing and equipping the institution, in addition to the cost of the
buildings. This covers the cost of the institution completed. The
revenues of the State will not permit an appropriation during the
next biennial period of a sum sufficient to complete the institution
as planned. The provisional contract, however, provides for the
construction of each separate building for an agreed price, clearly
specified in the contract, and is made subject to the approval and
ratification of the General Assembly. It is also provided that if the
General Assembly shall ratify the contract for any one of the build-
ings covered by the provisional contract and make an appropriation
for its construction, that the contract to that extent shall become
a valid and binding contract. This leaves the General Assembly in
a position to judge for itself the extent to which it shall appro-
priate funds and ratify the provisional contract.

If economy is used and appropriations are made with care and
discrimination, I believe the state of the finances will warrant an
appropriation of $400,000 for the next biennial period. The act
of appropriation, however, should clearly specify the purpose of
the appropriation, and the extent to which ratification of the con-
tract is intended to be made.

[5—19891]

66

SOUTHEASTERN HOSPITAL FOR THE INSANE.

An act approved February 21, 1905, authorized the construc-
tion of a new hospital for the insane to be known as the South-
eastern Hospital for the Insane, and for the appointment of a com-
mission having authority to select a site and construct the necessary
buildings. A commission was duly appointed and a site selected
near the city of Madison, overlooking the Ohio River. The build-
ing site and farm consists of 353.848 acres, for which the sum of
$36,829.84 was paid. In addition to the building site and farm,
9-943 acres for right of way and water supply were purchased at a
cost of $2,385, making a total acreage of 363.791 acres, and a total
cost of $39,214.84. Dr. S. E. Smith, Superintendent of the East-
ern Indiana Hospital for the Insane, was selected by the commis-
sion as expert medical adviser, and his services have added greatly
to the efficiency of the commission. Plans have been obtained for
a completed institution on the cottage plan, modern in character,
for a population of 1,000, consisting of 22 cottages, one-half to
constitute the department for men and the other half the depart-
ment for women, ranging in capacity from 30 to 60 beds each, for
the proper care of nine several and distinct classes of insane per-
sons ; an administration building for offices and officers' quarters ;
a service building for the kitchen ; 2 congregate dining-rooms, an
assembly hall, employes' quarters and dining-room, a power house,
a storeroom, a laundry, an industrial building for a sewing-room,
a shoeshop and rooms wherein patients may be safely employed, a
workshop for painters and carpenters, a pumping station, a water
tower and a stable.

The total appropriation carried by the bill authorizing the con-
struction of the institution was $560,000. The following disburse-
ments had been made at the close of the last fiscal year :

For land $39,214 84

Wells 2,273 75

Equipment for wells 1,296 13

Architect's fees 5,000 00

Commissioners' expenses 2,962 40

Maintenance of farm and grounds 1,340 36

Incidental expenses 698 42

Total $52,785 90

Balance available 507,214 10

67

The appropriation made was found wholly inadequate to com-
plete the institution. The necessities of the State on account of
the great number of insane persons whose care is unprovided for
were thought to be such as to justify the construction of an institu-
tion that shall have capacity for at least 1,000 beds. That there
should be no further delay a contract was entered into for the con-
struction of such number of the buildings as could be built within
the appropriation. These buildings are as follows: Standpipe,
foundation and casing; all tunnels, pumping station, administra-
tion building, rear center building, power house, laundry, store-
house, mechanical equipment, including the power equipment, steam
heating and ventilation, water supply and iron sewer, the electrical
equipment and wiring, plumbing and tile sewer, excepting so much
of the heating apparatus, electrical wiring and plumbing as be-
long to the buildings not enumerated in the contract. The con-
tract price is $493,468.00. A provisional contract was entered
into subject to approval and ratification by the General Assembly,
for the construction and equipment of all the structures not in-
cluded in the positive contract, for the sum of $673,005.00. In
addition to these contracts the hardware has been contracted for, at
a cost of $8,855.19, and a custodis chimney for $5,325.00. An
expense has also been incurred on account of changes amounting to
$419.30, making a total cost of the institution constructed ready
for furnishing, $1,181,072.49. It is estimated that the household
equipment and other expense incident to the preparation of the in-
stitution for occupancy will amount to $202,500, making the total
cost of the institution completed and ready for use, $1,436,358.39.
This leaves a balance of construction and equipment cost unpro-
vided for of $876,358. An appropriation of this sum is, in jny
judgment, greater than the revenues of the State will justify for
the next biennial period. The provisional contract, however, is so
drawn that the cost of each separate building is clearly set forth.
It is also provided that the General Assembly' may ratify such
provisional contract in whole or in part and that such part of the
contract as shall be ratified, shall be valid and binding. It is there-
fore important that whatever provision is made, shall specify
clearly what buildings are intended to be appropriated for and to
what extent the contract is ratified.

I believe the revenues of the State will justify an appropriation
for this institution of $500,000 for the next biennial period.

68

EPILEPTIC INSTITUTION.

By an act, approved March 6, 1905, an institution for the care
and treatment of epileptics was authorized and provision made for
the appointment of a commission to purchase a site therefor.
Within the time specified by the statute the commission was ap-
pointed and a site selected by it, consisting of 1,228.82 acres, near
the city of Newcastle, in Henry County, costing $122,882.00, or
an average of $100.00 per acre. The expenses of the commission
aggregated $2,697.34, leaving an unexpended balance of $24,-
420.66. The life of the commission ended with the purchase of
the site.

On the 15th day of March, 1906, a board of trustees was ap-
pointed, and this board has since been in charge of the institution.
It has selected a superintendent, and has erected buildings which
will accommodate fifty patients from the unexpended balance of the
appropriation. But on account of lack of sufficient funds they
cannot be equipped or furnished until an appropriation is made
therefor.

Further legislation should be had relative to the opening of the
institution and the character of the inmates which shall first be re-
ceived. The whole matter is something of an experiment and
should be developed with care and caution. In view of these facts
and the heavy drain to be made upon the public revenues during
the coming biennial period, I do not recommend the appropriation
of more than $150,000.00 for the construction of new buildings at
this institution.

The commission in purchasing the lands constituting the site
for the village contracted for the same at $100.00 an acre with a
committee of citizens of Henry County, on the supposition that it
was acquiring title to 1,228.82 acres, and with the understanding
that after the lands were conveyed to the State a careful survey
would be made, and that any excess would be paid for at the rate
of $100.00 per acre, and any deficiency in the number of acres
should work a reduction in the purchase price of $100.00 per acre.
Such a survey has been made by a competent engineer and certified
to the executive office, showing the aggregate of the several tracts
purchased to be 1,244.55 acres, or an excess of 15.73 acres. There
should be, therefore, an additional appropriation of $1,573.00, to
be paid, upon voucher of the Governor, to said committee in full
settlement of the purchase price of said lands.

69

The purchase of the sites for these three new institutions was
made with care, and the State has more than value received in each.
Titles to all the lands included in them were examined by the Attor-
ney-General and approved by him before payment was made.

TUBERCULOSIS COMMISSION.

By joint resolution approved March 6, 1905, the Sixty-fourth
General Assembly authorized the appointment of a commission of
five persons, two of whom were required to be members of the Sen-
ate, holding over, two members of the House of Representatives,
and one a practicing physician of prominence in the State, to in-
vestigate the need of a hospital for the treatment of tuberculosis in
this State and the work of such institutions in other States. Pur-
suant to the authority conferred by this resolution, the Executive
appointed Alexander G. Gavins and Carl E. Wood, Senators ; Rich-
ard N. Elliott and Loren F. Gage, members of the House of Repre-
sentatives, and Theodore F. Potter, a physician.

These gentlemen have made wide and intelligent investigation
of the subject and have filed a report of their proceedings and their
conclusions, copies of which will be furnished you and which I com-
mend to your consideration. The subject is one that appeals
greatly to all thoughtful persons, and if the finances of the State
will permit, steps leading to the establishment of such an institution
should be taken by you.

MORTON MONUMENT.

The Sixty-fourth General Assembly appropriated $35,000.00
"for the purpose of erecting an heroic statue of enduring material
to perpetuate the name and services of Oliver Perry Morton," and
providing for the appointment of five commissioners to erect such
statue.

The commission was duly appointed, consisting of Messrs.
Warren King, E. B. Martindale, Joseph I. Irwiri, Henry C.
Adams and Daniel R. Lucas. Shortly thereafter Dr. Lucas re-
signed to become the secretary of the commission, and Mr. I. H. C.
Royse was appointed to the vacancy occasioned by his resignation.

A site for the statue was selected immediately in front of the
east entrance to the Capitol. A design prepared by Mr. Rudolph
Schwarz of an heroic bronze statue was selected and a contract
entered into with Mr. Schwarz for the same.

The commission will be able to erect a monument and statue
in compliance with the law providing therefor, and which will fit-

70

tingly commemorate the memory and services of Governor Morton,
within the appropriation named, and hopes to be able to unveil the
same before your adjournment.

LAWTON STATUE.

The people of Indiana, through private subscription, have pro-
vided the means for a statue to the memory of General Henry W.
Lawton.

A commission was selected with authority to select and erect
what in their judgment should be a fitting memorial. A design —
the joint work of Daniel Chester French and Andrew O'Connor —
was accepted and a contract entered into with them therefor. This
statue has been completed and is now in the possession of the com-
mission. A site has been selected upon the Washington-street side
of the public square in the city of Indianapolis. The date of the
unveiling of the statue has been set for Memorial day of this year.
The occasion will be worthy of State recognition. It will mark
the first opportunity for formal recognition on the part of the
people of Indiana of the services and devotion of a great soldier.
The President of the United States has been invited to participate
in the ceremony of unveiling and is expected to be present. Up to
the present time the State has contributed nothing whatever toward
the consummation of this patriotic purpose.

I recommend that you appropriate the sum of $500.00, to be
used by the commission in defraying the expenses of the unveiling
ceremonies as it may think best.

NANCY HANKS LINCOLN GRAVE.

Nancy Hanks Lincoln, mother of Abraham Lincoln, is buried
near Lincoln City, in Spencer County, Indiana. The site of the
grave is marked by a suitable monument contributed by Mr. J. S.
Culver, of Springfield, Illinois, and unveiled two or three years
ago with appropriate ceremonies.

The title to the land where her grave is located is vested in
the Nancy Hanks Memorial Association. The association is in-
corporated under the laws of the State, but has no income out of
which to pay the expense of caring for the grave or maintaining
the grounds it owns. It now has on hands a fund of $925.37.
Both the grave and the grounds are sadly neglected, their condi-
tion being such as to cause much unfavorable but just criticism.
The association desires to convey the grounds to the State of In-

71

diana, and is willing to turn over to the State the money now in its
treasury if the State will accept the gift and assume the responsi-
bility of caring for the grave.

I recommend the passage of a law authorizing the acceptance
of both the land and the money, the appointment of a commission,
the members of which shall serve without compensation other than
necessary traveling expenses, and an appropriation of a sufficient
sum to erect a fence about the grounds and give them proper care.

ANDERSONVILLE MONUMENT.

Among the Union soldiers who died in Andersonville prison
during the Civil War were 750 from Indiana. But five States in
the Union contributed more men to the death roll of that prison
than the State of Indiana. All of these States, with others, have
erected monuments to commemorate the valor of their soldier citi-
zens who died" amid the horrors of a prison life unparalleled in hu-
man history. These monuments have ranged in cost from
$6,000.00 by the State of Rhode Island to $35,000.00 by the State
of New York.

I recommend an appropriation of $10,000.00 for a monument
to be erected on the prison site to the memory of the 750 heroic
dead who are buried there, and that an act be passed creating a
commission, to be appointed by the Governor, of five survivors of
the prison, to erect such monument, said commissioners to serve
without pay other than their actual and necessary traveling ex-
penses.

ANTI-LOBBY LAW.

Special interests, individual and corporate, are wont to exercise
undue influence upon all legislation relating to any matter of con-
cern them. They fill the legislative chambers and the approaches
thereto with paid agents who recognize no public interest which
conflicts with that of their employers. They voice no thought or
wish beyond the "interest" they represent. Their attitude is de-
scribed with exactness in the couplet,

Whose bread I eat,
His song I sing.

Such persons are not safe counsellors. They are the enemies
of the people's interests. Their very presence is inimical to the
public welfare. Human rights — the rights of the individual citi-
zen, or the rights of the body of the people — are not safe where
legislation can be procured or defeated or government administered

72

through the corrupt and demoralizing influence of the paid agents
of organized wealth and greed. Self -respect, the good name of the
State, and your duty to the great public, whose representatives you
are and which commissioned you to speak and act for it, should im-
pel you to banish them by affirmative action from these halls.
There are many measures of unusual public import coming before
you which profoundly concern the people and to which many of
these interests will be opposed. Indeed, I am advised that a num-
ber of professional lobbyists retained to represent them are already
here.

An act should be passed, under suspension of the rules, carrying
an emergency clause, which shall provide that every person re-
tained or employed for compensation as counsel or agent by any
person, firm, corporation or association to promote or oppose, di-
rectly or indirectly, the passage of bills or resolutions by either
house, or to promote or oppose executive approval of such bills or
resolutions, shall forthwith file in the office of the Secretary of
State a written statement subscribed by himself, under oath, setting-
out the names of the person or persons, firm or firms, corporation or
corporations, association or associations by whom or on whose be-
half he is retained or employed, together with a brief description
of the legislation in which such service is to be rendered. It should
also provide that the Secretary of State shall keep an appearance
docket, wherein the names of all such persons, counsel or agents
shall be recorded, together with the information contained in the
verified statement filed by them, which record shall be open to public
inspection. Upon the termination of such employment the fact of
such termination, with the date thereof, should be entered, by direc-
tion of such counsel, agent or employe. It should also provide that
no person, firm, corporation or association shall retain or employ
any person to promote or oppose legislation for compensation con-
tingent in whole or in part upon the passage or defeat of any
measure or measures, and that no person shall for compensation en-
gage in promoting or opposing legislation except upon such ap-
pearance duly entered, and that no person shall accept any such
employment or render any such service for compensation contingent
upon the passage or defeat of any legislative measure or measures,
and that every person, firm, corporation or association, within sixty
days after the adjournment of the General Assembly, shall file in
the office of the Secretary of State an itemized statement, verified by
the oath of such person, or in case of a firm a member thereof, or in
case of a domestic corporation or association an officer thereof, or

73

in case of a foreign association an officer or agent thereof, showing
in detail all expenses paid, incurred or promised, directly or indi-
rectly, in connection with the legislation pending at the last pre-
vious session, together with the names of the payees and the amount
paid each, including all disbursements of every kind or character
paid, incurred or promised to counsel or agents and specifying the
nature of said legislation and the interests of the person, firm, cor-
poration or association therein.

The act should also make the violation of any of its provisions
a crime and provide severe penalties as punishment therefor. Duly
accredited counsel or agents for counties, cities, towns, villages,
public boards and public institutions should be excepted ; also per-
sons rendering professional services in drafting bills or in advis-
ing clients, and in rendering advice as to the construction or effect
of such pending legislation, where such professional service is in no
otherwise connected with legislation.

This recommendation is substantially in accordance with the
New York law upon this subject. I believe it will be an effective
measure, and I urge its passage at the earliest possible moment.
The repetition of the scenes of former }^ears in and about these
chambers can be prevented if you desire to prevent them. You
have the power. The responsibility is yours.

RAILROAD PASSES.

Two years ago I urged upon the General Assembly the neces-
sity of anti-pass and anti-frank legislation. None was enacted.
Since then we have made great progress toward the elimination of
the evil. Public sentiment has been stirred. In the forum of public
thought decision has been reached. The administrative offices of
the State have ceased to be brokers' offices for the distribution of
such favors. State officers have quite generally declined to use or
receive them, and the National Congress has by law prohibited their
use by public officials in interstate travel. The practice as to
intrastate travel can be reached only through the action of the
General Assembly of the State. Railways, telegraph, telephone
and express companies are one and all public service corporations.
Every citizen is entitled to use a public service corporation under
like circumstances upon the same terms as to cost and accommoda-
tion. Anything else is discrimination, and should be inhibited by
law. The whole practice is corrupting and demoralizing. I there-
fore repeat the recommendation I made in this behalf to the Sixty-
fourth General Assembly.

74

The classification contained in the employers' liability law as
respects corporations other than railroads is too narrow, so nar-
row in fact as to make doubtful the validity of the statute. The
purpose of the law is the amelioration of the common law co-serv-
ant rule. This act is of such importance as to entitle it to a place
in the law of the State. The present statute has been often con-
strued by the courts. It is now well understood. Its defects can
be reached by amendment. It should not, therefore, be repealed.

The classification mentioned in Section 1 should be broadened
so as to include all persons, natural and artificial, except municipal
corporations. Changes in the title of the act and in other sections
will be necessary that they may conform to the change made in the
first section.

In this connection I desire also to commend to your considera-
tion the enactment of a statute that shall establish the principle of
comparative negligence in all personal injury cases. The rule of
comparative negligence is a just and humane one. However gross-
ly negligent the employer may be, the employe is now precluded
from recovering damages in any case where his own negligence
has contributed, however slight the degree, to his own injury. This
is a harsh and an unjust rule. It should be modified to the extent
suggested.

TWO-CENT FARE.

With free transportation eliminated there is no just reason why
the maximum passenger rate of steam railways in Indiana for
intrastate travel should not be fixed by law at 2 cents per mile.
There should be a provision that the minimum price of a ticket
should not be less than 5 cents. It will also be but just to the rail-
way companies that provision be made permitting them to charge
a cash fare on trains, of not to exceed &/>> cents per mile where the
passenger has been given opportunity by the company to purchase
a ticket at a regular ticket office before entering the cars. Such
legislation will be of substantial benefit to the traveling public.
The wealth and the population of the State amply justify it. Its
operation will not injure the railroad companies. Their passenger
receipts wrill not be diminished. The reduction of fare will be off-
set by the increased travel resulting therefrom. This has been the
effect of similar legislation in other States, and there is no reason
why the effect should be different here. I take it you will enact a
law in this behalf since most of you come with instructions from
your constituents to do so.

75

PRIVATE BANKS.

The Sixty-fourth General Assembly enacted a private banking
law which has been construed by the Supreme Court and held valid.
The law, though defective in many particulars, is a step in the right
direction. Its greatest defect is the lack of State supervision and
examination.

I recommend that the law be amended by providing for State
supervision and examination of all such banks. In fact, the whole
law relating to the examination of banks should be revised. Bank
examiners should be appointed by the Auditor by and with the
advice and consent of the Governor. They should be provided
with fixed salaries of not less than $2,500.00 a year. Fees for ex-
amination should be graded substantially as they now are, ac-
cording to the capital of the bank, and when collected they should
be covered into the treasury. The law should require at least two
examinations a year of each bank, state or private, and at such
other times as in the judgment of the Auditor an examination shall
be necessary. State examination of banking institutions is of no
valufr unless it results in actual examination. This is not obtained
under the present system. All fees collected are now the property
of the bank examiners. This presents constant temptation to the
examiner to make hurried examinations. The system is wrong and
should be changed.

INHERITANCE TAX.

I am thoroughly convinced of the necessity and the justness
of a law which shall provide for the taxation of the devolution or
succession of property by device or inheritance. The additional
revenue it will bring into the treasury is needed in the construction
of the institutions now under contract, and a little later, if the
revenues of the State exceed its needs, the tax levy for the general
fund can be lowered and the burden of taxation levied upon the
property of the citizens in general, lightened. Such a tax is levied
but once, and that at the time of the succession or devolution of
property inherited or bequeathed. It is levied at a time when it
can be paid without hardship. It is an eminently just form of taxa-
tion. It can be administered with small expense and collected with
little friction. In the apt words of another "it is collected with
ease and paid with contentment." It in no way disturbs commer-
cial activities. It levies tribute upon no business or industry. It
enables the State to reach much intangible property which has been
long sequestered. It is a tax which the beneficiary of the inherit-
ance can not shift from his shoulders to the backs of others. In-

76

deed, the tax is paid before he receives the inheritance. The right
to inherit property or to dispose of it by device exists only by grace
of the State. It is wholly an artificial right, resting solely upon
the authority and consent of the State. In collecting it the State
simply stops the inheritance in transmission long enough to take
from it a fair and just contribution in exchange for value already
had and received by him who accumulated it, and then passes it
on to the beneficiary. Indeed, its validity and fairness are quite
generally admitted. No great fortune is the sole product of the
man who organizes and directs its accumulation. It is to some ex-
tent the product of a social process to wrhich many persons con-
tribute. Every honest toiler contributes something to it whatever
the field of his labor. The mechanic, the farmer, the teacher, the
merchant, the physician, the lawyer, the minister and the statesman
or the administrator of public affairs, whose work makes for the
progress of society or for the maintenance of the peace and order of
the State, has some share in its production. The State itself is but
society organized, and when the owner of a great estate dies, and
in the transmission of his fortune the State takes toll out of it, it
takes only what is its own. And in the taking of it, it makes for
the wider diffusion of wealth and for the unity and solidarity of
society. Inheritance tax laws have a place in the revenue laws of
most modern states. They are found in the law of Great Britain,
Germany, France, Switzerland, Holland, Belgium, Norway, Italy,
Russia, Australia and Canada. They are imposed by the laws of
32 States of the Federal Union. The rate should be progressive,
increasing with the value of the inheritance, and as to collateral
heirs, it should run from 5 to 25 per cent. In the following States
the rate is progressive and is as indicated: California P/> to 5
per cent., Colorado 3 to 6 per cent., Illinois 2 to 6 per cent., Iowa
5 to 20 per cent., Nebraska 2 to 6 per cent., North Carolina I1/* to
15 per cent., South Dakota 2 to 4 per cent., Washington 3 to 12
per cent., West Virginia 21/i> to 7% per cent., Wisconsin I1/-? to 5
per cent. In the following States the rate is 5 per cent, or more:
Arkansas, Delaware, Iowa, Massachusetts, Michigan, Missouri,
Montana, New Hampshire, New Jersey, New York, Pennsylvania,
Tennessee, Utah, Vermont, Virginia and Wyoming. In Louisiana it
is 10 per cent. Seventeen States include inheritance to direct heirs
at a rate running from 1 to 5 per cent., exempting inheritances
varying in value from $2,000.00 to $25,000.00. In the States
heretofore named exemptions of inheritances to collateral heirs
are made only where the inheritance is of nominal value. In six

77

States the value is less than $500.00, in 9 it is $500.00, and in 8 no
exemption is made at all as to inheritances to collateral heirs. In
case of inheritances by direct heirs $20,000.00 is, in my judgment,
a reasonable exemption, and in case of inheritance by collateral heirs
the exemption should not be more than $1,000.00. Thirteen of the
American States have enacted revenue laws containing the prin-
ciple of the collateral inheritance tax within the last six years.
France derives $40,000,000.00 a year from this source, or 6 per
cent, of its entire national revenue. Great Britain receives from
this source $70,000,000.00, or 10 per cent, of its revenues. In 11
months of the year just past Louisiana received $86,655.00 from
this tax, Vermont $40,581.00, Colorado $51,236-00, Maine $70,-
000.00, Iowa $190,748.00, Minnesota $159,455.00, Missouri
$212,814.00, Wisconsin $103,917.00, Massachusetts $712,720.00,
Illinois in the two years last past $1,376,264.00, Pennsylvania in
1895, $1,677,185.00.

The income from an inheritance tax is necessarily irregular in
volume, but $150,000.00 to $200,000.00 is a conservative estimate
of the annual revenue such a law as that here recommended, will
bring into the treasury of this State. Indiana has been slow to
avail herself of this form of taxation. But the time has come when
the necessities of the State require its early enactment. If enacted
it will meet the approval of the people and will abundantly justify
the wisdom and the foresight of those who support it. It should
be drawn with care. It should not be imposed upon property in-
herited either real or personal, but upon the succession or devolu-
tion thereof. Such a tax levied upon the transmission of the share
a person receives from an estate, though progressive in character,
has been uniformly upheld by the courts, the Supreme Court of the
United States saying in a recent case (Magoun v. Illinois Trust
and Savings Bank, 170 U. S. 283) :

"The right to take property by devise or descent is a creature of the law
and not a natural right — a privilege, and therefore the authority which con-
fers it may impose conditions upon it."

UNITED STATES SENATORS.

I believe a great majority of the people of the State are in
favor of an amendment to the Federal Constitution which shall pro-
vide for the election of United States Senators by the direct vote
of the people. A convention was recently called by the Governor
of the State of Iowa under provision made by the late General
Assembly of that State, for the purpose of considering how such

78

an amendment could be secured. The convention was held in the
city of Des Moines. Upon invitation from the Executive of Iowa,
I appointed five members of the present General Assembly as dele-
gates to represent the State of Indiana at such convention, all of
whom attended and bore honorable part in its deliberations. It is
hoped the convention may be the means of securing such uniform-
ity of action on the part of the General Assemblies of a sufficient
number of the States either to secure the adoption of such an
amendment by Congress and its submission to the States for ratifi-
cation, or to require the calling of a constitutional convention for
the consideration of amendments to the Constitution, which, when
ratified by three-fourths of the States, shall become a part thereof.
I commend the subject to your consideration in the hope that
you will take favorable action thereon before the present session
shall close.

PRIMARY ELECTIONS.

I commend to your consideration the enactment of a primary
election law which shall be simple in the method it provides and
which shall require the nomination of all candidates for city and
county offices, of every political party, and the selection of all dele-
gates to any convention held by any political party for the pur-
pose of nominating candidates for any public office, to be made by
direct primaries.

TRUSTS.

There is need of legislation conferring upon the Attorney-
General authority to proceed against unlawful combinations of
capital and against corporations chartered by the State in all cases
where they abuse the power conferred upon them by the State.

The Attorney-General has prepared a comprehensive act upon
this subject which I believe is essential to the enforcement cither of
the common law or of any legislation relating to trusts which you
may enact. I commend it to your consideration.

In addition to the act referred to, there should be legislation
relating directly to the subject of trusts or combinations of capital
having for their purpose the elimination of competition or the con-
trol of prices. This legislation should be along the lines of the
Federal statutes upon this subject, in so far as they are applicable
to conditions in this State. These laws have been construed by the
Federal courts, and have, been found to be effective wherever those
charged with the duty of enforcing them have in good faith sought
their enforcement,

79

PUBLIC DEPOSITORIES.

The events of the last two years have emphasized the necessity
of reform in the methods of handling and caring for public funds.
Sums of money, varying in the aggregate from $13,000,000 to
$35,000,000, are constantly in the hands of public officials of In-
diana— state, county, city, town and township.

At the present time these funds are not and for years past
have not been in the vaults of the several public treasuries, but are
and have been either on deposit in the banking and financial insti-
tutions of the State or loaned to individuals or corporations by the
officers having their care and custody, for their personal profit. The
system has led to many abuses, some of which have been criminal
in character. The funds are often deposited in banks insolvent and
tottering to their fall, or are loaned to persons unable to repay
them when needed, or invested in speculative enterprises, the result
of which is often personal loss to the officials and their bondsmen
and not infrequently to the public as well. In many instances such
officers have speculated with the public funds entrusted to them un-
til they have drifted beyond return, and have been compelled to
stand before their respective communities as embezzlers and crim-
inals, and sometimes in the end to expiate their fault by a term
in the State Prison. The presence of large sums of money, for
which there is no immediate public demand or necessity of account-
ing, is a temptation which many well-meaning but weak officials
find themselves unable to resist.

Opportunity to secure the control of these funds is equally
tempting to many banking officials. To obtain their control they
dominate conventions and elections through corrupt and demoral-
izing methods which strike at the very heart and center of the civic
integrity of their communities. Some of the most demoralizing
spectacles in Indiana political history have been due to the cam-
paigns between rival financial institutions whose ultimate object
has been the control of the public funds. Their candidate once
nominated and elected, he becomes a chattel in their hands.

Interest accruing upon the funds loaned or deposited has been
considered to be and treated as the money of the official — a part
of the legitimate perquisites of the office. The whole system, from
beginning to end, is so demoralizing and ruinous that the public
conscience has become thoroughly aroused and the people, without
regard to party affiliation, expect you to enact legislation that
will destroy, it.

In recommending remedial legislation in this behalf, I can not

80

go into details ; but I submit what seem to me to be the essential
features of any legislation upon this subject.

Daily settlements and payments of all moneys received by any
officer into the proper treasury is the first essential step. The se-
lection of depositories for the funds is the second. Requirement
that all public moneys in the hands of treasury officials shall be
daily deposited in the depositories selected is the third. Provi-
sion that all interest accruing shall belong to the public and be
paid into the public treasuries is the fourth.

In the creation of the new system there are certain controlling
fundamental purposes which should be kept in mind: First, the
end of personal favoritism and of political banking; second, the
saving of public officials from the opportunity and the temptation
to misuse the funds entrusted to their care ; third, the safety of the
funds ; fourth, the saving to the public of the interest accruing
thereon.

These purposes can be effected best by providing for the cre-
ation of finance boards or boards of control for state, county and
city, with power to select depositories from the banks and trust com-
panies of the State, under such restrictions as will eliminate favor-
itism and political consideration ; by providing a minimum and max-
imum rate of interest of not less than 8 nor more than S^/2 per cent.,
or by establishing a level rate of 2^/2 Per cent, for all active funds
and of 3 per cent, on all dormant or permanent funds ; by provid-
ing that collateral securities, such as United States, state, county
or city bonds shall be accepted as security for the repayment of
deposits, together with such other securities of fixed and perma-
nent value as may be obtainable; or, in lieu thereof, a surety or
trust company bond.

The volume of the public funds is so great that state, county
and city bonds cannot be had in sufficient amount to enable the
banks to qualify, if they are made the sole receivable securities.

I believe these provisions to be fundamental requirements. The
details must be thought out with intelligent care, keeping in mind
the essential purposes of the legislation and the fact that the plan
adopted shall be as simple as the nature of the subject will permit.

INSURANCE LEGISLATION.

The establishment of a strong, well-equipped insurance depart-
ment is essential, but no fair-minded man can read the report of
the committee investigating insurance conditions in this State and
believe that the establishment of such a department will be of

81

itself sufficient to correct the abuses which have characterized and
still are characterizing the management of certain Indiana com-
panics. Something more than that is necessary. There must be
remedial legislation of a character to reach the root of the abuses
and put an end thereto. The suggestion that such legislation be
enacted has met with some criticism, but it has come in the main
from or been instigated by those who are mismanaging the com-
panies in question. They have industriously sought to persuade the
public that such suggestions are attacks upon the companies, made
for the purpose of injuring them. It is important to understand in
the beginning that the remedial legislation recommended means no
such thing. It is not an attack upon the companies, but upon the
abuses in their management and upon the individual officials who
are guilty of mismanagement. It does not mean the injury of
the companies. It means their preservation. The work of the
investigating committee was not undertaken in nor conducted with
malice toward any domestic company nor for the purpose of work-
ing harm to any such company. It was undertaken and conducted
to ascertain actual conditions touching life insurance and in the
hope that abuses, if found, could be ended and the companies saved
to the people of the State. You will search in vain for a sentence
or a word in all the report of the committee indicating either a ma-
licious purpose or revengeful spirit. Facts have been ascertained
and given to the people of the State. The truth has been learned
and plainly but kindly told. The good and the bad in the manage-
ment of the companies have been set forth with equal care and ac-
curacy. The good has been approved and the bad condemned, and
thoughtful, well considered recommendations made looking to its
elimination. The mistake the gentlemen who are opposing these
recommendations have made and are still making is in thinking
themselves the companies. They are not. They are simply trus-
tees. The policy holders constitute the companies.

The desire of the committee and of the Executive is that the
$23,000,000.00 annually paid for insurance by the people of In-
diana may so far as possible be paid to domestic companies and
kept at home to meet the industrial and commercial demands of
our own people.

The motive which prompted the committee *in its work is well
expressed in its own language :

"We believe that it is the duty of the State to so regulate and foster the
business of Indiana companies as to command the retention in Indiana of a
large portion of this great volume of money. There is no reason why the in-

[6—19891]

82

surance business cannot be as well conducted in Indiana as in New York,
Philadelphia or Hartford. The presence of these accumulations of money in
the communities means large local investments of it in business, and the conse-
quent development of the financial and industrial institutions of the State.

"Money will, however, seek its best investment, and State pride will not
divert this golden stream unless investors in insurance feel that Indiana com-
panies offer as good returns for the cost as are offered by like institutions
elsewhere. The Indiana companies, to command their share of the business of
the country, must have such regulation from the State and such management
within their home office, as will insure their integrity to the public. An In-
diana institution found to be guilty of dishonest methods, extravagant ex-
penditures and reckless 'wild-catting,' should be put out of business for the
credit of the State and the security of her citizens. An Indiana institution
which adopts correct methods, is economical in expenditures, and honest with
the public, should receive such support from the entire State as would insure
its success and usefulness."

We have realized what seems to us to be so apparent that all
must see it, that to retain any considerable portion of the vast sum
of money paid for insurance each year by Indiana people, there
must be built up in Indiana insurance companies founded upon
sound principles and correct actuarial bases and that to these must
be added careful, economical and honest management in adminis-
tration. In so far as these conditions obtain Indiana companies will
command the confidence of Indiana people, but in so far as they
are omitted they will only abuse the confidence of their policy hold-
ers, and if persisted in, will, in the end, entail shame and loss upon
the people of the whole State. It is insisted by those who have been
and are profiting by mismanaging some of the domestic companies
that solvency of the companies is sufficient. It is contended if, not-
withstanding mismanagement, extravagant expenditures in the
way of salaries, rebates, special contracts and agency company
commissions, and the misappropriations of funds, the companies
are still solvent, that the policy holders should be satisfied, and that
no remedial legislation should be enacted.

Solvency is, of course, the first consideration, but there are two
other considerations, second in importance only to that of solvency,
viz. : — honest and economical administration of the companies' af-
fairs and equitable treatment of all policy holders. Every policy
holder is concerned not only in the solvency of the companies, but
in the economy and integrity of their administration and in the
profit distributed to him. Remedial legislation means an end to ex-
travagant salaries and excessive commissions, to rebates and to dis-
criminating dividends on special contracts. It means annual dis-
tribution of the surplus of the several companies and fidelity of
service on the part of the company officials.

83

The directors and officers of an insurance company occupy a
clear and unequivocal position. Their relation is purely fiduciary.
They are the trustees of the policy holders. The trust committed
to them is a sacred one, calling for scrupulous integrity, great
ability and high purpose. Neither directors nor officers have any
moral right to vote salaries to themselves beyond the point of fair
compensation for services rendered or to incur expenses in any de-
partment except for the benefit of the policy holder. It is impos-
sible to reconcile the conduct of the managers of some of our do-
mestic companies with this statement of their duties. They have
been keenly alive to their own selfish interests, but oblivious to their
duty to the policy holder whose trustees they .are. They have
seemed unwilling to consider the interest of the policy holder a
single point beyond that involved in the solvency of the company.

One of these companies during the year 1905 expended $42.27
out of every $100.00 of premium income it received, to defray the
cost of administration. The money so expended was 46 per cent,
of its entire cash premium income, 42 per cent, of its entire cash
income, and 66 per cent, of its entire cash disbursements. Another
expended $51.10 out of each $100.00 of premium income it re-
ceived, to defray the cost of administration, or 88 per cent, of its
entire cash premium income, 85 per cent, of its entire cash income,
and 85 per cent, of its entire cash disbursements.

Other competing Indiana companies organized and doing busi-
ness under like conditions were able the same year to administer
their affairs for $20.00, $20.10, $21.30, and $21.97 out of every
$100.00 of premium income they received. The two companies first
referred to have averaged for the past five years an expenditure of
$41.20 and $33.40, respectively, out of each $100.00 of premiums
paid them, for administrative purposes alone. During the same
period other companies have been able to administer their affairs
for $20.60, $20.20, $19.70, $18.90, $18.70, $18.60, $18.20,
$18.10, $16.60, $14.40 and $13.70, respectively, out of every
$100.00 of premiums paid them. The average expenditure for one
of these companies for five years is exceeded only by those of one
other company in all the United States. The margin disclosed by
these figures between the expenditures for administrative purposes
by these two companies and the expenditures for such purposes by
other companies is so great as to lead inevitably to the conclusion
that there has been extravagance and mismanagement in their
administration. We are not, however, confined to inference in the
case of these two companies. There is ample fact and figure.

84

During the year 1905 the president of one of these companies
received a salary of $10,000.00, the second vice-president a salary
of $6,000.00, the general manager a salary of $7,200.00, the sec-
retary $4,200, the vice-president $4,200.00 and the superintendent
of agencies $4,000.00. The expenses for salaries at the home office
alone aggregated $59,793.00. Under the pressure of publicity
these salaries have been reduced, the president's to $4,000, the vice-
president's and superintendent of agencies' to $3,000.00, the secre-
tary and treasurer's to $2,100.00, and a number of offices abolished.
The total expenses of salaries at the home office for the year 1906
were $22,120.00, a reduction in salaries in a single year of $37,-
673.00. This, it seems to me, is conclusive proof of past extrava-
gance and mismanagement. In the year 1905 the other company
paid its president a salary of $20,000.00, its secretary $20,000.00,
its vice-president and superintendent of agents, $20,000.00 ; its
general counsel and director a salary of $9,000.00 and other allow-
ances aggregating $11,000.00, making $20,000.00 in all, counsel
for its loan department and director a salary of $1,500.00 and
other allowances of $6,500.00, making a total of $8,000.00, and
its medical director a salary of $4,375.00 — total home office expense
in wages and salaries of $150,846.37. The same company is now
paying its president a salary of $16,000.00, its secretary and ac-
tuary $16,000.00, its vice-president and manager of agents $16,-
000.00, its vice-president and general counsel, $16,000, and coun-
sel for its loan department, $7,000.00. It is important that the of-
ficers of these companies receive adequate compensation for services
rendered, but the salaries paid are extortionate and in some instances
more than double the value of their services. It is impossible to
reconcile the voting of such salaries to themselves by persons hold-
ing the relation these officials hold to the policy holders, with their
duty as such officials. In the light of the following formal resolu-
tion, adopted by the board of directors of this company on Jan-
uary 28, 1904, the act becomes easy of explanation, especially
when we remember that the executive officers to whom these salaries
were voted were themselves the board of dirctors :

"Resolved, That under the direction of the Board of Directors, the proxies
of policy holders be secured, authorizing Mr. Samuel Quinn to vote for the
same policy holders at all meetings of members; and in case of his death or
absence, said proxies to be voted by Mr. Andrew M. Sweeney.

"It is the purpose and spirit of this resolution that said proxies be used
for the perpetuation of the present members of the board of directors as long
as they live and desire membership on the board."

85

This company has greatly added to the cost of administration
by issuing a large number of special contracts providing for the
payment of discriminative dividends for services that were never
rendered and never intended to be rendered.

These contracts cost the company in 1905 $136,523.84, and a
yet greater sum in 1906. The company was organized September
24, 1894. In a little less than 12 years its special contracts cost
it $632,459.93. In July, 1906, $37,515,000 of its outstanding in-
surance, or 46.8 per cent, of the entire volume of insurance carried
on its books, was of this character. Another company, organized
April 1, 1899, has $14,909,250 of insurance covered by similar
contracts, or 74.5 per cent, of the entire volume of insurance car-
ried upon its books. Up to July, 1906, these contracts cost it $63,-
916.24, $20,544.95 of which were paid out in the year 1905. An-
other company, organized in March, 1897, is carrying $11,683,400
of special contract insurance, being 88 per cent, of all the insurance
upon its books. These contracts up to September, 1906, had cost it
$39,028.07. Another has 89.9 per cent, of its entire volume of
business written under special contracts ; another, 98.7 per cent. ;
another, 100 per cent., and yet another, 100 per cent.

These contracts, almost without exception, require the insured
to render certain services in the way of securing business, answer-
ing inquiries and making investigations or inspections for the com-
pany. On their face they import a consideration in the way of
service, which, if actually rendered as required, would make them
valid contracts, but, as a matter of fact, the services specified are
rarely, if ever, rendered. Most of the companies frankly admit
that the services are not required or requested. The simple truth is,
that it was never the intention, cither of the managers of the com-
pany, or of the persons insured, that any services whatever should be
rendered. The contracts were offered prospective policy holders
as a special inducement to take insurance, and the companies have
not attempted to put or keep them in operation as service con-
tracts.

In the language of the committee :

"The contracts, almost without exception, recite certain services in the way
of securing business, answering inquiries, and making investigations or in-
spections for the company writing the contracts which the holder is required
to render. The dividends or commissions are to be paid, with very few excep-
tions, from a fund derived by levying a tax of so much per thousand annually
on all insurance in force which was written during certain specified periods.
The aggregate fund derived from a certain levy upon insurance written in a.

86

certain time is divided pro rata among a limited number of policy holders
who have special contracts, and is remitted to them by deducting from the
annual renewal premiums upon their policies. About one-half the 'Special
Contracts' have a tontine feature providing that upon death or lapse of each
member of the class, his portion shall go to the survivors. The holders of the
'Special Contracts' are given such names as Advisory Agents, Trustees, Char-
ter Members, Counselors, Executive Agents, Trustee Counselors, District Re-
porters, Local Inspectors," etc. * * *

"Nearly all of the companies have issued more than one series of such con-
tracts. The policy holder who secures a 'Special Contract' is delivered an in-
strument with all the trimmings of a government or municipal bond and which
states that the membership in his particular class is limited to 300 or 500,
or such number as may have been decided upon, and he is led to believe that
he is one of a favored class whose renewal premiums shall be annually re-
duced by taxation of the premiums of his fellow mutual policy holders. If
he hesitates at the agreement to render such large services as are stated in
the 'Special Contract,' he is often told that the services will not be actually
required of him, but that this is a method of the company which it must use in
order to give him the particular advantage. In most cases he is also shown an
'estimate' which indicates that his premiums will be reduced annually until at
a certain time, varying with the judgment and scruples of the company print-
ing the 'estimate,' his premiums will be entirely overcome by the dividends on
his 'Special Contract,' and from that time on he will receive cash payments
from the company instead of being required to pay his annual premiums to
maintain his insurance, as his brethren in the mutual company are required to
do. In a very few forms of contract it is provided that such excess shall be
paid to him in additional insurance. The increase in annual dividends is ex-
pected to be produced in cases possessing the tontine or survivorship feature
from two sources: First, a decrease in the class of beneficiaries, and second,
an increase in the volume of business to be taxed for production of the fund.
In case of contracts possessing no tontine feature, its increase must come from
increased volume alone; many of these non-tontine contracts are written so
as to carry the idea that the survivors take the whole fund produced, although
this is technically not true. The estimates exhibited to purchasers, however,
convey the impression that tontine or increasing profits will be received
whether or not the actual language of the contract is of a tontine character.
The viciousness of the contract always present is that it offers the highest
compensation at times when the least service is likely to be rendered, viz., in
the later years of the life of the contract. The holder of the contract is led
to believe that he is securing a very great advantage over his fellow policy
holders, and the investment as presented is very attractive.

"It is well known that the 'estimates' made by the companies at the time
of the issue of these 'Special Contracts' have fallen far short in realization."

As to the expense of these contracts, the committee well says :

"The cost to the company of the dividends to 'Special Contract' holders
is reported by all the companies to have been charged to expense fund, and it
so appears in all of their annual reports, although usually not separate so as
to be identified. The cost to the companies who have had 'Special Contracts'

87

outstanding for a number of years, however, has grown to such proportions
that it is making a dangerous inroad upon the portion of the current pre-
miums which can be legitimately devoted to expense, and strenuous efforts
are being made to secure cancellation of many of the most expensive contracts,
and the substitution therefor of some different form of insurance contract.
The annual cost to the companies has varied from a few hundred dollars, in
case of the companies having 'Special Contracts' outstanding for no more
than one year, to over $136,000 in 1905 in case of the State Life Insurance
Company, which wrote a great many 'Special Contracts' early in its history.
"The annual tax assessed upon premiums accruing from the class of con-
tracts subjected to the levy varies from 25 cents per thousand to $1.50 per
thousand in force during that period, and within the geographical limits de-
termined upon, and the levy is to be continued for from ten to thirty years,
depending upon the terms of the particular contract."

The effect of these contracts is clearly set forth by the commit-
tee in the following extract from its report :

"We think it is apparent from the foregoing data and detailed description
that the Indiana companies have, in their anxiety to secure business, issued a
large number of contracts carrying extraordinary obligations which will, as
time goes on, make a more and more embarrassing draft upon the fund which
the companies could otherwise legitimately save to surplus. It is apparent that
the cost of these contracts increases as the amount of business written within
the specified time accumulates and as the issue of special contracts are written
to their full limit. That some of the companies appreciate the great draft
which is to be made upon their resources by this class of business is shown by
the strenuous efforts being made to substitute different contracts for them at
any reasonable cost. It is evident that the companies in their early anxiety
to make a large showing of business failed to anticipate the inevitable mathe-
matical results of these contracts. They may apologize for and explain them
as they will, but the fact remains that the estimates upon which they were
sold were absolutely impossible of fulfillment to the policy holder, thereby
bringing to him year by year disappointing results, while on the other hand
the unfair advantage actually secured to the holders of special contracts
will accumulate to such amounts as will, from year to year, embarrass and dis-
credit the business and methods of the companies. It is only the proverbial
'reaping of the whirlwind.' "

As to the legality of these contracts, I submit the following
statement from the report of the committee :

"The legality of these contracts is defended by the companies upon the
authority of Muller v. State Life Insurance Company, 27 Ind. App. 45, in which
the Appellate Court of our State decides that such a contract is not void. It
does not appear from a reading of that decision that any facts were presented
to the court going to the performance of the contract. A single contract
was presented to the court for its inspection. The court decided that the con-
tract imported a valid consideration, and that therefore it was a valid con-
tract. We do not believe, however, that if it had been shown to the court by
the record that a large number of special contracts had been issued, which

88

contracts were written so as to import a consideration that it was intended
should never be required or delivered, that the court would have held that
the holders of the special contracts could be lawfully paid their annual divi-
dends where the consideration of the class of contracts actually^ failed. We
are inclined to believe that if it were made to appear to a court having under
consideration such a contract, that the contract was issued in the course of
a practice engaged in by a large number of companies whereby they issued not
a few but thousands of such contracts purporting on their face to be service
contracts, but as a matter of fact they were only special inducements oifered
to a favored class of individuals in order to secure a larger volume of insur-
ance at an actual expense to the unfavored policy holders, and if it should ap-
pear to the court that the issue of a series of such contracts was in itself a
subterfuge and an indirect means of making a palpable discrimination among
members of a mutual concern, the court would treat the contracts as void.
We have no criticism to make of the decision rendered by the court in Muller
v. State Life Insurance Company, 27 Ind. App. 45, because that decision was
made on the facts as they appeared in the record. We believe, however, that
if the actual facts and circumstances as they existed in connection with the
issue of what are known as special contracts, excepting in a limited number of
instances, had come before the court, the language used by the Appellate Court
in the case of Robison v. Wolf, 27 Ind. App. 683, would probably have been
applied. In that case it was decided that a 'combination contract' whereby
a mutual accident insurance company in consideration of the payment of one
full annual premium selects insured as one of 500 policy holders to be insured
for a like amount to participate in a special renewal dividend on all insurance
written in the State for a period of ten years, such dividend to be applied to-
ward the payment of the year's premium, was void. The special contract in
that case provided for no duties to be performed by the favored member which
were not required by the by-laws of all members. The court there held that
since the special dividends were promised to the favored policy holders without
any consideration, that the contract was in itself void and unenforceable, that
it was not only forbidden by statute, but was contrary to public policy."

Fewer special contracts are being issued by two or three of the
larger Indiana companies than formerly, but on the whole the
number being issued in the State is on the increase, notwithstand-
ing recent publicity showing the impropriety of such contracts.
Two companies organized within the last year have issued a spe-
cial contract with every policy written. The methods of one of
these companies is forcefully set forth in the committee's report :

"In selling what is known as the 'Inspector's Contract,' this company used
a printed 'estimate' indicating that a 20-payment life policy for $5,000.00,
age 35, annual premium $189.85, when sold with an 'Inspectors' Contract,'
would on the tenth year cost the holder only $3.89 and on the eleventh year the
dividends on the contract would not only pay all of his premiums, but he
would receive in cash a check for $30.0(>, such annual cash payments to him
increasing gradually until in the twentieth year he would receive $289.13 cash.
Similar estimates were used in the sale of the other series of contracts. How

89

such results would be possible when all policy holders own similar contracts
this committee cannot understand, since the only source of revenue is from
the payment of premiums by holders of special contracts."

These contracts are as clear offers of "something for nothing"
as were ever made. If the estimates cannot be matured by the
company then every person who has purchased a special contract
has been deceived. If the estimates can be matured every dollar
of money paid upon the contracts in the way of dividends will be
an extravagant waste of the company's funds and an annual drain
upon its resources for which no consideration whatever will be re-
ceived. The proposition is a fraud upon somebody in either case.

Rebates and excessive commissions have long been and still are
a source of great expense to most Indiana companies and will con-
tinue to be until inhibited by law.

A new and fruitful field of extravagance and fraud has recently
been discovered and exploited by the managers of a number of do-
mestic life insurance companies. This has been done and is still
being done through the guise of corporations known as "agency
companies." These companies are used as "go-betweens" in the
transaction of the company's business with its soliciting agents.
Every moral and prudential reason requires that the insurance com-
pany should retain direct control of its own agents. There should
be direct responsibility of the agency force to the insurance com-
pany itself, and the company should be in a position to exercise the
closest supervision over the work of its agents. These companies
have all been organized for the purpose of taking over contracts
afterwards made to them by the insurance companies for the ex-
clusive right to solicit insurance. The agency force then becomes
responsible to the agency company alone. It is made the particu-
lar business of the agency company to take over all of the under-
writing for a certain territory and in this way relieve the officers of
the insurance company from the work of getting business. The
contracts they have obtained from the companies have provided
for extravagant commissions and bonuses, and some of them have
been so liberal in character that they have been sold and resold at
an advance of hundreds of thousands of dollars.

The officers of the insurance companies have been responsible
without exception, either directly or indirectly, for the incorpora-
tion of every such company.

The pioneer of these companies in Indiana was the State
Agency Company, organized by the officers of the State Life In-
surance Company. At the time this company was organized it was

90

given a contract for the exclusive agency for the States of Indiana
and Illinois and such other territory as might be agreed upon from
time to time. It provided for the payment of commissions of from
25 per cent, of the first premium paid on ten-year endowment an-
nual dividend policies up to 80 per cent, of the first premium on
continuous premium life policies with ten, fifteen or twenty-year
distribution periods. It also provided for the payment of 7Vi>
per cent, of all second year and subsequent renewal premiums col-
lected by the agency company on the insurance written by such
company and for a like per cent, on all renewal premiums on the
business then in force in the territory covered by the contract. The
contract also contained the remarkable stipulation for the pay-
ment by the agency company of $1,000,000 in installments run-
ning for fifteen years to the State Life Insurance Company as a
consideration for the contract. The authorized capital of this
company was $2,000,000. The sole and exclusive business of the
company was to sell life insurance. Beyond the funds necessary to
furnish its office and organize its agency force, it had no need of
assets, yet the officers and solicitors of the company, supported and
abetted by the officers and directors of the State Life Insurance
Company, sold to the people of Indiana capital stock of the face
value of $359,550.00 at a premium of $249,540.00, or an aggre-
gate of $609,090.00. One O. L. Van Laningham was one of the
directors of the company and its first president. Mr. Van Lan-
ingham had been for years identified with the agency department
of the State Life Insurance Company. Samuel Quinn, vice-presi-
dent and superintendent of agents of the State Life Insurance
Company, at the time receiving a salary of $16,000.00 a year
from said company, and Charles F. Coffin, director and general
counsel of the State Life Insurance Company, at the time in re-
ceipt of a salary of $16,000.00 from said company, and Andrew
M. Sweeney, president of the State Life Insurance Company, at
the time in receipt of a like salary, were active in the promotion
of the company and in recommending its stock as a profitable in-
vestment. These gentlemen seemed to be absolutely oblivious of
the fact that as such officers of the State Life Insurance Company
they stood in the relation of trustees of its policy holders and that
it was their highest duty to conserve the interests of such policy
holders. The contract to pay the agency company 7% per cent,
for the collection of renewal premiums on business written prior
to the incorporation of the company and the execution of the con-
tract was a fraud upon every policy holder within the territory

91

named in the contract at the time it was executed. It was repre-
sented by the solicitors for State Agency stock and by printed
literature circulated by them, that the renewal commissions on ex-
isting Indiana and Illinois business would amount to over $28,-
000.00 a year to the Agency Company. How officers standing in
fiduciary relation to the policy holders of the State Life Insurance
Company, whose rights were so materially and adversely affected
by this contract, could have executed it in behalf of the company
if they believed the statements they made as to the extraordinary
perspective 'profits of the agency company, is beyond explanation
upon any honest theory.

As an evidence of the part taken and the activity displayed by
the President of the State Life Insurance Company in the promo-
tion of the State Agency Company, and in the sale of its stock, I
submit the following extract from a letter written by him to a
friend under date of May 2, 1906:

"The State Life is putting upon the market the best financial investment
it has ever offered in this State. My brother and son are going to Covington
to present the matter to my friends there, and I could not afford to let so
good a thing pass around without giving you a chance at it. The stock has
been grabbed up here very rapidly and we could sell the whole $3,000,000
here, but I insist that some should be sold in each county seat."

Also the following extract from a letter to the same friend,
dated May 5, 1906:

"A friend of mine in town yesterday took sixty at $50.00 a share. The
President of the Agency Company notified his men yesterday that stock
would be selling on May 10th for $60.00, so, in ten days, .your $500.00 will be
worth $600.00. I think it will go to $100.00 before the summer."

In this connection it is important to remember that the State
Agency Company possessed no asset other than agency contracts
with the State Life Insurance Company. If these contracts were
so liberal in character and so certain in profit to the State Agency
Company as to make its stock the best financial investment ever
offered, what became of the fiduciary relation of Mr. Sweeney as a
director and the president of the State Life Insurance Company,
is a question which, in my judgment, has but one answer, and that
answer is that the relation had been abused and betrayed.

Not content with the contract already referred to, the officers
of the State Life Insurance Company, on the 19th day of May,
1906, entered into a contract with the said O. L. Van Laningham,
then President of the State Agency Company, for the territory of
Kansas, Nebraska, Texas, Oklahoma and Indian Territory, upon

92

terms of such liberal and extravagant character as to permit Van
Laningham to agree to pay the State Life Insurance Company, as
a consideration therefor, $250,000.00 at stipulated dates in the fu-
ture. On the 6th day of June next thereafter, and within sixteen
days from the time of receiving this contract, Van Laningham re-
signed from the presidency and directorship of the State Agency
Company. On the 9th day of. June Van Laningham assigned the
contract to the State Agency Company for a consideration of
$250,000, $150,000 of which was paid in cash, and the balance
of which was to be paid in thirty and sixty days from date. Drafts
for the sum of $150,000, payable to the order of the State Agency
Company, were endorsed and delivered to Mr. Van Laningham, wrho
immediately left the State. It is important to note that the payment
of the drafts was stopped only by injunction proceedings in the
Marion Superior Court. It is also important to note that the officers
of the State Life Insurance Company hereinbefore named, still re-
ceiving a salary from said company of $16,000 a year, each, pro-
moted, sanctioned and encouraged these transactions. How they
could give their assent to the execution of a contract in behalf of
the State Life Insurance Company so liberal and extravagant in
character as to enable the man to whom it was issued to sell it
within less than twenty days at an advance of $250,000 and rec-
oncile their act with the position they held as trustees for the
policy holders of the State Life Insurance Company, is beyond the
comprehension of any honest man. Subsequent to these transac-
tions a receiver was placed in charge of the State Agency Com-
pany by the order of the Superior Court of Marion County, and
the contracts held by the State Agency Company have been sold
under the order of that court. They were purchased by Van Lan-
ingham, who gave his notes for deferred payments aggregating
$160,000. These notes were endorsed by the five directors of the
State Life Insurance Company as individuals. That the situation
contains rare possibilities for dishonest or negligent officers is too
clear for debate. It is well stated in the committee's report :

"They are the directors of the company with which Mr. Van Laningham
and his agency companies do all their business. The continuance of this re-
lation is an intolerable one which should be scrutinized and watched, not only
by the policy holders but by the department. Both the policy holders and
the department should take all possible precautions to require that the legiti-
mate profits in the underwriting of the business of the State Life Insurance
Company should be protected and conserved to the policy holders by the of-
ficers whose sworn duty it is to act with an eye single to the interests of the
policy holders. * * * The legislature should confer upon the insurance de-

93

partment the power, upon a showing of such reckless manipulation as char-
acterized the State Agency scandal, to secure the appointment of a temporary
receiver of the Life Insurance Company until the company could be reorgan-
ized in the interests of its policy holders. The officers primarily to blame for
such diversion in the company's business should be deprived of their offices
and should be replaced by men of honest intentions and good business judg-
ment."

The State Agency Company manipulations and the contracts
it holds are but examples of the possibilities of the Agency Com-
pany system. Some of the contracts of these companies give the
companies a commission as high as 11 per cent, on all renewal pre-
miums paid upon business written by them. The extravagance of
this provision is apparent when we remember that many companies
collect their renewal premiums in Indiana at a cost not exceeding
1*4 per cent.

Preliminary term insurance is insurance for the term of one
year. It is a contract which ends with the year and in which there
is no element of investment either provided by the policy holder or
required of the company. The purpose of preliminary term in-
surance is to permit the company to use a greater portion of the
premium for expense than would be possible if the companies were
charged a full valuation upon the policies. The theory of a pre-
liminary term is that the insurance shall be for a preliminary
term of one year, and that at the end of the year it shall be con-
sidered as having entered upon an additional term of a fixed num-
ber of years or as having become a whole life policy. Up to the
present time all Indiana companies have operated according to the
preliminary term plan. No matter how considerable a percentage
of the amount, the annual premium charged for a policy may be,
or how considerable, and how rapidly increasing, the computed
premium reserve of the policy may be, the first premium has been
stipulated by the terms of the contract to be preliminary or term
insurance, creating or providing for no reserve at the end of that
year, and confining the generation of such reserve as the other
terms of the policy may demand exclusively to the subsequent years
of its term. This supplies a very large portion of the first premium
due by the terms of any policy for immediate use for expenses ;
and has helped more than any other single cause to make the com-
panies lavish or extravagant in permitting agency expense. It is
the main cause of the high record of percentage of management
expenses which it has been the painful duty of the Executive to em-
phasize in this message ; percentages which are fully twice those of

94

the more economical among the older and larger American com-
panies, and quite three times the percentages of the British life
companies generally. The plan inevitably leads to extravagant
and reckless administration.

This conclusion is fully warranted by a comparison of the ratio
of expense to income incurred by companies operating under pre-
liminary term valuation with that of the companies which set aside
a full reserve out of the first premiums. This comparison discloses
that the average ratio of expense to income for five years ending
January 1, 1906, in eight preliminary term companies has been
40.45 per cent., while the average ratio of expense to income for
the same five years of eight of the best full reserve companies has
been but 16.53 per cent., a difference of more than 100 per cent.

It is evident that this state of things cannot be allowed to con-
tinue. The credit of the State and of the companies and the wel-
fare of the thousands of policy holders preclude that it should
continue.

I have given this matter the most careful study and have made
much investigation and research concerning it. I have sought and
obtained at no inconsiderable personal expense the advice and
counsel of disinterested experts of admitted ability and integrity,
and I am thoroughly convinced that the preliminary term plan is
accountable in large measure for the waste and extravagance that
characterize the companies operating under it.

The avowed purpose of the plan is to require each new appli-
cant for insurance to pay out of his first premium the putative
cost of inducing him to become a policy holder, or in other words
to pay the agent's first commission, even if he applies directly to
the office for his insurance and no agent has seen or introduced him.
But even more is expected of him as the plan is actually operated.
It is expected that he shall contribute toward expenses the entire
excess of his first premium over the net or actual cost of insuring
him for that year, after allowing for any share of surplus, if any
is assigned to him, for that year. This is a tax which is crudely
inversely proportional to the value to the company, technically
known as the "insurance value" of the policy which he may apply
for; and from another point of view makes him advance money
to the company for expense purposes, as if he were to contribute
so much to a guaranty or promotion fund, regardless of the simple
value to him of his insurance for the first year, and without war-
rant for the ultimate return of the advance, or any promise of
interest for affording the accommodation. The vice of the plan

95

lies in the excess rate charged for the preliminary term and the
inducement it affords to extravagant and reckless administration.
Speaking to this point the committee aptly says:

"If the policy holder knows that his first premium secures him preliminary
term insurance, and understands what preliminary insurance means, and that
at the end of the first year his policy is valueless, in so far as any reserve
remaining to his credit, and if said policy holder pays for such first premium
a correct amount, the contract is above criticism on both legal and equitable
grounds. If, however? the policy holder is charged a level premium from
which, if he were treated equitably, a full reserve should be set aside to him,
then in principle such preliminary term contracts and preliminary valuation
thereof is wrong, and we believe that few policy holders would make such
contracts knowingly. In other words, we do not believe that a preliminary
term contract and preliminary term valuation is wrong if the policy holder
is charged an appropriate price for it. If he is charged a price which should
secure him a better contract and better valuation, then it is wrong and in-
equitable. If he understands what he is getting for his money, then, of course,
he cannot complain. We do not believe that the general public understands the
real import of the preliminary term feature for which level premiums are paid.

"It must be remembered that insurance for a term of one year, commonly
denoted a preliminary term, is a contract which ends with the year, and in
which there has been no element of investment either provided by the policy
holder or required of the company. Sufficient reserve must be set aside at the
beginning of the year which, with the mortality charge collected in the pre-
mium, will mature the policy to the end of the year. This reserve gradually
decreases until the end of the year, when no reserve remains. * * *
If the policy holder pays no more than a fair proportion of the expense for
the first year, his premium should be very much lower for the one-year pre-
liminary term than the level premium which he pays for the 20-payment
whole life policy. If he pays a level premium he is paying an amount which
entitles him, if equitably applied, to a reserve to his credit very much larger
than the small reserve set aside to him in the preliminary term valuation.

"From the standpoint of the permanent welfare of the insurance company,
we are convinced that the preliminary term feature is not scientific, and is of
no possible advantage to the company, except that if it can induce policy
holders to pay a level premium, the amount which may be used for expense
is greatly increased. * * *

"An examination of the percentages of first premium allowed to agents,
as shown by the agency company contracts executed by several of the com-
panies, indicate that there are very much larger profits to the agency com-
panies than good faith on the part of the management of the insurance com-
panies would permit. In other words, the management has been too expensive
and the commissions have been too high. The large commissions paid on the
first premiums, and the large renewal commissions provided in some of the
agency contracts of these companies, make it impossible for the companies
to live without impairing the net premiums based upon full valuation."

Another evil that has developed with the growth of life insur-
ance is the accumulation and hoarding of unecessary and useless

96

funds denominated "surplus." The term means the amount held
by the company over and at)ove that which is necessary to mature
all its contracts and to pay all its liabilities. The Equitable Life
Insurance Company of New York has a fund of this character ex-
ceeding $61,000,000, and the New York Life Insurance Company
a similar fund of more than $52,000,000. According to the sworn
report of one of the Indiana companies it has accumulated a sur-
plus in eleven years of $605,316.69, notwithstanding the illegiti-
mate drain of discriminating dividends paid to the policy holders
of special contracts in that time aggregating more than $605,-
000.00. These great funds have been accumulated notwithstand-
ing the extravagance and misuse which has characterized the ad-
ministration of the affairs of these companies. The only legiti-
mate purpose such a fund can serve is to meet any deficiency which
may arise under extraordinary circumstances in the other funds
of the company. While every dollar of it has been contributed by
policy holders, all claim upon it is forfeited whenever they cease
to be policy holders. A great surplus is a standing temptation to
those who are charged with its management, to extravagant, specu-
lative and corrupt transactions concerning it. It should be dis-
tributed annually to the people to whom it belongs — the policy
holders from whose contributions it has arisen.

The investigation made by the committee led it to the conclu-
sion that the rates charged for insurance arc excessive. The in-
vestigation made by the Executive has led him to a like conclusion,
and I believe the facts when known and considered, will inevitably
lead any fair minded man to the same conclusion. The rates are so
high that extortionate salaries can be paid, rebates and excessive
commissions allowed, discriminative dividends under special con-
tracts paid, misappropriation of funds committed, and the com-
panies remain solvent and at the same time accumulate large sur-
plus funds.

It is your solemn duty to so legislate as to put an end to mal-
administration of domestic life insurance companies. You should
enact a law which will limit the salaries of every executive officer
or director of any company. The business of no Indiana company
is such as to justify the payment of a salary of more than $10,-
000.00 to any executive officer. Limitation should be placed upon
the power of boards of directors to vote salaries. Publicity should
be required by the filing on the first day of each year a sworn
statement of the salaries and compensation paid to all such officers,
with the insurance commissioner. Every such salary list should

97

have the approval of the insurance commissioner before it becomes
"» effective.

There should also be legislation inhibiting any company or the
agent thereof from paying, allowing or offering as an inducement
to any person to take insurance, any rebate or premium or any
special favor or advantage whatever in the dividends to accrue
thereon, or any inducement whatever not specified in the policy.

Special contracts should also be inhibited. I can not do better
than to commend to your consideration the recommendation of the
committee in this behalf:

"We recommend that a statute be enacted prohibiting life insurance
companies doing business in this State from making any discrimination in
favor of individuals of the same class, either in the amount of premium
charged, or in any return of premium, dividends, special contracts, predated
policies, or any other advantages.

"The statute should further prohibit the companies from paying dividends
upon any existing special contracts, excepting in cases where the services
performed under said special contracts are so vouchered to the company as
to show the specific service and the amount of compensation therefor; and
the statute should prohibit any credit or payment being made by the company
to any present or future policy holder, on account of dividends, commissions,
or other provision of said special contracts, unless the amounts are so
vouchered. And the insurance department of the State should annually
scrutinize the accounts of the companies and make thorough examination of
their vouchers, so as to compel obedience to such provisions of the statute,
and to put an end to such discrimination.

"The companies should be required to file with their annual statements
made to the department, a schedule showing the amount paid to each policy
holder under existing special contracts, if any, and for what service the
same was paid."

The gain and loss statements of the various companies of the
country disclose that a company will as an average earn or accu-
mulate surplus amounting to about 2% per cent, of its entire as-
sets in the course of a year. No considerable sum of unapportioned
surplus in addition to the amount of the computed provision for
policy liabilities, together with the amount of outstanding death
claims, and other liabilities, needs to be held. For these reasons it
is sufficient to permit companies to accumulate and hold an unap-
portioned surplus fund of 5 per cent., or two full years' accumu-
lation. I therefore unqualifiedly recommend the suggestion of the
committee that

"The statute should provide that in the case of every policy issued on
or after January 1, 1908, the proportion of the surplus accruing upon each
policy shall be annually ascertained and annually distributed, and not other-

[7—19891]

98

wise. Said annual dividends should be either paid in cash, or credited to the
policy holder, as a fixed liability from the company to him, and no annual dis-
tribution of surplus should be treated as contingent liability on said policy.

"The statute should further provide that in case of all deferred dividend
policies written before January 1, 1908, the company should annually appor-
tion the surplus accruing to said policies, and make annual report of the
same to the department.

"The annual distribution to participating insurance should exhaust the
surplus to 5 per cent, of the assets, leaving, however, 5 per cent, surplus,
exclusive of guaranty funds, capital stock and any excess of market values
over book values of securities owned by the companies.

"The statute should provide that where mutual companies engage in writ-
ing participating insurance, such companies should cease to write non-partici-
pating insurance, but that all insurance written after January 1, 1908, should
share in the surplus in its due proportion and without discrimination.

"In case of stock companies the law should provide that in addition to
said 5 per cent, of surplus remaining, the directors may set aside sufficient
surplus to pay a dividend not exceeding 10 per cent, on capital stock, before
apportioning surplus to the policies, after which all available surplus over
the 5 per cent, above stated, shall be apportioned to policies."

I also recommend that the law be so amended as to require the
management of every company to be strictly confined to the com-
pany officers, acting solely in their capacity as company offi-
cers without the use or intervention of any allied or sub-
sidiary companies, and that the companies shall be required to deal
directly with their agency force, without the intervention of agency
companies. All such "go-betweens" as the present agency com-
panies should be inhibited.

The following provisions relative to preliminary term valuations
should also be enacted :

"On and after January 1, 1908, the premium for all policies issued by
companies organized and doing business under this act must be so computed
as to provide for insurance expense in equal proportion to the yearly net
or death costs of insurance thereunder, except that when any such policy stipu-
lates that insurance for the first year thereunder shall be term or pure insur-
ance, an extra allowance for expense may be made for that year, which shall be
proportional to all the future yearly costs of insurance, including provision
for insurance expense, which may accrue under the terms of the said policy."

It is well proved that even with a very few millions in amount
of policies of insurance outstanding and conservative premiums, a
fairly good basis or average is secured, the law of mortality being
so regular in its operation ; and if contented with a moderate rate
of growth, the larger Indiana companies will have no possible oc-
casion for dependence on the preliminary term, and with a suitable
guarantee fund covering necessary advance expenses, no newly or-

99

ganized and small company will have any occasion to depend on
such a plan. But for the fact that many of the advocates of the
preliminary term plan appear to conscientiously believe it is the
only equitable method of life insurance operation, I would recom-
mend the inhibition of the plan altogether. In view of the situa-
tion, however, I concur in the recommendation of the committee that
legislation shall be had which will insure placing the plan on a cor-
rect and equitable basis, to the end that applicants for policies em-
bracing this feature shall not be misled as to the nature of the
bargain into which they enter.

There is yet one other matter in connection with the subject of
life insurance which is entitled to your consideration. Among the
assets of the companies are an excessive number of loans secured by
assignment of policies. These are known as policy loans. They
are not, however, bona fide loans, as they do not represent cash
transactions. They arose out of a practice of dating back policies
five to seven years and taking notes for amounts computed to be
the value of the reserve upon the policies issued. Of the gross as-,
sets of one of these companies 41 per cent, are of this class of se-
curities. In another instance 50 per cent, of the company's assets
are of similar character; in another 64 2-3 per cent., another 72.5
per cent., and another 76.4 per cent.

The practice of the companies in this respect is well told in
the committee's report:

"These obligations have taken different forms. In one of its most com-
plex forms the policy is predated five or seven years, more often seven years,
or if not actually predated, it is stated that it shall be treated as if it had been
executed seven years prior to its actual execution. In other words, if the
applicant is twenty-eight years of age, he is stated in the policy to be insured
as of the age of twenty-one. He gives the company a note for an amount
which is computed to be the value of a reserve upon a policy seven years of
age. The eighth premium he is required prima facie to pay in cash, and it
is stated to him that he is in the same situation as his neighbor of the same
age who secured a similar policy seven years prior. The advantages held out
to him are in short that he has escaped all expense of the company on
account of mortality, operating expense, cost of writing business, etc., for
seven years, and that he is paying for those seven years only the amount of
the legal reserve. This amount he has not paid in cash but has paid with a
note which is stated to be a lien upon the policy "issued to him. The note
ordinarily provides for the payment of interest at 5 per cent, per annum,
which in most cases is annually to be added to the principal of the note,
thus compounding it. Instead of paying twenty full premiums on a twenty-
payment policy, he pays but thirteen full premiums, his first seven premiums
being paid only to the extent of the reserve, and that portion being paid not
in cash but by a note which fee is led to believe is very likely to be paid by

100

the accumulations which, during thirteen years, shall accrue to his policy.
In a number of cases it is provided that in case he dies within thirteen years,
the note shall be cancelled and not collected. In all cases it is provided that
at the time of settlement other than by death, the amount of the policy loan
shall be deducted from the sum due him or his beneficiary at settlement. * * *.
"In making their annual statements to the Auditor, the companies have
stated their first premiums in gross without indicating what amount was
paid in cash and what by premium notes or policy loans. They have given
the amount of renewal premiums in the same general terms, and the annual
statements published and distributed to their policy holders have failed to
distinguish between actual valuable assets and assets which consisted of credits
only. For instance, a company which has .$2,000,000 of actual commercial
assets of the cash value of $2,000,000 is in a very different situation from
a company which shows $2,000,000 of assets of which only $500,000 represents
valuable commercial assets, and the remaining $1,500,000 represents set-offs
against liability carried by the company. The set-off should be balanced
against its corresponding amount of liability, and the statement of these
companies should be revised so as to show their actual business. The items
as represented in the annual statement to the Auditor should, at all times,
be so separated as to indicate to the Auditor and to the public, who have
the privilege of examining such statements, the exact amount of actual cash
business and the amount which consists purely of credits done by the company
during the year."

The vice of the practice of making policy loans for commuted
premiums in case of predated contracts lies largely in the varied
and numerous species of deception to which it is susceptible and the
opportunity it affords to disguise the ratio of the operating expense
of the company to the actual income, and in the fact that this class
of business is not persistent. In time of financial stringency or
popular agitation over insurance questions, the policy holder does
not have the same attachment for a policy for which he has given
his premium note which becomes void upon lapse of the policy,
without personal liability against him, that he has for a policy upon
which he has paid a similar amount in hard-earned cash. I quite
agree with the conclusion of the committee :

"There is no doubt that bona fide policy loans representing cash trans-
actions, if kept within the actual accumulations to the credit of the policy,
are a perfectly legitimate, safe and profitable investment for the company.
We believe, however, that policy loans written in such large quantities as are
now possessed by a number of Indiana companies are a source of danger
and embarrassment to the company, and a means, whether used or not, of
deception and fraud upon the part of unscrupulous representatives of the
company."

The statute should be amended so as to provide that the amount
invested in loans upon policies, together with accrued interest

thereon, shall not at any time exceed the reserve against said policy,
and that no company shall in any year invest in policy loans an
amount in excess of 20 per cent, of its actual cash income for that
year. But for the large percentages of the assets of Indiana com-
panies already invested in such loans, I would recommend legisla-
tion limiting the amount of policy loans to certain percentages of
the gross assets of the companies.

The management of some of the Indiana companies has been of
such a character and the companies have become so far removed
from the control of the policy holders that an act should be passed
cancelling all proxies executed prior to its passage, and providing
for the restoration of the companies to the control of the policy
holders through the election of entirely new boards of directors.

Taken all in all, the matter of remedial insurance legislation is
perhaps the most important subject that will come before you dur-
ing your deliberations. It deserves painstaking study, thoughtful
consideration and dispassionate discussion. You have in the time
and circumstances of the present legislative session a rare and un-
usual opportunity to save Indiana life insurance companies from
the weaknesses and follies of those who manage them. You can,
if you will, provide opportunity for them to become strong and
safe and great. The people expect this legislation at your hands.
In the degree you fail to enact it, you will fail in the perform-
ance of your duty.

TEMPERANCE LEGISLATION.

The Sixty-fourth General Assembly amended the law relating to
the licensing and sale of intoxicating liquors by authorizing the
filing of a remonstrance, signed by the majority of the legal voters
of a township or ward, against the retail traffic in such township or
ward, and making a successful remonstrance effective for two years.
This amendment has been sustained by the Supreme Court, an$ is
proving a most effective means of restricting the traffic.

Since its enactment 189 townships and 18 city wards have ef-
fectively used its provisions. The legalized traffic is now ex-
cluded from the territory within such townships and wards. With-
in this territory live 421,750 people. By affirmative action these
people have driven the business from their midst.

The right of a free people to exclude from their communities a
traffic whose every element is an unmixed evil, is fundamental. It
is the basic principle of free government. That right these people
have exercised, and their decision should be respected by all men.

*102

But the liquor traffic brooks no restraint. It knows no law. It
recognizes no right, however fundamental and sacred. In Maine
it tramples upon the provisions of the Constitution and demands
the substitution of legislative enactment. In Indiana it breaks over
every legislative enactment, respecting neither hour, holiday nor
Sabbath. It invades townships from which it has been excluded by
,the solemn act of the inhabitants of such townships, and by every
trick and artifice and every secret and corrupt method known to
craft and greed seeks to impose itself upon an unwilling people.

That the will of the people lawfully expressed and recorded
may be maintained; that communities from which the traffic has
been excluded may be saved from invasion ; that public sentiment
against the business may not be broken down, and that education of
the people against it may go on, it is important that illicit sales by
unlicensed venders shall cease throughout all territory covered by
successful remonstrance.

Under existing conditions it is difficult to obtain sufficient proof
to convict persons selling without license in such territory. A law
against all such sales, carrying severe penalties, making it an of-
fense to run or operate a place where illicit sales of intoxicants are
made, providing that possession of intoxicating liquors by one un-
licensed, or the finding of such liquors upon his premises, or the
possession of a receipt showing the payment of the United States
revenue taxes for the sale of intoxicating liquors, shall constitute
prima facie evidence of the guilt of keeping, running and operat-
ing such a place, with an effective search and seizure clause author-
izing search for and confiscation and destruction of all intoxicating
liquors found in or upon the premises where such a place is kept,
run or operated, is essential to the peace and happiness of these
communities.

I do not desire that it shall be understood that I am opposed to
other restrictive measures, because I have recommended this legis-
lation. Such is not my attitude. The business is so utterly in-
defensible from any standpoint, moral or economic, that I am pre-
pared to give executive approval to any measure looking to the
further regulation or restriction of the traffic which I believe to be
a valid enactment.

DEATH PENALTY.

The law in Indiana still permits the infliction of the death pen-
alty as punishment for murder. I have been asked twice to inter-
vene in cases where this punishment has been adjudged. In one

103

case, as already indicated, the sentence was commuted to life im-
prisonment. The evidence was wholly circumstantial and the pris-
oner did not seem to have had the defense to which he was entitled.
In the other case I refused to interfere, withheld clemency and
permitted the decree of the law to be executed. I am opposed to
capital punishment in any form. Every fiber of my t>eing, physical
and moral, revolts at the taking of human life, even though the
deed be done in the name of the law and as a punishment for crime.
I did not interfere in the case named, because the evidence of the
prisoner's guilt was clear and overwhelming. The details of the
crime were substantially admitted. The murder was premeditated
and brutal, and there was in the whole case no palliating fact or cir-
cumstance. To have modified the decree in such a case would have
been to have suspended the law itself, and to have substituted my
individual conviction for the solemn judgment of the people as ex-
pressed through legislative enactment. This I felt I had no legal
right to do. I found myself bound by the law. Being so bound
I obeyed its mandate and staid my hand, though in doing so I
crucified my own conviction of right. The law requiring such pun-
ishment does violence to my every moral sense, and I can not stand
acquit at the bar of my own conscience until I have done what I
can to put an end to the practice in Indiana. It is out of keeping
with the spirit of the age in which we live. It is always and forever
in conflict with the teachings of the religion in which Christian
men believe. It has no place among the solemn enactments of an
enlightened and Christian people. It has but one defense even in
the minds of its adherents, that of public necessity. But that de-
fense has never yet been adequately made out. The shedding of hu-
man blood does not deter crime — it begets it. The brutality of such
a scene leaves every man who looks upon it the worse, for having
seen it. Even the men who have provided for it in the law of this
State confessed as much when they required it to be done in secret
behind the bolted doors of the State Prison. Society can be pro-
tected from the man who commits murder, by life imprisonment
quite as effectually as by taking his life. Life imprisonment is
adequate punishment. It is a greater deterrent than the death
penalty. It should be the limit of human law.

I have given this matter patient study and much research, and
have been unable to find any reliable statistics that justify the
belief that legal executions make the crime of murder less frequent.
There is not a State in the Union where the death penalty is in-
hibited which does not have fewer homicides than most of the

104

States whose laws impose it. This is especially true in Michigan
and Maine, where there have been no legal executions for many
years. In the Indiana State Prison the death penalty has been exe-
cuted eleven times within the last five years. It has been imposed
in murder cases for more than a half century, yet homicides are
more frequent here than in either of the States named.

As I read this message four men await execution in the death
cells of the State Prison. The days of execution are fixed, Feb-
ruary 8, February 25 and March 29. You have power to prevent
these executions by repealing the law that compels them, and au-
thorizing the Excutive to commute the death sentence to life im-
prisonment. If the sentence is carried out, you must assume the
responsibility. As the Executive I appeal to you to save the Execu-
tive officers of the prison and of the State from the further inflic-
tion of such a penalty. If you fail to do so and I can find sub-
stantial fact or circumstance in either of the four cases upon which
to predicate executive action, I shall commute the sentence ; and
if you fail, and I can find no such fact or circumstance, I shall
find, again, God helping me, somewhere and somehow, the resolu-
tion to stay my hand and permit the unholy sentence of the law
to be done, but to my dying day I shall be unable to acquit the law
which imposes the uncalled for burden upon me. You will be in
session here February 8 and February 25. I take it that you will
not forget that the lives of four men may depend upon your action.

LAW ENFORCEMENT.

The last two years have witnessed such improvement in the
civic thought of the State as to mark an epoch in our history.
An awakened public conscience has inspired new conceptions of
public obligation and made possible better enforcement of the law
throughout the State. For three years lawless assemblages, riots
and lynchings have been unknown in Indiana. Impressed with the
belief that timely action in such cases is more effective than punish-
ment afterward, I have sent an executive representative to the
scene of every such possible breach of the peace whenever I have
had notice of occasion for so doing. In several instances violence
has been prevented by this timely intervention.

Strict enforcement of the statutes enacted by the General As-
sembly should bring home to you a higher appreciation of the re-
sponsibility involved in making statutes. It is well that you under-
stand that the laws you enact will be enforced. Indeed, the Execu-
tive has no choice. His oath is to enforce all the laws all the time,

105

and the obligation of the citizen is to obey all the laws all the time.
Your word creates the law. The law creates the obligation. When
you have spoken and the obligation is imposed, executive action
must necessarily follow.

There are yet those, however, who look upon the enforcement
of even wholesome and beneficent laws as an abridgment of what
they are pleased to call personal liberty* There are yet others
who insist upon the right to decide for themselves what laws are
wise and wholesome and ought to be obeyed and what are unwise
and arbitrary and ought to be disregarded. It is important that
this false view of public duty and the obligation of citizenship be
eliminated from the public mind.

True liberty, of necessity, is compelled to find its limitations
in the law. This is the liberty our fathers established — the liberty
of civilization — the liberty of the free. Where it is, slavery never
is ; j ustice holds her court, and each individual citizen is free be-
cause every other citizen is restrained from the invasion of his
rights. This must be the rule in a government like ours, of the
people and by the people. Here the law is the source of justice;
the foundation of liberty. Here all men's rights are defined by the
law. Here the law stands between the liberties of all that the liberty
of none may be invaded. Here the law lays no restraints upon
the freedom of the good ; its hand falls upon the bad alone. Here
every power the law bestows, either upon the people or upon those
who govern them, is circumscribed and limited by the law itself.
Here every guard and security essential to the preservation of free
institutions is found imbedded in the law of the land, and here the
law cannot be long or often departed from without peril to all that
is worth saving in State or in Nation. Here there must be obedience
to the law so glad and so entire that its restraints shall be unfelt.
Here the Nation itself is held together by law. It is the bond that
binds the States together and keeps the "Many in One" from fall-
ing asunder. Here the people, having the power to make the law
and to change or repeal it at will, have no excuse for its violation.

J. FRANK HANLY.

106
ADDENDA.

Pardons, Paroles, Remissions of Fines and Commutations granted -by the
Governor of Indiana during the years 1905-1906.

April 7, 1905—

Bert Taylor (Marion County workhouse), pardon; in ad-
vanced stage of tuberculosis, and pardon recommended by
the State Board of Pardons.

Ora Sturgis (State Prison), parole; recommended by State
Board of Pardons.

April 10, 1905—

Harry Veach (Marion County workhouse), pardon.

June 2, 1905—

Wm. H. Kimberlin (Marion County workhouse), pardon; in
advanced stage of tuberculosis.

June 3, 1905—

Richard Roach (Marion County workhouse), pardon.

June 10, 1905—

Edison Barnhart (Indiana Reformatory), parole; in advanced

stage of tuberculosis.
Zebulum Ford (Indiana Reformatory), parole; in advanced

stage of tuberculosis.

June 17, 1905—

Thomas Fitzgerald (Marion County workhouse), parole.

June 20, 1905—

Samuel Peters (Benton County jail), parole; (revoked October
22, 1906).

June 24, 1905—

Edward McGeehee, pardon (paroled by Governor Durbin).

July 15, 1905—

Andrew Holt (Indiana Reformatory), pardon (fatally ill).

July 18, 1905—

Edward Donahue, commutation of death sentence to life im-
prisonment in the Indiana State Prison.

July 26, 1905—

John Perry (Benton County jail), remission of fine.

107

August 2, 1905—

Charles Poor (State Prison), parole.

August 25, 1905—

Sherman Crouch (Tippecanoe County jail), pardon.

November 14, 1905—

Thomas Hodgin (Hamilton County jail), remission of fine.

December 22, 1905—

James L. Myers (State Prison), pardon; recommended by

State Board of Pardons.
John E. Davis (State Prison), pardon; recommended by State

Board of Pardons.

January 22, 1906—

Ed. Kennedy (Benton County jail), pardon and remission of

fine.
Carl Carlson (Indiana Reformatory), pardon; totally blind.

February 14, 1906—

William Reasoner (State Prison), remission of fine; (paroled
by Prison Parole Board and had received final discharge).

March 24, 1906—

Brick Hop wood (Marion County workhouse), remission of

fine.

Claude Riddlebarger (Randolph County jail), remission of
fine.

April 17, 1906—

Orlie Costin (State Reformatory), parole; recommended by

State Board of Pardons.
Otto Doebler (Lake County jail), pardon; fatally ill.

May 18, 1906—

John Moon (Tip ton County jail), remission of fine.

May 19, 1906—

William Cook (State Reformatory), pardoned in order that he
might be tried for murder under indictment in the St. Jo-
seph Circuit Court.

May 29, 1906—

Matthew Johnson (Marion County workhouse), parole.

August 8, 1906—

Zora Hinckley (Marion County workhouse), pardon; in ad-
vanced stage of tuberculosis.

108

August 15, 1906—

Charlotte Eppes (Women's Prison), pardon; in precarious
physical condition.

November 16, 1906—

Alex Adair ( Marion County workhouse ) , pardon ; in advanced
stage of tuberculosis.

November 28, 1906—

William Wolsiffer (Indiana Reformatory), parole.

December 22, 1906—

Everett Van Auken (State Prison), parole.

Tone Tompkins (Rush County jail), parole and remission of

fine.
Scott Crawley (State Reformatory), parole; recommended by

State Board of Pardons.
Myra Freeze (Woman's Prison), pardon; recommended by

State Board of Pardons.
Granville Costin (State Prison), pardon; recommended by

State Board of Pardons.
Fred Vaughn, remission of forfeited recognizance bond.

109

TO THE SIXTY-FIFTH GENERAL ASSEMBLY.

CONVENED IN SPECIAL SESSION.

SEPTEMBER 18, 1908.

Gentlemen of the Senate and House of Representatives:

You are convened in extraordinary session because the welfare
of the State requires it. The matters I submit to you are impor-
tant, but they will not, I hope, necessitate more than a brief ses-
sion. Unity of action and singleness of purpose to meet the re-
quirements of the public welfare, will enable you speedily to re-
turn to your homes. The Constitution imposes upon the Execu-
tive the duty of giving you "information touching the condition
of the State" and of recommending for your consideration "such
measures as he shall judge to be expedient."

The following specific appropriations were made at the late
regular session of the General Assembly for the State institutions
named, to wit:

SPECIFIC APPROPRIATIONS.

Purdue University, agricultural experiment station building,
$100,000.00. The Indiana Girls' School, one cottage, $25,000.00.
The Indiana Village for Epileptics, for buildings and equipment,
$75,000.00. The Indiana State Normal School, library, $99,-
970.00. The Indiana School for the Deaf, dormitories, equipment,
etc., $367,272.00. The Indiana Southeastern Hospital for the
Insane, eighteen buildings, equipment, etc., $559,377.82. Total,
$1,226,619.82. Of this aggregate sum, $410,645.03 have been
expended, leaving unexpended balances aggregating $815,974.79.

There was also appropriated at the late regular session the sum
of $53,000.00 for the following purposes, to wit:

A statue of General Lew Wallace for the National Capitol,
$5,000.00. A monument in honor of the Indiana soldiers who
died at Anderson ville, Georgia, during the civil war, $10,000.00.
Monuments marking the position of the different Indiana military
organizations at Vicksburg, Mississippi, $38,000.00.

Substantially all of these several sums are unexpended, making
an aggregate unexpended balance of approximately $869,000.00.

Contracts for the construction of the buildings, structures and
monuments named have been let and the work of construction is
well under way, but no one of them is now completed or can be
completed by the 30th instant.

110

The agricultural experiment station building is under roof,
but is otherwise incomplete. Of this appropriation $21,480.00 are
unexpended, and under the law will lapse and cease to be available
on the 30th instant.

The new cottage at the Girls' School is under roof, but is
incomplete; $17,982.75 of the sum appropriated for it is unex-
pended, and will lapse and cease to be available on the 30th instant.

The new buildings at the Village for Epileptics are enclosed
and under roof. One of them, however, is otherwise incomplete.
Of this appropriation $17,084.13 are unexpended, and under the
law will lapse and cease to be available on the 30th instant.

The new library at the State Normal School is not yet under
roof. Only a small portion of the appropriation made for it has
been expended, leaving an unexpended balance of $87,096.29.
This unexpended balance will lapse and cease to be available on
the 30th instant.

The new dormitories at the School for the Deaf . are being
placed under roof, but are otherwise incomplete. Of the sum ap-
propriated for them $171,395.25 is unexpended, and will lapse
and cease to be available on the 30th instant.

The eighteen buildings at the Southeastern Hospital for the
Insane are but partially constructed. Some of the buildings cov-
ered by the general appropriation of 1905 are under roof, but the
buildings covered by the appropriation made at the regular ses-
sion of the present Assembly are in a condition that requires con-
tinuous effort and prompt prosecution of the work to save them
from damage and deterioration during the coming winter. Some
are ready for roofing; the walls of others are nearly completed.
None can be gotten under roof during the present month ; $500,-
936.37 of the sum appropriated for their construction will lapse
and cease to be available on the 30th instant. If these buildings
are left in their present condition the damage to all of them will
be great and to some of them irreparable.

The need of this hospital is imperative. All the existing hos-
pitals for the insane are crowded to their limit. A thousand other
insane persons are either being inadequately cared for by friends
or are confined in county infirmaries or county jails. Unnecessary
delay in the completion and opening of this institution would be
little less than criminal.

The appropriations for these buildings were not made available
until October 1, 1907, — last year. Section 5 of the act of 1907,
defining the fiscal year and providing for the covering of unex-

Ill

pended appropriations into the general fund of the treasury, makes
it the duty of the Treasurer of State "biennially, at the end of the
fiscal year immediately preceding each regular session of the Gen-
eral Assembly, to cover and transfer into the general fund of the
treasury the unexpended balances of all specific appropriations ex-
cept such as shall have been made available beyond said time by
the act appropriating the same."

None of the appropriations to which I have called your atten-
tion is made available beyond the end of the present fiscal year,
the 30th instant, by the act authorizing them. Therefore, all will
lapse and cease to be available at that time.

These provisions of the law limit the time in which the several
appropriations named are available to a single building season.
It has been physically impossible to complete groups of buildings
such as those at the School for the Deaf and at the Southeastern
Hospital for the Insane within that time.

Provision for the continuance of each of these appropriations
should be made. Failure to do so will have the effect to suspend
the work of construction on all these buildings on the date named.
The Sixty-sixth General Assembly will convene in regular session
at a season of the year when construction work cannot be success-
fully prosecuted. Unless payment to the contractors having their
construction in charge is authorized by a continuance of the appro-
priations heretofore made, the buildings will be left in an incom-
plete and unfinished condition until the building season opens
next year. I therefore submit to you the need of prompt legisla-
tion which shall continue each of said several appropriations and
make them available for the purposes named until the end of the
fiscal year 1909.

The new cottage at the Girls' School cannot be constructed,
equipped and made ready for occupancy for the sum appropriated,
$25,000.00. The board of trustees has not contracted a liability
beyond this sum, but I am advised that direct heating and water
connection will necessarily have to be made between the cottage
and the power house. The estimated cost of this line and its con-
nections is $10,000; the cost of plumbing, sewerage, electric light-
ing, cistern and equipment is $4,000.00 ; furnishings, $3,000.00,
making a necessary additional appropriation of $17,000.00. This
should be made at the present session, as the building will damage
unless heat can be carried to it before winter.

An appropriation of $6,500.00 was made at the late session
of the General Assembly for a storehouse and cold storage plant

112

at the Girls' School. This plant is now nearing completion, but
an additional sum of $2,000.00 is required to equip and make the
plant ready for use. This item should be included and added to
any appropriation you may make for this institution.

The contract for the construction of the buildings at the
Southeastern Hospital for the Insane was originally let to E. M.
Campfield for the sum of $1,171,798.00.

Mr. Campfield entered upon the work of construction imme-
diately after the execution of his contract, but his work was so
unsatisfactory, so deficient in quality of workmanship and of ma-
terial he sought to use, and was prosecuted with such indifference,
delay and lack of good faith, that the commission was compelled,
in order to protect the interests of the State, to forfeit his con-
tract in March of the present year. The commission took posses-
sion, for the benefit of the State, of all materials on the ground,
as provided for by the statute and the terms of the contract with
Mr. Campfield. Every effort was made to induce the surety on
Mr. Campfield's bond to take up the work and complete it, but with-
out avail. Then the commission advertised for the reletting of the
contract by full advertisement as provided by law. Six bids were
received, and on May 1, 1908, the work was reawarded and re-
let to Messrs. Pulse & Porter, the lowest bidders, for the sum of
$853,909.35. This sum, taking into account the work done by
Mr. Campfield and the sum paid him therefor, is $151,738.11 in
.excess of Mr. Campfield's contract. Mr. Campfield's bid was $73,-
193.00 below his nearest competitors, and his contract one that
could not be performed without loss.

The commission made a contract with Messrs. Pulse & Porter
to the extent of present appropriations, and entered into a provi-
sional contract for the completion of the buildings named therein,
subject to the ratification thereof by the General Assembly and
the appropriation of a sum sufficient to complete the same. The
work at the institution was delayed, because of Mr. Campfield's
failure and the consequent forfeiture of his contract, the readver-
tisement and the reletting of the same, for a period of two months.

The contract between the commission and Messrs. Pulse Si
Porter is a just one. They are doing their work in a satisfactory
manner, both as to quality of material being used and character
of workmanship, and are pressing the work in a manner to evidence
their good faith. The contract with them should be affirmed and
legalized at this session, that there may be no technical defense
when suit is brought upon the bond of Mr. Campfield. The sum

113

of $151,738.11 should be appropriated in addition to the appro-
priations heretofore made, and should be immediately available, for
the completion of the buildings named in such contract, and should
continue available until the end of the fiscal year 1910. This is of
immediate and pressing importance, and I trust you will not fail
to give it early and favorable consideration. The State has ample
money to meet all these necessities, there being at the time of writ-
ing this message $896,180.76 in the treasury, with half a year's
revenues to accrue in December.

I cannot urge these institutional needs too earnestly. Failure
will mean substantial loss to the State, embarrassment to contract-
ors, and may lead to many legal complications.

APPROPRIATIONS FOR MAINTENANCE.

By recent legislation the Girls' School and the Women's Prison
were separated, the school removed to a site near Clermont and
the Women's Prison remodeled and a portion of the building con-
verted into a workhouse for women. The actual separation of the
institutions was effected in July, 1^07. The cost of administration
in the separate institutions has necessarily been greater than the
administration of the single institution. The appropriation made
for the maintenance of each has been greatly insufficient to meet
the new conditions. Both institutions are now being efficiently ad-
ministered and the improvement in the administration of each has
been such as to amply justify the separation of the two institutions.

Up to August 1, 1908, I paid out of the Governor's emergency
contingent fund, for the maintenance of the Girls' School,
$8,945.45. August and September bills for maintenance are yet
to be met. To meet these bills an appropriation of $8,000.00 will
be necessary. Up to September 1st I paid out of the Governor's
emergency contingent fund, for maintenance of the Woman's
Prison, $3,236.58, with September bills for maintenance still to
be met. These will require an additional appropriation of
$1,000.00. The appropriation made for the Boys' School has also
been found insufficient. August and September bills are to be pro-
vided for. An additional appropriation of $7,000.00 will be re-
quired. The exigencies of the other institutions have from time to
time drawn upon the emergency contingent fund during the fiscal
year until it is now insufficient to meet these demands. The main-
tenance appropriation for these institutions which will become
available on October 1st, cannot be used to meet the unpaid ac-
counts of such institutions for the present fiscal year. Therefore,
[8—19891]

114

the appropriations suggested are absolutely essential to their ad-
ministration. The year just closing has been a hard one on all
the institutions of the State. Provisions have been high. In most
cases unusually so. Gardens upon which the Girls' School and
the Boys' School have largely depended for sustenance during the
summer have been wholly inadequate to meet their needs because of
the long-continued drouth.

NIGHT RIDERS.

In the early spring numerous raids were made in the part of
the State bordering upon the Ohio river by so-called "night riders"
upon the property of persons engaged in the growing of tobacco,
resulting in the destruction of a number of tobacco beds where
young plants were being grown preparatory to transplanting in
the fields. Many threatening letters were written warning the
growers net to plant a tobacco crop for this year, and threaten ing
personal violence and the destruction of property if the crop were
planted. I have done what I could under the limited authority
conferred upon the Governor by law and with the meager funds
in my hands, to apprehend these persons and protect the persons
and property of citizens in that section of the State. In a few
weeks the tobacco crop will be cut and housed in sheds and barns.
Many threatening letters are again being received by the tobacco
growers warning them not to cut their crops at peril of the destruc-
tion of crops and barns by fire-. For a year past one-third of the
neighboring State of Kentucky has been, and now is, in a state
of anarchy ; neither life nor property is secure. Property has
been destroyed and a number of persons murdered. Depredations
have been committed in Ohio necessitating special legislation and
the conferring of special authority upon officers in that State to
preserve the property and lives of her citizens.

The protection of property and its peaceful enjoyment and
the preservation of the lives of its people are among the primal
reasons for the maintenance of any government. I cannot consent
that the government of this Commonwealth shall fail in this behalf.
Under the present law I have neither authority nor money with
which to prevent it.

I therefore recommend the enactment of a statute for the pro-
tection of tobacco growers, making the destruction of, or injury to,
tobacco, cither in the field or after the same shall be severed from
the soil, a criminal offense, and fixing a severe penalty therefor. I
also recommend legislation authorizing and directing the Governor

115

to appoint such number of persons as he may deem necessary to
act as secret service officers, to detect or apprehend any person or
persons engaged in the malicious destruction of tobacco plants or
other property of persons engaged in growing, curing and mar-
keting of tobacco; giving to such officers the powers of a sheriff
or other police officer to arrest and detain until a legal warrant can
be obtained any person or persons found violating any of the laws
of this State enacted to prevent the destruction or injury of to-
bacco, and giving to the Governor authority to fix the compensation
of such officers in addition to their actual and necessary expenses,
and the making of an appropriation of $15,000.00 for the payment
and compensation of such officers and their necessary expenses.

The enactment of such legislation will of itself have a deterring
effect upon those engaged in the unlawful practices to which I
have adverted and will enable the Executive to meet with greater
efficiency the conditions that are likely to arise.

VINCENNES UNIVERSITY CLAIM.

An act was passed at the late regular session of the General
Assembly providing for the issuing of $120,548 of bonds of the
State to the trustees of Vincennes University. This act creates a
State debt, principal and interest, of more than $156,000.00. The
bonds were prepared by the Auditor of State and tendered to me
for Executive signature. I have not executed them because of a
firm conviction that the statute authorizing them is unconstitu-
tional. While the claim of the University against the State is un-
founded and wholly without merit, this fact would not have im-
pelled me to withhold my signature. The act was passed over Ex-
ecutive veto, and if it were a valid act it would be my duty to exe-
cute the bonds, whatever I might think of the merit of the claim. If,
however, as I verily believe, the act is invalid because of its con-
travention of the plain provisions of the Constitution, I would be
violating my oath of office to issue the bonds. My obligation is to
support the Constitution of the State. If the act contravenes the
Constitution, it is not a law, and I am under neither legal or moral
obligation to do any act under it. Indeed, any act taken would
in such case be invalid, and a violation of both my legal and moral
obligation.

The facts set forth in the veto message of the act in question
are such as to convince any unbiased investigator of the claim's
utter lack of merit.

I have submitted the question of the constitutionality of the

116

act to Messrs. Miller, Shirley & Miller, counsel of ability and
eminence in their profession, and I am advised by them that in
their opinion the act contravenes Section 5 of Article 10 of the Con-
stitution and is void.

I have also submitted the question of the constitutionality of
the act, considered in the light of the facts set forth in the veto
message, to the Attorney-General, and I am advised by him that
upon the facts stated the act is clearly unconstitutional.

I therefore deem it my duty to ask you to examine the opinion
of Messrs. Miller, Shirley & Miller, together with that of the At-
torney-General, and to re-examine the facts as set forth in my for-
mer message. Calm and candid consideration of these I am per-
suaded will lead you to support the act's repeal. Its repeal will
save the State more than $156,000.00, principal and interest, a
sum sufficient to several times defray the expense of the present
session. No new right has accrued to the University since the
passage of the act. The merit of their claim is now precisely what
it was before the act was passed. The status of neither party has
changed. Their rights will therefore not be affected by the repeal
of the statute.

If the claim of the University against the State is not valid in
law, the General Assembly has no authority to authorize the issuing
of bonds or the creation of a. debt to meet it. It cannot make a
gift to the University in that way. It cannot incur a debt for
that purpose. The issuing of the bonds is an attempt to create a
debt. They are obligations of the State to pay the holder of
them, principal and interest, $156,000.00. If they are invalid
they ought not to be issued to find their way into the hands of in-
nocent investors.

If the State desires to bestow a gratuity upon the University
because it is an educational institution which the State wishes to
foster, it must bestow the gratuity in money and not. in evidences
of indebtedness. If it docs that, it is entering upon a policy of
such far-reaching import as to cause thoughtful men to hesitate
before yielding assent thereto. If the State is to give Vincennes
University $156,000 in the next ten years, why shall it not give
similar amounts to Wabash College, to DePauw University, to
Franklin, to Hanover, to Earlham, and to the other colleges and
universities of the State, all of which are schools of at least equal
merit, doing equally efficient work? Such a policy simply means
the taking over for maintenance of all the higher institutions of

117

learning of the Commonwealth, and involves a departure from the
precedents of a hundred years.

Copies of the opinion of Messrs. Miller, Shirley & Miller, of the
opinion of the Attorney-General and of the veto message will be
supplied you for examination and consideration.

COUNTY LOCAL OPTION.

The welfare of the State, viewed from either a moral or an
economical standpoint, requires the enactment of a law giving to
the qualified voters of the respective counties of the State the right
to vote upon the question of the exclusion of the liquor traffic from
any such county. In my judgment it is both expedient and right
that this legislation be enacted now.

The traffic in intoxicating liquors is owned and controlled to-
day by a few men. It is closely and compactly organized, both
for defense and aggression. Its conduct has become such as to
challenge the thoughtful consideration of the people of every State
in the Union. In this Commonwealth this is especially true.

The independent retail dealer, owner of his place of business
and responsible to the community where he does business and in
which he lives, is fast becoming a memory. He has almost ceased
to be. More than thirty-five per cent, of the places where liquors
are sold at retail, to be drunk on the premises where sold, are owned
or controlled by brewery corporations, whose directors and officers
live out of the vicinity where the business is carried on, and who
have no interest or identity with the people of such communities.
Many of them live in palatial residences in fashionable quarters in
the larger cities of the State, far removed from the scenes of the
barrooms they maintain.

These men, acting through the legal fiction called a corpora-
tion, buy or rent the buildings where the business is conducted.
They own the fixtures. They furnish the liquors. They pay the
license fee. Where taxes are paid, they pay them. The law in-
hibits the issuing of a license to a corporation. To evade this,
license is taken in the name of some irresponsible person who owns
no property and has no concern and no mission except to sell in-
toxicants to anybody, at any hour, on any day, in order that his
master, the brewer, may gather his daily measure of profit. The
brewery corporation, the brewer himself, or some paid agent exe-
cutes the bond required of the licensee, and he is given to under-
stand that he must conduct the place turned over to him at a profit

118

to his master, and that he may evade the law without substantial
risk. If he is prosecuted, he is defended. If he is fined, his fine is
paid. His place is a rendezvous for the idle, the vicious and the
criminal — a hot-bed for the breeding of vice and crime. In time
of civic excitement or social disorder, arson and murder issue from
it like beasts from a lair. This is the experience and this the testi-
mony of every city that has become the victim of the mob or whose
laws have been defied by riot.

Those in control of these places are concerned about nothing
but profits and increased revenue. To obtain these they multiply
saloons, plant them in residential districts, and establish them in
communities where saloons otherwise would not go. For years they
have stood for and have countenanced anything that would pro-
mote the sale and consumption of their products, lawful or un-
lawful.

The aggression and the intolerance of the traffic, coupled with
its utter disregard of law, led the Sixty-fourth General Assembly
to enact a law giving to the majority of the legal voters of any
township or city ward the power, by remonstrance filed with the
board of county commissioners, to exclude the traffic from such Jter-
ritory for a period of two years.

Under the provisions of this law the traffic has been excluded,
in three and one-half years, from 880 of the 1,016 townships in
the State ; from many city wards ; from a number of cities, and
from 25 entire counties. More than 1,600,000 people now live in
territory where there is no licensed saloon. But this territory is
constantly invaded by the traffic and a constant warfare against
it is necessary for its exclusion. This statute was enacted without
submission to the vote of the people, but its effects have been so
beneficent and the good accomplished under it has been so great
that the people of the State are unwilling to see it repealed, modi-
fied or weakened. So strong is the sentiment in its behalf that both
the great parties in the State are pledged to maintain it inviolate.
And the desire of the people for the further restriction of the
traffic is so sincere, so widespread, so manifest and insistent that
both parties have promised additional and supplemental legislation.

Two methods are suggested. One, a township and ward elec-
tion, where the people of the township or ward may vote for or
against the traffic. The other, a county election, where the people
of each county may vote for or against it. Between these two prop-
ositions both the temperance people and the liquor interests of the
State have made quick and decisive choice.

119

The first method would add nothing to the present statute. The
unit would be precisely the same as that covered by the present re-
monstrance law. It would not be a step for the further restriction
of the traffic, but a step toward the weakening of the present re-
straint. In practice, it would greatly impair if not effectually de-
stroy the remonstrance law. Operating over the same territorial
unit, conflict would ensue and the remonstrance law would be sup-
planted. The township or ward covers too small a territory to be
an effective unit. No township or city ward can single-handed pro-
tect itself from the ravages and evils of the traffic so long as it is
permitted in the townships and wards surrounding it. A great ma-
jority of the citizens of a county or a city may be opposed to the
traffic, but while a single township or city ward favors it, though
by a majority of but one legal voter, the county or the city must
tolerate it, must suffer in silence without redress, denied a voice or
even a hearing concerning it. Thus the will of the people is made
ineffectual, their purpose impotent. A city ward or township is
not a substantial governmental unit. They have no officers qualified
or empowered to enforce the laws of- the State relating to the
traffic. The expense of criminal prosecutions for crimes committed
in the township or ward is not borne by such township or ward
alone, but by the county as a whole. The evil effects of the traffic
cannot be confined to their boundaries but reach all the people of
the county. Township or ward local option by election is a kind
of home rule but little better than that which would follow if the
unit were a precinct, a city block, a single flat in a city, or the
house of a single family. Carried to its last analysis, it localizes
the option to the individual conscience of each citizen and takes
away all right of society as represented in the majority to have a
voice in the matter. It is not government by majority, but gov-
ernment by the minority. It is not the rule of the people, but the
rule of the few.

The county is a well recognized and long established unit of
government. It has officers and courts and the machinery by
which the law of the State can be enforced. The people of this
unit all share the cost of criminal prosecutions for crimes commit-
ted within it. The traffic's evil effects can more nearly be confined
to its borders.

The difference between the two methods is emphasized and ac-
centuated by the character of those who support them. Good men
may be back of the township and ward unit, but back of it are also
the allied liquor interests of the State, organized as a single unit.

120

Every brewer, . every distiller, every saloon-keeper, the keeper of
every brothel and of every unlawful resort, and every allied inter-
est than can be reached, individual or corporate, are supporting it,
and they are not half-hearted in their support of it as against
county option. They are desperately in earnest. They are here
and will be here throughout this session, active, dominant, arro-
gant, intimidating and corrupting, prepared to defeat county op-
tion at any cost or by any means within their power. They seek
through you to take over unto themselves the enactment of law.
They are reaching for the reins of government, everywhere and in
every department, that they may administer it in their own behalf.

On the other side are the great body of our people, the many,
the masses, unorganized, without celerity of movement or corrupt-
ing power. They are for county local option. They plead their
cause in the open. The ministry of the State of all denominations ;
teachers, lawyers, doctors, manufacturers, farmers ; the moral
forces of the Commonwealth, represented by the Christian church
and religious societies ; the great rank and file ; the multitude whose
government this is, whose commissions you hold, whose represen-
tatives you are. Thousands of them are here and will be here to
urge their claim upon you.

The brewery, the distillery, the saloon, the brothel, on one side !
The church, the school, the home, on the other !

County option is in harmony with the spirit of our institutions.
It is in accord with the basic principle of American government.
It meets the requirement of the great declaration that "govern-
ments shall derive their just powers from the consent of the gov-
erned."

How can a man who enjoys the blessings of free popular gov-
ernment and who professes to believe in democratic institutions
where the people themselves, by majority, exercise the right to rule,
consistently deny to the people of the several counties of this Com-
monwealth the right to exclude this traffic from their midst, if they
so desire? How can a man who values political freedom for him-
self deny to the three millions of people in Indiana who desire to
be heard upon this question the exercise of a right so fundamental ?
How can a man who believes in the right of the majority to decide
questions of tariff schedules and monetary ratios refuse to submit
this question to the forum of a free people, or withhold from his
fellow-citizens a freeman's right to vote upon it?

I reiterate my belief that it is both expedient and right to en-
act this legislation now. If it is right to enact it next January, it

121

is right to enact it in September. Therefore, I recommend to you
and urge upon your favorable consideration the enactment of a
local option law with the county as a unit, giving to the people
the right to vote by counties upon the question, and so drawn as
to preserve the present remonstrance law. In this I voice the
thought and express the conscience and the purpose of the people
whose servants we are. If your enactment shall voice their thought
and express their purpose, you may justly claim their approval.
You will thereby place the State where the intelligence, the con-
science and the character of its citizens entitle it to stand. If you
fail, you will have to account to them, for soon or late they will
have their way upon this great question. In this neither the ma-
jority nor the minority can escape responsibility. As individuals
and as representatives of the people, your responsibility is the
same, whether you are of the majority or of the minority. Right
is right, and he who opposes it cannot long find safe refuge behind
the barricades of party.

The General Assembly is now in session. You constitute it.
You have the power to legislate. The people know you have the
power. They will not be satisfied with postponement or delay.
They expect you to act upon this question before you adjourn.

These are the reasons that impelled me to convene you in
special session. In presenting them to you I do but discharge
the duty imposed upon me by the Constitution. I am conscious
that all of you do not agree with all I have submitted, and that
some of you may not agree with any part of it. That is your right.
And that right I respect. But I bespeak for what I have submitted
the careful and candid consideration which its importance entitles
it to receive, and which may be justly claimed for the views of an
earnest and sincere man, who shares your responsibility and who
has thought much and long upon the questions involved.

Permit me, in conclusion, to express the hope that the business
of the session may be promptly dispatched, and that your labors
may be signalized by loftiness of purpose and patriotic devotion
to the public welfare.

J. FRANK HANLY.

122
TO THE SIXTY-SIXTH GENERAL ASSEMBLY.

JANUARY 7, 1909.

Gentlemen of the Senate and House of Representatives:

Upon your assembling it becomes the duty of the Executive to
submit to you "information touching the condition of the State,
and to recommend such measures as he shall judge to be expedient."
In their majorities your respective bodies arc not in political
accord. This is a condition that not infrequently effectively pre-
vents much desirable legislation. But the greater part of the busi-
ness that will come before you will not be partisan in character,
and should have consideration quite aside from politics. In every
such case it becomes the duty of majority and minority to rise
above party differences and meet each other on the higher, broader
plane of common citizenship and the public welfare.

This I shall sincerely endeavor to do in what I here present.
The information submitted is the result of four years of close
touch with the institutions and the affairs of the State and of
painstaking effort, and is, I believe, expressed in accurate figures
and reliable statements, while the measures recommended are sug-
gested by the experience and observation incident to a full constitu-
tional term in the executive office.

CONDITION OF FINANCES AND SOME SPECIAL FUNDS.

The financial condition of the State is exceptionally good. The
revenues for the fiscal year ending September 30, 1907, exclusive
of transfer funds and including a balance in the treasury October
81, 1906, of $507,654.60, aggregate $4,599,333.58; the expendi-
tures were $3,701,705.97, leaving a balance in the treasury at the
close of the fiscal year ending September 30, 1907, of $897,627.61.
The revenues 'for the fiscal year ending September 30, 1908, ex-
clusive of transfer funds and including the balance in the treasury
at the end of the fiscal year 1907, aggregated $5,217,370.85 ; the
expenditures were $4,724,253.85, leaving a balance in the treasury
September 30, 1908, of $495,117.00. In this balance there was
no advance payment, nor were the revenues for the present year
anticipated or impaired.

The revenues for the present fiscal year, exclusive of transfer
funds and including the balance in the treasury September 30,
1908, will aggregate $4,637,152.00. Appropriations heretofore

123

made for this year and liable to be disbursed aggregate $4,189,-
121.00, leaving an available balance for specific purposes of $448,-
031.00. From this balance, however, must be deducted the prob-
able expense of the present session of the General Assembly, $120,-
000.00, leaving a net balance from the regular revenues of $328,-
031.00 available for specific purposes for the present fiscal year.

The 3 per cent, sinking fund levy made last year will create
a revenue during the present fiscal year, coming into the treasury
in June, of $260,000. If this fund be transferred to the general
fund the net balance available for specific purposes for the present
fiscal year will be $588,031.

ESTIMATED REVENUES.

The revenues, based upon present levies and existing valuations,
for the fiscal year, 1910, exclusive of transfer funds, are conserva-
tively estimated at $3,927,888. The regular expenditures for 1910
are estimated at $2,991,326, leaving a balance for the fiscal year
ending September 30, 1910, available for specific purposes, of
$936,562. The 3 cent sinking fund levy made last year, coming
into the treasury in December, 1909, and during the fiscal year
1910, will produce $240,000. If this fund be transferred to the
general fund the aggregate sum available for specific purposes for
the fiscal year ending September 30, 1910, is conservatively esti-
mated at $1,176,562. The revenues for the fiscal year, 1911, ex-
clusive of transfer funds based on present levies and valuations,
are estimated at $3,927,888. The regular expenses for the fiscal
year 1911 are estimated at $2,991,326, leaving a balance available
for specific purposes for the fiscal year ending September 30, 1911,
of $936,562.

These estimates are believed to be conservative and reliable.
The total funds, therefore, available for specific purposes, between
now and Sptember 30, 1911, if the sinking fund revenue coming
into the treasury during the present calendar year is transferred
to the general fund, will aggregate $2,701,155. This sum meas-
ures the limit of specific appropriations for the term indicated if
the revenues for the fiscal year ending September 30, 1912, are not
to be impaired.

AVAILABLE FUNDS.

If the sinking fund revenue for the present calendar year is
not transferred to the general fund, the funds available for specific
purposes between now and September 30, 1911, will aggregate

124

$2,201,155, and will measure the limit of specific appropriations
unless the revenues for the fiscal year ending September 30, 1912,
are anticipated and impaired.

On the 31st day of October, 1904, the close of the fiscal year
last preceding the present administration, the treasury balance was
$60,601.93, but to obtain this balance advance payments from
county treasurers had been called and received, and the revenues for
1905 anticipated in the sum of $154,740. But for these advance
payments there wrould have been no treasury balance, but a deficit
of $94,138.07. September 30, 1908, after four years of extensive
construction of public buildings aggregating $3,362,566.90, this
deficit was recouped and an actual balance of $493,117 accumu-
lated without calling a single advance payment from any county
treasurer or anticipating the revenues of this year a single dollar,
and without increasing the total tax levy on account thereof the
fraction of a mill.

To do this, however, the 3 cent sinking fund levy was trans-
ferred to the general fund for the years 1905, 1906 and 1907.
This was done without impairing our ability to meet the foreign
bonded indebtedness of the State within six months after the privi-
lege to pay accrues, and four years and a half before the debt ma-
tures.

PAYMENT OF PUBLIC DEBT.

Under the two preceding administrations a remarkable record
was made in the payment of the public debt. Under the first
$2,216,000.00, under the second $3,008,000.00, an aggregate dur-
ing the two administrations of $5,224,000.00.

During the present administration $407,000.00 have been paid
on the principal of the State debt and the last dollar of the debt
now payable canceled. This leaves a total foreign bonded indebt-
edness of only $800,000, none of which will be payable until Jan-
uary, 1910, and none of which will be due until 1915. This entire
debt can be paid within six months from the date the privilege of
payment obtains, from the sinking fund, which will come into the
treasury during the present calendar year and the first half of next
year.

The institutional needs of the State, however, are so impera-
tive and our duty to those whose care we have undertaken out of
feelings of humanity and for the public good, is so clear and in-
sistent that I am impressed with the belief that an act should be

125

passed by you during the present session transferring the sinking
fund to be derived from the 3-cent levy for the year 1908 and com-
ing into the treasury in June and December of the present calen-
dar year, to the general fund, that it may become available for
specfic purposes. If this is done the sinking fund from the levy
of the present year coming into the treasury during the calendar
year 1910 will remain intact. This fund will aggregate $510,000
and will enable the incoming administration to pay $510,000 on
the principal of the State debt within a year after the same becomes
payable, and within six months thereafter the fund derived from
the sinking fund levy will be sufficient to retire every dollar of the
debt and leave the State absolutely unincumbered, except a nominal
sum on account of certain university bonds, which are really due to
itself.

TRANSFER OF SINKING FUND LEVY.

In my message to the Sixty-fifth General Assembly I recom-
mended the transfer of the sinking fund levy for the year 1908 to
the general fund, foreseeing the present necessity, and the General
Assembly passed a bill for that purpose on the eve of adjournment,
which I was compelled to veto because of an error in naming the
year for which the transfer was made.

The transfer of this fund will enable us to complete the South-
eastern Hospital for the Insane and the School for the Deaf, and
to make needed improvements and additions at the State Prison,
the Reformatory, the Boys' School, the Girls' School, the Epileptic
Village and the School for Feeble-Minded Youth, and to provide
effectively for the other hospitals for the insane, and begin in a
substantial way the institution for the treatment of tuberculosis ;
also to construct and equip at Purdue University and at the State
University additional buildings somewhat commensurate with their
present insistent need.

The just consideration of obligations incurred and every dic-
tate of duty assumed demands that these things be done. We are
in a position to, and can, if we will, do them all without calling
upon posterity to pay any portion of the cost, and we can, at the
same time, pay the foreign bonded indebtedness of the State be-
fore the expiration of the first two years of the incoming adminis-
tration.

The transfer of this fund as here suggested will create a gen-
eral fund somewhat in excess of the specific appropriations im-

126

peratively needed ; if so, the surplus can be applied to the pay-
ment of the State debt, as such payment may be lawfully made
from the general fund.

These State institutions — educational, benevolent and penal-
have been upon my conscience every hour since I took the oath of
office as Governor of the State, as few other things have been, and
they will continue to be on my conscience long after I have left the
executive office.

In this there is no politics, but there is in it an appeal to civic
pride and to humanity that can not well be denied by a civilized
and Christian people. I am profoundly impressed with the convic-
tion that in the degree you fail in this, you will fail in your obli-
gation to the people you represent.

GOVERNOR'S EMERGENCY FUND.

During the fiscal year ending September 30, 1907, there was
expended from the Governor's emergency contingent fund the sum
of $27,365.34, less $110.82 returned to the treasury, leaving an
unexpended balance of $254.48. The expenditures were for the
following purposes and in the following amounts :

Completion and furnishing of two new cottages at the Northern Hos-
pital for the Insane $6,150 49

Southern Hospital for the Insane 14 01

Maintenance Boys' School 3,256 21

Maintenance Girls' school 3,388 87

Maintenance Women's Prison 6,226 55

Expanses in the case of McCormick vs. State 1,426 65

In the case of Samuel Peters 11 76

Investigation of Elkhart Insurance Company 12 75

Investigation of State Life Insurance Company 1,017 80

Expense of tuberculosis commission 540 15

Expense of committee investigating Auditor's office 145 00

Expense incurred in the closing of the Dearborn Park Casino in Lake

county, Indiana 816 57

Expense in French Lick litigation 1 45

Aid to flood sufferers under authorization of special act of Sixty-fifth

General Assembly .' 4,457 08

For the year ending September 30, 1908, there was expended
from the emergency contingent fund $26,113.42, less $146.53 re-
turned by committees having in charge the distribution of funds
contributed to the flood sufferers, leaving an unexpended balance
of $4,033.11. Said expenditures were in the following amounts
and for the following purposes, to wit:

127

Maintenance Boys' School $2,743 73

Maintenance Girls' School 8,944 95

Maintenance Women's Prison 3,539 22

Electric wiring, Soldiers' Home 2,245 00

Furnishing and equipping two cottages at the Eastern Hospital for

the Insane 4,095 84

Expense in the prosecution of the whitecap cases in the Bartholomew

Circuit Court 3,223 50

Expense in the disbarment of George Kurtz 10 89

Expense in Dearborn Park Casino case 355 00

Expense in French Lick litigation 365 48

Expense in relation to State lands 43 96

Records for State Finance Board 318 00

Expense incurred in Muncie strike riot 8 50

Expense incurred in litigation by the State vs. J. O. Henderson 219 35

CIVIL, AND MILITARY CONTINGENT FUND.

For the year ending September 30, 1907, there was expended
from this fund the sum of $1,606.90, leaving an unexpended bal-
ance of $7,559.74. These expenditures were in the following
sums and for the following purposes :

Expense incurred in prosecution of French Lick litigation $249 31

Expense in Dearborn Park Casino case 155 00

Expense incurred in the prosecution of the whitecap cases in Bartholo-
mew county 402 23

Expense of National Guard, account Tell City strike 800 36

For the year ending September 30, 1908, there was expended
from the civil and military contingent fund the sum of $7,251.87,
leaving an unexpended balance of $2,768.13 less $20.00 returned
to the treasury. These expenditures were made for the following
purposes and in the following sums :

Expense of National Guard, account Tell City strike $311 83

Expense National Guard account powder-mill explosion at Fontanet,

Ind 1,260 23

Expense of National Guard account of Muncie riot 3,119 73

Expense of investigating "Night Rider" depredations in Dearborn,

Switzerland and Ohio counties 680 00

Expense account special election in White, Newton, Starke and Jasper

co-unties 21 21

Expense in French Lick litigation 510 37

Expense in the prosecution of the whitecap cases in Bartholomew

county 1,007 75

Legal opinion in Vincennes University bond matter 200 00

Expense of National Guard on account of Avaline Hotel fire at Ft.

Wayne 140 75

128

CLAIM OF ONE HUNDRED SIXTY-FIRST REGIMENT.

By an act of the Sixty-fifth General Assembly $11,674.61 was
appropriated to reimburse the members of the One Hundred and
Sixty-first Regiment, Indiana Volunteer Infantry, and of Com-
panies A and B, colored infantry, for the sum paid for counsel
fees out of the allowance made to them by the Federal govern-
ment. Of this sum there still remains a balance in the treasury of
$2,648.82. Of the original sum, $35,023.86, placed in the hands
of the Governor for distribution, there still remains undistributed
$5,736.04. Both these funds are being distributed as rapidly as
the persons entitled to receive the same can be found and proof of
their claims made.

There is no law requiring the Governor to act as custodian of
this fund, but I have distributed it, through the Adjutant-General
of the State, in so far as distribution has been made, simply as a
matter of good-will to the members of these organizations, that
the expense of distribution might be saved them. Their individual
claims are small, often but a very few dollars. The balance of this
fund, $5,736.04, I shall turn over to the succeeding Governor, if
he is willing to accept the trust, that the distribution may continue
without cost to the claimants.

The original fund has been kept in bank since it came into my
hands, as a fund to be checked against as distribution was made.
Interest thereon has been paid by the bank at the rate of 3 per
cent, per annum, amounting in the aggregate to $812.77.

The appropriation of $11,674.61 made by the General Assem-
bly has made good the whole sum allowed by the general govern-
ment. Every member of either of the organizations interested has
received or will receive the full share of the whole allowance due to
him. It has therefore seemed just to me that the interest accruing
should be paid into the State treasury to reimburse the State in
part for the appropriation so made. The interest does not belong
to me. The claims of the members of these organizations are being
paid in full through the generosity of the State and the free serv-
ices of its officers, without cost to them for counsel fee or even of
distribution. I have therefor paid the interest accruing, $812.77,
into the State treasury for the use of the State.

129

STATE AVENUE STREET ASSESSMENT.

The purchase price of that portion of the site of the present
School for the Deaf, sold to the city of Indianapolis during the
preceding administration, has been fully paid and the property
transferred by deed of conveyance to the city of Indianapolis.

Prior to such transfer said avenue, from Washington street to
English avenue, was improved with a brick roadway and curbing
under proceedings begun and had before the Board of Public
Works of said city. The property sold to the city abuts upon this
improvement and was assessed for its construction in the sum of
$2,448.26, which, with interest accrued thereon, now amounts to
$2,629.34.

As the State still occupies the property and will, of necessity,
continue to occupy it until the new buildings for the School for the
Deaf are ready for occupancy, and the ^improvement was con-
structed and the assessment levied before the deed of conveyance
was executed, it is just that the State should pay the assessment.
I therefore recommend the appropriation of a sum sufficient to pay
principal and interest, and that the same be made payable to the
American Construction Company, the contractor constructing the
improvement.

CLAIM OF JOHN R. WARREN.

The contract for the construction of the buildings at the Girls'
School was awarded to John R. Warren. Upon the completion of
said buildings a claim of more than $12,000 for extras was pre-
sented by Mr. Warren to the commission having in charge the con-
struction of said work. This claim the commission refused to al-
low, but it allowed a claim of $3,190.10 as the fair value of the
extras which Mr. Warren had furnished under the direction of the
board.

Only the sum of $481.05 remained of the fund available for
the payment of the cost of construction of this institution. A bal-
ance, therefore, of $2,709.05 still remains unpaid. The debt is a
just one, and an appropriation should be made to Mr. Warren, to
be immediately available.

GRAVE OF NANCY HANKS LINCOLN.

Under an act of the Sixty-fifth General Assembly title to a
small tract of laud containing the grave of Nancy Hanks Lincoln,
mother of Abraham Lincoln, lias been acquired, a commission ap-

[9—19891]

130

pointed and steps taken to beautify the grounds and preserve the
grave.

The annual appropriation of $500 made in this behalf should
be continued.

MORTON MONUMENT.

An act of the Sixty-fourth General Assembly, approved March
25, 1905, authorized the erection of a monument and statue to the
memory of Oliver P. Morton, to be located in a conspicuous place
on the State House grounds and appropriated therefor the sum
of $35,000. Under this act a commmission was appointed, and
the plaza at the east entrance of the State House selected as a site.
The monument was erected and the statue placed and dedicated
July 23, 1907. The statue is the work of Mr. Adolph Schwartz,
of the city of Indianapolis. The whole memorial, monument and
statue, was constructed within the appropriation made.

T1PPECANOE BATTLEFIELD MONUMENT.

Under an act of the Sixty-fifth General Assembly, and an act
of the Federal Congress, authorizing the construction of a monu-
ment on the Tippecanoe battlefield, and appropriating therefor
the sum of $12,500 by the State and a like sum by the Federal
government, a beautiful monument of granite has been erected on
that historic field. It was formally dedicated with appropriate
and impressive ceremonies November 7, 1908. Official report of
the proceedings of the commission having in charge its construction
is now in the hands of the public printer, and will shortly be laid
upon your desks. This monument was also constructed within the
appropriation made by the two governments.

ANDERSONVILLE MONUMENT,

The late General Assembly, by an act approved March 9, 1907,
authorized the construction of a monument at Andersonville, Ga., as
a tribute to the soldiers of Indiana, who died in Andersonville
prison during the Civil War, and appropriated therefor $10,000.
On the 26th of November last the memorial was formally dedicated
and turned over to the care and custody of the Federal govern-
ment. The commission having its construction in charge was pe-
culiarly fortunate in the selection of both design and material. The
appropriation was small, but with it a monument has been provided,
the most appropriate and beautiful so far erected .-it Andersonville.
The report of this commission is in preparation, and will be pub-
lished at an early date.

131

VICKSBURG MOXUM KXTS.

Aii act of the Sixty-fifth General Assembly, approved March
10, 1907, authorized the construction of monuments to the twenty-
eight military organizations from Indiana which participated in
the campaign and siege resulting in the capture of Vicksburg,
July 4, 1863, and markers designating the lines occupied by such
organizations at the time of such capture, and appropriating $38,-
000 therefor. Under this act sixteen monuments and fifty-three
markers have been constructed and placed in position. The mark-
ers are of granite, and are of substantial size. The monuments are
of the same material, beautiful in design and distinctive in appear-
ance. These were dedicated on December 29. The dedicatory
ceremonies were participated in by the Governor of Mississippi and
many of the people of Vicksburg. The report of the proceedings
of the commission is in preparation and will soon be submitted.

The reports of the commissions having in charge the construc-
tion of monuments at Chickamauga and at Shiloh were published
in somewhat extensive form, and it is desirable that the report of
this commission be published in like form, giving a brief history
of each Indiana organization participating in the campaign. It is
estimated that the publication of such report will cost $3,000. The
appropriation of this sum is recommended.

STATK MKMOHIAL AT VICKSBURG.

In many respects the Vicksburg campaign was the most impor-
tant campaign of the Civil War. This fact is widely recognized,
and many States in addition to regimental monuments and markers
have and are appropriating substantial sums for the construction
of State memorials. Pennsylvania has constructed a State me-
morial costing $15,000, New York $12,500, Minnesota $23,000,
Mississippi $50,000, Illinois $200,000, and Wisconsin has re-
cently appropriated $100,000. A beautiful and impressive me-
morial can be constructed and dedicated for $50,000. A site there-
for, centrally located and of commanding position, has been re-
served by the national commission, and I earnestly recommend that
an appropriation of such sum be made by you. But three other
States had more organizations in the siege of Vicksburg or in the
campaign preceding it than Indiana. Her troops bore the brunt
of the most hotly contested battle of the campaign and she should
not be behind in the expression of her appreciation and gratitude.

132

GKN. PLEASANT A. HACKLEMAN,

Gen. Pleasant A. Hackleman was killed in battle at Corinth,
Miss., October 3, 1862. He was the only general officer from In-
diana to fall in battle during the Civil War. His services to the
State and the Nation ought to be perpetuated. His last message,
"I am dying, but I am dying for my country," ought to be remem-
bered by our people.

I recommend an appropriation of $35,000 for the construction
of a monument and statue to his memory, to be located in Uni-
versity Park in the city of Indianapolis, under the direction of a
commission to be created and appointed for that purpose.

PRIVATE BANK ACT.

A step in the direction of State supervision and inspection of
private banks was taken by the Sixty -fourth General Assembly.
The law as then enacted was crude and ineffective. It was valuable
only as a beginning.

But the legislation had during the session of the Sixty -fifth
General Assembly was of more value. The result of its operation
has been to lessen somewhat the number of private banks in the
State and to increase the number of state banks. The number of
private banks in the State September 30, 1907, was 213; on Sep-
tember 30, 1908, 188, a decrease of 25. The number of State
banks in the State September 30, 1907, was 235; the number
September 30, 1908, 256 ; an increase of 21.

During the fiscal year 1908 there was no state bank failure
within the State. During the same time there were seven private
bank failures. One of these failed before the operation of the
private banking act providing for examinations became effective.
The other six were closed by the order of the Auditor of State
shortly after the private banking act went into effect, upon ex-
amination made under its provisions, showing the banks to be in-
solvent.

DEPOSITORY LAW.

The act of the late General Assembly providing depositories
for public funds has now been in operation one year. In that
time it has vindicated in the most remarkable manner the claims
made for it by its friends at the time of its enactment.

The interest collected on the general State funds for the cal-
endar year 1908 aggregated $27,201.61 ; on account of the edu-
cational institutional funds, $4,312.86; total, $31,514.47.

133

During the fiscal year ending September 30, 1 908, it cost $1 2,-
17().2<) to administer the treasury department, and $18,002.98 to
administer the executive office, a total for the two offices of $30,-
179.27.

It will be seen that the interest accruing to the State exceeds
the cost of administering both the treasury and executive offices by
$1,335.20.

The result of the law's operations in the several counties of the
State is little less satisfactory than in the State. The salaries of
the treasurers of the ninety-two counties of the State aggregate
$273,250. Reports from sixty-six of the ninety-two counties indi-
cate that the interest accruing to the several counties will aggregate
$204,934, a sum only $68,316 less than the aggregate salaries of
the treasurers of all the counties.

Actual data from the sixty-six counties reporting disclose the
fact that in the counties of Whitley, Lake, Randolph, Morgan,
Carroll, Lawrence, Warren, Decatur, Hamilton, Jay, Clay, Fulton,
Sullivan, Adams, Bartholomew, Posey, Starke, Wells and Jasper
the interest accruing to the county more than equaled the salary
of the treasurer. The salaries of the treasurers of these eighteen
counties aggregrate $47,450, the interest collected $59,895.92, an
excess of interest in the eighteen counties over treasurers' salaries
of $12,445.92.

SAVING OF MORE THAN $440,000.

Reports indicate that interest accruing to the several towns
and cities of the State, civil and school, and to the several town-
ships, civil and school, will equal, if not exceed, the interest accru-
ing to the counties, making a total saving to the people of the State
of more than $440,000.

In the county of Marion interest on the county fund aggre-
grated $11,817.11, while the total interest collected by the county
for the school city of Indianapolis and from other sources, exclusive
of townships, equals $17,352.39, a total collection of $29,169.50.

The financial gain indicated by these figures is not, however,
the most valuable result of the operation of this law. It has ended
speculation in public funds, secured their honest and safe adminis-
tration, and saved weak and inefficient custodians of such funds
from embezzlement and dishonor.

The principle embodied in the law should be preserved. Expe-
rience may have indicated here and there defects in it of minor
character, but these do not seriously affect its value. If amenda-

134

torv legislation is had the greatest care should be exercised to pre-
>erve unimpaired every vital feature of the law.

The provision of the law requiring daily settlements on the part
of all administrative officers of the State handling public funds, is
no less valuable. Its effect has been to revolutionize the adminis-
tration of these offices, in so far as the same relates to public
moneys, and in connection with the work of the executive account-
ant, to minimize the hazard of their misappropriation or loss.

THE STATE'S INSTITUTIONS AND THEIR GROWING NEEDS.

The State institutions, taken as a whole, have been most effi-
ciently administered. They have been kept out of politics abso-
lutely. Character, ability and fitness alone have determined every
appointment made either by the Executive, by the several boards,
or by the several superintendents. In the four years no recom-
mendation has gone from the Executive to the members of any
board or to the superintendent of any institution for the appoint-
ment of any person. The Executive has selected the boards and
has charged them with the responsibility of selecting the superin-
tendents and of supervising their respective institutions, and the
superintendents have been left free to select their own subordinates.
Responsibility for the several boards has devolved upon the Exec-
utive, for the superintendent upon the boards, and for the im-
mediate administration of the institutions upon the superintend-
ents. Few changes in the superintendents have occurred during the
administration. The State Prison, the Reformatory, the Women's
Prison, the Boys' School, the School for Feeble-MJnded Youth,
the School for the Deaf, the School for the Blind, the Eastern
Hospital for the Insane, the Southern Hospital for the Insane,
the Central Hospital for the Insane, and the Soldiers'
Home have today the same superintendents they had at the
beginning of the administration. The selection of the new
superintendent for the Girls' School was due to the separa-
tion of that institution from the Women's Prison; while the
change of superintendents at the Soldiers' and Sailors' Orphans'
Home and at the Northern Hospital for the Insane was due to the
death of the respective superintendents of those institutions. .Both
Dr. Rogers and Colonel Graham died within the year. Both were
long in the service of the State and each had served it with credit
and distinction. Their deaths were distinct losses to the Common-
wealth. The highest compliment the present administration can
pay to the three preceding administrations has been the fact that

135

the superintendents of the several institutions appointed by them,
have been retained in their respective positions, except in case of
removal by death, throughout the life of the present administra-
tion, because of exceptional worth and superior ability.

The act of the late General Assembly relative to the govern-
ment and administration of the penal, correctional and benevolent
institutions of the State and providing for bipartisan boards of
trustees has confirmed and established their nonpartisan adminis-
tration. The present system I believe to be the best found in any
of the many States which I have visited and whose institutions I
have inspected. It ought not to be departed from.

MAINTENANCE OF STATE INSTITUTIONS.

The funds appropriated for the maintenance of the Boys'
School, the Girls' School and the Women's Prison have been great-
ly inadequate for each of the last two. fiscal years. For the year
ending September 30, 1907, I was compelled to pay out of the
Governor's emergency contingent fund for the maintenance of the
Boys' School $2,256.21, for the maintenance of the Girls' School
$3,388.87, and for the maintenance of the Women's Prison
$6,226.55, an aggregate expenditure out of this fund for main-
tenance of these three institutions of $11,871.63.

For the year ending September 30, 1908, I was compelled to
pay out of this fund on account of maintenance of the Boys' School
$2,743.73, for the Girls' School $8,944.95 and for the Women's
Prison $3,539.22, an expenditure from this fund for the mainte-
nance of these three institutions aggregating $15,227.90. In ad-
dition to this, appropriations wrere made at the special session of
the General Assembly in September on account of the maintenance
of these same institutions, as follows : Boys' School, $7,000 ; Girls'
School, $8,000, and Women's Prison, $1,000, an aggregate of
$16,000.

The deficit in the maintenance fund of the Girls' School for
the last fiscal year was, therefore, $16,944.95, in the maintenance
fund of the Boys' School $9,743.73 and in the maintenance fund
of the Women's Prison $4,539.22, an aggregate deficit in the main-
tenance fund of the three institutions of $31,227.90.

It is the imperative duty of the State to provide a sufficient
maintenance fund for these institutions. Appropriations made
therefor should not be so deficient in amount as to compel the Gov-
ernor to invade I lie enier^encv contiftgenl fund for the purpose
of their maintenance. The Governor's emergency contingent fund

136

should be kept intact to meet such emergencies as may be occa-
sioned to the buildings and equipment of the State institutions by
fire or other accident, and for other emergency demands that may
be made thereon. It is earnestly insisted that you make sufficient
provision to feed the wards of the State for the next two fiscal
years.

STATE EDUCATIONAL INSTITUTIONS.

Long before any of us became in any degree responsible for
policies of state, the people of Indiana, through their chosen rep-
resentatives, entered upon the policy of higher education for her
young men and women, through the establishment of the State
Normal School, Purdue University and the State University. For
that policy we are not responsible. It comes to us already estab-
lished, with millions of dollars devoted to its support. We have
now reached a point in the development of all three of these in-
stitutions where we must decide either to abandon them or to give
them such support in equipment and maintenance as will maintain
their dignity and efficiency. The first alternative is not to be
thought of. We can not abandon them, nor can we reduce arbi-
trarily the number of students attending them, or close their doors
to the multitude of young men and women who are seeking educa-
tion in them. In 1888 Indiana University had an enrollment of
275, now 2,051. Ten years ago Purdue University had an enroll-
ment of 702, now 1,805. Then she granted 158 degrees, last year
328.

MORE SUPPORT NECESSARY.

This increased enrollment makes absolutely necessary increased
room and equipment and increased maintenance. By devotion to
right ideals, by sacrifices innumerable and by long and invaluable
service they have earned the right to such support and maintenance
as will preserve their prestige and insure their further efficiency.
The equipment and buildings at the State University are greatly
insufficient, and those at Purdue University are pitifully so. Pro-
vision for building and equipment for the engineering department
at the latter institution is absolutely essential. But greater, if
possible, than the lack of buildings and equipment, is the lack of
funds to meet their current necessities. Indiana is far behind sur-
rounding States in the per capita expenditure made for such in-
stitutions. She is at the bottom of a list which includes Illinois,
Iowa, Nebraska, Michigan, Kansas, Wisconsin and Ohio. The
maintenance funds of the State University and Purdue University

137

combined are less than the corresponding funds for Ohio, Michi-
gan, Wisconsin, Illinois or Iowa. The effect of our parsimony has
been to deprive both universities of the services of the best and
ablest men they have had. We lost these men to Harvard, Cornell,
Virginia, Dartmouth, Bryn Mawr, Chicago, Illinois, Wisconsin,
Cincinnati, the Naval Academy, California and Stanford.

SHOULD NOT LET GOOD MEN GO.

We ought not to allow any first-rate man to go from either of
these universities on account of inability to pay him what his serv-
ices are worth as valued by the management of the great institu-
tions of other States. To let such men go for lack of compensation
is to the discredit of the State and to the great misfortune of our
young men and women who turn to these institutions for the higher
education to which they arc entitled by a policy long established
and maintained. The report of the board of trustees for each of
these institutions is before the legislative institutional committee.
I commend them to your most thoughtful consideration and earn-
estly recommend that provision be made for buildings and equip-
ment at each of them to the limit of present resources, and that
the tax rate for the maintenance fund of all be increased, that of
Indiana and Purdue by one-half and that of the State Normal
School by one-third. This will add to the maintenance fund of
each of the first two institutions $83,000 annually, and to that of
the State Normal $41,000. This increase will not then be suffi-
cient to maintain them as similar institutions are maintained in
other States.

SOUTHEASTERN HOSPITAL FOR THE INSANE.

The needs of each of the hospitals for the insane are clearly
and ably set forth in the several reports made by the trustees of
the respective hospitals to the Governor and to the legislative insti-
tutional committee, copies of all of which will be referred to you
for your examination and consideration. While all of the demands
made can not be met, many of the most essential and urgent ones
can and ought to be provided for.

The crowded condition of the Central Hospital for the Insane,
and the fact that there are more than 1,100 insane persons in the
State now without hospital care in county jails and poorhouses, or
dependent upon the ineffective care of friends, makes the comple-
tion of the new Southeastern Hospital for the Insane at the ear-
liest possible moment an absolute and imperative necessity. This

138

need is so fairly and forcefully presented in the report of the su-
perintendent of the Central Hospital to his hoard of trustees, and
in the report of the Southeastern Hospital commission, prepared
by the superintendent of the Eastern Hospital, that little can be
added thereto. I desire to commend especially both these reports
to your most sincere and kindly consideration.

CENTRAL HOSPITAL CROWDED.

The Central Hospital, with a normal capacity of 1,605 beds
and a forced capacity of 1,748, has 2,009 patients enrolled, and
an actual attendance of 1,850. This you will note is 245 in excess
of the normal capacity and 102 in excess of the forced capacity of
the institution. In addition to this there are in the Central Hos-
pital district 410 insane persons not enrolled, making an insane
population in the district, in and out of the institution, of 814 in
excess of the Central Hospital's normal capacity. While this con-
dition continues, the proper classification and treatment of the pa-
tients is impossible; discipline will be impaired, and the individual
care and treatment to whch the patients are entitled will be pre-
cluded. The only relief that can be obtained is the completion of
the Southeastern Hospital to its full capacity.

An appropriation of $151,738.15, made immediately available,
is necessary to complete the buildings now under contract. These
will afford a normal capacity of 750 beds. The appropriation sug-
gested will also provide for completing mechanical equipment and
tunnels for eleven other buildings not now under contract, for lack
of funds to build and equip them, eight of which are cottages for
patients. In the words of Dr. Smith :

"These are a necessary part of the scheme of classification of patients
worked out with the greatest care, and which gives this new hospital one of its
chief claims to distinction among all similar institutions of its class in this
country."

NEED APT^LY PRESENTED.

The need of this institution is so aptly and ably presented in
this report, that I can not refrain from further quotation:

"No one feature of the plan of such institution is, in the judgment and
experience of the specialist in the care of the insane, so essential and influential
in the results of treatment as the classification of the patients. Usually, and
scarcely without exception in similar undertaking, this element has received
secondary consideration and, resulted, by haphazard after-additions, in fatally
impairing the classification, and thereby hampering the methods of treatment,
to say nothing of the damage to the architectural symmetry and beauty of the
institution, but here, under expert advice and direction, a scientific scheme

139

of classification has reached its highest degree of development and has formed
the central idea from which the entire institution has been evolved. These addi-
tional structures are component parts of it. If built now, they perfect it;
if omitted, they mar it forever.

REASONS OF ECONOMY.

"Moreover, the tunnels and mechanical equipment necessary for these
omitted structures have already been provided for and built at considerable
outlay. Contrary to custom, but profiting by experience, which leads to the
conviction that it is far more economical, this mechanical equipment was
planned to have sufficient capacity and efficiency to meet the highest require-
ments of a complete institution as originally planned. Thereby it was the
aim to avoid the frequent additions to it, which too often and unavoidably
increase the cost of maintenance. -Inasmuch as this equipment will soon be
in place and ready for service, some loss will be entailed by increasing the
cost of maintenance for operation far below capacity, as well as by deteriora-
tion from idleness and neglect in such parts of the apparatus as may be
wholly or in part out of service.

"Again, these additional structures can never again be constructed in
complete conformity with those now under way at such small cost as now.
The prices for building materials and labor are reasonable, and with a con-
tractor's organization on the premises, the actual cost will be less than if built
by different contractors from, time to time, to say nothing of the probable
inability to secure uniform materials.

"The additional structures will complete the hospital and afford it a normal
capacity of 1,100 beds and a maximum capacity of 1,275 beds, at a cost of
approximately $1,331 a bed at its normal capacity, and $1,144 a bed at its
maximum capacity.

NEEDS OF THE STATED INSANE.

"Finally, and above all other reasons for the rounding out of this hos-
pital by this additional construction, is the duty of the State toward its
insane population. The additional room is needed, and urgently needed. The
other four hospitals are crowded to their maximum capacity; the county poor-
houses are overburdened; many are in jails; many more are wandering in
neglect at large; and still others are improperly kept in private families,
exposing the members, particularly the little children, to violence and baneful
influences. The State in its Constitution promises its insane care and treat-
ment. It should keep its obligation. It has no moral right to provide for one

citizen and deny another. This is discrimination which can not be justified.

* * *

"With the full completion of this hospital by the additional construction
now proposed and urged, it will come nearer a complete system of State care
than ever before in its entire history. * * *

"When completed and ready for occupancy every one of its 1,100 beds
can be immediately filled by transfers from the" alarmingly overcrowded
("cntral Hospital, where there are now approximately (JOO patients ready and
waiting, and from the counties, by slight alterations of the district lines,
without the development of one more case of insanity within the State's
borders."

140

The original contract for the construction of the institution
was awarded to Edwin M. Campfield, lie being the lowest bidder by
nearly $100,000. The contract awarded Mr. Campfield consisted
of a positive and provisional contract. The positive contract cov-
nvd construction and mechanical equipment as follows: Stand-
pipe, foundation and casing; all tunnels; pumping station; ad-
ministration building; rear center buildings; power-house, laun-
dry; store; mechanical equipment, including the power equip-
ment, low pressure mains and returns ; steam heating and ventila-
tion ; water supply and iron tower ; the electric equipment and
wiring; plumbing and tile sewer, excepting so much of the heat-
ing apparatus, electric wiring and plumbing as belong to the build-
ings not enumerated in the positive contract, and including the
cost of smokestack and hardware, amounted to $508,067:49.

The provisional contract as ratified by the Sixty-fifth General
Assembly provided for the construction of twelve cottages, which,
with equipment, supervision, etc., were to cost $559,377.82.

A FORFEITURE OF CONTRACT.

Mr. Campfield entered upon the performance of his contract,
but on March 11, 1908, his contract was declared forfeited by the
board, because of his utter failure to comply with its terms and
provisions, and the construction of the buildings relet, after full
advertisements, to Messrs. Pulse & Porter, May 28, 1908. This
contract is $151,738.15 in excess of the Campfield contract. This
excess occasions the necessity for the appropriation of that sum,
to be made immediately available, in order that the buildings now
under contract may be completed. A full history of the proceed-
ings of the commission, the forfeiture of Mr. Campfield's con-
tract and the reletting of the contract to Messrs. Pulse & Porter is
found in the report of the commission filed with the legislative in-
stitutional committee, to which you are referred for full and com-
plete information.

The new contractors have been prosecuting their work with en-
ergy and fidelity. All structures under contract are now well un-
der way. The time of completion, however, has been necessarily
extended to December, 1909.

The act of the Sixty-fifth General Assembly relating to the
administration of the penal, correctional and charitable institutions
of the State provides that the board of trustees for this institution
can not be appointed until the hospital is completed. The urgent

141

necessity for the opening of the hospital at the earliest possible
moment requires a change in this statute. The Governor should be
authorized to appoint a board of trustees immediately. It will re-
quire at least four months for the board to select a superintendent
and for the organization of the hospital. If the board is not ap-
pointed until the hospital is completed, the time required for the
selection of a superintendent and the organization of the institution
will delay its opening. Under the circumstances, delay on such ac-
count is inexcusable.

SCHOOL FOR THE DEAF.

Under the preceding administration the School for the Deaf,
lands and buildings, was sold with a view of relocating the same.
During the present administration a new site was purchased, con-
sisting of 76.93 acres, advantageously situated on Forty-second
street, at a cost to the State of $30,772, and of a present value of
$76,930.

The Sixty-fourth General Assembly appropriated $315,000
for the purpose of constructing the new institution, one-third of
which came from the sale of the old site. This appropriation was
wholly inadequate. The institution faced an emergency. Its
present site was sold. Purchasers were insisting upon possession.
The old buildings were in need of extensive repairs. The State
could not well make such repairs on property it did not own. It
was absolutely necessary that prompt action of some kind be taken.
After full consideration the commission decided to have plans
drawn for a completed institution, and to let a contract for the
construction of such part thereof as could be paid from the limited
appropriation then in hand. After due advertisement a contract
was let for a schoolhouse, a dining hall, a kitchen bakery, a power-
house, a smokestack and tunnels, and a provisional contract entered
into for the construction of the other buildings embraced within
the plans adopted.

The proceedings of the commission were reported to the Sixty-
fifth General Assembly, and an additional appropriation, amount-
ing to $367,217, was made, under which the provisional contracts
were changed into positive contracts for the construction, in part,
of boys' dormitories, girls' dormitories and mechanical equipment.
All these buildings are now under roof and inclosed from the
weather and the work rapidly proceeding toward completion.

142

ADDITIONAL APPROPRIATION.

To build the institution as planned will require $409,370.50
additional appropriation. It is of the highest importance that
the new institution he made habitable before the beginning of the
school year, next September. This can not be done with less than
$170,000, which should be made immediately available. A larger
appropriation is needed, but less than that indicated will not make
possible the removal of the school during the present year. The
old buildings are sadly out of repair and will be scarcely habitable
for another winter. Every dollar of repairs put upon them is
\vasted money, as they arc not the property of the State.

Some criticism has been made because of the expense of the
new institution, founded upon comparison with other institutions.
No such comparison can be justly made. The School for the Deaf
is neither a hospital nor a charitable institution. It is an educa-
tional institution. It lias a dual nature. Its students are not adults,
but children. They live in the institution. This necessitates dor-
mitories, kitchen bakery, dining hall, storehouse and cold storage,
and hospital accommodations, with school facilities of a peculiar
kind. The large classes usual in public schools are not possible.
Close individual work is absolutely essential to substantial progress.
Every honest consideration precludes comparison with any other in-
stitution of the State, correctional or charitable.

SCHOOL IN THE WIDEST SENSE.

The law provides that "it shall not be regarded nor classed as
a benevolent or charitable institution, but as an educational insti-
tution of the State, conducted wholly as such." In this connection
I beg to submit the following from the report of the board of trus-
tees:

"The Indiana State School for the Deaf is strictly an educational institu-
tion— a school in its widest and best sense — and should he in law what it is in
fact, a part of the common school system of the State, wherein all children
of the State too deaf to be properly educated in the public schools may receive
an education as a matter of right, not as a matter of charity. It is in no
sense an asylum for the deaf, nor a place of refuge for those who can not
talk; neither is it a prison, a reform school, an almshouse, a children's home,
nor a hospital, nor should it be associated and classed with such institutions.

"Neither prison nor reform school methods, nor 'home' nor asylum re-
strictions obtain in its management. With literary, dramatic and other
societies, and with athletic associations, those in attendance constitute a gen-
uine student body and assist in governing themselves. They mingle with the
hearing-speaking world in business and social ways, and in athletic contests
visit high schools and colleges of the State. * * *

143

"The deaf boys and girls sent to the school are not deficient in mind
(insane, feeble-minded or imbecile), will or emotion (criminals, or with crim-
inal instincts), nor in need of correction, and do not belong in the general
class of so-called 'defectives.' They are here for the purpose of receiving an
education such as is given to their hearing-speaking brothers and sisters in
the public schools. In fact, it is the duty of the State to provide for the deaf
in these same public schools, but, because of economical reasons and for
their more thorough instruction, they are gathered together in a central
institution.

TRAINING IN SELF-SUPPORT.

"As students they are trained to become self-supporting in greater or less
degree after leaving the institution, by being required to become proficient
in some useful trade or occupation, or in the underlying principles of several
trades while in attendance. As good citizens and taxpayers of the State they
help to support the benevolent and charitable institutions of the State for the
insane, the epileptics, the feeble-minded and others of penal and correctional
nature. * * *

"The general plan and scheme of the entire plant of the new institution is
commensurate with the modern requirements of an educational institution,
with both sexes in attendance, with industrial and literary departments, with
oral and sign departments, with kindergarten, primary, intermediate and aca-
demic grades, with boys and girls from six to twenty-one years of age, and the
whole requiring proper division and separation, with general supervision, and
with many, and especially the younger, close personal attention. These things
can not be fully and properly p'ut into execution under existing conditions,
nor can they be hi the future, unless special and studied attention is given
to them in the complete plan agreed upon. This has been done.

THE SCHOOL'S CAPACITY.

"The new school has been planned with ample capacity for 500 students,
with forced or crowded capacity for 720 students. It is not being erected for
last year, this year or for next year only, but for many years to come. And
if Indiana is to do her bounden duty in the education of the deaf the time is
not far distant as the State's population increases, when the forced or
crowded capacity will be required."

In 1900 there were in the State 650 deaf persons under twenty
years of age. Five hundred and nine totally deaf, 141 partially
deaf.

If all the deaf children in Indiana were gathered in the insti-
tution, the student body would immediately reach five to six hun-
dred. Under present conditions Indiana is educating about 45 per
cent, of her deaf mutes, \vhile Ohio is educating 50 per cent., Illi-
nois 52 per cent., Michigan 71 per cent., and Wisconsin 87 per
cent.

The facts when once understood will justify every step taken
by the commission. The buildings now nearing completion are

144

substantial and beautiful structures and will be a credit to the
State long after the cavilling criticism of the present has been for-
gotten. In my own behalf as Governor and as chairman of the
board of construction and in behalf of the members of the board,
I invite the most thorough investigation and inspection of the acts
of the board and of the buildings themselves.

The Girls' School has been separated from the Women's Prison,
and established at Clermont as a new institution. The needs of this
institution are set out in the report of the board of trustees, to
which you are respectfully referred. I deem it important for the
welfare of the institution that an appropriation be made for the
purchase of the twelve acres of land lying directly across the road
therefrom. It is important, also, that the law relative to the parole
of the inmates be amended. The Attorney-General has held that
the board of trustees has no parole authority under the present
statute. I have met the emergency by extending executive clem-
ency where the board recommended it, but the power to parole
should be vested in the board, and the policy of the institution
should be to find homes for the girls in private families as rapidly
as their physical, mental and moral development will justify.

VILLAGE FOR EPILEPTICS.

The Village for Epileptics, the establishment of which was au-
thorized by the Sixty-fourth General Assembly, was formally
opened for the admission of patients on August 19, 1907, and at
the end of the fiscal year five patients were present. Since its open-
ing five buildings for patients have been erected, furnished and
occupied, and 101 patients are now in the institution. The site for
the village embraces 1,244 acres of rich agricultural land, from
which $4,300 were turned into the State treasury during the last
fiscal year. Drainage, fencing and additional buildings are greatly
needed. Provision should be made for horses, wagons and other
implements in order that the highest possible use be made of the
services of such patients as are able to labor. The pressure for
the admission of patients is extreme. I quote from the report of
the trustees :

"If the institution was now fully equipped for 1,250 patients it could be
immediately filled. Surely there can not be a greater demand for State care
for any class of unfortunates. The lot of the epileptic, unprovided for, in
Indiana is a pitiable one. Since the establishment of this institution epileptics

145

are excluded from some of the institutions to which they formerly had access,
upon the ground that the State has made provision for them here. In
answering the appeals of relatives we can only say that provision has not yet
been made for them."

I commend the growing needs of the institution to your con-
sideration in the hope that you will meet them as fully as available
funds will justify.

HOSPITAL FOR TUBERCULOSIS.

The Sixty-fifth General Assembly, by an act approved March
8, 1907, authorized the purchase of not less than 500 acres of land
as site for a hospital for the treatment of tuberculosis. • After much
investigation and the most thorough and thoughtful consideration
the commission selected a site three miles east of Rockville, contain-
ing 504 acres of land at a cost of $24,000. Provision should be
made for the beginning of this institution, and, if possible, the sum
of $250,000 appropriated therefor.

The ravages of tuberculosis are daily brought home to our peo-
ple by the untimely death of friends and kin. I bespeak for the
proposition to found and equip an institution for its prevention and
cure, the serious consideration its great importance deserves.

STATE PRISON.

The population in both the State Prison and the State Re-
formatory has increased to such an extent as to tax both institu-
tions beyond their normal capacity. In the State Prison 260 pris-
oners are compelled to sleep two in a cell. Both sanitary and dis-
ciplinary considerations preclude this. The cells are built for one
prisoner, not for two. It is important, therefore, that an addition
to the north cellhouse in the State Prison be provided at the ear-
liest possible moment. This will relieve the crowded condition of
both institutions, as, under the law, transfers can be made by the
Executive from the Reformatory to the prison. I commend the re-
port of the board of trustees to your kindly consideration.

STATE REFORMATORY.

A fire in the State Reformatory, completely destroying the
foundry building, occurred since the close of the last fiscal year,
making idle nearly three hundred inmates. The emergency seemed
to demand the immediate reconstruction of this building. I, there-
fore, directed the board of trustees to proceed at once with its re-
[10—19891]

146

construction, and auHiori/ed the payment of a sum not exceeding
$15,000 out of the Governor's emergency contingent fund there-
for. Whatever additional sum is required for the completion of
the foundry should be promptly appropriated arid made imme-
diately available. The Governor's emergency contingent fund for
the present fiscal year should be increased $15,000 to replace the
expenditure therefrom on account of the sum expended for this
building, as emergencies during the year may arise requiring a
greater sum to meet them than that remaining in the fund after
this expenditure is made. A great work is being done in the in-
stitution. It deserves your solicitous care. Its needs are fully set
out in the report filed by its trustees.

NEW PENAL, INSTITUTION.

I submit for your consideration the propriety of an act author-
izing the purchase of a site for the location of an additional penal
institution, and the appointment of a commission to purchase the
same, and make a report to the next General Assembly of plans for
the construction thereof and the probable cost of same. In ten years
the number of prisoners in the State Prison has increased from 782
to 1,192, an increase of 410, or 52.42 per cent. The number of pris-
oners in the State Reformatory has increased in ten years from 941
to 1,250, an increase of 309, or 33 1-3 per cent. The combined pop-
ulation of the two institutions has increased in ten years from 1,723
to 2,432, an increase of 719, or 41.72 per cent. AJ; this rate of in-
crease both the Prison and the Reformatory will be, within ten
years, utterly inadequate to care for the boys and men committed
to them. The increase in population is not due in any considerable
degree to an increase in crime, as the actual number of commit-
ments have not greatly increased. The increase is not due so much
to the greater number of commitments as it is to the indeterminate
sentence and parole law. The operation of this law has lengthened
the average term of service. The habitual criminal is retained
longer than under the old definite time law, a result much to be de-
sired. I quote Superintendent Whittaker on the proposition here
advanced, with unreserved approval:

ABNORMAL PRISONERS.

"The new institution should be a special institution, not known as a re-
formatory or prison; it should be constructed in some agricultural com-
munity upon not less than 2,000 acres of land. To it every confirmed criminal,
insane criminal, epileptic and degenerate should be transferred from the
State Prison and Reformatory, and there, under humane treatment, should

147

be kept for the full time of their maximum sentence. * * * Forty to 50
per cent, of all boys and men who are today convicted and sent to the
Reformatory or State Prison are abnormal and can no more be benefited or
made to become good citizens than the dwarfed and crooked bush can be
trained and cultivated into a straight tree. Subjects that are abnormal are
to be pitied and should be properly cared for by the State, but should not
be allowed to mingle and be classed -with the 50 per cent, who are normal and
who can be benefited by proper discipline, school, trade or manual instruc-
tion. * * Something must be done to relieve our crowded condition.
This system would care for our criminal population for fifty years and at
all times permit of the greatest good in methods of reformation in our State
Prison and Reformatory."

The inmates of the new institution on such a farm could pro-
duce all vegetables for their own consumption and could cultivate
crops for the use of other State penal institutions and be employed
in the manufacture of road material and the making of roads, and
in this way become self-sustaining without their labor coming into
competition with that of free men. I know of no greater business
in which the State can engage than that of saving men, and espe-
cially boys. With the perfect classification made possible by the
new institution, thousands of dollars now wasted, and hundreds of
bo}^s and men now lost, could be saved.

SUSPENDED SENTENCE LAW.

By an act of the Sixty-fifth General Assembly circuit and crim-
inal courts were clothed with discretion to suspend sentence in cer-
tain criminal cases of first offense. This has been done in the last
two years in many instances. The operation of the law in its
present form is not satisfactory. Sentence is suspended. The of-
fender is permitted to go. He does not report to either the super-
intendent of the Reformatory or the warden of the Prison. Nei-
ther of these officers is advised of the action of the court. The de-
fendant is left without supervision. The court loses knowledge of
him. He violates his parole, but remains unapprehended. The
purpose of the law is an excellent one, but it should be so amended
as to require the clerk of every circuit or criminal court within
five days after the suspension of sentence in any case, to advise the
superintendent of the Reformatory or the warden of the Prison, as
the age of the defendant shall indicate, of the fact of conviction,
the name of the defendant and the terms of the parole, so that the
Reformatory or Prison authorities may have some opportunity of
visitation and supervision. This will make the law effective and
will save many first offenders from subsequent terms in prison cells.

148

INHERITANCE TAX AND OTHER NEW LAWS ADVOCATED.

I commend to your consideration the enactment of a law which
shall provide for the taxation of the devolution or succession of
property by devise or inheritance.

The enactment of such a law was recommended to the Sixty-
fifty General Assembly. Such a measure was introduced, passed
the House, but failed in the Senate. I can not now do better than
to submit to you the recommendation then made :

"Such a tax is levied but once, and that at the time of the succession or
devolution of property inherited or bequeathed. It is levied at a time when it
can be paid without hardship. It is an eminently just form of taxation. It
can be administered with small expense and collected with little friction. In
the apt words of another, 'It is collected with ease and paid with contentment.'
It in no way disturbs commercial activities. It levies tribute upon no busi-
ness or industry. It enables the State to reach much intangible property which
has been long sequestered. It is a tax which the beneficiary of the inheritance
can not shift from his shoulders to the backs of others. Indeed, the tax is
paid before he receives the inheritance. The right to inherit property or to
dispose of it by devise exists only by grace of the State. It is wholly an
artificial right, resting solely upon the authority and consent of the State.
In collecting it the State simply stops the inheritance in transmission long
enough to take from it a fair and just contribution in exchange for value
already had and received by him who accumulated it, and then passes it on
to the beneficiary. Indeed, its validity and fairness are quite generally ad-
mitted. No great fortune is the sole product of the man who organizes and
directs its accumulation. It is to some extent the product of the social
process to which many persons contribute. Every honest toiler contributes
something to it, whatever the field of his labor.

STATE ENTITLED TO SHARE.

"The mechanic, the farmer, the teacher, the merchant, the physician, the
lawyer, the minister and the statesman or the administrator of public affairs
whose work makes for the progress of society or for the maintenance of the
peace and order of the State, has some share in its production. The State
itself is but society organized, and when the owner of a great estate dies, and
in the transmission of his fortune the State takes toll out of it, it takes only
what is its own. And in the taking of it, it makes for the wider diffusion of
wealth and for the unity and solidarity of society. Inheritance tax laws have
a place in the revenue laws of most modern states. They are found in the
laws of Great Britain, Germany, France, Switzerland, Holland, Belgium,
Norway, Italy, Russia, Australia and Canada. They are imposed by the laws
of thirty-two States of the Federal Union. The rate should be progressive,
increasing with the value of the inheritance, and as to collateral heirs, it
should run from 5 to 25 per cent. In the following States the rate is progres-
sive and is as indicated: California, iys to 5 per cent.; Colorado, 3 to 6
per cent. ; Illinois, 2 to 6 per cent. ; Iowa, 5 to 20 per cent. ; Nebraska, 2 to 6'
per cent.; North Carolina, iyz to 15 per cent.; South Dakota, 2 to 4 per cent;

149

/

Washington, 3 to 12 per cent.; West Virginia, 2y2 to 7y2 per cent.; Wisconsin,
iy2 to 5 per cent. In the following States the rate is 5 per cent, or more:
Arkansas, Delaware, Iowa, Massachusetts, Michigan, Missouri, Montana, New
Hampshire, New Jersey, New York, Pennsylvania, Tennessee, Utah, Vermont,
Virginia and Wyoming. In Louisiana it is 10 per cent. Seventeen States
include inheritances to direct heirs at a rate running from 1 to 5 per cent.,
exempting inheritances varying in value from $2,000 to $25,000. In the
States heretofore named exemptions of inheritances to collateral heirs are
made only where the inheritance is of nominal value. In six States the value
is less than $500, in nine it is $500, and in eight no exemption is made at all as
to inheritances to collateral heirs. In case of inheritances by direct heirs
$20,000 is, in my judgment, a reasonable exemption, and in case of inheritances
by collateral heirs the exemption should not be more than $1,000. Thirteen
of the American States have enacted revenue laws containing the principle
of the collateral inheritance tax within the last six years. France derives
$40,000,000 a year from this source, or 6 per cent, of its entire national
revenue. Great Britain receives from this source $70,000,000, or 10 per cent,
of its revenues. In eleven months of the year just past Louisiana received
$86,655 from this tax; Vermont, $40,581; Colorado, $51,236; Maine, $70,000;
Iowa, $190,748; Minnesota, $159,455; Missouri, $212,814; Wisconsin, $103,917;
Massachusetts, $712,720; Illinois, in the two years last past, $1,376,264; Penn-
sylvania, in 1895, $1,677,185.

INDIANA SLOW TO ACT.

"The income from an inheritance tax is necessarily irregular in volume,
but $150,000 to $200,000 is a conservative estimate of the annual revenue
such a law as that here recommended will bring into the treasury of this
State. Indiana has been slow to avail herself of this form of taxation. But
the time has come when the necessities of the State require its early enactment.
If enacted it will meet the approval of the people and will abundantly justify
the wisdom and foresight of those who support it. It should be! drawn with
care. It should not be imposed upon property inherited, either real or per-
sonal, but upon the succession or devolution thereof. Such a tax levied upon
the transmission of the share a person receives from an estate, though pro-
gressive in character, has been uniformly upheld by the courts, the Supreme
Court of the United States saying in a recent case (Magoun v. Illinois Trust
and Savings Bank, 170 U. S. 283):

" 'The right to take property by devise or descent is a creature of the law
and not a natural right — a privilege, and therefore the authority which confers
it may impose conditions upon it.'"

REGISTRATION LAW.

An unusual influx of persons of foreign birth during the last
five years lias raised the question in the minds of thoughtful men
of the propriety of extending the time of their residence within the
State before they shall be entitled to exercise the privilege of elect-
ors. I am doubtful as to the legality of any such legislation.

The Constitution of the State provides :

150

"Kvcry male- of foreign birth, of the age of twenty-one years and upward,
shall have resided in the United States one year, and shall have resided
in this State during the six months, and in the township sixty days, and in
the ward or precinct thirty days, immediately preceding such election, and
shall have declared his intention to become a citizen of the United States,
conformably to the laws of the United States on the subject of naturalisa-
tion, shall be entitled to vote in the township or precinct where he may
reside, if he shall have been duly registered according to law."

The declaration required by the Federal statute, and referred
to in the section of the Constitution quoted, is as follows :

"He (an alien) shall declare on oath before the clerk of any court
authorized by this act to naturalize aliens, or his authorized deputy, in the
district in which such alien resides, two years at least prior to his admission,
and after he has reached the age of eighteen years, that it is bona fide his
intention to become a citizen of the United States, and to renounce forever
all allegiance and fidelity to any foreign prince, potentate, state or sovereignty,
and particularly by name, to the prince, potentate, state or sovereignty of
which the alien may be at the time a citizen or subject. And such declaration
shall set forth the name, age, occupation, personal description, place of birth,
last foreign residence and allegiance, the date of arrival, the name of the
vessel, if any, in which he came to the United States, and the present place of
rsidence in the United States of said alien."

The Federal laws seem to require no length of residence in the
United States before an alien may declare his intention to become
a citizen, and the Constitution of the State seems to provide that
any male of foreign birth who has made the declaration required
by the Federal law and has lived in the State six months, in the
township sixty days, and in the ward or precinct thirty days im-
mediately preceding an election, shall be qualified to vote.

I do not believe the General Assembly can add to or take from
the qualifications of electors named in the Constitution.

A registration law prepared with care to meet the constitu-
tional objection raised to such registration legislation as has here-
tofore been enacted, would go far toward curbing the evil sought
to be inhibited. I commend such a measure to your consideration.

PRIMARY ELECTION LAW.

For four years I have watched with increasing interest the
operation of primary election laws in the different States enacting
them, and have become impressed witli their practicability and
their benefit. Such laws take the power of nomination of candi-
dates for public office out of the hands of the few and put it into
the hands of the many, where it belongs.

I recommend the enactment of a law that will provide for party

151

nominations of all candidates for office, state, county, municipal
and township, at primary elections and at public expense.

UNIFORM SYSTEM OF ACCOUNTING.

A uniform system of accounting in all public offices, state and
county, will add greatly to the efficiency of the administration of
fiscal affairs, and should be provided for by you before you ad-
journ.

Inspection of public offices is also important, but care should
be used in this behalf, that the machinery provided shall be as in-
expensive as possible to obtain the results required. Annual in-
spection and auditing of the accounts of all the officers of the State,
from the State government down to township offices, will require
an army of inspectors and accountants, and will involve an expendi-
ture wholly unjustifiable. If provision were made for the exami-
nation of county, city, town and township offices under the direc-
tion of a State accountant, upon the request of a fixed number of
the taxpayers of either county, city, town or township, made in
writing and filed with the Governor, the expense incurred would
be greatly lessened and the law quite as effective.

The executive accountant provided for by the Sixty-fifth Gen-
eral Assembly has proved of great value in the discovery and cor-
rection of inefficient bookkeeping in the institutions of the State
and of loss of funds due to carelessness or neglect. Unless a gen-
eral system of State accounting shall be provided for, the office
of executive accountant should be continued. Such an officer dur-
ing the last twenty years would have saved the State hundreds of
thousands of dollars, and the reputation of a number of men who
have held high office in the administration of its affairs.

PUBLIC UTILITIES LAW.

I do not urge the enactment of a public utilities law, but if such
a law is enacted it should be done by amending the present Rail-
road Commission law, extending the jurisdiction of the present
commission to include public utilities, its authority in that behalf
being carefully defined, and the machinery for its execution sup-
plied.

EXECUTIVE MANSION.

The State of Indiana has reached a position in population, in
wealth and in greatness to justify an executive mansion. It would
add to tl*e dignity of the executive office and immeasurably to the

152

comfort of the Executive and his family and to the social enjoy-
ment and privileges of the people.

It is not in keeping with the dignity of the office or of our peo-
ple that a man elected to the high office of Governor should be
compelled to become a seeker for a home in rented property. Many
other States, with less wealth and population than ours, provide
comfortable homes for their Governors during their official terms.
An incoming Governor, for reasons of delicacy rising out of his
personal interest, is deterred from making any recommendation
for such a departure from existing conditions.

I can now urge an appropriation for this purpose without fear
of being charged with selfish interest. I hope a sum of not less
than $75,000 will be provided by you either for the construction
or the purchase of such a house, with grounds sufficient and of a
character to insure its beauty and its dignity.

ALCOHOL AS CAUSE OF CEIME AND DEPENDENCY.

The enormous cost of the army of the criminal, defective and
dependent members of society is neither appreciated nor under-
stood by those who do not give the subject special study and in-
vestigation.

The regular appropriations asked by the authorities of the
several hospitals for the insane for the next two years aggregate
$2,109,290. The specific appropriations asked for are $776,530,
making a total asked for, for two years, of $2,885,820 on account
of the insane alone.

The School for Feeble-Minded Youth and the Village for Epi-
leptics ask, for the next two years, in regular and specific appro-
priations, $641,325.

The penal, reformatory and correctional institutions ask regu-
lar and specific appropriations for the next two years aggregat-
ing $1,493,886.

Making a total asked for the insane, the epileptic, the feeble-
minded and the criminal, for two years, of $5,021,031.00.

To this should be added the cost of township poor relief, which
for the next two years will not be less than $454,609.42, and the
cost of maintaining the county poor infirmaries of the State, which
for the same period will not be less than $892,862.56.

Making a grand total demand for support and housing of the
criminal, defective and dependent of $6,368,502.98.

The demands made by the authorities of these several institu-
tion represent what in the judgment of such authorities is neces-

153

sary for the maintenance and efficient administration of these in-
stitutions. All of the demands, of course, will not, can not, be met,
but they fairly represent the immediate burden laid upon the pro-
ductive, normal and law-abiding citizenship of the State because
of the criminal, the defective and dependent classes of society.

FUTURE BURDEN STILT, GREATER.

These figures, appalling as they are, do not, however, ade-
quately measure the demands of the future in this behalf, for near-
ly all these classes are increasing year by year.

Ten years ago the number of inmates in the State Prison, Re-
formatory, Women's Prison, Girls' School, Boys' School and in
the county jails, was 3,429; now it is 4,544, an increase of 1,115,
or 32.51 per cent.

Ten years ago there were 3,395 in the hospitals for the insane ;
now 5,573, an increase of 2,178 or 64.15 per cent., with more than
1,100 insane persons in the State outside of the hospitals for the
insane and unprovided for.

In 1898 there were 568 inmates in the School for Feeble-Minded
Youth ; now there are in this school and in the village for epileptics
1,188, an increase of 620, or more than 100 per cent.

Ten years ago the total enrollment in the penal and charitable
institutions of tfee State was 7,392; now 11,305, an increase of
3,913, or 52.93 per cent. Within ten years an additional hospital
for the insane and another penal institution will of necessity be
added to the present burden laid upon us.

If the same ratio of increase continues in this State, the num-
ber of the criminal, the defective and the dependent will be more
than doubled in twenty years, and in thirty years, the life of a sin-
gle generation, three times what it now is.

ALCOHOL THE LEADING CAUSE.

Viewed in the aggregate for a term of years it presents a prob-
lem of profound and deep concern. To find its causes, and point
out its prevention, would be a public benefaction of invaluable
character. Formerly little concern existed on the part of society
as to the care of this army of the helpless, and even less concern
to find the cause producing it. Recently, however, it has chal-
lenged the thought of many men and women. Much investigation
has been made and much accomplished toward finding the cause
and pointing out methods of * prevention. Personally, I have be-

154

come entirely convinced that a single evil lies at the very founda-
tion of the problem and is responsible for from 25 to 50 per cent,
of all the crime, insanity and dependency of the country together
with the burdens entailed by them upon society. My conclusion
is based upon personal observation and investigation made with
patient, earnest purpose and sincere desire to find the truth. It
is corroborated and supported by the best thought and scientific
investigation of the day.

In a recently published article, notable for care of preparation,
accuracy of statement and the wide investigation it discloses, Dr.
Henry Smith Williams sums up the conclusion as follows :

"Considering the United States as a whole, it is variously estimated that
from 25 to 50 per cent, of all the insane patients admitted to the asylums
year by year owe their misfortune directly or indirectly to the abuse of alcohol.
The statistics of other countries are closely similar.

"Alcohol must be held responsible for about four-fifths of the anti-social
propensities that make necessary the huge paraphernalia of police systems,
criminal courts, jails, prisons and reformatories that constitute so serious
a blot upon present-day civilization.

ALCOHOL AND THE MORAL 8ENSK.

"Were it not for the influence of alcohol the vast army of delinquents who
prey upon society directly when at large and indirectly through cost of
sustenance when confined in correctional institutions, might be living useful,
productive lives as normal members of a normal society.

"It is a characteristic feature of alcohol to produce impairment of this
highest mental faculty (moral sense), while at the same time stimulating
various lower propensities and passions. We might infer almost without
argument, therefore, that an agent which inflames the passions and lowers
the moral sense must make for the commission of crime. This inference as
regards alcohol is abundantly justified by every -day experience.

"The general relation between alcohol and pauperism is everywhere recog-
nized, and in many localities studies have been made with the aim of determin-
ing the exact share of alcohol in producing the gigantic burden of incompe-
tency with which every civilized society is handicapped. Investigations made
give secure warrant for the belief that at least one-third of all the recog-
nized pauperism in the most highly civilized communities of Christendom
result from bodily and mental inefficiency due to alcoholic indulgence.

"It is fairly demonstrable that as a minumum estimate about two-fifths
of the paupers in almshouses, one-fourth of the seekers of charity outside
almshouses, and almost one-half of the dependent children in America owe
their deplorable condition to alcohol.

"The same cause is responsible for the mental overthrow of fully <»ne-
i'ourth of all the unfortunates who are sent to tlit- asylums for the insane;
for the misfortunes of two-fifths of the neglected or abandoned children,
:ni(l for the moral delinquency of at least half of I he convicts in our prisons,
and not less than four-fifths of the inmates of our jails and workhouses."

155

CONCLUSIONS OF COMMITTEE.

The conclusion of Dr. Williams is corroborated and partly
based upon the findings of the American Committee of Fifty,
which recently investigated this subject.

Prof. Henry W. Foreman, secretary of the committee, writes:

"Of the poverty which comes under the view of the charity organization
societies, 18 per cent, of the persons studied brought on their poverty through
the personal use of liquors, and 9 per cent, attributed it to the intemperance
of parents or others.

"Of the poverty found in almshouses, 37 per cent, can be traced to liquor,
and of this 32 per cent, is due to the personal habits of the inmates and 15
per cent, to the intemperance of others.

"In cases of destitution of children not less than 45 per cent, was found
to be due to the liquor habits either of parents, guardians or others.

"Of the total number of cases investigated it appeared that intemperance
figured as one of the causes of crime in nearly 50 per cent. It was, however,
the first cause in only 31 per cent."

Mr. Koren, statistical expert of the committee, confirms the
accuracy of the conclusions of Professor Foreman.

The Massachusetts Bureau of Labor Statistics, after long and
careful consideration, declares in its published reports that 39 per
cent, of the inmates of almshouses are there because of personal use
of liquor, and 10 per cent, through intemperate habits of parents,
guardians or others.

The conclusion of Dr. Williams as to the part alcohol bears in
the causation of iiisanity is sustained by Dr. Clouston, superin-
tendent Royal Edinburgh Asylum ; by Dr. Fake, of the Royal
Dundee Asylum ; by Dr. Thomas B. Hyslop, a distinguished
British alienist, and by the ablest alienists of France, Germany and
Austria.

His conclusion as to the part it bears in the causation of crime
is supported by the Committee of Fifty, the Massachusetts Bu-
reau of Labor Statistics, the Lord Chief Justice of England, Dr.
William Sullivan, Prison Medical Officer of England, the Rev.
Canon J. W. Horsley, late chaplain of his majesty's prison at
Clerkenwell, and the best students of criminology in France, Ger-
many and Austria.

TESTIMONY IN INDIANA.

Within the last few days I submitted this article of Dr. Wil-
liams to the superintendents of the several hospitals for the insane,
the School for Feeble-Minded Youth, to the warden of the State
Prison and the superintendents of the Reformatory and correc-

156

tional institutions of the State, and to Mr. Amos W. Butler, secre-
tary of the Hoard of State Charities, with the request that they
each advise me as to how far their own observation and knowledge
justified Dr. Williams' conclusions. All have submitted answers in
writing.

IN THE INSANE HOSPITALS.

Dr. S. E. Smith, superintendent of the Eastern Hospital for
the Insane, writes that the records of that institution show about 2
per cent, of all patients admitted are cases of alcoholic insanity
"clearly and directly caused by the use of alcohol," and that 10
per cent, of all other cases admitted are addicted to the use of
alcohol, and that the number whose parents have a history of alco-
holism is not definitely known. This makes a record in his institu-
tion of 12 per cent. But in this estimate no account is taken of
the element of transmissibility.

Speaking of these figures the doctor writes :

"This is a conservative statement, as certainly there are others in this
group addicted to drink in some degree, but the history of it is either unknown
or concealed."

He adds:

"I am fully convinced that alcoholic parents transmit to their offspring
tendencies to both physical and mental degeneration. No study of the effects
of the use of alcohol upon society can be complete or fair which does not
include the element of transmissibility. It is in my judgment quite as im-
portant as its direct influence. I believe alcohol is a potent factor in the
etiology of insanity and nervous disease and that it can not be habitually
used in any degree without damage to some part of the human organism. No
rr.ore dangerous doctrine was ever promulgated than that alcohol is a food.
The truth is it is a destructive and not a constructive element."

Dr. George F. Edenharter, superintendent of the Central Hos-
pital for the Insane, states that of the total number of cases ad-
mitted to that institution in ten years 5 per cent, are returned
as due to alcohol. This takes no account of the number of cases
due indirectly to its use.

Dr. C. E. Laughlin, Superintendent of the Southern Hospital
for the Insane, writes :

"My observation and experience lead me to the conclusion that, if we
consider the immediate and remote influence exercised by the various forms
of alcohol in the causation of insanity, the estimated percentage stated by
Dr. "Williams in his summary is ultra-conservative; and the further belief that
any one who takes an appreciable quantity of alcohol into his system assumes

157

thereby a risk of inflicting an increased tendency to disease and crime upon
himself and his progeny."

Dr. Fred W. Terflinger, Superintendent of the Northern Hos-
pital for the Insane, writes:

"Some years ago Dr. Rogers estimated that two per cent, of all male
insane are so because of liquor; that is, their insanity was due directly to its
use. Personally, I am inclined to think this estimate is low, and I would
place it at 5 to 7 per cent. Intemperance as a cause of insanity assumes a
much more important role indirectly than directly. While from 5 to 7 per
cent, reach the hospital directly because of chronic alcoholism, a much larger
number, consisting of wives of drunkards, worried into a state of suicidal
depression, because of the husband's abuse and failure to provide, and a train
of neuropathic, neurasthenic and choreic progeny, often conceived during a
drunken spree, constitute a percentage which it is difficult to correctly esti-
mate. On the whole, I would be inclined to say that my experience corroborates
the statement of this author (Dr. Williams), and I would think that his
figures are conservative."

IN SCHOOL FOR FEEBLE-MINDED.

Mr. Albert E. Carroll, superintendent of the School for Feeble-
Minded Youth, writes :

"I have taken the cases of 100 female epileptics from our files, in regular
alphabetical order, and the causation shown by the individual paupers as
follows: Alcoholism: Father, 22; mother, 2; paternal grandfather, 2; mater-
nal grandmother, 4; total, 30.

"I also selected in the same manner 100 male cases with idiocy and feeble-
mindedness present, without epileptic history, with the following result:
Alcoholism: Father, 24; mother, 2; paternal grandfather, 4; maternal grand-
mother, 4; total, 34.

"Alcoholism is the parent of so many vices and conditions and her genera-
tions have multiplied and spread out until in many instances it is almost
impossible to trace the lineage to the original source."

As to the conclusion of Dr. Williams, concerning alcohol's
share in the causation of crime, poverty and dependency, based
upon the report of the Committee of Fifty, Mr. Amos W. Butler,
secretary of the Board of State Charities, writes:

"The reports of the Committee of Fifty on the liquor problem are very
interesting and exceedingly valuable. I can say that as far as my observa-
tion goes, they are the most accurate information we have on that subject.
The figures given therein conform to my observations. In fact, in part they
were drawn from our Indiana institutions."

Mr. James D. Reid, warden of the State Prison, writes, as to
that portion of the article of Dr. Williams relating to alcohol's
share in the causation of crime :

158

"The article docs not overstate the fact* in my judgment, based on the
experience I h;ivc IKH! \\illi the criminal classes received at this institution.
1 believe if the influence of alcoholics could be eliminated and no substitute
found, that 7.5 per cent, of crin.e would not exist."

PRISON STATISTICS.

In the last four years 1,101 men have been admitted to the State
Prison. Of these, 51 per cent, drank to excess ; 34 per cent, were
moderate drinkers ; total, 85 per cent. Less than 15 per cent, were
abstainers.

Mr. Reid adds :

"This statement shows the moderate and excessive drinkers, with a
total for these two classes. I feel that the majority of those classed as
moderate should come under the excessive users. It is next to impossible to
obtain reliable information regarding the habits of the parents, as few will
admit that the father, and especially the mother, was a drunkard."

Mr. W. H. Whittaker, superintendent of the Indiana Reforma-
tory, writes:

"I hereby indorse everything that is said by the writer (Dr. Williams).
I think his figures are as near correct as it is possible to give them. My
experience and investigation in the work of handling criminals has con-
vinced me that the use of intoxicating liquors, either directly or indirectly,
is the cause of a very large per cent, of the men who are today confined
within the walls of reformatory or prison. Fifty per cent, of the fellows in the
Reformatory are abnormal, and possibly 60 to 80 per cent, of these abnormal
fellows would get into institutions of this character whether liquor was sold
to them or not. The other 20 to 40 per cent, even of the abnormals in my
judgment, are here either directly or indirectly through the cause of liquor.
The other 50 per cent, of the inmates here are normal subjects, and I verily
believe that 90 per cent, of the normal fellows in the institution are here
absolutely through the cause of intoxicating liquors. This, summed up, gives
about the same per cent, as that given by the writer of the McClure Magazine
article.

"Out of the 426 fellows received last year, 105 claimed to drink tem-
perately, 221 moderately and 100 claimed to be excessive drinkers. So that
every man received at the institution last year was more or less addicted to the
use of liquors from his own statement."

WOMEN'S PRISON.

Miss Emily Rhoades, superintendent of the Women's Prison,
writes :

"I have had a personal interview with each woman in the correctional
department, and from their own testimony I find of the 37 confined here at
the present time, all but 4 were addicted to the use of intoxicants and were
sentenced on that account."

159

GIRLS AND BOYS SCHOOLS.

Miss Charlotte Dye, superintendent of the Girls' School, writes :

"Our statistics give but 20.77 per cent, of drunken fathers and 5.98 per
cent, of drunken mothers, a much lower per cent, than many other institutions
in our own and other countries. I can not vouch for the accuracy of our
statistics, as they are made up largely from statements of the children enter-
ing the institution. They often do not know the facts, and are ashamed to
state all they do know. I am fully convinced that alcoholism is the chief
cause of delinquency of children in Indiana. Many of our worst girls are the
offspring of both drunken parents."

E. E. York, superintendent of the Boys' School, writes :

"I have read the article very carefully, and wish to say that my knowl-
edge and experience are in accord with what the doctor says about alcoholic
stimulants as crime-producing agencies. The percentage of juvenile crime
that can be traced to either the direct or indirect use of intoxicants has been
gradually on the increase year by year, according to statistics as compiled
from our records, since April 1, 1901. Our statistics for the fiscal year clos-
ing September 30, 1908, show the direct effect of intoxicants upon admissions
to the school, as follows: Total admissions, 242. Sixty-two boys were ad-
dicted to the use of intoxicants. Of the 62, 32 owe their downfall to the use
of intoxicants. These boys were all under 16 years of age. One hundred and
twenty were admitted whose fathers were drunkards, or were addicted to the
use of liquors, which can be charged against them as a direct cause of their
son's delinquency. Thirty mothers were found to be addicted to the use of
liquors, making a total of 150 boys out of 242 admissions last year, whose
downfall can be attributed to intoxicants. Six boys admitted last year, the
offspring of drunken parents, are now in our feeble-minded class. Were
the true facts known concerning the causes which have contributed to the
delinquency of so many boys, I am sure that at least 85 per cent, of the 242
admissions could trace their present condition to the effects of intoxicants.

"It appears that alcohol can be held responsible for nearly three-fifths of
the 242 admissions to the Indiana Boys' School during the last year, based
upon reliable figures and facts.

JUVENILE COURT OBSERVATIONS.

"We have gathered our statistics from records furnished by Juvenile Court
judges, by probation officers and from the boys themselves. We have found
in the majority of cases that the boys refrain from divulging information
as to the waywardntias of their parents."

Speaking of the accuracy of the statistics given in the article
referred to, Dr. Williams says :

"Let it be particularly borne in mind that. UK- conclusions just presented
as to the casual rel.Mlion of alcohol to 1 he production of each of these abnormal
elements of society are as far removed as possible from mere sentimental
estimates or pessimistic guesses. They are inductions based on careful sur
veys of evidence. Dealing with matters of great complexity, they are subject
to a good deal of latitude, for reasons that I have given; but they are suffi-

160

ciently precise to serve the purpose of reasonably secure scientific hypotheses.
Considered as gages of the misery caused by alcohol, our percentages are
utterly inadequate, to be sure. There is a vast host of victims of alcohol
that can not thus be classified. * * * They have no share in the estimates
that have just been made."

ALCOHOL'S SHARE IN THE BURDEN.

Here, then, we have, in terms definite and certain, enough for
"secure scientific hypotheses," the cause of 25 per cent, of the in-
sanity, 33 per cent, of the poverty and pauperism and 50 per cent,
of the crime with which society is inflicted.

Reduced to actual figures, alcohol's share in the burden to be
laid upon the people of Indiana for the next two years on account
of the insane is $881,786; on account of poverty and pauperism,
represented by township aid and county infirmary housing and
maintenance, $449,157 ; on account of crime, $726,942 ; an aggre-
gate of $2,047,885. This does not include ministrations to the poor
by private persons or organized charitable societies. Nor does it
take into account the moral element involved.

To this extent the cause of crime, insanity and dependency is
ascertained. The method of prevention is obvious — remove or mini-
mize the cause. This you have the power to do. You know how
to do it. Posterity will know that you knew how, and if you leave
to it this immeasurable burden unlessened, it will forever censure
you.

COUNTY LOCAL OPTION LAW.

It was this sense of responsibility to the generations yet to be,
more than all else, that impelled me to seek the enactment of a law
putting into the hands of the people of the respective counties of
Indiana the power to inhibit the traffic in intoxicating liquors. This
law was enacted but a few months since. It has been in effect less
than sixty days. Three counties have already availed themselves of
the power it conferred upon their people, and by majorities deci-
sive and overwhelming have banished the traffic from their confines.
Elections have been ordered in quite one-fourth of the counties of
the State. An enfranchised people at last have found opportunitv
to speak effectively upon this question and it will be well for you
to stop and think, long and seriously, before you disenfranchise
them and turn loose again this hateful traffic among them. All ex-
perience admonishes of the danger that attends the disenfranchise-
nieiit of a free people. Neither the individual nor the party who
docs it may expect continued power at their hands.

161

I do not claim for this law that it will entirely eliminate the
evils to which I have adverted, but I do claim that it tends effect-
ively and aggressively in that direction. The good that attends it
will be accumulative. It will multiply with the years. A genera-
tion hence, if the law be sustained and the traffic limited to a half
dozen counties in the State, from whence it can be finally driven
entirely from its borders, its benefits will be told in the story of
millions of dollars saved in the administration of the penal, re-
formatory, correctional and benevolent institutions of the State, to
say nothing of the moral value of the men and women it will re-
claim.

I am aware that there are some who have already celebrated this
law's repeal, but I beg to remind all those who contemplate its re-
peal that it is the livest wire in the political machinery of this Com-
monwealth, and is charged with enough electricity to electrocute
the party that repeals it.

RESPECT FOR THE LAW.

For four years there has been unbroken peace in Indiana. The
National Guard, except in camps of instruction, upon civic occa-
sions, or in case of fire, explosion or accident, has been under arms
but twice, and was then used as prevention rather than as cure. In
four years no shot has been fired by any member of the Guard
in anger or to preserve the peace or maintain order.

Crime has decreased. This is especially true of homicide and of
all other crimes involving physical violence. Respect for the law
has deepened and sentiment for its enforcement increased.

Legislation, however, ought to be enacted giving the Governor
of the State greater authority and providing him better machinery
for the enforcement of the law than he now has. Under the con-
stitution he is charged with the faithful enforcement of the law,
but, under the law he can not act effectively except through local
officials. He has no authority to direct the action of any county
sheriff or prosecuting attorney in any case. It is as unjust as it is
idle to charge the Executive with the enforcement of the law, and
then leave him without effective means to discharge the duty im-
posed upon him.

CONCLUSION.

I close this message — probably my ln.st official utterance — with
malice toward no »mn. There are no foes that I desire to punish.
I go out of office with an intensified love of the Commonwealth find
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162

of its people. I have sought to serve them in all things unselfishly
and courageously. Their welfare has been my chief concern. The
recommendations I have made from time to time to successive Gen-
eral Assemblies, I have believed to be in their interests. The battles
I have waged, I have fought for them. I have made war on men
only when they were inseparably involved with public questions.
The mistakes I have made, and there may be many, I have made
with sincere purpose and in the white heat of zeal for what I con-
ceived to be in the interests of the people.

The chapter is about finished. I will close it soon altogether
and submit it to the impartial judgment of my countrymen, con-
scious that in the end their vision will be clear and their judgment
true. In most part I would not rewrite or change it if I could. I
am content to let it stand.

J. FRANK HANLY.

163

ADDENDA.

Pardons, Paroles, Remissions of Fines and Commutations granted during the

years 1907-1908.

February 23, 1907-

William A. Spores, commutation of death sentence to life im-
prisonment in the Indiana State Prison.

March 12, 1907-

Thomas O'Neil (Marion County workhouse), parole; seriously
ill.

March 18, 1907—

Cyrus Todd (Indiana Reformatory), parole for 90 days; in
advanced stage of tuberculosis.

March 28, 1907-

Constantinos Stathocopoulas, commutation of death sentence to
life imprisonment in the Indiana State Prison.

John Lapadat, commutation of death sentence to life imprison-
ment in the Indiana State Prison.

May 4, 1907-

Harry Limberty (Marion County workhouse), parole; insane.

June 3, 1907—

George Denny (Marion County workhouse), parole; in ad-
vanced stage of tuberculosis.

June 28, 1907-

Michael Beegler (Indiana Reformatory), parole; in advanced
stage of tuberculosis.

July 1, 1907—

Walter Mosher (Indiana Reformatory), parole.

August 19, 1907—

Harry W. Smith (Indiana Reformatory), parole for 15 days,
account of serious illness of his father.

August 24, 1907—

Cyrus Todd (Indiana Ref onnatory ) , pardon; fatally ill with
tuberculosis.

August. 27, 1907—

Henry Tuckenbrook (Indiana Reformatory), parole; recom-
mended by the State Board of Pardons.
Delbert Overman (Indiana Reformatory), parole.

August »8, 1907

John Stafford (Indiana State Prison), parole; seriously ill with
tuberculosis (revoked September 23, 1907).

October 3, 1907—

William Duchane (Marion County workhouse), parole.

October 9, 1907-

Hazel McMillan (Indiana Girls' School), parole.
Ulysses Grant Perkins (Indiana Reformatory), parole; fatally
ill.

October 12, 1907—

William Lane (Clark County jail), remission of fine.

October 19, 1907—

Frank Dupps (Dubois County jail), remission of fine.

October 31, 1907—

William Burcham (Indiana Reformatory), parole for 15 days,
account of serious illness of his mother.

November 27, 1907-

Thomas Skinner (State Prison), parole.

Jesse Voris (Marion County workhouse), parole.

December 23, 1907-

Albert Miles (Marion County workhouse), remission of fine.

December 24, 1907-

William WolsifFer, pardon. (Paroled from Indiana Reforma-
tory November 28, 1906.)

Orlie Costin, pardon. (Paroled from Indiana, Reformatory
April 17, 1906.)

Samuel Harmon (State Prison), parole; recommended by
State Board of Pardons.

Joseph Osborne ( State Prison ) , parole ; recommended by State
Board of Pardons.

January 2, 1908—

Harry W. Smith (Indiana Ref ormatory ) , parole for 60 days,
account of serious illness of his father.

January 27, 1908—

Thomas Kinroy (State Prison), parole.
January 28, 1908—

Willard Bryant, remission df fine.

1(55

January 29, 1908-

George G. Hill, remission of fine.

January 31, 1908—

Joseph Flora (Marion County workhouse), parole.

February 14, 1908—

Louis E. Halpin (Indiana Reformatory), parole.

March 25, 1908—

Otis Wells (Indiana Reformatory), parole for 16 days, account
of serious illness of his father.

April 13, 1908—

Daniel A. Hughes (Indiana Reformatory), parole.
Oliver Lindley (Indiana Reformatory), parole; seriously ill
with tuberculosis.

April 15, 1908—

John Weedman (Indiana Reformatory), parole for 30 days,
account of illness of his wife.

April 23, 1908—

Nellie Hogue (Indiana Girls' School), pardon.
John McGuire (Fountain County jail), parole.

May 2, 1908—

Leslie L. Miller (Marion County workhouse), parole.

May 11, 1908—

Ruchie Wilson (Indiana Reformatory), parole; blind, deaf,

fatally ill.

Peter White (Indiana Reformatory), parole; fatally ill with
tuberculosis.

June 2, 1908—

Dercia Wellons, Ethel Simmons, Doyne Kempf, Margaret Ellis,
Nellie Segreaves, Bessie Gilbert, Hazel Cherry, Mae Bowers,
Maud Johnson, Lizzie Wright, Ada Strange, Lilly Fay
Suit, Dora Steele, Susie Jameson, Viola Gray, Margaret
Peer, Mary Bennett, Ruth Feighner, Frances Acton, Hettie
White, Goldie Holden, Frances Hall, Bertha Holman, Edith
Jones, Mamie Mallory, Alma Turk, Edith Edwards, Eliza-
beth Howell, Jesse Henderson, Helen Saunders, Charlotte
Willison, Lenna Woggerman, Mary Ragoshke, Flora Arn-
old, Marie Washburn, Alice Chandler and Freda Schmuck

1(5(5

( Indiana Girls1 School). ( Paroled upon the recommendation
of Hie Superintendent and Hoard of Trustees of the Insti-
tution, in order that they might he placed in suitahle homes.)

June 2S, 1908-

John B. Newton, Charles W. Sparks, and John B. Cummins,
alias John S. Burris (State Prison), pardoned in order that
they might be delivered to the agent of the State of Ohio,
where they were under indictment for the crime of forgery.

John Biddle and Benjamin Burdette (State Prison), pardoned
in order that they might be delivered to the agent of the
State of Illinois, they being escaped convicts from the Re-
formatory and the Prison respectively,' of said State.

Frank Johnson, alias John Thomas (State Prison), pardoned
in order that he might be delivered to the agent of the State
of Michigan, he being an escaped convict from the Jackson
(Michigan) Prison.

July 7, 1908—

Minnie Hickman, Gather Wright, Bessie Annadel, Mabel Love-
less, Beulah Erney, Mae Van Buskirk, Hallie Prine, Hazel
Bell and Susie Conyers (Indiana Girls' School). (Paroled
upon the recommendation of the Superintendent and Board
of Trustees of the Institution, in order that they might be
placed in suitable homes.)

July 8, 1908—

John Pinter (St. Joseph County jail), remission of fine.

July 17, 1908—

Edison Barnhart (Indiana Reformatory), pardon. (Paroled
June 10, 1905.)

August 18, 1908—

Hazel Hummer, Lena Wright, Mayme Wilson and Goldie Per-
cival (Indiana Girls' School). (Paroled upon the recom-
mendation of the Superintendent and Board of Trustees
of the Institution, in order that they might be placed in
suitable homes.)

September 11, 1908—

Sylvester Anderson (Sullivan County jail), remission of fine.
Markwood Anderson (Sullivan County jail), remission of fine.

September 16, 1908—

Geoerge Homer (Delaware County jail), parole.

167

September 21, 1908—

Blaine Reynolds (Henry County jail), remission of fine.

October 27, 1908—

John Mclntosh (State Prison), parole; in precarious physical
condition.

November 11, 1908—

William Tucker (Indiana Reformatory), parole; fatally ill
with tuberculosis.

November 28, 1908—

Eva Buckner, Irene Hedges, Pearl Croft, Minnie Barnhart,
Martha Hupke, Zona Jones, Linnie Wilson (Indiana Girls'
School). (Paroled upon the recommendation of the Super-
intendent and Board of Trustees of the Institution, in order
that they might be placed in suitable homes.)

December 10, 1908—

Joseph Eacock, pardon. (Paroled by State Prison Parole
Board.)

December 19, 1908—

H. A. Faulkner (Indiana Reformatory), parole; fatally ill
with tuberculosis.

December 23, 1908-

John Ransberger (Indiana Reformatory), parole.

'December 24, 1908—

Thomas Thornburg (Indiana State Prison), parole; recom-
mended by State Board of Pardons.

Robert Lane (State Prison), parole; recommended by State
Board of Pardons.

December 31, 1908—

William Flowers (State Prison), parole.

168

Pardons, Paroles, Remissions of Fines and Commutations granted subsequent to

December 31, 1908.

January 8, 1909—

Ernest Freeman (State Prison), parole; recommended by the
State Board of Pardons.

January 9, 1909—

Bert Wentworth (Indiana Reformatory), pardon; fatally ill.
Thomas Skinner (State Prison), unconditional pardon; having

faithfully observed parole.
Ira Light (State Prison), parole; recommended by the State

Board of Pardons.
Charles Gray (State Prison), parole; having been a model

prisoner. Recommended by the Judge and Prosecuting

Attorney.
Louis Ruelle (Reformatory), parole; recommended by the

State Board of Pardons.

Special Messages to the Sixty-Fourth
General Assembly

171

APPOINTMENT OF SECRETARY.

JANUARY 9, 1905.

Gentlemen of the Senate and House of Representatives:

You are hereby most respectfully notified that I have appointed
the Hon. Union B. Hunt as Secretary to the Governor, and that
as such secretary he is authorized to transmit and make executive
communication to the Senate and the House.

J. FRANK HANLY,

Governor.

RESIGNATION OF SENATOR FAIRBANKS.

JANUARY 9, 1905.

Gentlemen of the Senate and House of Representatives :

I hereby apprise you of the fact that I have this day received
the resignation of the Honorable Charles Warren Fairbanks as a
Senator of the United -States from the State of Indiana. Such
resignation to take effect at the close of the Fifty-eighth Congress,
and that I have accepted the same according to the terms thereof.
A vacancy will therefore occur in the representation of the State
in the Senate of the United States on the 4th day of March next.

Respectfully,

J. FRANK HANLY,

Governor.

APPOINTMENT OF W. C. VAN ARSDEL

A B MEMBER OF BOARD OF TRUSTEES FOR INDIANA BOYS' SCHOOL.

MARCH 3, 1905.

Mr. President and Gentlemen of the Senate:

Inasmuch as the statute providing for the appointment of the
Board of Trustees of the Indiana Boys' School requires that said
appointment shall be made by the Governor, with the advice and
consent of the Senate, I have the honor to inform the Senate that

172

I have this day appointed William C. Van Arsdel, of the city of
Indianapolis, as a member of said board, to serve for a term of
four years from the first day of March, 1905, which appointment
is respectfully submitted to your honorable body for approval.

J. FRANK HA^LY,

Governor.

APPOINTMENT OF ELLA B. McCOY

As A MEMBER OF BOARD OF MANAGERS FOR INDIANA INDUSTRIAL SCHOOL FOR
GIRLS AND WOMEN'S PRISON.

MARCH 6, 1905.

Mr. President and Gentlemen of the Senate:

Inasmuch as the statute providing for the appointment of the
Board of Managers of the Indiana Industrial School for Girls and
.Women's Prison requires that said appointment shall be made by
the Governor with the advice and consent of the Senate, I have the
honor to inform the Senate that I have this day appointed Ella
B. McCoy, of the city of Indianapolis, as a member of said board,
to serve for a term of four years from the first of March, 1905,
which appointment is respectfully submitted to your honorable
body for approval.

J. FRANK HANLY,

Governor.

FAREWELL MESSAGE.

MARCH 6, 1905.

To the President of the Senate, the Speaker of the House of Rep-
resentatives and the Members and Officers of the Sixty-fourth
General Assembly:

Gentlemen — The Sixty-fourth General Assembly of the State
of Indiana is about to end by constitutional limitation. In a few
hours it will have gone into history, there to be judged for its deeds
whether of omission or commission.

There is in the record it has made so much of the good and so

173

little of the bad, that I cannot forbear a word of commendation be-
fore you depart to take up again the duties of private citizenship.

Incessant labor, high ability and lofty purpose have character-
ized your services to the State throughout the session. You have
earned the gratitude of the people whose servants you have in-
deed been. The volume and the character of the legislation jou
have enacted, bespeaks for you the continued confidence of your
fellow-citizens, without regard to their party affiliations.

The measures you have passed, are in the interest of the peace
and the repose of society and of its improvement and elevation, as
well as for the material interests of the Commonwealth. Your work
may contain imperfections — it doubtless does — the work of no man
or set of men can be expected to be perfect. Some of these imper-
fections may not yet be apparent and may not become so until
tried in the crucible of actual experience. In the main, however,
your work is such as to justify the partiality of the people whose
commissions you have borne.

All has not been obtained that I desired, but it has been more
nearly obtained than is usual in public affairs. We have sometimes
differed, but our differences have been at all times the fearless dif-
ferences of courageous, sincere and honest men, who were moved
by a common impulse — a desire for the welfare of the State and
the happiness of its people.

Personally, I beg to thank you, one and all. You have been,
without exception, considerate and tolerant. Of your kindness I
am deeply sensible, and in these, the closing hours of what I believe
will be looked upon as an historic session, I beg to make grateful
and public acknowledgment thereof.

On the whole, you have builded better than I had hoped, and
in fact better than any General Assembly convened in the State in
many years has builded.

Commending you to the considerate judgment of an apprecia-
tive people, and wishing you safe return to your homes and your
families, I bid you good-bye with sincerest concern and desire for
your future happiness and for the prosperity and advancement of
the people of Indiana.

J. FRANK HANLY,

Governor.

Special Messages to the Sixty-Fifth
General Assembly

(175)

177
APPOINTMENT OF SECRETARY,

JANUARY 18, 1907.

Gentlemen of the Senate and House of Representatives:

You are hereby notified that Colonel Fred L. Gemmer has been
appointed Secretary to the Governor, and as such is authorized to
convey executive messages to the Senate and the House.

J. FRANK HANLY,

Governor.

FLOOD IN SOUTHERN INDIANA.

JANUARY 23, 1907.

Gentlemen of the Senate and House of Representatives:

Southern and Southwestern Indiana has been visited within the
week by a disastrous flood, occasioned by the overflow of the Ohio
and Wabash rivers. Property loss is heavy. A considerable num-
ber of our people at different points have been driven from their
homes. Some of them are destitute. Their needs are imperative.
The inhabitants of the several communities affected who were
spared the ravages of the flood have been quick and generous in
their response and are doing what they can to alleviate the suffer-
ing and to provide for the immediate necessities of their unfor-
tunate neighbors. In most instances their efforts have been suffi-
cient, but in a few localities local resources are exhausted, and the
people are still in want. In these cases the duty of the State is
clear. Prompt and effective measures should be taken. The de-
mand is not large, but the necessities of the afflicted ones are as
great as though their numbers were thousands.

Believing the General Assembly will desire to take action on
behalf of the State, I call your attention to the facts and suggest
the propriety of a joint resolution authorizing the Executive to
use such portion of the emergency contingent fund now in his
hands for use during the present fiscal year as the present need
shall require and authorizing him to send executive agents to the
localities affected that actual conditions may be learned and that
the funds may not be wasted or improperly used. A direct ap-

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178

propriation might be made, but I believe the emergency contingent
fund will be ample to meet all present requirements.
Respectfully submitted,

J. FRANK HANLY,

Governor.

BINDER TWINE PLANT IN STATE PRISON.

JANUARY 28, 1907.
Mr. Speaker and Gentlemen of the House of Representatives :

In compliance with the request contained in Engrossed House
Resolution No. 8, I submit herewith information relative to the in-
stallation, equipment and operation of the binder twine plant in the
State Prison.

Seven items are included in said resolution, as follows :

"One. A complete detailed statement of money paid out for
machinery and installing the binder twine plant, now being op-
erated in the northern prison.

"Second. The statement to show business done, for twelve
months previous ending January 1, 1907.

"Third. Number of men employed in operating said plant.

"Fourth. Number of pounds of raw material bought during
the twelve months.

"Fifth. Number of pounds of twine sold and price realized
from said sale.

"Sixth. Amount of money paid out for oil, grease and fuel.

"Seventh. Expenses of all nature, paid out in connection
with the manufacture of said twine.

"Eighth. And any other information pertaining to the man-
ufacturing of binder twine."

The plant had not been in operation a year on the first day of
January, 1907.

Its operation was not begun until in March, 1906. It had
been in operation on the first day of January, 1907, but 230
days.

The figures hereinafter given as to expense, cost of manufac-
turing and quantity of output are therefore based on 230 days
instead of twelve months.

The expense of remodeling buildings and installing the plant
was $2,135.75; cost of machinery and tools, $30,038.65; cost
of plant complete ready for operation, $32,174.40.

179

During the 230 days the plant lias been in operation the av-
erage number of persons employed therein has been as follows :
Two officers, one superintendent, three foremen and sixty-six pris-
oners.

On the first day of January, 1907, $6,092.90 had been ex-
pended for oil, grease, fuel, sacks, asphaltum and other materials
and for repairs and for free labor.

The total expense for material and operation was $185,820.24.

This, with the cost of establishing the plant, $32,174.40, ag-
gregates $167,994.64, and is the total expenditure on account of
the plant for the period named.

During this time 1,659,065 pounds of sisal were purchased, at
a cost of $120,932.16, and 1,697,400 pounds of twine were manu-
factured.

During the summer of 1906, 535,945 pounds of twine were
sold, from which $46,165.35 were realized.

On the first day of January, 1907, there was on hand sisal
and other raw materials of the value of $6,458.72.

The late date at which the actual manufacture of twine was
begun precluded the manufacture of any considerable quantity of
twine in time for the market for the harvest of 1906.

This accounts for the fact that but 535,946 pounds were sold
in that year.

Of the stock now on hand, 400,000 pounds have been con-
tracted for for sale to the Indiana Grange, an organization com-
posed of farmers, at 8% cents per pound f. o. b. cars at the
Prison.

A considerable quantity, in addition, has been sold, and there
is little doubt that the entire product now on hand and all that
can be manufactured between now and harvest time can be sold
at the price named.

On the first day of January, 1907, the account stood as fol-
lows :

Manufactured twine on hand, 1,161,456 pounds, which, at S1/-?
cents per pound, the minimum value for which twine has been sold
by the Prison authorities, is worth $98,723.76, f. o. b. cars
at Prison ; receipts from sales made last year, $46,165.35 ;
sisal and other materials on hand, $6,458.72; total, $151,347.83;
total cost of operating plant, including all raw materials pur-
chased, $135,820.24; profit to the State, $15,527.79, which, I sub-
mit, is a remarkable lowing for a new plant only 230 days in
operation,

180

It should be noted that the profit for this time is almost equal
to fifty per cent, of the total cost of installing the plant.

In this connection it is important also to remember that it has
been necessary to find a market and establish the character and
value of the product.

The quality manufactured is of the finest character and has
given general satisfaction wherever it has been used.

It is equal in quality to that manufactured by the plants op-
erated by private corporations.

The prices at which the product has been sold has been as fol-
lows : In quantities less than 500 pounds, 9 cents ; from 500
pounds to 10,000 pounds, 8% cents; from 10,000 pounds up,
8l/> cents f. o. b. cars at Prison.

The International Harvester Company controls substantially
the twine output of the United States, except that manufactured
by state institutions.

Prior to 1906 twine sold to the farmers of Indiana at from 12
to 14 cents per pound. Last year when the intention to manu-
facture twine at the Prison on State account was learned, the price
was reduced to 10 and 11 cents.

It is estimated upon reliable authority that more than ten mil-
lion pounds of twine are used annually by the farmers of Indiana.

The effect of a reduction of I1/:} cents per pound in cost is a
saving of $150,000.00, and this saving was due very largely to
the establishment of the Prison plant.

A similar plant has been in operation in the Minnesota State
prison for a number of years. It was operated last year, accord-
ing to the report of the warden of that institution, at a profit of
$200,000.

A prison plant is also in operation in Missouri, Kansas and
North Dakota, all of which are being successfully operated at
profit to the State.

In manufacturing binder twine the State competes with no In-
diana industry.

Not a pound of binder twine is manufactured in the State
other than that manufactured in the Prison.

For this reason it interferes less with free labor than almost
any other industry to which prison authorities could turn.

It will result in a substantial saving to the farmers of the
State. For this reason labor and agriculture both favor the es-
tablishment and operation of the plant.

In 1910 the present Prison labor contracts expire. If they are

181

not to be renewed, it is of the greatest importance that some prep-
aration be made in advance for the establishment of industries in
the Prison on State account.

There will be substantially a thousand prisoners in the insti-
tution from now on.

Economical and humanitarian reasons preclude that they
should remain idle.

As has been seen, we have been able to employ, during the last
230 days, an average of 66 prisoners in this plant, and the profit
has been such as to bring to the State more than 90 cents a day for
each day they were employed.

The average price per day for prison contract labor is about
50 cents.

In November and December 388,025 pounds of twine were
manufactured at a total cost, exclusive of prison labor, of $28,-
786.96. Valued at 8Vi> cents, the minimum price for which the
product is being sold, the output for these two months is worth
$32,982.12— a profit in two months of $4,195.16.

This gives an average return to the State of more than $1.$$
for each day of prison labor employed.

Calculated at the mean price for which the product is being
sold, 8% cents, the profit for these two months is $5,087.00, or an
average of $1.52 for every day of prison labor.

The enterprise was not entered upon hastily or without full and
thorough consideration, nor without assurance of legal authority
of the board to install and operate the plant. On August 3, 1905,
the Executive submitted the legal phases of the proposition to the
Attorney-General, and was advised by him as follows:

"August 4, 1905.
"Hon. J. Frank Hanly, Governor of Indiana:

"Dear Sir — Replying to your communication of August 3, in which you
ask: 'It is proposed to establish and operate in the Indiana State Prison a
plant for the manufacture of binder twine, on State account. The warden
and the members of the board of control, together with this department, have
given much consideration to the question of the practicability of establishing
and operating such plant. The question has been raised as to whether the
board of control possesses the authority to purchase the machinery, con-
struct the necessary building for a warehouse, and purchase the raw material
from which to manufacture such twine, under the existing law. I therefore
submit to you for your opinion the following interrogatories:

"'1. Does the act of February 8, 189!), authorize the board of control of
the Indiana Prison to purchase the machinery, establish and operate such
plant, and construct the necessary warehouse?

is:.!

"•.>. Does said act authorize said hoard lo purchase the raw material
from which to manufacture such binding twine?

"'3. Is the appropriation provided for in section 9 of said act, sub-
stantially none of the same having been heretofore used, available for the
purpose of purchasing the machinery, the raw material and of operating
said plant?'

"Section 6 of said act provides as follows: 'It shall be the duty of the
warden to assign the convicts to such labor as, in his opinion, they are par-
ticularly adapted to, and shall recommend to the board of control from time
to time such necessary materials, tools, apparatus or accommodations as are
needful for the purpose of the carrying on and conducting of such industries as
may be authorized under the provisions of this act.'

"Section 9 provides as follows: 'There is hereby appropriated t-> the
board of control of the Indiana State Prison, out of moneys not otherwise
appropriated, the sum of $125,000, to be used by them in purchasing mate-
rials, tools, machinery, apparatus and accommodations, as may be by said
board of control deemed necessary for the purpose of establishing, carrying
on and conducting such trades and industries as may be determined upon
by such board of control upon the public account system, whereby the labor
of the convicts of said prison shall be employed only on its own account:
Provided, No expenditures shall be made for printing(,) machinery or ma-
terial.'

"This appropriation is made contingent on the adoption by said board of
control of the public account system, and the sums hereby appropriated shall
only be used to establish, provide for and furnish the necessary machinery
and materials for the inauguration of such public account system, and out of
said sum hereby appropriated there shall be available each year, beginning
with the present year, a sum not to exceed $25,000, but if such sum of
$25,000 be not used by the said board of control in any one year, the same
shall not be deducted from said sum of $125,000 hereby appropriated, but may
be drawn and applied to said purposes thereafter, together with such further
sums as may, at the ttime or thereafter, become available for such use.

"Under the provisions of this act it is my opinion that the warden and
the board of control of said Prison have authority to purchase machinery
and furnish accommodations and establish and operate any sort of a manu-
facturing plant that such board shall determine to be proper and efficient,
and the provisions of the act clearly provide that in the operation of such
plant the board is authorized to purchase such materials, apparatus and
appliances as may be necessary for any sort of manufacturing business en-
gaged in and the appropriation provided for in section 9 may be used for
either or all of such purposes.

"I have the honor to be, very truly yours,

(Signed) "CHARLES W. MILLER,

"Attorney-General."

The sum appropriated and available under the provisions of
the section cited in the opinion of the Attorney -General was in-
sufficient to install and operate the plant.

After consultation with the Executive and the Attorney-Gen-
eral, and with their assent, the board of control reinvested from

183

funds derived from the sale of binder twine $41,776.47 that the
plant might be kept in operation and its practicability demon-
strated. In addition to this, Warden Keid has advanced, within
the last sixty days, out of his own personal funds, more than
$4,000.00. He has done this voluntarily that he might be able
to demonstrate the value and importance of the enterprise. His
act was wholly unselfish and patriotic, and is in accord with the
high service the warden is daily giving the State. By so doing,
even though estimated at the minimum price for which the prod-
uct of the plant is sold, 81/* cents per pound, he made for the
State, during the months of November and December, $4,195.16.

The bill making an appropriation for the future operation of
the plant, now pending before you, carries a revolving appropria-
tion of $200,000.00. This should not be in addition to the money
already invested in the plant, in raw material or in manufactured
product. The revolving fund should be $200,000.00, but the pro-
ceeds of the sale of present and future stock in excess of such
sum should be paid into the treasury.

Sisal is the principal raw material entering into the manufac-
ture of binder twine. It is not produced in the United States. It
must be purchased in large quantities. It can usually be pur-
chased at best advantage and at lowest cost in the months of Au-
gust, September and October. The revolving fund should be large
enough to permit the State to take advantage of the lowest price
for the purchase of sisal in sufficient quantity for a year's run of
the plant. The saving of a quarter of a cent per pound on sisal
means of itself a fair profit to the State.

Such an appropriation is not a straight out appropriation like
that made for the construction of a building or the establishment
of a State institution, nor is it ever all called for longer than a
few months at a time, after which it is returned to the treasury.

There has been no opposition to the establishment and opera-
tion of this plant coming to Executive knowledge, except that in-
spired by the International Harvester Company people.

This opposition is due solely to the fact that the manufacture
of binder twine on State account will make it possible for the
State to dispute with them the Indiana market.

The board of control, the warden and the Executive are fully
convinced that the establishment of this plant and its operation
under an appropriation such as that made in the pending measure,
will go far toward making the Prison self-sustaining.

Every dollar thus gained is a dollar taken from general taxa-

184

tion. It will give employment after a little to a hundred men and
will be a long step toward solving the problem of prison employ-
ment at the expiration of the present labor contracts. It will not
compete with any Indiana industry.

It will save thousands of dollars annually to the farmers of
the State. It is therefore a matter of no little importance and
should receive thoughtful, candid consideration at your hands.
Respectfully submitted,

J. FRANK HANLY,

Governor.

BABCOCK INSURANCE BILL.

FEBRUARY 6, 1907.

Gentlemen of the Senate and House of Representatives :

In view of the constitutional obligation imposed upon the Ex-
ecutive that "he shall, from time to time, * * * recommend"
to the General Assembly "such measures as he shall judge to be ex-
pedient," I feel it to be my duty to urge the passage of House
Bill No. 31, commonly known as the "Babcock Bill," the same be-
ing Senate Bill No. 89, commonly known as the "Farber Bill,"
creating a separate department of insurance, and providing for
the appointment of a commissioner with power to effectively ad-
minister such department.

This bill represents the best thought of the hour relative to
the establishment of a State Department of Insurance and the
powers which should be conferred thereon. It had, in the begin-
ning, the careful consideration of the committee which recently in-
vestigated insurance conditions in Indiana. While neither of the
members of that committee is an insurance expert, each is a man of
affairs, of clear thought and of high and disinterested purpose,
and each gave substantially a year to the investigation of the sub-
ject to which the bill relates. Actuaries of ability and character
and of independent relations have been consulted concerning it.
Many of its most essential provisions were taken from the legisla-
tion recommended by the conference of governors, attorneys-gen-
eral and insurance commissioners of the various States, held in
Chicago in 1906 for the purpose of considering insurance abuses
and remedial legislation relating thereto, and prepared by the com-
mittee appointed by such conference.

185

The personnel of this conference is of itself of a character to
entitle its report to the highest consideration. Governor John A.
Johnson, of Minnesota, was its chairman, and Frederick H. Nash,
Esq., was its secretary. The committee appointed to prepare the
report consisted of the following insurance commissioners : Thomas

D. O'Brien, Minnesota; Zeno M. Host, Wisconsin; B. F. Carroll,
Iowa; J. L. Pierce, Nebraska; Henry R. Prewitt, Kentucky;
Thomas E. Drake, District of Columbia ; Reau E. Folk, Ten-
nessee; W. D. Vandiver, Missouri; E. Myron Wolf, California;
A. I. Vorys, Ohio; B. F. Crouse, Maryland, and George H.
Adams, New Hampshire; the following attorneys-general: E. T.
Young, Minnesota; J. H. Meyer, New York, and J. E. Bird,
Michigan ; and Messrs. F. H. Nash, Massachusetts ; N. E. Had-
ley, Michigan, and John A. Hartigan, Minnesota.

The committee also had the benefit of the presence and advice
of Butler Ames, M. C., Massachusetts; the Legislative Investigat-
ing Committee of Wisconsin, consisting of Mr. James A. Frear,
Chairman, H. L. Ecker, G. A. Beadle, W. S. Braddock, B. Potter,
J. E. Roche, James L. O'Connor, Counsel, and J. M. Glover, Ac-
tuary ; the Legislative Investigating Committee of Iowa, repre-
sented by Messrs. J. M. Jameson, Chairman, John L. Blaeckly, N.

E. Kendall, F. F. Jones and T. E. Cleary ; also Mr. Earle Stewart,
Chairman of the Legislative Investigating Committee of Ohio, and
the following members of the Insurance Committee of the Com-
mission on Uniform Laws : Messrs. Amasa M. Eaton, C. F. Libby,
Talcott H. Russell, J. C. Richburg and Robert W. William*.

Since the introduction of the bill it has received the attention
and thoughtful study of the members of the House and Senate
Committees on Insurance. Public hearings have been held and full
and free discussion had. Objections and criticisms have been con-
sidered and wherever such objections and criticisms have seemed
just and tenable, modification and amendment have been made. As
the bill now stands before you it is the best thought of many
minds. It is presented to you in response to a widespread and im-
perative need, not peculiar to Indiana, but common to all the
States. It is a part of an effort being made throughout the coun-
try to secure the reformation of life insurance practices which have
been and are injuring the business of life insurance and wronging
the policy holders of such companies. Its passage will constitute
the first great step toward insurance reformation in Indiana.

The reports it requires of the companies are already required
in a number of the States. This is especially true in Minnesota and

186

Wisconsin. These reports are essential if present abuses are to be
ended. The bill puts an end to divided service on the part of de-
partmental officials by placing the department on the people's side
of the counter and by requiring those who administer it to remain
on that side of the counter.

It does not deal generally with questions remedial in character,
such as special contracts, rebates, the distribution of surplus, the
inhibition of political contributions, forms of policies, real estate
holdings, the status of persons soliciting insurance, the issuance
of non-participating policies by companies issuing participating
policies, the election of directors, the retirement of capital stock,
the preliminary term plan, or other kindred questions. These are
left to be covered by separate and specific bills. It relates wholly
to matters of departmental administration and the supervision of
insurance companies doing business in the State. It inhibits agency
companies, foreign and domestic, provides for publicity as to sal-
aries and expenses, and for the making of reports which shall give
information calculated to expose extravagant administration and
fraudulent practices wrherever they exist. These matters are all
so closely related to the administration of the department and to
the supervision of the administration of insurance companies, that
they come naturally and logically within the purview of legisla-
tion creating an insurance department.

Representatives of certain Indiana life insurance companies
have based their objections to the bill on the ground that it dis-
criminates against domestic companies and in favor of the foreign
companies doing business in the State. x The contention is abso-
lutely without foundation. In fact, nothing is further from the
truth. The bill itself is the best answer to this argument. Every
section affects foreign and domestic companies alike save four, and
one of these relates solely to foreign companies. Of the three sec-
tions, relating exclusively to domestic companies Section 22 simply
requires agents of such companies to procure a license from the
insurance department before soliciting insurance, and fixes a fee
of $1.00 for such license. The present law requires all agents of
foreign insurance companies doing business in the State to be
licensed and the fee therefor ranges from $3.00 to $5.00. This
law will not be changed by the passage of the proposed bill. Here
then in one of the three sections which apply solely to domestic com-
panies, is a clear discrimination in I heir favor. As suu-ovsted Sec-
tion 25 applies only to foreign insurance companies. It is one of
the most radical sections in the statute. Sections 26 and 27 apply

1ST

to domestic companies only. Their provisions are similar to the
provisions of Section 25, which, as we have seen, applies alone to
foreign companies, except as to the action of the commissioner in
cases of insolvency or of disobedience by the companies of execu-
tive orders entered by the commissioner. In the event of the insolv-
ency of a foreign company doing business in this State or of dis-
obedience of executive orders entered of record by him, the com-
missioner is authorized by Section 25 to revoke the right of the
company to do business in the State. The company not being in-
corporated under our laws and not being domiciled in the State, it
is difficult to see how more than this could be done. Our courts
could have no jurisdiction beyond the assets of the company within
the State. The limit of authority is reached when the company
is deprived of the right to conduct business within our borders.
Domestic companies are chartered under our own laws. They are
domiciled here and in case of insolvency or disobedience of certain
executive orders entered by the commissioner, the commissioner is
authorized to institute proceedings in the courts of Marion County
for the appointment of a temporary receiver and in proper cases
for the dissolution of the company. In every such case the court
has ample power to protect the rights of the company against all
aggressions of the commissioner. Indeed, his every act is made
the subject of review by the courts at the will of any company
aggrieved.

Instead of being directed against domestic companies to their
injury, its fundamental purpose is their protection. They will find
in it a sure defense from the assaults of foreign companies as long
as their own affairs are managed with economy and integrity. The
certificate of the department it creates that Indiana companies have
complied with its requirements and are administering their affairs
in conformity with its regulations, will be accepted at home and
abroad as conclusive evidence of good character and of honest and
efficient management. I am profoundly impressed with the con-
viction that the establishment of such a department will do more
to reinstate Indiana life insurance companies in the confidence of
the people throughout the country than any other single piece of
legislation that you can enact.

The expense of a separate department has also been the basis
of some criticism. The difference, however, between the annual ex-
pense of a separate department and that of a proper department
administered in the Auditor's office, is 'but nominal. The present
measure provides for a total annual expense of $19,440.00. The

188

bill prepared at the instance of Indiana insurance companies, pend-
ing in the Senate, providing for an insurance department in the
Auditor's office, carries an annual expense of $14,720.00. The dif-
ference is but $4,720.00. This difference will be more than made
up in fees, the collection of which is provided for and which are
required to be turned into the treasury as the property of the
State. The greatest benefit, however, to accrue from the estab-
lishment of a separate department will be in the way of increased
efficiency. By this statement I mean no reflection upon either the
integrity or the ability of the present Auditor of State.

I speak only of conditions admitted and well known. His
office is already in need of additional clerical help in both the au-
diting and banking departments. As the fiscal agent and account-
ant of the State, he has to do with receipts and disbursements ag-
gregating each year something like $8,000,000. He is by law a
member of the State Board of Finance and his duties in this be-
half will, in all probability, be substantially added to by any public
depository legislation that may be enacted. He is a member of the
State Printing Board which has to do with the making of contracts
for all the printing for the offices and institutions of the State, the
passing upon their reports and requisitions for supplies and the
allowance of all bills for such printing, amounting to many thou-
sands of dollars annually. He is also a member of the State Board
of Tax Commissioners and is required by the present law to
give 45 to 50 days each year to matters coming before that
body. He has the supervision and control of 217 state banks,
over 200 private banks, 70 trust companies, 4 savings and more
than 300 building and loan associations, all of which impose upon
him much labor, supervision and responsibility. The duties of the
office have multiplied many times in recent years and will continue
to multiply with the growth of the State in wealth, enterprise and
population. A single comparison will serve to illustrate this point.
In 1896 the Auditor of State collected insurance taxes and fees
aggregating $183,705.73; in 1906, $427,310.35. In 1893 there
was not a single domestic legal reserve life insurance company in
the State; now there are 18, with more than 30,000 policy holders
and millions of dollars of insurance in force. The present Auditor
of State, recognizing and appreciating the conditions I here pre-
sent, recently made the following statement in a letter addressed to
the Chairman of the House Committee on Insurance:

"Realizing the importance and continued growth of all these departments
until they have reached a magnitude where one's best judgment would dictate

189

that the public and the insurance world can best be served by placing the
supervision of 1 he insurance companies in a separate department, I am willing
to lay aside any selfish wish of mine and for the good of the people and of the
State acquiesce in and recommend the establishment of a separate insurance
department under such wise provisions of law as our legislative body may
enact. I do this without any idea or purpose of shirking any duty that may
be imposed upon me, knowing full well that my hand and brain will be busy
with other arduous duties in the Auditor's office."

The head of the State insurance department, if it is to be effect-
ively administered, must necessarily possess something of special
qualification. He ought to be removed from the exigencies of poli-
tics and placed beyond the importunities and influences of the
special interests which constantly seek to influence his official ac-
tion in matters relating to them. Under the present law the Au-
ditor of State is elected for a term of two years. He is eligible to
renomination and election. Whoever is Auditor naturally desires to
succeed himself. He is more than human if he is at all times able
to resist the powerful influences that are brought to bear upon
him in matters relating to insurance supervision. The history of
the office in the last twrenty years does not sustain the contention
that the Auditor of State, being elected by the people, is a safer
depository of the power necessary to the proper supervision of life
insurance than a commissioner appointed by the Executive. Prior
to the term of the present incumbent of that office no man in
twenty years, with a single exception, has administered its affairs
with fidelity to the interests of the people. The records in the
office, as I have heretofore shown in an executive message to this
General Assembly, disclose a continuous story of peculation and
defalcation — a system carried on without interruption save for the
term of a single incumbent.

The Governor of the State cannot succeed himself. Our fa-
thers, in the exercise of high wisdom and far-seeing statesman-
ship, precluded his doing so by constitutional inhibition. Who-
ever enters the executive office assumes its duties with full knowl-
edge of that fact. No other officer in the State, not even except-
ing judicial officers, is so fully and entirely removed from the temp-
tation to use his position for political purposes or in response to
the appeals or the threats of special interests as is the Executive.
They may succeed themselves by re-nomination and re-election. He
can not. Personally, the authority to appoint a commissioner of in-
surance means absolutely nothing to the present incumbent of the
executive office. The duties and responsibilities of the office will
soon slip from his shoulders, to be assumed by another. He is a

190

candidate for no office. He has no use for a political machine,
(iiven the authority to appoint, selection will he made upon quali-
fication alone. If the proposed law is enacted the appointment of
a commissioner will come in the middle of the executive term, and
after two years' experience in the office of Governor, any man who
occupies the position will hesitate long before he declines to reap-
point a commissioner whose services during the term of four years
show him to be impartial, courageous and efficient. These reasons
lead me to the conclusion that the head of the department should
be appointed by the Executive.

I have heretofore called your attention to some of the existing
abuses in the administration of the present insurance department
and have supplemented what I have said by facts and figures
which seem to me to be conclusive. I desire, however, to submit fur-
ther information upon the subject.

The present actuary receives a salary of $2,000.00 per annum
from the State. He is the only person in the department who has
technical knowledge of the business of life insurance. Whatever is
done in the department is done largely upon his advice and under
his direction. From the very nature of the case this is necessarily
so. Being in the employ of the State and being charged with
duties in relation to the supervision of life insurance companies do-
ing business in the State, both foreign and domestic, his place is
always on the State's side of every question arising between the
State and insurance companies. Indeed the people have no other
representative than he. Under the present system, however, the
actuary spends more time in the employment of the companies
whose affairs it is his duty to supervise, than he does in the service
of the State, and annually receives more money from the com-
panies than he receives from the State. In 1905 the present ac-
tuary of the department received from the State $2,000.00. But
he received from the insurance companies of the State in the way
of fees $2,226.00. In 1906 he received from the State $2,000.00 ;
from the companies, $2,925.00. In the month of January, 1907,
his salary from the State amounted to $166.662-3, but he re-
ceived from the insurance companies $716.00. The law does not
forbid this divided service, but the condition presented seems to me
to be an intolerable one. In 1905 the State Life Insurance Com-
pany paid the present actuary $350.00 ; the Inter-State Life Insur-
ance Company paid him $298.00; the American Central, $135.00;
and the Reserve Loan Life Company, $443.00. In 1906 the State
Life Insurance Company paid him $425.00 ; the Inter-State Life

191

Company, $617.00 ; the American Central Company, $188.00; the
Reserve Loan Life Company, $115.00. In the month of January,
1907, the State Life Insurance Company paid him $455.00; the
Reserve Loan Life Company, $123.00 ; the Inter-State Life Com-
pany, $98.00. The proposed bill will put an end to this practice.
If it be permitted to continue the responsibility will be yours alone.
If you fail to end it, you may be able to make satisfactory answer
to the people who commisioned you, but as for me I am unable to
conceive an adequate answer.

I have also heretofore called your attention to certain abuses
in the administration of the affairs of certain domestic life insur-
ance companies, which have long existed and which still continue to
exist, and I now submit additional facts and further information
in that behalf. In doing so it is necessary that I use the name of
a certain life insurance company and the names of certain of its
officers. I do so from necessity and not as a personal attack upon
the company or upon the individuals to whom I shall advert. I
am not and have not been engaged in personal attacks upon any
one. During my official life I have attacked the acts of no man
outside the purview of my official obligation. And then only when
they have related to public affairs and when attack and exposure
were necessary to preserve the public welfare. In such cases I
have spoken with all the vigor and directness my knowledge of the
English language has permitted, but I have done so in every in-
stance without personal malice, moved only by a sense of public
duty.

The State Life Insurance Company has no capital stock. It is
a mutual company. It lias no asset that is not the property of its
policy holders. It is governed by a board of five directors. The
present directors hold enough proxies, gathered from year to year,
to insure their re-election. They have resolved, by written resolu-
tion spread of record upon their minutes, to be a self-perpetuating
body. The company was incorporated in 1894. It is now 12
years old. The following facts, taken from the books of the com-
pany, disclose the character of administration it has received from
the hands of these five directors :

In 1899, A. M. Sweeney, as president, received a salary of
$7,000.00; as director, $600.00; as an office employe, $2,000.00;
total, $9,600.00. Samuel Qninn received a salary as vice-presi-
dent of $7,000. 00; .MS dim-tor, $600. 00 ; as ,-tn office employe,
$2,000. 00; lolal, $<),(J()0.()(). W. S. Wynn, as secretary, received
a salary of $7,050.00; as director, $600.00; as an office employe,

192

$2,000.00 ; total, $9,650.00. Charles F. Coffin, as counsel, received
a salary of $1,800.00; as director, $600.00; for legal services,
$1,200.00; total, $3,600.00. R. W. McBride received a salary
as director of $600.00; fees for legal services, $400.00; total,
$1,000.00.

In 1900, Mr. Sweeney, as president, received a salary of
$8,000.00 ; as director, $1,250.00 ; as an office employe, $1,750.00 ;
total, $11,000.00 Samuel Quinn, as vice-president, received a sal-
ary of $8,000.00; as director, $1,000.00; as an office employe,
$2,000.00; total, $11,000.00. W. S. Wynn, as secretary, received
a salary of $8,000.00; as director, $1,000.00; as an office em-
ploye, $2,000.00; total, $11,000.00. Charles F. Coffin, as direct-
or, received a salary of $1,000.00; allowance for legal expense,
$4,000.00; total, $5,000.00. R. W. McBride, as director, re-
ceived a salary of $950.00 ; allowance for legal expense, $500.00 ;
total, $1,450.00.

In 1901, Mr. Sweeney, as president, received a salary of $10,-
250.00; as an office employe, $750.00; as director, $1,000.00;
total, $12,000.00. Mr. Quinn, as vice-president, received a salary
of $10,200.00; as an office employe, $1,000.00; as director,
$800.00; total, $12,000. Mr. Wynn, as secretary, received a
salary of $8,000.00 ; as an office employe, $3,000.00 ; as director,
$1,000.00; total, $12,000.00. Mr. Coffin, as director, received a
salary of $1,000.00; allowance for legal expense, $4,000.00; to-
tal, $5,000.00.

Mr. McBride, as director, received a salary of $1,000.00; al-
lowance for legal expense, $450.00; total, $1,450.00.

In 1902, Mr. Sweeney, as president, received a salary of $12,-
000.00; as director, $1,500.00; total, $13,500.00. Mr. Quinn,
as vice-president, received a salary of $12,000.00 ; as director,
$1,500.00; total, $13,500.00. Mr. Wynn, as secretary, received
a salary of $12,000.00 ; as director, $1,500.00 ; total, $13,500.00.
Mr. Coffin, as director, received a salary of $1,500.00; allowance
for legal expense, $4,500.00 ; total, $6,000.00. Mr. McBride, as
director, received a salary of $1,500.00; allowance for legal ex-
pense, $100.00 ; total, $1,600.00.

In 1903, Mr. Sweeney, as president, received a salary of $16,-
000.00; Mr. Quinn, as vice-president, received a salary of $16,-
000.00; Mr. Wynn, as secretary, received a salary of $16,000.00;
Mr. Coffin, as director, a salary of $1,525.00, and an allowance on
account of le^al expense of $0,475.00; total, $8,000.00. Mr.

193

McBride, as director, received a salary of $1,500.00, and an allow-
ance on account of legal expense of $500.00 ; total, $2,000.00.

In 1904, Mr. Sweeney, as president, received a salary of $18,-
000.00; Mr. Quinn, as vice-president, received a salary of $18,-
000.00 ; Mr. Wynn, as secretary, received a salary of $18,000.00 ;
Mr. Coffin, as director, received a salary of $204.00, and an al-
lowance on account of legal expense of $14,000.00; total, $14,-
204.00. Mr. McBride, as director, received a salary of $2,000.00
and an allowance on account of legal expense of $6,300.00 ; total,
$8,300.00.

In 1905, Mr. Sweeney, as president, received a salary of $20,-
000.00; traveling expenses, $491.25; total, $20,491.25. Mr.
Quinn, as vice-president, received a salary of $20,000.00 ; travel-
ing expenses, $1,630.00; total, $21,630.00. Mr. Wynn, as sec-
retary, received a salary of $20,000.00; traveling expenses,
$481.70; total, $20,481.70. Mr. Coffin, as director and counsel,
received a salary of $9,000.00 ; allowance on account of legal ex-
penses, $11,000.00, and on account of traveling expense, $505.00,
a total of $20,505.00. Mr. McBride received salary and allow-
ances aggregating $8,000.00.

In 1906, Mr. Sweeney, as president, received a salary of $16,-
000.00; Mr. Quinn, as vice-president, received a salary of $16,-
000.00, and traveling expenses aggregating $1,140.00; total,
$17,140.00. Mr. Wynn, as secretary, received a salary of $16,-
000.00, and an allowance of $221.50 for traveling expenses;
total, $16,221.50. Mr. Coffin, as director, received a salary of
$16,000.00 and an allowance for traveling expenses of $500.00;
total, $16,500.00. Mr. McBride received a salary and allowance
aggregating $7,000.00.

Not a dollar of the money allowed for traveling expenses is
vouchered, and with the exception of the allowances made to Mr.
Wynn, no itemized account thereof has been given.

It will be seen that Mr. Sweeney, while drawing one salary as
president of the company and another as director, during the years
1899, 1900 and 1901, drew $4,500.00 as an "office employe"; that
Mr. Quinn under like circumstances as to salaries as an officer and
director, drew $4,000.00 as an "office employe," and Mr. Wynn,
$6,000.00. What their duties were as "employes" is left to con-
jecture.

The policy holders are entitled to know why $14,500 was
paid in three years to these three men in addition to the dual sal-

194

aries they were receiving as executive officers and directors. They
have a right to be advised as to the services performed by them.

In eight years Mr. Sweeney drew from the treasury of the
company, on account of salary and allowances made to him, $116,-
660.25; Mr. Quinn, $118,870.00; Mr. Wynn, $117,852.00; Mr.
Coffin, $78,809.00 ; Mr. McBride, $30,800.00. In the four years,
1903, 1904, 1905, 1906, four men drew, in salaries and allow-
ances, from the treasury of the company, an aggregate of $274,-
196.45. In the three years, 1904, 1905 and 1906, allowances were
made to two men as directors and counsel of the company aggre-
gating $74,509.00. In eight years the total allowance to these
five men aggregate $462,947.45 — almost a half million dollars.

The bill pending creates a department with authority to put an
end to such wasteful and systematic misappropriation of trust
money as that evidenced by the figures I have just given. If this
condition is permitted to continue, the responsibility for its con-
tinuance will be yours. If you do not end it, it may be when you
return to your homes you can make satisfactory answer to the peo-
ple whose commissions you hold, but I am unable to conceive an ade-
quate answer for such failure.

In addition to these allowances, $8,306.15 were paid in 1896
and $11,562.48 in 1897, to a corporation known as the Star
Agency Company, on account of collections of premiums made by
it. I am advised that Messrs. Sweeney, Quinn and Wynn were
stockholders in that corporation. If so, they were on both sides of
the counter when this money was paid.

In 1904, $3,675.38 were paid to a single individual for in-
spection services and $5,116.66 to a company known as the Na-
tional Agency Company. I am advised that this company is op-
erated by and under the control of one of the employes in the
home office of the State Life Insurance Company.

In 1905, $9,835.16 were paid to this company, making an ag-
gregate of $14,951.82 paid to it in two years, and a total on ac-
count of inspection services within that time of $18,627.20.

The aggregate allowances made in 1905 to Messrs. Sweeney,
Quinn, Wynn, Coffin and McBride and to the National Agency
Company, were $93,942.11.

The books *of the company also disclose the payment, in the
month of February, 1899, of six several checks payable to the
cashier of the company and by him turned over to the executive
committee of the company, aggregating $3,290, on account of
"attorneys' fees." None of this money was used in the employment

195

of counsel. The company had able and efficient counsel of its
own. The Sixty -first General Assembly of the State of Indiana
was then in session. It is now admitted by the officers of the com-
pany that the sums represented by these several checks were used
for the purpose of securing the passage of legislation then pend-
ing in that body. The entry "attorneys' fees" upon the books was
simply a blind to conceal the real purpose for which these funds
were used.

It is of the utmost importance, in the administration of every
life insurance company, that every expenditure in excess of nomi-
nal sums should be itemized and vouchered. Under the present
system entries upon the books of the company of "traveling ex-
penses" or "attorneys' fees" constitute the only information given.
Such entries are of no value in ascertaining the actual use made
of the money in question as we have seen in the items just named.
They may readily be used to conceal unqualified sins.

The figures I have given measure to some extent the possibili-
ties under the present system of State supervision for the personal
enrichment of the officers of these companies and disclose better
reasons why the men who are profiting thereby are opposed to the
proposed legislation than any they have as yet given to either you
or to the public.

As already suggested, the bill inhibits the licensing of agency
companies. It applies to all such companies whether doing busi-
ness for domestic or foreign insurance companies, and whether
they themselves be domestic or foreign corporations. It incorpo-
rates substantially the language of the legislation proposed by the
conference on uniform insurance legislation upon this subject. It
is insisted by the promoters of these companies that they furnish
insurance companies the means of acquiring a large volume of in-
surance at less cost then it could be acquired through personal
agencies responsible directly to the insurance companies. The ex-
periences, however, of the last two years do not sustain the con-
tention. So far as I have been able to learn the commissions pro-
vided for in the contracts between such companies and the insur-
ance companies have been excessive without exception. For in-
stance : the contract of the Lafayette Life Insurance Company with
its agency company provides for the payment of 10 per cent, on
all renewal premiums collected. The contract of the Inter-State
Life provides for the payment of 15 per cent, for the second year,
5 per cent, for the third, 10 per cent, for the fourth year, and 7%
per cent, until 13 annual premiums have been paid; the contract

with the Reserve Loan Life requires the payment of 7% per cent,
on all renewal premiums, and that of the State Life with the State
Agency Company provides for the payment of 7% Per cent, on
all renewal premiums on policies written either before or after the
execution of the contract. Renewal premiums are being collected
in this State now by some insurance companies at a cost of 1%
per cent., and in no instance ought such collections to cost more
than 5 per cent. These companies are simply open doors to ex-
travagance and fraud. They are officered by high salaried officers.
Their stockholders have been in many instances officers of the in-
surance companies whose representatives they are and without ex-
ception they have been organized at the instance of insurance offi-
cials. A more striking illustration of the truth of this can scarcely
be desired than that furnished in the late State Agency affair of
the State Life Insurance Company.

I know of no worse misfortune that could befall domestic life
insurance companies than your failure to enact effective insurance
legislation. The conditions I have described to you exist. They
are not to be talked or reasoned away. They will continue to ex-
ist until the law, backed by efficient executive authority, strikes
them down. Till this is done the question of such legislation will
remain open. The matter can not be definitely settled until it is
settled right. If it is not settled right the agitation will continue
for the next two years and until another General Assembly shall
have been elected and convened. Agitation and discussion, though
helpful to the public in its effort to recover its rights, can not be
helpful to the insurance companies. Every honest insurance offi-
cial and every policy holder ought to join hands in an effort to
obtain legislation that will end the conditions complained of. These
ended, agitation and discussion will cease.

The people expect, and have a right to expect, effective legis-
lation at your hands. Enactments with high sounding titles cov-
ering weak and ineffectual provisions, will not do. Such measures
will not end present conditions nor stop discussion. Time and op-
portunity both are yours. And the people know they are yours.
You are not like the hapless mother in travail. She must needs
give birth to whatsoever has been begotten. But you have the
power to choose. You can send forth men-children instead of still-
born sexless things, if you desire. This power of choice measures
the weight and height of your responsibility.

At such an hour, personalities should be forgotten. Supposed
"political advantages" and "tactical positions" assumed for parti-

197

san purposes will in the end be valueless. Every safe path leads
to a higher plane than the field of factional dissensions or of party
strife. Into those safer paths I am willing to go with you, ma-
jority and minority, friend and foe, leaving personal differences to
be settled at other times and in other forums, that the public wel-
fare may be conserved and the rights of the people preserved.
Respectfully submitted,

J. FRANK HANLY,

Governor.

SENATE ENROLLED ACT No. 248.

MARCH 8, 1907.

Mr. President and Gentlemen of the Senate:

I herewith return to the Senate, Senate Enrolled Act No. 248,
in compliance with the request of the Senate that the same should be
returned to it.

Respectfully submitted,

J. FRANK HANLY,

Governor.

Special Messages to the Special

Session of the Sixty-Fifth

General Assembly

(199)

201
'NIGHT RIDER" SITUATION IN INDIANA.

SEPTEMBER 24, 1908.
Mr. President and Gentlemen of the Senate:

Engrossed Senate Resolution No. 9, requesting the Executive
"to furnish at his earliest convenience to the Finance and Agricul-
tural Committees and to the Senate all documents and information
in his possession relative to the 'Night Rider' situation," has been
received and given consideration.

In answer thereto I beg to submit that my information has
come to me through letters and documents filed in the executive
office by persons living in localities where the threats and depreda-
tions complained of have been made or committed; from personal
interviews with many responsible citizens from said localities, and
from investigations made by the Adjutant-General of the State
and other agents under executive direction.

For some three years there has been an effort on the part of
certain tobacco growers living in the tobacco districts in the State
of Kentucky, to control the production and sale of tobacco through
an organization known as the "American Society of Equity." The
successful pooling of a tobacco crop depends upon securing the as-
sent and co-operation of enough tobacco growers to substantially
control the production and sale of tobacco each year. This effort
has led to differences among tobacco growers, some preferring to
determine for themselves the extent of their own planting of to-
bacco and the marketing of their own crops. These differences
have intensified and widened until enmities have been engendered
between the independent owners and those belonging to the society,
of a character to challenge serious consideration. Under cover of
conditions thus created, organized bands of men on horseback,
popularly known as "Night Riders," because they ride and com-
mit their depredations in the night, have ridden to and fro over the
tobacco section of the State of Kentucky, terrorizing the people,
destroying crops, burning barns, and sometimes killing innocent
citizens who have refused to diminish the planting of tobacco or
to pool their crops when produced. The entire National Guard of
the State seems to have been insufficient to meet and control the
situation. In some counties the condition has been and now is but
little better than anarchy. Even railway depots and structures
have been burned because the National Guard was permitted to
encamp upon the company's right of way. Within the last two

202

years the American Society of Equity has been effectively organ-
ized in this State and in Ohio.

In the early spring, at the time of sowing the tobacco beds,
the tobacco growers in Ohio and Indiana were quite generally
warned not to plant a crop this year because the crop produced and
pooled last year had not yet been marketed, as satisfactory prices
had not been obtained. These notices varied in form, but were
all to the same effect. Many of them were mailed at postoffices in
Kentucky ; some of them from Cincinnati, Ohio ; others from post-
offices in Indiana. Yet others were tacked upon doors or left in
mail boxes. Copies of some of the notices are submitted:

"Did you ever stop to think what you were doing by not cutting out the
1908 crop? You are running great risk by standing in with the Trust. We have
cut out the 1908 crop and made better prices for you, which you are taking
advantage of. We are holding our tobacco, and our people are suffering.
We say cut it out! You had better do so for your own good."

"Sir: Did it ever occur to you it would be better for you to cut your
1908 crop out? Do you not realize you and the tobacco trust are squeezing
the life out of many women and children? We say stop! What do you say?"

"Sir: You had better cut out your 1908 crop of tobacco or you may not
have any barn to put it in. We are watching you."

These notices were usually signed "Night Riders" or "N. R.,"
and with them matches were usually enclosed.

The tobacco beds of certain persons who failed to heed the warn-
ing given were destroyed in several counties of the State, and in
Ohio barns were burned and other depredations committed. The
Governor of that State recently informed me that Ohio has been
compelled to expend during the spring and summer more than
$40,000 to protect the property and lives of her citizens living in
the counties of that State bordering upon the Ohio River, and that
even then the Executive Department has not been able altogether
to prevent the destruction of property. Conditions in Indiana be-
came such in April and May as to cause many tobacco growers —
men of integrity and of substantial property — to appeal to the
Executive of the State for protection. The appeals became so
numerous and urgent that I sent the Adjutant-General to make in-
vestigation. His investigation disclosed facts amply justifying the
fear and alarm of those complaining. Other agents were employed
by the Executive and further investigations made. In some
instances local officials were appealed to; in other instances no ap-
peal was made to them because of information that such officials
were themselves either members of the organization, whose repre-

203

scntatives were infracting the law, or were in full sympathy with
the infractions committed or threatened. After the tobacco crop
was planted, threats and depredations in this State ceased for a
while, but by the latter part of August both were renewed, the form
of the notice sent out at that time frequently running as follows :
"Pool your tobacco. A hint to the wise is sufficient. N. R."

This notice has been almost invariably accompanied with matches,
implying the intent of arson if the warning was not heeded. The
tobacco crop while growing could not be destroyed without detec-
tion, but now as it is being cut and housed it may be easily de-
stroyed by burning the barns or sheds in which it is enclosed. In
the investigations made I have expended $680.00 of the Governor's
Emergency Contingent Fund during the present fiscal year. I
here submit extracts from some of the letters I have received :

"The tobacco industry in this part of the State amounts to thousands
of dollars annually, which will be an entire loss unless some assurance is
given at once. Our tenants are mostly panic stricken and are leaving us.
Hoping you will give this your immediate attention and will find some way
in which our rights and property may be protected, we are," etc.

"We believe they will try to destroy our property if we do not receive
protection in some way. We believe we should have the privilege of raising
on our own farms such crops as we see fit. We believe these threats are
sent out by order of the Tobacco Association of Kentucky, and are intended
to be carried out."

"Every person that raises tobacco in this vicinity has received similar
notices. Will you please answer immediately and let us know what protection
if any, we may expect?"

"What aid, if any, can the State furnish us in our efforts to peacefully
follow our vocations?"

"Numerous threatening letters have been received and personal threats
made. The situation is becoming serious."

"I have no doubt some barns will be burned and likely soon."

"I have no doubt that the plan is to destroy crops later on and later still
to resort to the burning of barns. I have many times said in discussing
the situation in Kentucky that 1 did not believe such practices would be
permitted in our State."

"There is a spirit of anarchy and we ask you to take such steps as you
think best to suppress it and bring the guilty parties before the courts. If
we don't want the same reputation Kentucky has, you must 'nip it in the
bud'."

"The man who received the letter is a respectable citizen and has on
hand a fine crop of tobacco. He is scared almost to death and asked me to
inform you. If he sells his tobacco he is warned to leave the county."

The above is from a letter received on the 22d inst.

204

"On one night during the latter part of August a supposed 'Night
Rider' from the Owensboro Ferry went out through the Patronville neighbor-
hood and tobacco district, and left letters in each mail box along the road,
warning tobacco growers, and closing with the threat 'Save your back and
your barn.' If Mr. Lieb had the welfare of his own constituency at heart
he could have found all the information on this subject he wanted and would
not now be asking the Governor for more specific information.

"In this vicinity the growers have had their tobacco plants destroyed and
barns burned, two large barns, one recently. The owner of this barn was
warned to cease growing his tobacco. That night they burnt his barn con-
taining 11 head of horses and mules, 40 tons of hay, a lot of grain and all his
farming implements."

This letter was received on the 21st inst.

These letters, complaints and appeals could be multiplied al-
most without number, but repetition is needless.

I am advised that two barns other than those mentioned in the
communication above have been burned within the last thirty days,
and I am in receipt of a statement from Spencer County, signed
by three reputable citizens of that county, one a buyer of tobacco,
one a prominent lawyer, and the other a substantial tobacco grow-
er, setting forth conditions of a character well calculated to chal-
lenge the consideration of every thoughtful man, a copy of which
accompanies this message and is filed herewith.

I do not charge the American Society of Equity with the
threats made or the crimes committed. I do not know that those
who make or commit them are members of such society. I do not
here seek to fix either guilt or responsibility. I simply submit the
condition.

The transmission of the letters and documents I have received,
the information I have, or the particulars of the investigations I
have made, in further detail than I have given them, is incompatible
with the public welfare. With due deference to your honorable
body and with all courtesy and respect I am compelled to withhold
them. Their publication would subject the persons writing them
and the persons who have brought me information to immediate
persecution and attack. I deem it my duty to protect these people ;
to withhold all names, all letters and documents except the copy
of the statement filed herewith, consent of the parties signing it to
file it having been obtained. The right of the Executive to exer-
cise his discretion in such case is clear and well established. The
conditions described obtain in more or less degree in all the coun-
ties bordering upon the Ohio River in which tobacco is produced.
In some of the counties the situation is really grave; the danger

205

imminent. I have convened the General Assembly in special ses-
sion. The facts are before you. I have asked for additional funds
and authority that I may, in some measure, discharge the duty of
the State to the citizens whose property and lives are threatened.
The responsibility is now yours. If you act upon the recommen-
dations made and serious trouble is averted without the use of the
appropriation made or the exercise of the authority conferred, no
harm will have been done. If you fail to act and conditions that
threaten finally obtain, I am at a loss to understand how you will
justify your failure.

Respectfully submitted,

J. FRANK HANLY,

Governor.

To His Excellency, J. Frank Hanly, Governor of the State of Indiana:

For your information with reference to the Night Rider situation in
southern Indiana, we desire to submit the following statement as to the con-
dition in Spencer County:

That Spencer County produced last year about 4,000,000 pounds of tobacco
of the aggregate value of about $300,000; that there is now growing and in
process of curing, a crop in excess in quantity and value of last year's crop;
that Spencer County is the southernmost county in the State, and lies in close
proximity to the Night Rider depredations in the State of Kentucky; that
in many cases the tobacco crop is grown principally by tenants and ranges
in acreage from one to about ten or twelve acres per tenant; that at Lake
in Luce township, there is a Society of Equity organized for the purpose of
pooling the tobacco crop in Spencer County; that for two years last past it
has pooled some tobacco; that about eight weeks ago notices were dis-
tributed throughout the southern end of this county containing this language:
"Pool your tobacco. A hint to the wise is sufficient. N. R."

These notices were enclosed in a plain envelope, with from two to three
matches, and left at the late hours at night at the gates, doors and barns
of perhaps 125 tobacco growers. These notices were printed upon plain
bond paper about two by three inches, and from all indications the printing
was done with a rubber stamp. One or two days following the distribution
of these notices certain officers of the Society of Equity canvassed among the
respective farmers requesting them to sign pooling contracts, pooling their
tobacco with this society. Some of the farmers signed through fear; some
signed willingly; many refused to sign.

This notice produced fear and anger among many of the farmers. It
is the general opinion of the citizens of Spencer County that there is danger
of barns being burned and property destroyed in the event that the farmers
do not pool their tobacco. It is also common talk among the farmers that
if any barns of tobacco is destroyed, the origin of which can be traced to
parties engaged in the pooling of tobacco that lives will be sacrificed and
property belonging to those who are attempting to force the pooling of
tobacco will also be destroyed.

206

The situation is such at the present time that if any barns are burned
that can reasonably be traced to the Night Riders that all insurance on all
tobacco barns and farmers' barns containing tobacco will be cancelled, and
that buyers of tobacco in Spencer County will be compelled to go out of the
market on account of not being able to protect their property with insurance;
that some of the leading companies are now refusing, and have so notified
their agents not to take any further risks on tobacco in Spencer County.

We desire to say to you that the chief objection by the farmers to pool-
ing their tobacco in the pooling house of the above society is that the society
requires them to deposit their tobacco in their warehouse to be classified,
mixed and bulked with all tobacco placed in the pooling house; that the
society does not give to the farmer any contract, bond, nor indemnity that it
will safely keep his tobacco and indemnify him against damages in case it
is injured in bulk or in handling. In fact the situation is simply this:

The farmer under the pooling agreement deposits his tobacco with the
society and thereby loses all control over it as to its sale, the price, insurance
and its return to the farmer in case it is not sold or handled properly; that
the officers of this society grade the tobacco and control it until it is finally
sold. These officers receive certain compensation for their services. The
compensation of the officers and all expense is fixed and created by the society
and the tobacco grower has no voice.

We also desire to call your attention to the fact that the present repre-
sentative from Spencer County is the father-in-law of the attorney and con-
fidential advisor of this Society of Equity; that this confidential advisor's
father is the chief pooling officer of this society and is the grader and classi-
fier of the tobacco pooled.

It is our opinion and the opinion of many of the leading citizens of
Spencer County that the Governor should be clothed with such power as will
enable him to deal promptly and effectually with any depredations that may
be committed. A stringent law should be passed to punish those who are
guilty of the destruction of property, also that a law should be passed to mete
out severe punishment to those who send out these notices as referred to
above. We also desire to say to you that if you so wish we will furnish you with
names of those who have received Night Rider notices, supported by their
affidavit as to their receiving same and that they ,desire protection from the
State along the lines set out herein, as there have already been two barns
burned in Spencer County about four weeks ago on the same night, origin
of which is mysterious and unknown.

Respectfully submitted,
(Signed) T. R. HARDY,

ALLEN PAYTON,
J. J. BROWN.

207
"NIGHT RIDER" SITUATION IN INDIANA.

SEPTEMBER 24, 1908.

Mr. Speaker and Gentlemen of the House of Representatives :

The resolution of the House of Representatives, requesting
"more specific information" relative to the situation in the tobacco
district of the State and to certain expenditures made from the
Governor's contingent fund, has been received and considered.
(Remainder of message similar to that to the Senate, p. 201.)

CHARGES MADE BY LUTHER W. KNISELY.

SEPTEMBER 29, 1908.

Mr. Speaker and Gentlemen of the House of Representatives:

I am advised, through the press of this date, that Luther W.
Knisely, a member of the House of Representatives, has sworn to
and published the following statement:

"I, Luther W. Knisely, a representative in the General Assembly of the
State of Indiana from the county of Dekalb, and as such being in Indianapolis
in attendance upon the special session of said General Assembly, on the
morning of September 26, 1908, do state under oath that upon the said morn-
ing of said date and twenty minutes before the House convened Senator
Wick wire came to me and took me .and wanted an interview. He made me
the proposition that if I would vote for the county local option bill I could
have a position. I asked him what kind of a position. He said the position
would pay from $700 a year up to $2,000 and better, according to my ability
to fill the same.

I made the statement to him that he had no authority to give these
positions. He wanted to know if I would accept any higher authority. I
said I could consider the matter and went back to the House. About ten
minutes before the House opened Senator Wickwire came to me and took
me to Governor J. Frank Hanly, who conducted me into his private office.
There the Governor requested me to vote for the county local option bill,
saying that if I would I would be well taken care of. I said: 'Governor,
I am a democrat; if you were put. in my chair and I in yours, what would
you do in this case?' He answered: 'I would most certainly accept.' He
also said: 'Knisely, this is the opportunity of your life.' I answered: 'I beg
to differ with you.' Then the conference ended and I returned immediately
to the House chamber."

I am also advised, through the public press, that Mr. Knisely
is advising against any investigation of his charge by the House.

208

The charge made is a grave one. It involves the honor of the
House of Representatives, the honor of a member of the Senate,
and the honor of the Governor of the State of Indiana. The facts
relating to this charge should be known by the House. If they
are true, I ought to be impeached and removed from office. If
they are false, I am entitled that their falsity should be disclosed.

Knowing that the charge is wickedly and maliciously false and
without any foundation or semblance of truth, I deem it my duty
to call your attention thereto and to request that a committee be
appointed, with power to send for persons and papers and to ad-
minister oaths, to make full and complete investigation of said
charge, and return the facts to this House for such action as in
its judgment shall be proper in the light of the facts disclosed.
Respectfully submitted,

J. FRANK HANLY,

Governor.

Senate Veto Messages, Sixty-Fourth
General Assembly

[14—19891] ,209|

211
SENATE BILL No. 48.

FEBRUARY 20, 1905.

Mr. President and Gentlemen of the Senate:

I return herewith Senate Bill No. 48 without my approval.
I do so with reluctance and regret, for I am conscious that my act
may be criticised by some of the persons whom it is attempted to
make beneficiaries under the bill. I have, also, a sincere and pro-
found appreciation of the services rendered by the soldiers, sailors
and marines of -the country. Their valor and sacrifices saved and
preserved the integrity of the republic and carried its flag in a
march of glory around the world.

But for the fact that my duty to the State precluded my doing
so I would have gladly signed this bill. After the best thought of
which I am capable, however, I am compelled to believe that the
good of the public service and the welfare of the institutional life
of the State, penal and benevolent, require that the measure should
not become a law. I have therefore preferred to accept the hazard
of criticism rather than lack the courage to do what has seemed
to me to be a plain public duty.

The bill provides that any honorably discharged soldier, sailor
or marine of the United States, who is a resident of Indiana, and
who makes application for appointment, and who served in the
Civil War, the war with Spain or the war in the Philippines, and
who

"is honest and competent, shall be given the preference for any appoint-
ment to be made by whatever administrative authority conferred by the
State of Indiana to any position paying not more than ninety dollars per
month in any penal institution, benevolent institution, public building or other
institution or employment maintained or conducted by the State of Indiana."

This would compel the appointing power to appoint them in
every such instance, or, by the act of non-appointment, to brand
them either as dishonest or incompetent. Failure to appoint them
could be justified, under the law, solely upon the ground that they
are either dishonest or incompetent. I cannot sign an act that
would compel me to do that.

It will be observed that the proposed law does not require the
preference to be given to the class named where their qualifications
are equal to the qualifications of other citizens, but whenever they
are applicants and are "honest and competent."

212

"Competent" is defined by the Century Dictionary to mean
-I Living ability or capacity." There are degrees of competency,
degrees of ability, and degrees of capacity. Ten men are appli-
cants for a position ; all of them may be competent ; all of them
may have ability ; and all of them may have capacity ; but some of
them arc more competent, have greater ability and possess greater
capacity than some of the others ; and of the ten, one is most com-
petent, has the greatest capacity and possesses the greatest ability
of all the ten. In such a case he is the one of all the ten who ought
to be appointed, for the welfare of the State and the good of the
public service of of the institution the control of which he is to
assume. Under the proposed legislation he could not be appointed
if any one of the ten applicants happened to be an "honest" sol-
dier, marine or sailor who is competent to discharge the duties of
the position, though it stands confessed that such soldier, marine
or sailor is the least competent of all the ten applicants.

It is now forty years since the Civil War closed and the armies
of Grant and Sherman returned to civil life — more than an av-
erage lifetime. Few survivors of that war are today under sixty
years of age. Physical and mental infirmities have impaired in
many instances both body and mind.

The above language limits the appointing power of the entire
executive and administrative departments of the State in making
appointments to any positions in the service of the State where
the compensation is not more than ninety dollars per month, to
soldiers, sailors and marines of the United States, who served in
either of the wars named, whenever any such soldier, sailor or ma-
rine, who is "honest and competent," is an applicant.

If the class of citizens named in this bill are entitled to appoint-
ment to all positions in the public services where the compensation
is not more than ninety dollars per month, upon application made
by any of them who are "honest and competent," then they are
equally entitled to appointment to all positions in the public serv-
ice upon application made by any of them who are "honest and
competent," however great the compensation or arduous and diffi-
cult the duties of such positions.

I do not understand why an arbitrary limitation to positions
paying not more than ninety dollars per month has been made.
It cheapens the class of citizens it seeks to befriend, and is in effect
a legislative declaration that the public services of all such citizens
are limited in value to less than ninety dollars per month — a
declaration in which I decline to join.

213

Should this bill become a law every appointment made in any
of the institutions of the State where the compensation is not more
than ninety dollars per month; every member of every board of
trustees, board of control or board of managers of any such in-
stitutions ; every member of every police board in every city op-
erating under the metropolitan police law of the State ; and every
appointive position in every department of the State government
not paying more than ninety dollars per month, would have to be
made from ex-soldiers, sailors or marines of the United States, if
any such were applicants for appointment and any of such appli-
cants were "honest and competent."

While many of them are still entirely competent to discharge
the duties of any position included within the provisions of this
bill, many thousands of them are competent to do so only in a lim-
ited sense, and have certainly ceased to be the most competent per-
sons for such positions. Not all, but many of them, lack the
strength and fiber, the tenacity of purpose, the firmness of will
and the grasp of large affairs essential to the most capable and
efficient administration of the great penal and benevolent institu-
tions of the State — institutions requiring the expenditure and han-
dling of hundreds of thousands of dollars of public funds each
year. Yet the boards of control of all these institutions, under the
provisions of this bill, would have to be made up of soldier, sailor
and marine applicants if they were "honest and competent," though
they were far less competent than thousands of other and younger
men in the State, whose services could be had if the executive or
appointing power were left free to select from the entire body of
our citizenship.

This administration will not be satisfied with merely competent
men for these State institutions. It insists upon having the privi-
lege of selecting the most competent and the best men for these po-
sitions afforded by our entire citizenship, if such men can be in-
duced to enter such service.

Every one upon whom the responsibility of these appointments
has ever rested has found the field from which to select none too
large, though he had the whole body of citizens from which to
make selection.

Then, too, the public service ought to be open to all men and
the State ought not to be deprived of the services of its best and
most capable citizens by any limitation whatever. This is espe-
cially true of the State institutions mentioned. If there be any
citizens whose services to the country in time of war and whose fit-

214

ness for these positions justify the partiality of the appointing
power, and they are found to be willing to accept positions in the
public service, this administration will be only too glad to avail
itself of their services and thereby recognize the services they have
already rendered in behalf of the country on the field of battle.

Another well-known fact to those who have had experience in
public affairs touching the management of our State institutions
is that the best and most competent persons, those who possess the
highest qualifications for positions on the institutional boards, are
rarely found among those who are applicants for appointment
thereto. The necessity of going outside of all applicants and of
selecting men whose character, habits and peculiar ability give them
special fitness for such positions, has been felt by every man who
has occupied a position with appointive power.

In some instances I have already gone outside of all applicants
and selected persons whom I have believed to have a special fitness
for the position in question, and I hope to do so many times during
this administration, unless prevented by restrictions laid upon
me by legislative action.

If I can find such men among the soldiers, sailors and marines
of the wars named, I shall be glad indeed to recognize their serv-
ices to the country in the hour of its need and appoint them. But
if I cannot, I shall unhesitatingly make selection of others, feeling
that in so doing I am only discharging my duty to the State whose
servant I am. The administration ought to be left free to call to
its aid the services of the most competent men in the State without
regard to past military service.

In vetoing this bill I am simply saving to one of the States of
the republic the Union soldiers, sailors and marines fought to save,
the opportunity of obtaining the highest and best possible admin-
istration of its public affairs. The motive that prompts me to do
it does not widely differ from the motives which prompted the sol-
diery of the country to the performance of its duty in the years
gone by.

Respectfully submitted,

J. FRANK HANLY, •
Governor.

215
SENATE BILL No. 80.

FEBRUARY 20, 1905.
Mr. President and Gentlemen of the Senate:

I return herewith Senate Bill No. 80 without my approval.
The law as it now is provides adequate redress for every substan-
tial injury to the peaceful possession or quiet enjoyment of the
home or property of any citizen arising from the maintenance of
a private nuisance.

If such peaceful possession or quiet enjoyment is impaired in
any substantial degree, by anything which is in fact a nuisance
maintained by an adjoining property owner, damages may be re-
covered and the maintenance of such nuisance enjoined under ex-
isting law in any court of competent jurisdiction in the State.
There must, of course, be substantial invasion either of such pos-
session or of such enjoyment, and the thing sought to be enjoined
or abated must be a nuisance in fact before an action for damages
or injunction will lie. This is as it should be. The law is right as
it is.

The bill returned herewith makes

"any fence or other structure in the nature of a fence unnecessarily exceed-
ing six feet in height, maliciously erected or maintained for the purpose
of annoying an owner or an occupant of an adjoining property,"

a private nuisance per se, whether it be so in fact or not, or whether
or not there is in fact any impairment of such adjoining owner's
possession or enjoyment of his property.

Actual injury to, or impairment of, such possession or enjoy-
ment by such adjoining owner, is not a necessary element at all
under Section 1 of the bill. The only elements necessary to con-
stitute the fence or structure a nuisance are, an unnecessary height
of more than six feet, a malicious purpose in the mind of the per-
son erecting or maintaining such fence or structure, and a purpose
to annoy the owner of the adjoining property. Such a fence or
structure maintained with such a purpose is declared to be a nuis-
ance per se, and an action will lie though such fence or structure
results in no injury or impairment whatever to the possession or
enjoyment of the adjoining owner's property.

The proposed law is wholly unnecessary and is petty in char-
acter. It is calculated to engender ill-will and to intensify existing
and trivial differences between neighbors, and will tend to multiply

216

frivolous and spiteful litigation between persons who ought to be
friends.

Section 3 of the bill contains a declaration of an emergency
for the immediate taking effect of the act upon and from its pas-
sage. An emergency clause has no justification in a bill such as this.
By it the bill makes unlawful today what was lawful yesterday, and
gives the citizen no opportunity to conform to the change in the
law. It makes it possible to bring an offending citizen into court
the moment the passage of the bill is completed by executive ap-
proval. The bill creates a new cause of action and imposes new
liabilities instantly and without warning. This ought not to be
done.

An emergency for the immediate taking effect of an act from
and upon its passage ought rarely, if ever, to be declared where
the act carries a penalty for its violation, imposes a forfeiture,
or makes unlawful an existing deed or thing which was lawful be-
fore the passage of such act.

Under the Constitution of the State the General Assembly has
authority to declare the existence of an emergency for the imme-
diate taking effect of a legislative act. But it ought not to do so
arbitrarily. There should exist some reason for such declaration,
and where no emergency does in fact exist, none should be declared
to exist. There is absolutely no emergency of which I have been
able to learn for the immediate taking effect of this act.

The act of legislation, under the Constitution of this State, is
not complete — the passage of a bill is not accomplished — until it
receives executive approval, or, having received executive disap-
proval is passed by the General Assembly notwithstanding such dis-
approval. There being in fact no emergency for the immediate ta-
king effect of the act in question, and the act itself being of doubt-
ful propriety, creating a new cause of action and providing for
penalties for its violation, I cannot join in the arbitrary declara-
tion of the existence of an emergency.

I have given more consideration in this message to the bill than
its importance deserves; but I have done so in the hope that the
General Assembly may be induced to adopt a more conservative
course in declaring an emergency for the immediate taking effect
of measures, when in fact no such emergency exists, or where the
measures create new causes of action, or carry penalties for their
violation, or impose forfeitures.

Respectfully submitted,

J. FRANK HANLY,

Governor.

217
SENATE BILL No. 17.

FEBRUARY 23, 1905.

Mr. President and Gentlemen of the Senate :

I return herewith Senate Bill No. 17 without my approval.
The bill seeks to legalize a certain gravel road proceeding in Or-
ange County, to validate the bonds issued therein and the assess-
ments made for the creation of a fund with which to retire such
bonds. The measure is special and local in its character. It has
application to but one county in the State and to a particular pro-
ceeding in that county, and involves the assessment and collection
of taxes for road purposes to the extent that it seeks to validate
the bonds issued and the assessments levied for their retirement.

Section 22 of Article 4 of the Constitution of the State pro-
vides :

"The General Assembly shall not pass local or special laws in any of the
following enumerated cases, that is to say *. For laying out, opening

and working on highways * * *. For the assessment and collection of taxes
for * * * road purposes."

As the case sought to be reached by the bill now stands, the
bonds issued in the proceedings sought to be affected are invalid,
and the assessments are also invalid, because of errors in said pro-
ceedings.

The measure under consideration is forbidden by the Constitu-
tion. It is an attempt to validate said proceedings, said bonds and
said assessments. It is, therefore, in effect, an attempt to authorize
an assessment and collection of taxes for road purposes by an act
local and special in character, and is clearly within the constitu-
tional inhibition.

The question here involved has recently had the consideration
of the Supreme Court of the State in the case of Board v. Span-
gler, reported in the 159 Ind. 579, where the unconstitutionally of
a like statute is declared.

In that case a proceeding for the establishment of a free gravel
road in Owen County was pending at the time the act of February
7, 1899, limiting the issue of bonds or other evidence of indebted-
ness for the construction of free gravel or macadamized roads to
four per centum of the total valuation of the taxable property of
the township, became a law. On March 4, 1899, an act, containing
an emergency, was passed, exempting proceedings in counties hav-

218

ing a population between 15,000 and 15,050, and which were pend-
ing at the time of the taking effect of the first act, from the pro-
visions of said act.

Afterward, relying upon the validity of said act of March 4,
1899, a contract was let in said gravel road proceedings in Owen
County for a sum in excess of four per centum of the taxable valu-
ation of the property of the township in which such road was
located.

In 1901 the General Assembly passed a curative act, solely ap-
plicable to said proceedings in Owen County, by which all of said
proceedings and said bonds were declared validated.

In the bill returned herewith said proceedings in Orange
County, including the contract, the bonds and the assessments, arc
sought to be validated substantially as it was sought by the act of
1901 to validate the contract, the bonds and the assessments in
the Owen County proceedings.

In the Owen County case the court held that while Owen
County was not mentioned by name in the act of March
4, 1899, the court would take judicial notice of the fact that
such act applied to Owen County alone, it being the only county in
the State having a population between 15,000 and 15,050, and
that the act, in effect, sought to provide that the provisions of the
general act of February 7, 1899, limiting the issue of bonds,
should not apply to certain described proceedings to improve
gravel roads in the county of Owen.

In passing upon the validity of the act of March 4, 1899, the
court said :

"The attempted exclusion of pending proceedings for the improvement
of gravel roads in Owen County from the operation of the general law pro-
hibiting an issue of bonds for gravel road purposes in excess of four per
centum of the taxable valuation of property of the township, was in effect an
attempt to provide by a local law not alone for an issue of bonds, but for
the levy of a tax that, under existing law, constitutes the means of retiring
such bonds. We think that it was not competent for the General Assembly
to make such exception. The act of March 4, 1899, does not purport to be
a curative act, and it is not curative in the sense of attempting to validate
a past proceeding, but we think that its validity is to be tested by the con-
siderations that are applicable to statutes that purport to be curative. In
cases where it would have been originally competent for the General Assembly
to have authorized particular proceedings upon the part of a board or other
official, the same source of power may ordinarily validate the proceedings;
but unless the General Assembly had the power to have authorized the pro-
ceedings originally by an act that in its substance would have been of the
same character as the curative act, then the curative act would be invalid.

219

Walsh v. State, ex rel., 142 Ind. 357, 33 L. R. A. 392; Schneck v. City of
Jeffersonville, 152 Ind. 204.

The act of February 7, 1899, was general in its character, and if it
had contained an exception that excluded from its operation proceedings
generally that were then pending, we take it that it would not have thereby
lost its general character. It cannot, however, be contended with any show
of reason that it would have been competent to have limited said act so as to
exclude from its operation proceedings to improve highways in Owen County,
thereby legislating for Owen County in such particular. This is in substance
what it was sought to do by the act of March 4, 1899. As the subject of the
legislation falls within Sec. 22, of Article 4, of the State Constitution, we hold
that the proceedings could not be validated by any act that could properly
be characterized as local or special."

The curative act of 1901 was also held invalid for like reason.
In speaking of that act, the court said :

"The act of 1901 is also invalid. The attempts to validate the contract
and the assessment of taxes to pay the bonds upon their maturity were
abortive, because of the special and local character of the act; and as it is not
to be presumed that the issue of bonds would have been declared validated
by the General Assembly, had it been advised that there was no power to
retire such bonds in the manner proposed, the entire act must be regarded as
a nullity."

I believe the above case is decisive of the question involved in
the bill returned herewith; that it is controlling upon both the
legislative and executive departments of government, and there-
fore precludes me from giving it my approval.

It is, perhaps, proper, however, to suggest that the relief
sought by this bill is not improper, and that a general measure
validating all gravel road proceedings in the State, where the de-
fects in such proceedings are only technical in character, would
be a valid exercise of the legislative power.

Respectfully submitted,

J. FRANK HANLY,

Governor.

220
SENATE BILL No. 160.

FEBRUARY 27> 1905.

Mr. President and Gentlemen of the Senate:

I return herewith Senate Bill No. 160 without my approval.
This bill provides for the reimbursement of Henry J. Hostettler,
late trustee of Clear Spring township, Lagrange County, out of
the -public funds of said township, for certain moneys of such
township coming into his hands as such trustee, and by him de-
posited in a certain banking institution, which moneys were lost
to him through the failure of such institution, and which amounted
to the sum of $1,812.00.

Other bills providing for the reimbursement of other public
officials of Lagrange County, for public moneys lost in like man-
ner, have received the sanction of the General Assembly. The ag-
gregate appropriation of public funds belonging to the citizens
of this county made by bills already passed exceeds $3,400.00.

Similar bills for the relief of certain other township and county
officers of Elkhart, Dekalb, Laporte, Jasper and Steuben counties,
on account of similar losses, have passed both houses of the Gen-
eral Assembly. The aggregate appropriations of the funds of
these several counties and the several townships thereof, made by
the several measures already passed, are more than $65,000. This
is a goodly sum to give away. And yet, as shown by the calen-
dars of the respective houses of the General Assembly, other meas-
ures having like provisions and like purposes are far on their way
toward legislative approval.

I am unable to state with accuracy the amount of the aggre-
gate appropriations carried by these several pending bills, but the
grand total of such appropriations made by these bills, passed and
pending, is startling in amount and is certainly sufficient to chal-
lenge the thoughtful consideration of every member of the Gen-
eral Assembly.

The character of this legislation, the number of public officials
relieved of just and solemn obligations, and the great sum of
money appropriated by it in the aggregate from the treasuries
of the several townships and counties affected and placed in the
pockets of private individuals as a gift, have caused me to con-
sider with thoughtful care two questions which seem to me to go
to the very heart of each of these measures.

221

First. Docs sound public policy admit of such an appropria-
tion of the public funds of a township or county?

Second. Is such legislation inhibited by the Constitution of
the State?

I am compelled to answer the first of these questions in the nega-
tive. A public policy which relieves from liability a public official
who makes a deposit of public funds entrusted to his care in a bank
which fails, and in which failure such funds are lost to him, is un-
sound and dangerous. If such policy be generally adopted and
long continued, it will inevitably beget loose and careless adminis-
tration, multiply such losses and mulct the people d'lily by the use
of public funds raised by taxation to recoup private losses.

Between the trustee named as the beneficiary in the bill re-
turned herewith and the people of his township there was an im-
plied contract. A contract none the less binding and sacred be-
cause it was unwritten. On his part this contract required him
to faithfully discharge his duties as such official and account to
his township for all moneys belonging to such township and coming
into his hands. On the people's part it required them to pay him
the salary fixed by law. Then, in addition, that the assurance on
the part of the trustee might not fail, the law required from him
a solemn and binding written contract with surety that he would
faithfully discharge his duties and account for all moneys be-
longing to his township which should come into his hands. The
amount of money received by him measured his liability. He was
bound, as a public officer, to keep the funds in his hands safely. He
was, in fact, an insurer of the safety of the funds in his hands
and was bound to account for the moneys lost by him, though lost
without his fault.

Good morals and a sound public policy require that these con-
tracts, both the implied and the written one, shall be kept, and
that there shall be no impairment of either of them, and that there
shall be no relief from the penalties by them imposed.

When the beneficiary named in this bill sought and obtained his
office he knew the obligation he would be required to assume. He
knew, also, the hazards he would incur, and that the extent of his
liability would be measured by the amount of money coming into
his hands. Knowing this he was not deterred from accepting his
trust. On the contrary, he chose to qualify and to enter upon the
discharge of his duties as such trustee.

Having entered upon the discharge of such duties, he was not
compelled by any public necessity to withdraw in bulk the funds

222

due his township from the county treasury. He could have left
them there until required for public use. While such funds were
in the county treasury he, as township trustee, would have carried
no hazard of their loss, nor would he have incurred any liability had
they been lost while in such treasury. He chose to remove them in
bulk and in larger sums than public necessity required and to place
them on deposit in a bank of his own choice. The bank failed.
The loss of funds so deposited was his individual loss. The deposit
of such funds in such bank was his affair and not the public's.
Knowing the law, he chose to carry the hazard, to assume the risk
and to accept any liability consequent upon the loss of any part
of such funds, and now, that such loss has come upon him, he is
in no position to ask relief from the requirements imposed upon
him by the law. He has no claim, either moral, legal or equitable.

As to the second question, the inhibition of the Constitution
against such measures as these, the law is too clear to admit of seri-
ous debate.

The decision of the Supreme Court in the case of Mount, Trus-
tee, v. The State, ex rel. Richey, 90 Ind. 29, has been cited in sup-
port of the constitutionality of the bill by its friends and by the
friends of the several kindred measures hereinbefore referred to.
I have given consideration to that decision. It was written by a
learned and eminent judge, in whose ability and learning I have
very great confidence. The decision is in point and the bill is
clearly within the rules therein declared, in so far as it seeks to re-
imburse-the beneficiary on account of public funds lost by him, but
it is not in point and the provisions of the bill are not within the
rules of the decision in the case named in so far as it seeks, by
direct provision, to relieve such beneficiary and the sureties on his
official bond and discharge them from any and all liability on ac-
count of such bond for the payment of the money due the said
township from such beneficiary.

I am thoroughly convinced, howrever, that the decision is wrong
in principle; that it is opposed to the great weight of judicial
decision upon the question involved; that it rests upon a false
premise, involving mixed questions of law and fact; and that it
has been modified, if not overruled by implication, in a subsequent
decision of the Supreme Court, and that it has ceased to be the law.
And I am quite as thoroughly persuaded that it never ought to
have been the law.

The bill is silent upon the question as to whether or not the
trustee sought to be relieved has paid to his township the moneys

223

lost by him. If he has paid the township the money lost, he occu-
pies to his township, as to such money, the position neither of
debtor nor creditor. He has no right in law or in equity to the re-
turn of his money. In the absence of special legislation for the
purpose such money cannot be returned to him. A return of, it
would amount to nothing but a gift, pure and simple, a gift, too,
of public money for a private purpose.

That the General Assembly has no constitutional power to
make an appropriation of public funds raised by taxation to a
private purpose is agreed by all authorities. This is conceded in
the decision in the 90th Ind., above cited. On this point I submit
the language of the decision:

"It is, perhaps, true that the legislature cannot authorize the assessment
of a tax for a mere private purpose * * *."

The writer of the opinion states the basis of the decision as
follows :

"Reimbursing a public officer for the loss of public funds, occurring while
he is engaged in discharging public official duties, cannot be deemed an ap-
propriation to private purposes."

This is the sole basis of the decision, and the pith and point of
the decision itself is embraced in the following sentence:

"We do no more than decide that the legislature has power to direct
the application of township funds to the payment of claims growing out of the
discharge of official duties by the trustee where the claims are of a public
nature."

The premise stated above is a mistaken one. It involves two
mixed questions of law and fact, both of which are erroneous :

First. It assumes that the money was lost by the trustee
"while engaged in discharging public official duties."

Second. It declares that an appropriation reimbursing a trus-
tee for the loss of public funds "cannot be deemed an appropria-
tion for a private purpose."

When the trustee drew the money from the treasury in bulk and
before it was needed to meet the public expenses of his trust, and
deposited it in a bank, he was not engaged in the discharge of any
public official duty. No duty he owed to the public and no duty
imposed upon him by law required him to withdraw the money
from the county treasury in bulk before there was a necessity to
pay it out for the public benefit and deposit it in a bank. That act
was a private act in which the public was not concerned. It was
done either for his own convenience or profit.

224

If, having made this disposition of the money, lie loses it
through the failure of the bank, he is liable for the loss. His bond
is also liable. He or his bondsmen must make it good. Knowing
his liability and the liability of his bondsmen, he docs make it good
by restoring to the public fund the sum lost. This done, the trans-
action is closed. It never was at any time a public official act, but
the private act of a public official, which was not required by law
or by any duty he owed to the public. But whatever the act —
private or official — the transaction is a closed incident. The town-
ship has lost nothing. The books are square. He has no claim.
The township has no claim. He goes out of office with a clean ac-
count.

It is in that condition that we find him. While he is in that
condition it is proposed to do what ? To appropriate public money
to pay an obligation which the public owes to him ? Not so. The
public owes him no obligation, legal, moral or equitable. But it
is proposed to appropriate public funds, raised by a tax upon the
property owned by the people of the township, to make him a gift
for his private and personal benefit, the only basis of which is pub-
lic sympathy for a private misfortune. To say that such an ap-
propriation of public funds made under such circumstances is for
a public and not a private purpose, is to distort a self-evident
truth, one so plain that there is room for neither cavil nor dispute.

The foundation upon which the decision is based, it will be ob-
served, melts away under analysis and leaves no grain of fact or
truth upon which it may rest, and the decision itself must there-
fore fall.

It will be remembered that in the language of the court itself
the opinion does "no more than decide that the legislature has
power to direct the application of township funds to the payment
of claims growing out of the discharge of official duties by the
trustee, where the claims are of a public nature"

Neither the claim in the Mount case, supra, nor the claim now
under consideration grew out of the discharge of official duties,
nor was the Mount claim or is this of a public nature.

These considerations led the Supreme Court to correct the above
decision, in the case of McClelland, Trustee, v. The State, ex rel.
Speer, 138 Ind. 321, and to decide that the levying of taxes upon
the property of a township to create a fund to reimburse a trustee
for money lost under such circumstances would be the taxing of
the property of the citizens of the township for a private and not
a public use.

225

In that case the court said:

"Here was an unconstitutional discrimination between citizens, in this,
that the act arbitrarily requires the taxpayers of Wayne township to give
the relator the sum of $2,812.90 and fastens upon a township and its tax-
payers a debt for that amount, for which the township never received any-
thing and for which it never gave its consent nor contracted a liability.
In our opinion the General Assembly is not vested with power to legislate
a tax upon the people of a township for a private purpose."

It is urged that in the McClelland case, just cited, the question
involved was different from the question involved in the Mount case,
supra, in that the money lost by the trustee in the McClelland case
was not raised by taxation upon the property of the people of
the township whose property it was proposed to assess to create a
fund with which to reimburse the trustee. In part that is true, but
not wholly so. A part of the funds lost by him were raised by
taxation upon the people of the township whose property the legis-
lature proposed to retax for the purpose of creating a fund with
which to reimburse such trustee.

In passing upon the question of what is a public use, the court,
in the McClelland case, aptly said :

"We think the law is well settled that nothing can fairly be regarded as
a public use, unless it has a state use or a national use in furtherance of a
state use. To defray the necessary expenses of a township, or to make nec-
essary improvements in a township, is a state or public use. But the donation
of a large sum of money to the relator in this case cannot be regarded as a
public use of money."

It is true that in the above case the act provided for the levy
of a tax upon the property of the citizens of the township from
which to create a fund with which to reimburse the trustee, there
being no funds in the township treasury out of which he could be
reimbursed. We submit, however, that there is no distinction in
principle between that case and the case involved in this bill. If
the General Assembly has no power to legislate a tax upon the
people of a township for a private purpose, it has no power to
take the funds of a township, which have been raised by a tax lev-
ied upon the property of the people of such township, and appro-
priate them to a private purpose. If the General Assembly is in-
hibited from laying a tax for a private purpose, it must neces-
sarily be inhibited, on like principle and for like reasons, from
appropriating for a private purpose the money which has been
raised by taxation.

The levying of a tax, or the appropriation of money raised
[15—19891]

226

by taxation, for the reimbursing of the trustee named in this bill,
would be, in effect, taking the property of one man to bestow it
upon another. In effect, it would be a taking of the property of
the citizens of the township affected for a private and not a public
use. It would be, in plain English, a robbery and a spoliation of
the citizens of the township for the benefit of the individual named
as the beneficiary in the bill — a robbery and a spoliation for which
no warrant can be found in the Constitution of the State, in law,
in equity, or in the conscience of honest men.

The bill under consideration provides specifically for the levy-
ing of a tax for the creation of a fund to recoup the township for
the money appropriated by it for the reimbursement of the trustee.

That it is an attempt to make an appropriation of public funds
for a private purpose, and, in effect, to take private property for
private use, through the appropriation of public funds which have
been raised by taxation, and that such an attempt is unconstitu-
tional, is well established by judicial decision. In fact, there is
almost an unbroken line of authority to that effect:

McClelland, etc., v. The State, 138 Ind. 321 ;
State, etc., v. Tappen, 29 Wis. 664 ;
People v. Supervisor, etc., 16 Mich. 253;
Bristol v. Johnson, 34 Mich. 123;
Hoagland v. City of Sacramento, 52 Cal. 142;
Lowell v. City of Boston, 111 Mass. 454;
Thorndyke v. Inhabitants of Camden, 82 Me. 39;
Cooley on Constitutional Limitations, pp. 332-341.

On the other side, the case in 90 Ind., supra, stands practically
alone. The premise upon which the decision rests, as we have
shown, is a mistaken one. It consists of a bare statement without
a word of reasoning or the citation of a single authority to sup-
port it.

In the discussion of the power of the legislature to make such
an appropriation as was there sought to be made, the case of
Brooks v. Landsborough, 36 O. St. 227, is cited, but the citation
is somewhat unfortunate, in that the Ohio court, in its decision, was
construing a law entirely different in principle from the one before
the Indiana court. In the Ohio case the treasurer of a school dis-
trict was robbed. He was unable to replace the money. The legis-
lature passed an act relieving his bondsmen and authorizing the
district officers to levy a tax upon the property of the district to
reimburse him, after first submitting the matter to the vote of the
electors of the district and receiving their approval. It will be

99

observed that the bondsmen were not relieved and that the tax was
not levied by the act of the Ohio legislature. It only provided a
way by which the people of the school district might relieve the
bondsmen and levy a tax.

That case, we submit, is slight authority for an act which
levies a tax, or takes funds raised from a tax levy, for the reim-
bursement of public officials for money lost by them, and does so
without the consent of the citizens taxed.

There is yet another reason, as before indicated, why the bill
returned herewith is unconstitutional, and which takes it clearly
outside of the rule laid down by the court in the case of Mount v.
State, supra. It provides

"that the said Henry J. Hostettler and the sureties on his bond as trustees
shall be released and discharged from any and all liability for the payment
of the money of said township so lost."

This provision is clearly within the constitutional inhibition
contained in Section 24* of the Bill of Rights which provides that
"No * * * law impairing the obligation of contracts shall be passed."

It is also in direct conflict with the decisions of the Supreme
Court of the State.

The case of Johnson v. The Board of Commissioners of Ran-
dolph County, reported in the 140 Ind. 152, is directly in point.
The decision there rendered has never been criticised, modified or
overruled, so far as I have been able to ascertain. The above case
involved the validity of a statute which sought to relieve a county
treasurer and his bondsmen from liability on account of the official
bond of the treasurer for money belonging to his county and lost
by him. } | ^j

The language of the statute seeking to relieve the official and
his bondsmen from liability on his official bond, is substantially the
same as the language used in the present bill.

In speaking to the question of the constitutionality of the
statute, the court said :

"The act could not have been any more violative of the Constitution, both
state and federal, if it had provided that the obligation of the bond be, and
the same is, hereby abrogated and annulled. Because, if the Legislature can
release a party from a part of the obligation of his contract, it can release
him from all of it. Both Constitutions forbid the Legislature to pass a law
impairing the obligation of contracts * * *.

"We, therefore, hold that the act referred to was and is void because
it violates the constitutional provisions above referred to."

228

Because of the considerations named above, I have been unable
to give my approval to this measure, and I venture to express the
hope that there is not a member of the General Assembly who will
be willing to sustain the bill and the kindred measures still pending,
before the General Assembly, upon a careful consideration of the
authorities cited, in view of the public policy involved, and his
oath to support the Constitution of the State.
Respectfully submitted,

J. FRANK HANLY,

Governor.

SENATE BILL No. 174.

FEBRUARY 27, 1905.

Mr. President and Gentlemen of the Senate:

I return herewith without my approval, Senate Bill No. 174,
for the relief of William Watters, Treasurer of Lagrange County.

The bill provides that

"said Watters and his sureties are hereby released and discharged from any
and all liability for the loss of said money."

This language refers to the loss of certain public moneys com-
ing into the hands of said Watters as treasurer of said county,
and by him deposited in a certain bank, and lost through the fail-
ure of such bank.

The bill also provides for the levying of a tax for the creation
of a fund from which to recoup said county for the money appro-
priated for the purpose of reimbursing said treasurer.

I withhold my approval from the bill for the following reasons :

First. It is against public policy.

Second. It is unconstitutional.

My reasons for my action are fully set forth in the message
accompanying Senate Bill No. 160, this day returned to the Sen-
ate without my approval.

Respectfully submitted,

J. FRANK HANLY,

Governor.

229
SENATE BILL No. 38.

FEBRUARY 28, 1905.

Mr. President and Gentlemen of the Senate:

I return herewith Senate Bill No. 38 without my approval.
The bill provides for certain changes and innovations in matters
of pleading and practice in civil, probate, special statutory and
criminal proceedings, and purports to "provide for the removal of
technical defects and for the decision of causes upon the substan-
tial issues between the parties," but its effect, if it became a law,
would be to increase appeals and multiply reversals rather than to
minimize them.

I agree with the friends of the measure that pleading and
practice is too technical in the courts of Indiana, and that there are
too many reversals of causes upon grounds other than the merits of
such causes. The sole object of judicial machinery should be to
secure exact justice between men. In so far as existing judicial
machinery falls short of that purpose, it is defective and ought to
be amended.

The frequent reversal of causes for slight errors in the admis-
sion of testimony or trifling slips made by the trial judge in the
progress of the trial, impairs the confidence of the public in the
certainty of justice, and is to be greatly regretted. There are
some provisions in the bill under consideration that, if enacted,
would tend to minimize such errors. These appeal to me, and I
would give my approval to them if I could. But there are provi-
sions in the bill which I am confident would multiply such errors,
and which preclude me from assenting to its passage.

Sections 1 to 5, inclusive, require that all demurrers, motions
to quash, or motions of any kind, addressed to any pleading, con-
taining two or more paragraphs or counts, or to two or more sub-
j ects or questions ; and that two or more j oint obj ections to any
motion or proceeding, or to two or more items of evidence, shall
be held to be separate and several, and shall be sufficient to chal-
lenge, separately and severally, the sufficiency of each paragraph
or count of any such pleading, or of each of such subjects or
questions, or the correctness of the ruling of the court upon each
of such items of evidence or upon such motions.

Said sections also provide that any exception taken to any rul-
ing of the court shall be held to be separate and several objections
to each question ruled upon, though it be a joint exception in fact.

230

They further provide that exceptions taken to the giving, re-
fusing or modifying instructions, though such exceptions be gen-
eral in character, shall be held to be separate and several, and that
general assignments of error in motions for a new trial shall be held
to be separate and several.

They also further provide that any demurrer, motion, objec-
tion, exception or assignment of error, in which two or more par-
ties shall join, shall be held to be separate and several.

In short, it applies to the whole procedure of issue and trial,
the vice embodied in the general demurrer for want of facts now
allowed by the law.

I know of no one rule of practice which makes it possible to
plant so many errors in causes pending in the nisi prius courts of
the State as does the right of general demurrer.

Lawyers find what they conceive to be a fatal defect in a plead-
ing filed by opposing counsel. They file thereto a general demur-
rer for want of sufficient facts. Argument is made upon the de-
murrer, but the real defect is adroitly and purposely concealed
and not presented to the court, lest the court discover and permit
amendment and thereby remove the chance to implant error
in the record of a cause of doubtful merit. Not being presented,
the court overlooks it, and overrules the demurrer. Counsel prompt-
ly except to the ruling. The trial proceeds. The cause is lost on
its merits. Then the knowledge of the existence of a fatal error
in the record impels both counsel and client to take an appeal. The
appeal is taken. Once in the Supreme Court, the battery so care-
fully masked in the trial court is revealed, the error pointed out,
and the cause reversed.

The provisions contained in the first five sections of the bill will
make possible a like practice in all the proceedings of causes in
the trial court, involving the issues, the trial and the motion for a
new trial. If enacted, they will inevitably increase appeals and
multiply reversals, and prove a grievous disappointment to those
who enacted them with the belief that they would minimize appeals
and reversals.

If there is real desire to minimize appeals and reversals, an act
precluding the reversal of a case on account of any ruling of the
trial court on a demurrer for want of sufficient facts, except for
such causes as are specified and set out in such demurrer, ought to
challenge the favorable consideration of the General Assembly, and,
if enacted, it would do much toward accomplishing the object de-
sired.

231

Section 10 of the bill is also objectionable. It provides that
any rule made by any court shall not be binding upon the court
when its enforcement will work a hardship or injustice.

Rules of court, when adopted and declared, now have the force
and effect of statutes, and are binding upon the court who makes
them, upon all counsel and upon all litigants who come before such
court. They rest upon and bind all alike, and so they ought to do.

If a cause has progressed until a rule of court attaches thereto,
the court ought not to have the power to waive the rule and take
such cause out of the operation of such rule upon discretion.

Section 11 provides that where one division of the Appellate
Court has rendered a decision, one or more judges of the other divi-
sion of such court may at any time, before the opinion has been
certified to the trial court, bring such cause before the full court
for further examination, opinion or decision.

The effect of this provision would be to cause counsel, who lose
a case in one division of the Appellate Court, to importune members
of the other division of such court until some one of such members
exercise the power vested in him by the statute and brings the case
before the whole court. In this way the business of the court
would be disarranged and obstructed and the court compelled to sit
en bane upon every case.

I am fully convinced that there ought not to be two divisions
of the Appellate Court, and that the court should be required in
every case to sit as a single body, but the statute ought to make
direct provision for such change and not seek to do it by the indi-
rect provisions found in said section.

I am conscious that lawyers differ greatly upon questions of
practice and judicial procedure, and that what may be accepted by
one as the consummate flower of human wisdom may appear to an-
other as dangerous or as little better than a useless and ineffective
provision. For this reason I would hesitate to withhold my ap-
proval from the present measure were it not for the presence in the
bill of a section that is clearly within the inhibition of the Con-
stitution.

Section 12 of the measure provides that when a petition for a
rehearing is filed in either the Appellate or the Supreme Court, the
chief justice or presiding judge shall distribute the case to some
judge other than the writer of the original opinion, who shall re-
examine such record, and report thereon. This section presents a
graver question than any heretofore mentioned. It is a direct in-
vasion by the Legislature of the rights and powers of another in-

232

dependent and co-ordinate department of the State government.
By express constitutional provision the government of this State
is divided into three separate departments, independent and co-
ordinate— legislative, executive and judicial. The judiciary con-
stitutes an independent department of government — possessing not
only equal powers, but exclusive powers with respect to the duties
assigned to it. The Supreme Court is a constitutional tribunal.
Its power to prescribe rules regulating the conduct of its business
exists, not by virtue of legislation, but by virtue of the inherent
right of that tribunal to maintain its dignity and independence
and to decide for itself the manner and mode in which it shall dis-
charge its official duties. Into that domain the Legislature has no
right to go.

In the case of Smythe v. Boswell, 117 Ind. 366, this language
is used in the discussion of the question now under consideration :

"* * * the judiciary is an independent department of government,
exclusively invested by the Constitution with one element of sovereignty, and
this court receives its essential and inherent powers, rights and jurisdiction
from the Constitution and not from the legislature."

An act of the General Assembly of 1889 provided that

"It shall be the duty of the Supreme Court to make a syllabus of each
opinion recorded by said court * * *."

This act was held unconstitutional on the ground that it sought
to add duties to those devolved upon the judges of the Supreme
Court by the Constitution. In passing upon the question the court
said :

"We have no doubt that it is our right and our duty to give judgment
upon the questions we have stated, because they directly concern the rights,
powers and functions of the court, and no other tribunal can determine for
us what our rights, duties and functions are under, the Constitution."
Ex Parte Griifths, 118 Ind. 86.

In a very early case in this State it was decided :

"The powers of the three departments are not merely equal, — they are
exclusive, in respect to the duties assigned to each. They are absolutely inde-
pendent of each other."

Wright v. Sefrees, 8 Ind. 298.

Speaking upon this question Judge Elliott, in his "Appellate
Procedure," aptly says:

"It is true, no doubt, that the Legislature may regulate the procedure,
but it cannot in any manner destroy or impair the substantive power, for that
is above legislative reach. The fundamental principle to which we have re-

233

ferred requires that it shouid be held that the conduct of business, the course
of argument and the like, are matters for the determination of the courts
and not for legislative decision. The Legislature may, of course, prescribe
rules of pleading and practice and require the courts to conform to those
rules, but it cannot so far control the conduct of business as to invade the
domain of the judiciary. It is very questionable whether the Legislature can
direct how briefs shall be prepared or arguments conducted, since the attempt
to exercise such power would seem to be an unauthorized encroachment upon
the province of the courts.

"It is an ancient principle that courts may prescribe rules for the conduct
of business and this power is an inherent one, so far, at least, as concerns
the mode of conducting the affairs of the court. * * * It is not, and cannot be,
within the legislative power to so fetter or control the action of the courts in
the conduct of business as to preclude the exercise of judicial discretion
or judgment. * In so far as regards the personal conduct of judges

of constitutional courts in the exercise of the duties of the judicial office it is
the law that legislative power is ineffective to control them, for it is evident
that without freedom of judicial action government must degenerate into
a system of sovereign and supreme legislative power, and this cannot be
allowed to take place under a republican form of government."
Elliot's Appellate Procedure, Sections 6 and 7.

In a very recent opinion of the Supreme Court, handed down
as late as the first day of the present month, and not yet pub-
lished, the court has spoken quite vigorously upon this question.
The language hereinafter quoted is used in construing an act of
the General Assembly, approved March 9, 1903, concerning civil
procedure and requiring the Supreme Court to weigh the evidence
and decide questions of fact in certain cases, and is as follows :

"The court's power to prescribe rules regulating the conduct of its busi-
ness is inherent in the tribunal. It does not depend on any authority granted
by the Legislature. While the latter may prescribe rules of procedure and
pleading by which both courts and the parties in the case are bound, never-
theless, it cannot, under the Constitution, encroach on judicial domain by
prescribing the manner and mode in which the courts shall discharge their
official duties. The Legislature has no more right to break down the rules
prescribed by this court for conducting its official business, than the court
has to prescribe the mode and manner in which the Legislature shall perform
its legislative duties."

Parkinson v. Thompson, No. 20,401.

A California statute provided:

"All decisions given upon an appeal to any Appellate Court of this
State, shall be given in writing, with the reason thereof, and filed with the
clerk of the court."

Acting under this statute the Supreme Court of that State de-
cided a case without giving an opinion in writing setting forth its

234

reason for the decision. A motion was made to require the court to
file an opinion giving its reason. In passing upon the motion the
court said :

"The provisions of the statute had not been overlooked when the decision
was rendered. It is but one of many provisions embodied in different statutes
by which control over the Judiciary Department of the government has been
attempted by legislation. To accede to it any obligatory force, would be to
sanction a most palpable encroachment upon the independence of this depart-
ment. If the power of the Legislature to prescribe the mode and manner
in which the Judiciary shall discharge their official duties be once recognized,
there will be no limit to the dependence of the latter. If the Legislature can
require the reasons of our decisions to be stated in writing, it can forbid
their statements in writing, and enforce their oral announcement or prescribe
the paper upon which they shall be written, and the ink which shall be used.
And yet no sane man will justify any such absurd pretension, but where is the
limit to this power if its exercise in any particular be admitted?

"The truth is, no such power can exist in the legislative department, or
be sanctioned by any court which has the least respect for its own dignity
and independence. In its own sphere of duties, this court cannot be trammeled
by any legislative restrictions. Its constitutional duty is discharged by the
rendition of decisions. The Legislature can no more require this court to
state the reasons for its decisions, than this court can require, for the validity
of the statutes, that the Legislature shall accompany them with the reasons
for their enactment."

Houston v. Williams, 13 Cal. 25.

The Legislature of this State has no power to require a re-
examination or a rehearing of a case already considered and ad-
judicated by the Supreme Court.

Address of Mr. Justice Brown on Judicial Independence,
Second Volume, American Bar Association, 1889.

Nor has the Legislature power to require the Supreme Court
of this State to give an opinion in writing. The fact that an
opinion in writing is prepared and handed down in every case de-
cided by the Supreme Court, is due not to legislative enactment,
but to a constitutional provision.

Section 7, Article 5, State Constitution.

It has been urged by the friends of this measure that the Su-
preme Court can take care of itself and needs no assistance from me.
I think the statement is quite true. But the Supreme Court, nor
any other tribunal or department of government, can perform for
me the constitutional functions devolved upon me. These I my-
self must assume. One of the duties devolved upon this office is
that whoever occupies it shall participate in legislation to the extent

235

of approving or disapproving all measures passed by the General
Assembly. This duty, considered in the light of his official oath,
requires whoever is Governor to decide for himself the constitu-
tionality of every legislative measure coming before him. If, upon
consideration, the imconstitutionality of a measure is clear to him,
it is his duty to interpose objection to its passage and to give the
reasons of his objection.

Respectfully submitted,

J. FRANK HANLY,

Governor.

SENATE BILL No. 130.

MARCH 5, 1905.
Mr. President and Gentlemen of the Senate:

I return herewith Senate Bill No. 130 without my approval.
The bill provides for the elevation of steam railroad grade cross-
ings and other matters relative thereto, in the city of Indianapolis,
and is indentical with House Bill No. 145, which I have already
signed, and deposited with the Secretary of State, as heretofore
reported to the House of Representatives.

Respectfully submitted,

J. FRANK HANLY,

Governor.

SENATE BILL No. 278.

MARCH 6, 1905.
Mr. President and Gentlemen of the Senate:

I return herewith Senate Bill No. 278 without my approval.

The bill relates to the improvement of streets, alleys, sidewalks
«'ind other public places in incorporated towns and in incorporated
cities having a population at the last United States census of less
than 35,599.

I approve of its provisions, but, upon examination, I find that
similar provisions arc incorporated in Senate Bill No. 75, con-
cerning municipal corporations, which has received executive ap-
proval, and which will become the law upon the publication and
distribution of the session acts.

Two acts containing two systems of procedure relative to the
same kind of improvements in cities and towns, and substantially

236

alike in all their provisions, ought not to encumber the statutes. I
therefore withhold my approval from said bill.
Respectfully submitted,

J. FRANK HANLY,

Governor.

SENATE BILL No. 224.

MARCH 8, 1905.
Mr. President and Gentlemen of the Senate:

I deposit herewith Senate Bill No. 224, with the Secretary of
State without my approval, pursuant to the provisions of the Con-
stitution of the State, and submit herewith my reasons for so doing.
The bill seeks to amend Section 2 of an act concerning the loca-
tion and construction of free gravel, stone and macadamized
roads, approved March 11, 1901. The subject-matter thereof is
fully covered by the provisions of Senate Bill No. 77, entitled "An
act concerning highways," which has this day received executive
approval. The provisions of the bill deposited herewith are sub-
stantially the same as the provisions of said Senate bill.

The session acts ought not to be encumbered by two separate
acts covering the same subject matter and containing substantially
the same provisions. I therefore withhold executive approval from
said Senate Bill No. 224.

Respectfully submitted,

J. FRANK HANLY,

Governor.

SENATE BILL No. 275.

MARCH 8, 1905.
Mr. President and Gentlemen of the Senate:

I deposit herewith Senate Bill No. 275 with the Secretary of
State without my approval, pursuant to the provisions of the Con-
stitution of the State, and submit herewith my reasons for so doing.

The bill is supplemental to an act concerning the location and
construction of free gravel, stone and macadamized roads, approved
March 11, 1901. The subject-matter of such bill is covered by
the provisions of Senate Bill No. 77, the same being "An act con-
cerning highways," which has this day received executive ap-
proval. The provisions of both bills are substantially the same.

237

The session acts ought not to be encumbered by two acts con-
taining substantially the same provisions upon the same subject.
I therefore withhold executive approval from said Senate Bill No.
275.

Respectfully submitted,

J. FRANK HANLY,

Governor.

SENATE BILL No. 310.

MARCH 8, 1905.
Mr. President and Gentlemen of the Senate:

I deposit herewith Senate Bill No. 310 with the Secretary of
State without my approval, pursuant to the provisions of the Con-
stitution of the State, and submit herewith my reasons for so
doing.

The bill seeks to amend Section 256 of "An act concerning pro-
ceedings in civil cases," approved April 7, 1881, in force September
19, 1881, and being Section 413 of the Revised Statutes of 1881
and Section 417 of Burns' Revised Statutes of 1901.

The title of the act sought to be amended is improperly set
out in the title of the bill. The bill reads, "An act to amend Sec-
tion 256 of an act entitled an 'act concerning civil procedure.' '

As above suggested, the title of the act sought to be amended
is an "Act concerning proceedings in civil cases."

The error in the title renders the bill invalid.

Section 21, Article 4, of the Constitution provides:

"No act shall ever be revised or amended by mere reference to its title;
but the act revised or section amended shall be set forth and published at full
length."

R. S. 1901, Section 117.

It has been decided that where the title to an amendatory stat-
ute refers to but does not recite the title of the act sought to be
amended, the designation in such title is insufficient, although the
section attempted to be amended is referred to as being a desig-
nated section of the Revised Statutes of 1881.

Boreing v. State, 141 Ind. 640;
Feibleman v. State, 93 Ind. 516;
Linquest v. State, 153 Ind. 543.

In the last cited case the court announces the rule as follows :

238

"It is settled by the decisions of this court that, in the revision of an
act or the amendment of a section, two things are required: (1) The title
of the act to be amended must be referred to by setting it out; (2) The
act as revised, or section as amended, must be set forth, and published at full
length * * *.

"When the act is identified in the manner required by the Constitution,
and it is not certain what act was intended to be amended, the court will
resort to means other than the title to determine what act was intended.
But if the act is not identified in the manner required by the Constitution,
the court cannot resort to other means of identification, although a resort
to such other means would point out the act intended beyond any question."

The exact question presented by the defect in the title to the
bill filed herewith was presented to the Supreme Court in the case
of Mankin v. Pennsylvania Company, 160 Ind. 453. In this case
the court was asked to construe an act of the General Assembly of
1891, which purported to amend Section 350 of the act of 1881
concerning struck juries. The amendatory act submitted to the
court for construction referred to the title of the act to be amended
as "An act concerning trial by jury," giving the number of the
section of the act sought to be amended, and the section number
thereof in the Revised Statutes of 1881. The act sought to be
amended was the same act sought to be amended by the bill filed
herewith. As we have seen, the title of said act of 1881 is "An
act concerning proceedings in civil cases."

The court held the act of 1891 to be unconstitutional and void,
under the provision of the Constitution hereinbefore cited. I quote
from the opinion :

"It has been uniformly held by this court that two things were required
by said section of the Constitution in the amendment of a section of an act:
(1) The title of the act amended should be referred to by setting the same
out in the title to the amendatory act; and (2) the section as amended
should be set forth and published at full length. '* * *. The title to the act
of 1891, in controversy, reads as follows: 'An act to amend Section 359 of
an act concerning trial by jury, in force since September 19, 1881, the same
being Section 525 of the Revised Statutes of 1881.' The reference in the title
to Section 359, under the cases cited above, is not sufficient. Said section
may be found in an act entitled 'An act concerning proceedings in civil cases,'
*. It will be observed that the amendatory act of 1891 does not refer
to the title of the act to be amended by setting it out, as required by said
Section 21 of Article 4 of the Constitution, but refers to the act to be
amended as 'An act concerning trial by jury,' which is not the title of the
act in which said Section 359, supra, may be found. When the net or section
to be amended is identified in the manner required by the Constitution, and
it is not certain what act or section was amended, the court will resort to
means other than the title to determine what act or section was amended.
But if the act or section is not identified in the manner required by the

239

Constitution, the court will not resort to such other means of identification,
although the act intended would thereby be ascertained beyond question.
* * *. It follows that as the title of said act of 1891, supra, fails to
identify the section to be amended by setting the same out in the title thereof,
as required by Section 21 of Article 4 of the Constitution, the same is uncon-
stitutional and void, *' * *."

From the above authorities it becomes clear that the title to the
bill filed herewith is insufficient, and that the act would be invalid if
the bill were signed. I therefore refuse to approve the same.
Respectfully submitted,

J. FRANK HANL.Y,

Governor.

SENATE BILL No. 235.

MARCH 9, 1905.
Mr. President and Gentlemen of the Senate:

I deposit herewith Senate Bill No. 235 with the Secretary of
State without my approval, pursuant to the provisions of the Con-
stitution of the State, and submit herewith my reasons for so doing.

The bill is entitled "An act concerning the city court and the
judge thereof in cities of more than 36,500 and less than 43,000
inhabitants, as shown by the last preceding United States census,
and declaring an emergency." It is, however, in fact an act regu-
lating the practice in certain courts of justice in the class of cities
named and for the punishment of crimes and misdemeanors. It is
local and special in character, and is within two of the inhibitions
contained in Section 22, Article 4, of the State Constitution.

In effect, it divides the cities of the State into three classes, viz. :
those having a less population than 36,500, — those having a popu-
lation of more than 43,000, — and those having a population be-
tween 36,500 and 43,000.

The provisions of the bill apply only to the last named class
of cities. The difference in population between the cities of the
first class, having the minimum population, and thovsc of the sec-
ond class, having the maximum population, is only 6,500, and the
cities of the third class, to which the provisions of the bill apply,
must be found within that narrow limitation.

In terms the bill is general, but no one is deceived thereby. In
effect, it is local and special, and applies to but one city in the
State, — Terre Haute, — that being the only city in the State shown
by the last United States census to have a population between 36,-

240

500 and 43,000. No other city in the State comes within the limi-
tation named. In all such cases the subterfuge of arbitrary classi-
fication might as well be dispensed with, and the name of the city
sought to be affected boldly written into the bill. The measure
under consideration might as well have contained the name of
Terre Haute, and have been entitled, "An act to regulate the prac-
tice in certain courts of justice and for the punishment of crimes
and misdemeanors in the city of Terre Haute." Its meaning would
have been exactly the same, and, in addition, it would have been an
honest declaration of its purpose.

That such acts are local and special in character has been de-
cided by the Supreme Court so often and so recently that the deci-
sions ought to be fresh in the minds of even the laity.

In re application of Bank of Commerce, 153 Ind. 474;

Board v. Spangler, 159 Ind. 579 ;

School City of Rushville v. Hayes, 162 Ind. 198;

The Town of Longview v. City of Crawfordsville, No. 20,-
274, handed down January 13, 1905.

In the second case cited above, an act of the General Assembly,
approved March 4, 1899, making an arbitrary classification of
counties between those having a population of 15,000 and 15,050,
according to the last Federal census, was under consideration.
The court said :

"This court takes judicial notice of the population of the counties of this
State according to the federal census of 1890. It is, therefore, advised that
the only county in this State that had a population between 15,000 and
15,050, according to the federal census of 1890, was Owen County. As the
population referred to in said act was to be determined according to a
particular past census, so that other counties could not subsequently enter
the class, it is apparent that by said act the General Assembly, in effect,
sought to provide that the provisions of the general act of February 27, 1899,
should not apply to certain described proceedings to improve gravel roads
in the county of Owen. * * *. The attempted exclusion of pending pro-
ceedings for the improvement of gravel roads in Owen County from the
operation of the general law * was in effect an attempt to provide

by a local law not alone for an issue of bonds, but for the levy of a tax that,
under existing law, constitutes the means of retiring such bonds. We think
that it was not competent for the General Assembly to make such exception.
* * *. As the subject of the legislation falls within Section 22, of Article 4,
of the State Constitution, we hold that the proceedings could not be validated
by any act that could properly be characterized as local or special."

The Sixty-third General Assembly enacted nine laws arbitra-
rily establishing classifications of counties and cities upon differ-
ences of population varying, as to the classes legislated for, from

241

5 to 1,000. In considering one of these acts in a recent case, the
Supreme Court said:

"Its legal foundation is not mare secure than if it had been declared
to apply to all cities and towns bearing the name of Rushville, as shown
by the last preceding census. The classification is entirely arbitrary and arti-
ficial, and the plain command of the Constitution cannot be evaded by so
weak and transparent a device.

Let it be supposed that the act of March 9, 1903, supra, is valid, what
provision of the Constitution cannot be rendered nugatory by similar evasions?
If cities and towns may be classified according to trifling differences in
population, so may counties and townships. By means of statutes, general
in form, but local and special in purpose, resting entirely upon slight differ-
ences in population, every provision of Article 4, Section 22, of the Constitu-
tion may be successfully evaded.

Inferior in dignity and force of obligation only to the Constitution of the
United States and the acts of Congress and treaties made under it, the State
Constitution is the supreme law of the Commonwealth. It is to be interpreted
and applied in a reasonable manner; it is to be observed and obeyed, and not
evaded and defeated by distinctions and classifications which rest upon no
rational or natural basis, and which deceive no one. When it declares that the
General Assembly shall not pass local or special laws providing for support-
ing common schools and for the preservation of school funds, its mandate
cannot be defeated by creating a class of cities differing in no material respect
from scores of others in the State. The mere convenience of local communities,
the financial necessities of particular cities, the conflicting views of citizens
on the subject of the necessity for the erection of school buildings, are not
sufficient to authorize legislation which the Constitution prohibits. Attempted
evasions of the Constitution, the object of which is to meet and overcome
such local and special conditions, cannot be tolerated. A due regard for the
highest interests of the citizens of the State requires that all constitutional
limitations and restrictions shall be firmly and constantly enforced."
The School City of Rushville v. Hayes, 162 Ind. 198.

In the case of the Town of Longview v. City of Crawfords-
ville, supra, construing another act of the Sixty-third General As-
sembly, in a decision rendered as late as the 13th day of January,
1905, the same court said:

"In jurisdictions where classification is permitted by the organic law,
it is settled that the same, in order to furnish a basis for legislation that will
exempt it from the charge of being special, must be a classification which in
the nature of things suggests and furnishes a reason for, and justifies the
making of the class. The reason for the classification must inhere in the
subject matter, and the same must be natural, not artificial. Under this rule,
neither mere isolation nor arbitrary selection is proper classification."

In the statute above referred to the classification made was
based on a difference of 1,000 in population. The court held it to
be an arbitrary classification, and in the course of its opinion said :
[1«— 19801]

242

"Applying these tests it is evident that the classification in said act is
merely arbitrary and cannot relieve the same from the infirmity of being
special and local. There is no reason inhering in the subect matter of the
act for giving the power mentioned therein to cities of a population between
six and seven thousand according to the last preceding United States census,
and not giving the same to the other cities in the State."

In the measure under consideration the classification of cities
is based upon a difference in population of only 6,500, and is,
therefore, clearly within the rule above declared, unless there in-
heres in the subject-matter thereof a reason natural and not arti-
ficial for the classification. As we have seen, the subject-matter
of the bill is the regulation of practice in certain courts of justice
and of the punishment of crimes and misdemeanors. It is clear
that there inheres in such subject-matter no natural reason for the
making of a classification of cities having no greater difference in
population than that named. There inheres in the subject of the
practice in courts of justice in cities under 36,500 no natural rea-
son why such practice should be regulated by a different law in
such cities than that which regulates the practice in similar courts
in cities of over 43,000 ; nor does any natural reason inhere in
the subject-matter of regulating the practice in said courts in
cities having a population between 36,500 and 43,000 for a differ-
ent regulation of the practice in such courts than that which gov-
erns in either of the other classes named ; nor is there any natural
reason inherent in the subject of the punishment of crimes and
misdemeanors upon which such classification can be based. The
classification made by the bill is wholly arbitrary and artificial, and
is based on no natural reason inherent in the subject-matter thereof.
It is true that arbitrary and artificial classifications may be made
and local and special laws passed in reference to certain subjects
not included in the seventeen inhibitions of Section 22, of Article
4, of the Constitution, and that when so made the courts cannot
review the action of the Legislature. But the inhibitions in Sec-
tion 22 are absolute, and as to them the reason for the classifica-
tion must be a natural one and must inhere in the subject upon
which such classification is based.

There can be no doubt of the local and special character of this
bill. That fact is established, and may as well be admitted. To
admit the local and special character of the bill, however, is to ad-
mit its invalidity, if we keep in mind the fact that its purpose is
the regulation of the practice in certain courts of justice and of
the punishment of crimes and misdemeanors in the city of Terre
Haute.

243

The Constitution provides:

"The General Assembly shall not pass local or special laws in any of the
following enumerated cases, that is to say: * * * j?or the punishment of
crimes and misdemeanors; regulating the practice in courts of justice."
Section 22, Article 4, State Constitution.

I am thoroughly convinced that the provisions of the bill un-
der consideration, making an arbitrary classification of cities based
upon a difference of 6,500 in population, concerning a subject in
which there is no natural and inherent reason for a classification,
make such measure local and special in character.

I am equally well convinced, providing as it does for the pun-

ishment of crimes and misdemeanors and for the regulation of the

practice in courts of justice in the city of Terre Haute, that it is

within the inhibition of Section 22, Article 4, of the Constitution.

Respectfully submitted,

J. FRANK HANLY,

Governor.

SENATE BILL No.

MARCH 10, 1905.
Mr. President and Gentlemen of the Senate:

I deposit herewith Senate Bill No. 214 with the Secretary of
State without my approval, pursuant to the provisions of the Con-
stitution of the State, and submit herewith my reasons for so
doing.

The bill extends, by amendment, the provisions of the act of
March 2, 1901, concerning surety companies and the securities in
which they may invest their funds. The extension includes in such
securities : "Bonds or other evidences of indebtedness, bearing
interest, of any county, incorporated city, town, township or school
district, or street improvement, sewer, drainage or gravel road
bonds, or municipal improvement bonds, in any such State ( where
it is doing business), when such bonds or other evidence of in-
debtedness are issued by authority of law, and on which interest
has not been defaulted."

This would materially change the character of the investment
of surety companies, and open wide the door to the investment of
the funds of such companies in cheap, doubtful and uncertain se-
curities issued by small municipalities of distant States, or by the
townships and school districts thereof. It would make it possible

244

for such companies to invest in such securities as soon as issued and
before there could be a default in the payment of interest. As to
the class of securities named in the above quotation, there is not
even a requirement that they shall have a current value of not less
than par at the time when such investment is made. Such restric-
tion is made in the law as to much more valuable and stable securi-
ties, but it seems to have been carefully excluded as to these. Un-
der the law of this State, surety companies are taken as surety on
all kinds of official bonds, or upon bonds of any person acting in a
fiduciary capacity. The value of the bond upon which such com-
pany becomes surety depends in each instance wholly upon the
character and value of the securities in which the funds of such
companies are invested, and the law ought not to give opportunity
for uncertain and questionable investments of their capital. It may
be true that such companies are too closely limited as to the securi-
ties in which they may invest under the present statute, but by the
provisions of the bill under consideration, practically all limitation
is removed as to investments that may be made by them.

I am convinced that a due regard for the interests of the pub-
lic, who deal with surety companies, requires that the law remain as
it is, rather than become what it would be if this measure were
the law. That the law shall remain as it is, I know is safe so far as
the public interests are concerned. If it were changed, as sug-
gested, I would have grave doubts as to the safety of such interests.
I am fully persuaded that the evidence of the indebtedness of a
school district in a distant State is not the character of security in
which the funds of such companies should be invested. Nor are
street improvement or sewer bonds of small municipalities in such
States safe securities. For these reasons I decline to give my ap-
proval to the measure.

Respectfully submitted,

J. FRANK HANLY,

Governor.

245
SENATE BILL No. 265.

MARCH 10, 1905.

Mr. President and Gentlemen of the Senate :

I deposit herewith Senate Bill No. 265 with the Secretary of
State without my approval, pursuant to the provisions of the Con-
stitution of the State, and submit herewith my reasons for so doing.

The bill provides for the publication of notice in two news-
papers of general circulation, of different politics, of each item of
any and all allowances made by the board of trustees of any town
or by the common council of any city having a population of less
than twenty-five thousand, within ten days after the making of
such allowances.

Section 2 provides a penalty of from ten to twenty-five dollars
for any violation of the provisions of such bill.

There is no public demand nor necessity for this measure. If
enacted, it would conserve no public purpose. It would benefit no
one in any community except the publishers of local newspapers
in the several towns and cities to which its provisions would apply.
I concede the value of local newspapers to such communities. They
are worthy of consideration and encouragement. They are not,
however, entitled to consideration and encouragement at the ex-
pense of the several municipal treasuries of the State. Public funds
raised by taxation ought not to go for any purpose other than a
public one.

It is urged that publicity will prevent extravagant and fraud-
ulent allowances, and the law requiring township trustees to pub-
lish annually a statement of public expenditures is referred to as
a justification for the measure under consideration.

It is true that, under existing law, township trustees are re-
quired to publish an account of their expenditures. But this is re-
quired only once a year. The position of township trustee differs
materially from that of town boards and city councils. The town-
ship trustee generally lives in a rural district. He is more or less
isolated. The people are separated from him by distances of
greater or less length. Many of his official acts are done in pri-
vate. There is little opportunity for the taxpayers of the town-
ship to know what expenditures he is making. For these reasons
there is some justification for the existing law requiring him to
make publication once a year of such expenditures. It is doubtless
true, also, that the fact that he is required to make publication of

246

such expenditures has a restraining influence upon him, and that
the law has done something to prevent extravagant expenditure of
township money. But the law has been the subject of no inconsid-
erable abuse through the separation of items, resulting in an in-
creased number of items for publication, to the profit of the local
newspapers and the detriment of the township.

Trustees of towns and common councils of cities are not so sit-
uated. They meet at fixed and stated intervals. They have a des-
ignated place of meeting. The public is advised of the time and
place of such meetings. No expenditure of public money can be
made or authorized except in open sessions of such boards duly
convened. The places of meeting for such bodies are convenient of
access. The population of towns and cities is centralized, and
every opportunity is given the citizens of such municipalities to
know exactly what expenditures are being made. Every allowance
made is practically made in the presence of the people whose money
supplies the fund from which payment is made. Opportunity for
debate and discussion is always present. A record is required to
be made of every allowance. This record is open to the inspection
of any taxpayer.

Under the provisions of the bill filed herewith, every item allowed
by any such board is required to be published in two newspapers, if
there be such newspapers in such city or town, at an expense of five
cents per item for each paper, within ten days after such allowance
is made. This would necessitate repeated notice of partial pay-
ments and would multiply the expense many times beyond what it
would be if notice of such allowances was required to be made at
the close of the year. For example: If John Smith is employed
by the town or city as a laborer upon its streets and an allowance
is made to him therefor, it must be immediately published. In
most towns and cities of the State, the boards of trustees and the
city councils meet at least once each month, and in many of them
twice each month. Every allowance made to John Smith for labor
upon the streets of any such town or city must be published as
a separate item within ten days after it is made. If he is employed
a single day each week during the year, 25 different publications
will be required, at a cost of $2.50. The same is true of every other
laborer upon the streets of any such town or city. The only pur-
pose of this expenditure is to inform the taxpayers that Smith
has been paid, — a fact of which every taxpayer has had ample op-
portunity to know without publication.

In my judgment the benefit to the public is not worth the cost.

247

And this is especially true in view of the fact that every such
allowance must be, and in fact is, made openly, on motion, by a
public body in a public meeting of which general knowledge ex-
ists, and to which every taxpayer may go, and to which many do
actually go. Here is another example: A city employs 120 school
teachers. Their salaries are paid monthly. Each such payment
is made up of 120 items. Such publication, therefore, will be
required once a month for as many months as constitute the school
year in such city, which is usually from eight to nine months. If
such school year is nine months in length, the items of salary al-
lowance to teachers alone, if made monthly, will aggregate 1,080.
At 10 cents per item for each publication the total cost of such
publications in such city is $108.00. What value has the public
received for this expenditure? Absolutely nothing beyond the in-
formation that the school board has paid the several teachers of
the city the salaries which were fixed by written contracts, of which
contracts public record was made before the term of service of any
of such teachers began. This is but one instance. I repeat, the in-
formation is not worth the cost.

This measure, if it became a law, would involve the expenditure
by the various towns and cities to which it would apply of from
$100.00 to $1,000.00 per annum, for which the taxpayers would
receive substantially no return. When we consider the number of
towns and cities in the State that would be subject to the provisions
of the bill, we can at least roughly estimate the cost. The aggre-
gate of such expenditures would, in the course of a year, reach a
startling sum. I know of no way in which I can better serve the
citizens of such municipalities than by withholding executive ap-
proval from such a measure. I do not undervalue the newspapers
of these several communities. I know they would profit by the
measure if it were the law. But I am a public servant of the pub-
lic interest and not a private servant of private interests. I
therefore decline to sign the bill.

Respectfully submitted,

J. FRANK HANLY,

Governor.

248
SENATE BILL No. 306.

MARCH 10, 1905.
Mr. President and Gentlemen of the Senate:

I deposit herewith Senate Bill No. 306 with the Secretary of
State without my approval, pursuant to the provisions of the Con-
stitution of the State, and submit herewith my reasons for so doing.

The bill appropriates $500 for such printing and stationery as
may be required by the "Assistant Adjutant-General and Assist-
ant Quartermaster-General of the Department of Indiana, Grand
Army of the Republic," to be procured, through the Commissioners
of Public Printing, of the State Printer, to be paid out on vouch-
ers approved by said Commission and said officers.

This seems to me to be a most extraordinary appropriation of
public funds. It is one to which I have given much consideration,
for I have been impelled by sympathy and gratitude to give it my
approval, but I am unable to do so.

I have the highest possible regard and esteem, — amounting al-
most to veneration, — for the men who constitute the Grand Army of
the Republic. The story of their services and valor is linked for-
ever with the history of the Nation's life. The debt the present
generation owes them can never be fully paid. Of this I am keenly
conscious. The memory of what they did and what they wrought
in behalf of constitutional government, makes it hard for me to
do my duty in this matter. It would be far easier for me to sign
the bill and allow it to become a law, than to withhold executive
approval from it. And I would do so were I not convinced that
by so doing I would betray my trust, set a dangerous precedent and
do an unconstitutional thing. These considerations, and these
alone, prevent my signing it. Neither sympathy nor grateful re-
membrance can justify one in my position for the doing of an act
unwarranted by the law of the land which, with uplifted hand, he
has sworn to support.

The Grand Army of the Republic, however noble its prupose
and splendid its services, under the law of the State, has no offi-
cial relation to the State. It performs no service for the
State, which can be recognized by the appropriation of public
funds for its benefit. It serves the State, and serves it greatly,
by keeping alive the memories of the sacrifice and devotion made
by its members in behalf of the land in which we live and in de-
fense of the flag we love, and by planting in the hearts and incul-

249

eating in the minds of the children who are to be the men and
women of tomorrow a reverence for lofty devotion and the lessons
of patriotism ; and by maintaining the general observance of the
most sacred day in the national calendar, — Memorial Day ; but
these are services for which, under the law of the land, no money
compensation can be made out of the public funds.

Every church, every social, benevolent, or fraternal, or civil or-
der, in greater or less degree serves the State in the same way.
There is no more warrant in law for the appropriation of public
funds to defray the expenses of the officers of the State Depart-
ment of the Grand Army of the Republic, than there is for the
appropriation of public funds to meet the expenses of the annual
conferences of the several churches of the State, or of the officers
of the grand lodges of the various civic orders of the State, such
as the Knights of Pythias, the Independent Order of Odd Fellows,
or the various Masonic bodies.

It has been suggested to me that the appropriation is small, —
only $500.00. But the precedent, if I were to sign the bill, would
be far-reaching and lasting in its effect. A bad precedent founded
upon a small appropriation is as dangerous and far-reaching as
though founded upon a large appropriation. Such a precedent as
this, if established, might be considered warrant for an appropria-
tion of public funds for the payment of all the expenses of the
State Department of the Grand Army of the Republic, including
the salaries of its officers. The power to do the one implies the
power to do the other, and the policy of the one necessarily in-
cludes the policy of the other.

It suggests a door that must not be opened. It is against pub-
lic policy. It is also against the best interests of the Grand Army
of the Republic. That organization will hold a higher place in
the hearts and affections of the people if it does not become the
recipient of public funds appropriated in defiance of the Consti-
tution of the State. Its members fought on many fields to preserve
the Constitution not only of the national government, but of the
State as well, and they ought not now to ask either the Legislature
or the Chief Executive of the State to violate that Constitution.

What I have said implies the unconstitutionality of the meas-
ure. That it is unconstitutional is so clear to me that no doubt
remains. The appropriation is an appropriation of public funds
for the use of private persons. It may be said that the Assistant
Adjutant-General and the Assistant Quartermaster-General of the
Department of Indiana of the Grand Army of the Republic, are

250

not private persons, but officers of the civic order to which they
belong. That, however, is not an accurate statement. Under the
law, they are private persons. They are not officials of the State.
They have no official connection with the Svtate. In contempla-
tion of law they serve the State in no way. Whatever positions
they may hold in the order named, they are simply private citizens
in law. The order to which they belong is not a department of
the State government; but, on the contrary, it is a civic order,
private in character.

I have recently had occasion to veto certain measures passed
by the General Assembly, appropriating money of the people, —
public funds, — for the purpose of reimbursing certain public officers
for moneys of the, public lost by them, on the ground that such
appropriations were for the use of private persons, and beyond
the purposes of taxation contemplated by the Constitution.

That the General Assembly has no constitutional power to
make an appropriation of public funds raised by taxation for a
private purpose, or for the use of a private individual, is agreed
by all the authorities.

In the case of McClelland, trustee, v. The State, ex rel. Speer,
138 Ind. 321, it was held that the levying of taxes upon the prop-
erty of a township to create a fund for a private and not a public
use, was without the Constitution. In that case the court said :

"Here was an unconstitutional discrimination between citizens, in this,
that the act arbitrarily requires the taxpayers of Wayne township to give to
the relator the sum of $2,812.90 and fastens upon the township and its tax-
payers a debt for that amount, for which the township never received any-
thing and for which it never gave its consent or contracted a liability. In
our opinion the General Assembly is not vested with power to legislate a
tax upon the people of a township for a private purpose."

In passing upon the question of what is a public use, the court
in the above case aptly said :

"We think the law is well settled that nothing can fairly be regarded as
a public use, unless it has a state use or a national use in furtherance of a
state use. To defray the necessary expenses of a township, or to make
necessary improvements in a township, is a state or public use. But the dona-
tion of a large sum of money to the relator in this case cannot be regarded as
a public use of money."

The word "tax" of itself implies a public purpose. Properly
defined, it is :

"An enforced proportional contribution levied on persons, property or
income, either (a) by the authority of the State for the support of the gov~

251

eminent and for all its public or governmental needs, or (b) by local authori-
ties for general municipal purposes."

This definition furnishes no room or shelter for an appropria-
tion of public funds for the use of any person or organization that
has no claim upon the State, or to whom no legal obligation is due.

A public statute cannot be valid which is intended to, and does
in effect, so tax an individual as to take private property for pri-
vate use. Such an appropriation is a gift, pure and simple. To
warrant taxation the purpose must not only be beneficial, but it
must concern the public. A merely private benefit is not enough.
Under a free government, when no public considerations are in-
volved, every man must be allowed to choose for himself when it
comes to the giving of money. As already suggested, taxation, by
the very meaning of the term, implies the raising of money for
public use and excludes the raising of it for private objects and
purposes. The acquisition, possession and protection of property
are among the chief ends of government. To take, directly or in-
directly, the property of individuals to give to others, is to with-
draw it from the protection of the Constitution and submit it to
the will of an irresponsible majority.

It is true that the bill does not contemplate the levy of a tax
upon the property of the citizens of the State, from which to cre-
ate a fund with which to meet the appropriation it makes. But
there is no distinction in principle between the appropriation of
public funds already raised by taxation and the laying of a tax
for the creation of a fund for such an appropriation. If the Gen-
eral Assembly has no power to legislate a tax upon the people of
the State for a private purpose, it has no power to take the funds
of the State, which have been raised by a tax levied upon the peo-
ple of the State, and appropriate them to a private purpose. If
it is inhibited from laying a tax for a private purpose, it must
necessarily be inhibited, on like principle and for like reasons, from
appropriating for a private purpose the money which has been
raised by taxation. In either case it is taking the property of one
man to bestow it upon another, and this is clearly within the con-
stitutional inhibition that no man's property shall be taken without
due process of law.

Respectfully submitted,

J. FRANK HANLY,

Governor.

House Veto Messages, Sixty-Fourth
General Assembly

(253)

255
HOUSE BILL No. 39.

FEBRUARY 22, 1905.

Mr. Speaker and Gentlemen of the House of Representatives:

I return herewith House Bill No. 39 without my approval.

This bill provides for the reimbursement of certain ex-trustees
of seven several townships of Dekalb County, out of the public
funds of said respective townships, for certain sums of money re-
spectively paid by them to their said several townships on account
of township funds received by them, as trustees of their said re-
spective townships, and deposited in certain banking institutions,
which sums were lost to them through the failure of such institu-
tions.

These sums range from $195 in one instance to $2,323.97 in
another, and amount in the aggregate to $6,961.30.

Other bills providing for the reimbursement of other public
officials of Dekalb County for public moneys lost in like manner
have received the sanction of the General Assembly. The aggre-
gate appropriation of public funds belonging to the citizens of
this county made by bills already passed exceeds $18,000.

Similar bills for the relief of certain other township and county
officers of Steubcn, Elkhart, Jasper, Laporte and Lagrange coun-
ties, on account of similar losses, have passed both houses of the
General Assembly. The aggregate appropriations of funds of
these several counties and the several townships thereof, made by
the several measures already passed, are more than $65,000. This
is a goodly sum to give away. And yet, as shown by the calen-
dars of the respective houses of the General Assembly, other meas-
ures having like provisions and like purposes are far on their way
toward legislative approval. I am unable to state with accuracy
the amount of the aggregate appropriations carried by these sev-
eral pending bills, but the grand total of such appropriations made
by these bills, passed and pending, is startling Jn amount, and is
certainly sufficient to challenge the thoughtful consideration of
every member of the General Assembly.

The character of this legislation, the number of public officials
relieved of just and solemn obligation, and the great sum of money
appropriated by it in the aggregate from the treasuries of the sev-
eral townships and counties affected and placed in the pockets of
private individuals as a gift, have caused me to consider with

256

thoughtful care two questions which seem to me to go to the very
heart of each of these measures.

First. Does sound public policy admit of such an appropria-
tion of the public funds of a township or county?

Second. Is such legislation inhibited by the Constitution of
the State?

I am compelled to answer the first of these questions in the neg-
ative. A public policy which relieves from liability a public offi-
cial who makes a deposit of public funds entrusted to his care in
a bank which fails, and in which failure such funds are lost to
him, is unsound and dangerous. If such policy be generally adopt-
ed and long continued, it will inevitably beget loose and careless
administration, multiply such losses and mulct the people daily
by the use of public funds raised by taxation to recoup private
losses.

Between each of the several trustees named as beneficiaries in
the bill returned herewith and the people of their respective town-
ships there was an implied contract. A contract none the less bind-
ing and sacred because it was unwritten. On the one part this
contract required each of said officers to faithfully discharge his
duties as such official and account to his township for all moneys
belonging to such township and coming into his hands. On the
other side it required the people to pay him the salary fixed by law.
Then, in addition, that the assurance on his part might not fail,
the law required from him a solemn and binding written contract
with surety that he would faithfully discharge his duties and ac-
count for all moneys belonging to his township which should come
into his hands. The amount of money received by him measured
his liability. He was bound, as a public officer, to keep the funds
in his hands safely. He was, in fact, an insurer of the safety of
the funds in his hands and was bound to account for the moneys
lost by him, though lost without his fault.

Good morals and a sound public policy require that these con-
tracts, both the implied and the written one, shall be kept, and that
there shall be no impairment of either of them, and that there shall
be no relief from the penalties by them imposed.

When the beneficiaries named in this bill sought and obtained
their respective offices they knew the obligation they would be re-
quired to assume. They knew, also, the hazards they would incur,
and that the extent of their liability would be measured by the
amount of money coming into their hands. Knowing this they
were not deterred from accepting their several trusts. On the con-

257

trary, they chose to qualify and to enter upon the discharge of
their respective duties.

Having entered upon the discharge of such duties, they were
not compelled by any public necessity to withdraw in bulk the funds
due their several townships from the county treasury. They could
have left them there until required for public use. While such
funds were in the county treasury they, as township trustees,
would have carried no hazard of their loss, nor would they have
incurred any liability had they been lost while in such treasury.
They chose to remove them in bulk and in larger sums than public
necessity required and to place them on deposit in banks of their
own choice. These banks failed. The loss of funds -so deposited
was their respective individual loss. The deposit of money in such
banks was their affair and not the public's. Knowing the law,
they chose to carry the hazard, to assume the risk and to accept the
liability consequent upon loss, and now, that such loss has come
upon them, they are in no position to ask relief from the require-
ments imposed upon them by the law. They have no claim, either
moral, legal or equitable.

As to the second question, the inhibition of the Constitution
against such measures as these is too clear to admit of serious de-
bate.

The decision of the Supreme Court in the case of Mount, trus-
tee, v. The State, ex rel. Richey, 90 Ind. 29, has been cited in sup-
port of the constitutionality of the bill by its friends and by the
friends of the several kindred measures hereinbefore referred to. I
have given consideration to that decision. It was written by a
learned and eminent judge, in whose ability and learning I have
very great confidence. The decision is in point and the bill is
clearly within the rules there declared.

I am thoroughly convinced, however, that the decision is wrong
In principle; that it is opposed to the great weight of judicial
decision upon the question involved; that it rests upon a false
premise, involving mixed questions of law and fact; and that it
has been modified, if not overruled by implication, in a subsequent
decision of the Supreme Court, and that it has ceased to be the law.
In fact, it never ought to have been the law.

The bill recites that the officials named therein have paid to
their respective townships the several sums lost by them. Since do-
ing that they have ceased to hold their respective offices. They
occupy to their respective townships, as to the moneys lost and
made good by them, the position neither of debtors or creditors.
[17—19891]

258

They have no right in law or in equity to a return of their money.
In the absence of special legislation for the purpose such money
can not be returned to them. A return of it would amount to noth-
ing but a gift, pure and simple, — a gift, too, of public money for a
private purpose.

That the General Assembly has no constitutional power to make
an appropriation of public funds raised by taxation to a private
purpose is agreed by all authorities. This is conceded in the de-
cision in the 90th Ind., above cited. On this point I submit the
language of the decision :

"It is, perhaps, true that the legislature cannot authorize the assessment
of a tax for a«mere private purpose * * *."

The writer of the opinion states the basis of the decision as
follows :

"Reimbursing a public officer for the loss of public funds, occurring while
"he is engaged in discharging public official duties, cannot be deemed an appro-
priation to private purposes."

This is the sole basis of the decision, and the pith and point of
the decision itself is embraced in the following sentence:

"We do no more than decide that the legislature has power to direct the
application of township funds to the payment of claims growing out of the
discharge of official duties by the trustee where the claims are of a public
nature."

The premise stated above is a mistaken one. It involves two
mixed questions of law and fact, both of which are erroneous :

First. It assumes that the money was lost by the trustee "while
engaged in discharging public official duties."

Second. It declares that an appropriation reimbursing a trus-
tee for the loss of public funds "cannot be deemed an appropria-
tion for a private purpose."

When the trustee drew the money from the treasury in bulk
and before it was needed to meet the public expenses of his trust,
and deposited it in a bank, he was not engaged in the discharge
of any public official duty. No duty he owed to the public and no
duty imposed upon him by law required him to withdraw the money
from the county treasury in bulk before there was a necessity to
pay it out for the public benefit and deposit it in a bank. That
act was a private act in which the public was not concerned. It
was done either for his own convenience or profit.

If, having made this disposition of the money, he loses it

259

through the failure of the bank, he is liable for the loss. His bond
is also liable. He or his bondsmen must make it good. Knowing
his liability and the liabilily of his bondsmen, he does make it good
by restoring to the public fund the sum lost. This done, the trans-
action is closed. It never was at any time a public official act, but
the private act of a public official, which was not required by law or
by any duty he owed to the public. But whatever the act, — private
or official, — the transaction is a closed incident. The township has
lost nothing. The books are square. He has no claim. The town-
ship has no claim. He goes out of office with a clean account.

It is in that condition that we find him. While he is in that
condition, it is proposed to do what? To appropriate public
money to pay an obligation which the public owes to him ? Not so.
The public owes him no obligation, legal, moral or equitable. But
it is proposed to appropriate public funds, raised by a tax upon
the property owned by the people of the township, to make him
a gift for his private and personal benefit, the only basis of which
is public sympathy for a private misfortune. To say that such
an appropriation of public funds made under such circumstances
is for a public and not a private purpose, is to distort a self-evident
truth, — one so plain that there is room for neither cavil nor dispute.

The foundation upon which the decision is based, it will be ob-
served, melts away under analysis and leaves no grain of fact or
truth upon which it may rest, and the decision itself must therefore
fall.

It will be remembered that in the language of the court itself
the opinion does "no more than decide that the Legislature has
power to direct the application of township funds to the payment
of claims growing out of the discharge of official duties by the
trustee, where the claims are of a public nature."

Neither the claim in the Mount case, supra, nor any of the
claims now under consideration grew out of the discharge of offi-
cial duties, nor was said claim or any of these of a public nature.

These considerations led the Supreme Court to correct the above
decision, in the case of McClelland, trustee, v. The State, ex rel.
Speer, 138 Ind. 321, and to decide that the levying of taxes upon
the property of a township to create a fund to reimburse a trustee
for money lost under such circumstances, would be the taxing of
the property of the citizens of the township for a private and not a
public use.

In that case the court said :

260

"Here was an unconstitutional discriminulion between citizens, in this,
that the act arbitrarily requires the taxpayers of Wayne township to give
the relator the sum of $2,812.90 and fastens 'upon a township and its tax-
payers a debt for that amount, for which the township never received any-
thing and for which it never gave its consent nor contracted a liability. . In
our opinion the General Assembly is not vested with power to legislate a
tax upon the people of a township for a private purpose."

It is urged that in the McClelland case, just cited, the question
involved was different from the question involved in the Mount
case, supra, in that the money lost by the trustee in the McClelland
case was not raised by taxation upon the property of the people of
Hie township whose property it was proposed to assess to create
the fund with which to reimburse the trustee. In part that is true,
but not wholly so. A part of the funds lost by him were raised by
taxation upon the people of the township whose property the Leg-
islature proposed to retax for the purpose of creating a fund with
which to reimburse such trustee.

In deciding this branch of the case, the court declares the rule
to be directly the opposite to the rule declared in the Mount case.

In passing upon the question of what is a public use, the court,
in the McClelland case, aptly said :

"We think the law is well settled that nothing can fairly be regarded as a
public use, unless it has a state use or a national use in furtherance of a state
use. To defray the necessary expenses of a township, or to make necessary
improvements in a township, is a state or public use. But the donation of a
large sum of money to the relator in this case cannot be regarded as a public-
use of money."

It is true that in the above case the act provided for the levy
of a tax upon the property of the citizens of the township from
which to create a fund with which to reimburse the trustee, there
being no funds in the township treasury out of which he could be
reimbursed. We submit, however, that there is no distinction in
principle between that case and the case involved in this bill. If
the General Assembly has no power to legislate a tax upon the
people of a township for a private purpose, it has no power to
take the funds of a township which have been raised by a tax levied
upon the property of the people of such township, and appropriate
them to a private purpose. If the General Assembly is inhibited
from laying a tax for a private purpose, it must necessarily be
inhibited, on like principle and for like reasons, from appropriating
for a private purpose the money which has been raised by taxation.

The levying of a tax, or the appropriation of money raised by

261

taxation, for the reimbursing of the trustees named in this bill,
would be, in effect, taking the property of one man to bestow it
upon another. In effect, it would be a taking of the property of
the citizens of the several townships affected, for a private and not
a public use. It would be, in plain English, a robbery and a spoli-
ation of the citizens of such townships for the benefit of the seven
individuals named as beneficiaries in the bill, — a robbery and a
spoliation for which no warrant can be found in the Constitution
of the State, in law, in equity or in the conscience of honest men.

That this bill is an attempt to make an appropriation of public
funds for a private purpose, and, in effect, to take private prop-
erty for private use, through the appropriation of public funds
which have been raised by taxation, and that such an attempt is
unconstitutional, is well established by judicial decision. In fact,
there is almost an unbroken line of authority to that effect:

McClelland, etc., v. The State, 138 Ind. 321 ;
State, etc., v. Tappen, 29 Wis. 664;
People v. Supervisor, etc., 16 Mich. 253;
Bristol v. Johnson, 34 Mich. 123;
Hoagland v. City of Sacramento, 52 Cal. 142;
Lowell v. City of Boston, 111 Mass. 454;
Thorndyke v. Inhabitants of Camden, 82 Me. 39 ;
Cooley on Constitutional Limitations, pp. 332-341.

On the other side, the case in 90 Ind., supra, stands practically
alone. The premise upon which the decision rests, as we have
shown, is a mistaken one. It consists of a bare statement without
a word of reasoning or the citation of a single authority to sup-
port it.

In the discussion of the power of the legislature to make such
an appropriation as was there sought to be made, the case of
Brooks v. Landsborough, 36 O. St. 227, is cited, but the citation
is somewhat unfortunate, in that the Ohio court, in its decision,
was construing a law entirely different in principle from the one
before the Indiana court. In the Ohio case the treasurer of a
school district was robbed. He was unable to replace the money.
The legislature passed an act relieving his bondsmen and authoriz-
ing the district officers to levy a tax upon the property of the dis-
trict to reimburse him, after first submitting the matter to the vote
of the electors of the district and receiving their approval. It will
be observed that the bondsmen were not relieved and that the tax
was not levied by the act of the Ohio legislature. It only provided

2f>2

;i way by which the people of the school district might relieve the
bondsmen and Irvy a tax.

Tli-'it c;isc, \ve submit, is slight authority for an act which levies
a tax, or takes funds raised from a tax levy, for the reimbursement
of public officials for money lost by them, and does so without the
consent of the citizens taxed.

In conclusion, I venture to express the hope that there is not a
member of the General Assembly who will be willing to sustain this
measure and the kindred measures still pending before the Assem-
bly, upon a careful consideration of the authorities cited, in view
of the public policy involved, and his oath to support the Constitu-
tion of the State.

Respectfully submitted,

J. FRANK HANLY,

Governor.

HOUSE BILL No. 27.

FEBRUARY 22, 1905.

Mr. Speaker and Gentlemen of the House of Representatives:

I return herewith House Bill No. 27, for the relief of George
W. Willennar, Treasurer of Steuben County, without my approval.

The bill provides for the reimbursement of said treasurer out
of the public funds of said county for certain moneys paid by him
to said county on account of county funds received by him and
deposited in a certain banking institution, which moneys were lost
to him through failure of said institution. My reasons for return-
ing the bill without my signature are :

1st. The measure is against public policy.

2d. It is unconstitutional.

I have more fully set out these reasons in a message accompany-
ing House Bill No. 39 this day returned to you without my ap-
proval.

Respectfully submitted,

J. FRANK HANLY,

Governor.

263
HOUSE BILL No. 113.

FEBRUARY 22, 1905.

Mr. Speaker and Gentlemen of the House of Representatives:

I return herewith House Bill No. 113 for the relief of George
M. Wilcox, Samuel L. Luce, John Bill, Joseph Stewart and
Charles M. Blue, ex-township trustees of certain townships in Jas-
per County, without my approval.

The bill provides for the reimbursement of certain ex-trustees
of five several townships of Jasper County, out of the public funds
of said several townships, for certain sums of money respectively
deposited by them in a certain banking institution, which sums
were lost to them through the failure of said institution. These
sums range from $673 in one instance to $2,929.14 in another, an
amount in the aggregate of $7,939.54. The reasons for returning
the bill without my signature are :

1st. The measure is against public policy.

2d. It is unconstitutional.

My reasons are more fully set forth in a message accompany-
ing House Bill No. 39, this day returned to you without my ap-
proval.

Respectfully submitted,

J. FRANK HANLY,

Governor.

HOUSE BILL No. 146.

FEBRUARY 22, 1905.

Mr. Speaker and Gentlemen of the House of Representatives:

I return herewith House Bill No. 146 without my approval.

The title of the bill applies to cities of over 100,000 population,
and the bill is evidently intended to apply to the city of Indian-
apolis, that being the only city in the State of over 100,000 pop-
ulation.

Section 1 of the act, however, applies to "cities of this State
having a population of 100,000." The word "over" has evidently
been omitted from this section by mistake. As the section reads
it would apply only to cities having 100,000 population. There is
no city in the State having such a population.

My failure to approve the bill is based wholly upon this omis-

264

sion, which, in my judgment, is a fatal defect. I am informed
that a similar bill is still pending before the General Assembly, and
if so, this error can be corrected and the pending bill passed.
Respectfully submitted,

J. FRANK HANI/T,

Governor.

HOUSE BILL No. 208.

FEBRUARY 27, 1905.

Mr. Speaker and Gentlemen of the House of Representatives:

I return herewith House Bill No. 208 without my approval.

The act authorizes the Governor to issue patents for certain
Michigan road lands in this State, heretofore sold under the acts
of the General Assembly and the purchase price of which has been
fully paid, and for which no patents have been issued heretofore
by the State.

The purpose of the measure is not an improper one, and J.
would give the bill my approval were I not convinced that it fails
to accomplish the purpose intended. There is an irreconcilable
conflict between the provisions of the bill.

One provision requires the Governor to issue a patent, under
certain conditions named, to any such lands "in the name of the
original purchaser," and provides that when the patent is so issued
it "shall vest in such purchaser all the title and interest held by the
State at the time of such final payment for the land so purchased."
And this, without regard as to whether the original purchaser is
now the owner of the lands covered by the patent.

The next succeeding sentence provides "that upon issuing of
such patent the title to the land therein described shall vest in said
original purchaser, if still living and the owner of such lands, or if
dead, such title shall vest in the heirs, devisees, legatees or assignees
of such original purchaser."

One sentence vests the title in the original purchaser without re-
gard to present ownership. The other vests the title in the orig-
inal purchaser on the condition that he is still the owner. The two
provisions are inconsistent. Instead of removing the cloud resting
upon the title to any such lands by furnishing a missing link in the
chain of such title, which I have no doubt was the purpose of the
author of the bill, the measure, if it became a law, would cast an
additional cloud or doubt upon such title.

_~ 265

If the intention of its author was to vest the title of the State
to these lands in the present owners thereof, the bill ought to so
provide.

Respectfully submitted,

J. FRANK HANLY,

Governor.

HOUSE BILL No. 92.

MARCH 1, 1905.

Mr. Speaker and Gentlemen of the House of Representatives:

I return herewith House Bill No. 92 without my approval.

The bill authorizes and directs the county council of Spencer
County to appropriate, for the payment of the unpaid court ex-
penses of the Spencer Circuit Court for the year 1903, a sum of
money sufficient to cover and pay such unpaid expenses, not ex-
ceeding $250.00.

There is nothing in the bill to disclose what is included in the
words "unpaid court expenses," an appropriation for the payment
of which is ordered. I have been informed, however, that such un-
paid expenses consist of fees due certain citizens of said county for
jury services rendered in said court during said year. These per-
sons are, it is said, sixty-four in number, and their unpaid claims
vary in amount from $2.00 to $6.00 and aggregate $241.15 ; that
said last named sum is in excess of the appropriation made by said
Spencer County county council for court expenses for said year;
that the excess exists because of the fact that the terms of said court
were extended by an act of the General Assembly passed after the
county council of said county had made the appropriation for court
expenses for said year ; that the fact that such appropriation was
exhausted was not observed by the judge of said court, nor called
to his attention by the county officials, until near the close of the
November term of said court for said year; that there was the
utmost good faith in the entire transaction ; that the services were
honestly rendered, the money honestly earned by said jurors, and
that they ought to be paid. It is also said that the county council
of said county has refused to make an appropriation for the pay-
ment of such fees, and that they remain unpaid because of said
failure to make such appropriation.

The bill is local and special. It applies only to Spencer County,
which is referred to bv name. It is clearlv within the constitutional

266

inhibition contained in Section 22 of Article 4 of the Constitution
of the State, which provides :

"The General Assembly shall not pass local or special laws in any of I he
following enumerated eases, that is to say: Regulating county and

township business."

The term "county and township business" has been defined by
the Supreme Court as follows :

"The term 'business,' when applied to a public corporation, signifies the
conduct of the usual affairs of the corporation, and the conduct of such
affairs as commonly engage the attention of county and township officers."
Mount, Trustee, v. The State, ex rel. Richey, 90 Ind. 31.

I have had occasion heretofore to criticise the decision ren-
dered in the above case, in so far as it held constitutional legislative
acts for the reimbursement of public officers on account of public
funds lost by them. I am, however, in accord with the definition
given in the opinion in said case upon the question now under con-
sideration. The correctness of such definition has since been recog-
nized by the Supreme Court and has never, to my knowledge, re-
ceived judicial criticism.

In a later opinion it is said, with reference to the above defini-
tion:

"This statement of the law is, we think, correct and especially applicable
to the case now before us, * * *."

Mode v. Beasley, 143 Ind. 316.

In this case it is held that the seventeen inhibitions contained in
Section 22 of Article 4 of the Constitution are absolute, and that
the. Legislature has no discretion or right of judgment relative to
the subjects therein named. The court said:

"One of the seventeen subjects embraced in that section, and thereby
put beyond the power of the Legislature to pass a local law upon it, is the
subject of 'regulating county and township business.'"

The provisions of the bill under consideration bring it clearly
within the above definition of "county and township business."

If "county and township business," as used in the Constitution,
signifies the conduct of the -usual affairs of the corporation, and the
conduct of such affairs as commonly engage the attention of county
and township officers it certainly includes the act of making an ap-
propriation by the county council for the payment of the expenses
of the circuit court of the county. It also includes the allowance
for jury fees by said court, and their payment upon the warrant
of the auditor by the treasurer of the county. These duties, —

267

making such appropriation, allowing such fees and paying such
jurors, are clearly devolved by the law upon the members of the
county council, the judge of the court, and the auditor and the
treasurer, all of whom are officers, who, when so acting, are en-
gaged in the conduct of the usual affairs of the county.

It may be conceded that the claims of the several persons in-
cluded in the appropriation ordered to be made by the terms of the
bill, arc just and that they ought to be paid. But the fact re-
mains that the General Assembly has no power to authorize their
payment. If the claims are just, it is the duty of the county coun-
cil to make an appropriation for their payment. That duty is
devolved upon them by the law. They have full authority to act.
The appeal that justice be done these claimants should be made to
such council and not to the Legislature.

The claim provided for in the bill is little, it is true, but if the
bill were to become a law it would establish a bad precedent, and a
bad precedent based upon a little claim is as dangerous as if it
were based upon a large one. If this bill were to become a law, it
would in a few years become quite the custom on the part of those
having claims against counties, which the county councils of such
counties have refused to recognize, to come to the General Assem-
bly for relief, and secure the passage of measures ordering and di-
recting such councils to make appropriations for the payment of
such claims. Such legislation is against public policy, is clearly un-
constitutional, and cannot receive my approval.
Respectfully submitted,

J. FRANK HANLY,

Governor.

HOUSE BILL No. 306.

MARCH 2, 1905.

Mr. Speaker and Gentlemen of the House of Representatives :
I return herewith House Bill No. 306 without my approval.
The act creates and defines the crime of child desertion and
provides punishment therefor. I am in full symapthy with the
principal object of the bill, and regret that I am not able to give
it, my approval in its present form.

The title of the bill is, I think, clearly insufficient. It reads
as follows : "An act concerning child desertion." It is impossible
to tell from this title that the bill is penal in character, that it de-

268

fines a mine, or provides punishment for the commission of the
net inhibited.

The bill provides :

"That the father, or, when charged by law for the maintenance thereof,
the mother, of a legitimate child or an illegitimate child or children under
sixteen years of age living in this State, who, being able, either by reason
of having means or by means of having capacity to earn wages by personal
services or labor, to provide such child or children with proper and necessary
home, care, food and clothing, shall neglect or refuse so to do, * * * shall
be deemed guilty of child desertion."

It also provides that any such father or mother, their
"said child or children being legally an inmate or inmates of a county or
other children's home, who shall neglect or refuse to pay the trustees of such
children's home the reasonable cost of keeping such child or children in said
home, shall be deemed guilty of child desertion and on conviction shall be
imprisoned in a state prison not less than one year nor more than three years."

The last clause just quoted in effect provides for imprisonment
for debt. It creates a civil liability, — an obligation upon the part
of such father or mother to pay money, — and provides imprison-
ment for failure to meet such obligation.

Section 22 of the Bill of Rights provides :

"There shall be no imprisonment for debt, except in case of fraud."

The clause under consideration is therefore invalid. So, also,
is Section 3, the same being based upon the offense created in the
clause just considered.

There ought to be a statute defining child desertion, making the
same a crime, and providing for the punishment of persons found
guilty of such offense. That portion of the first section of the act,
which provides that failure on the part of the parent who is able,
cither by reason of having means or by reason of having capacity
to earn wages by personal services or labor, to provide for the
necessary and proper home, care, food and clothing of his child,
and makes the neglect or refusal of such parent so to do an offense
punishable by imprisonment, is, I have no doubt, a valid exercise
of legislative authority, and I would be glad to give approval to
such a measure.

I therefore suggest that the bill be rewritten, that the clause
and the section thereof within the constitutional inhibition, be
eliminated therefrom, that the title thereto be rewritten and made
sufficient, and that such bill be then reintroduced and passed.
Respectfully submitted,

J. FRANK HANLY,

Governor.

269
HOUSE BILL No. 149.

MARCH 4, 1905.

Mr. Speaker and Gentlemen of the House of Representatives:

I return herewith House bill No. 149 without my approval.

The bill seeks to preserve the fresh water lakes of the State
of Indiana at their established level and protect them from being
injuriously affected or destroyed by the lowering of the water level
thereof.

In the main the bill has my approval. It has some provisions,
however, which are so clearly within the inhibitions of the Con-
stitution as to render it invalid.

Certain provisions of the bill contemplate that drains may
hereafter be established within forty rods of fresh water lakes, in
accordance with the present drainage laws.

Section 6 provides that the State Board of Health, if it deter-
mines that the water level in a lake has fallen below the high water
mark as established by the act, and has consequently affected the
public health, may enter an order requiring the drains within forty
rods of the lake affected to be filled, and file a copy of this order
with the clerk of the court in the county where such lake is situate,
whereupon notice shall be given to the parties interested, by pub-
lication, and any person interested or aggrieved by the action of
said board in ordering the filling up of such portion of said ditch
as lies more than forty rods and less than eighty rods from the
meander or marginal line of said lake, may appeal to the circuit
court of said county and that thereupon a hearing shall be had
before such court upon the single issue, as to whether the level of
water in such lake is not threatened or impaired by the escape of
waters into such ditch. The ditch ordered filled may have been
constructed under the public drainage laws and the cost of its con-
struction met by assessments upon property benefited thereby and-
may have resulted in the reclamation of lands above the point in
said ditch ordered to be filled.

In every such case the filling of such ditch would destroy an
improvement in which each of said land owners would have a
vested right, — a property interest. It might also destroy valuable
lands reclaimed by such improvement and cause them to become
waste or overflowed. This would result in the destruction of prop-
erty rights that are clearly within the constitutional inhibition
found in Section 31 of the bill of rights which provides that no
man's property shall be taken by law without just compensation.

270

There is no provision in the act for the assessment of any com-
pensation or damages on account of the destruction and the taking
of the property. In effect this section of the measure under con-
sideration takes the property of the citizen without any provision
whereby his damages and injuries may be asssessed. It is so
clearly invalid as to require neither argument or citation of au-
thority beyond the Constitution itself.

I am informed that the subject of the protection of the fresh
water lakes of the State is fully covered by the provisions of the
general drainage act which has been pending in the General As-
sembly and which I understand has passed and is now being en-
rolled for transmission to the Executive. If so, no substantial in-
jury will follow the failure of the present measure to become a
Respectfully submitted,

J. FRANK HANLY,

Governor.

HOUSE BILL No. 186.

MARCH 4, 1905.

Mr. Speaker and Gentlemen of the House of Representatives:
I return herewith House Bill No. 186 without my approval.
The bill, in special terms, declares that all sales or transfers in
bulk of the whole or any part of a stock of merchandise, otherwise
than in the ordinary course of trade and in the usual course of
the seller's business, shall be void as against the creditors of the
seller, unless, at least five days before such sale or transfer, the
purchaser shall demand and receive from such seller a full detailed
inventory, showing the quantity and so far as possible, with the
exercise of reasonable diligence, the fair wholesale value of each
article to be included in such sale or transfer, and unless the pur-
chaser shall further demand and receive from the seller a written
statement, under oath, of the names and addresses of* all creditors
of the seller, with the amount of indebtedness owing to each, or, if
there be no creditor, a written statement to that effect, and unless
the purchaser or seller shall, at least five days before the taking
possession of the merchandise and articles included in such sale or
transfer, notify personally, or by telegram, or by registered mail,
every creditor whose name and address is included in said statement
of the propased purchase, sale or transfer.

The purpose of the bill, no doubt, is to prevent fraudulent sales

271

by merchants and to secure the equal distribution of the property
of insolvent merchants, — a purpose which I concede is a proper and
legitimate one. But it is not confined to insolvent persons. Unfor-
tunately, it is so framed as to include all merchants who may be
in any manner indebted to any one. It is not directed at fraudu-
lent sellers or at sales by insolvent merchants. There is no ques-
tion but what the Legislature has ample power to declare fraudu-
lent sales void, and to pass proper enactments for the just distri-
bution of the property of insolvents. But it is equally clear that
it possesses no power, under the Constitution, to declare fraudu-
lent and void a transaction that is not as a matter of fact tainted
with fraud. It is not within the power of the Legislature, by the
use of an epithet, to change an innocent transaction into a vicious
one ; nor can it destroy the rights of solvent debtors in endeavors
to equitably distribute the assets of insolvents. There must be
some public reason existing to justify the invasion by the Legisla-
ture of the inalienable and ancient rights of the citizens. No public
reason can be offered why an honest and solvent merchant shall be
trammeled and restricted in his power to sell and dispose of his
goods simply because he may be indebted to some extent.
In a recent and w ell-considered Ohio case it is said :

"While it is not required that every act which restricts the enjoyment of
property must affect every member of society, it is required that every
such act must be founded upon a reason of public nature, and the act must
affect all who are within the reason of its enactment. * * *.

"For every restriction upon the enjoyment and use of property there
must be some substantial reason of a public character. * * *. If a restric-
tion is placed upon the alienation of property, it must be for the benefit of
either the entire body of the people, or at least of all who are within the
reason of the restriction."

Glos v. Mulchay, 71 N. E. 630.

In another very recent decision, remarkable for the force, ac-
curacy and cogency of its reasoning, for the care with which it was
considered and the learning and research it displays, it is said of
an act similar to the one here under consideration, in speaking of
the police power of the State, under the authority of which the va-
lidity of the act was sought to be maintained :

"The power may be exercised to promote the safety, health, comfort and
welfare of society, and to sustain legislation as a proper exercise of the
police power it must have reference to some such end. * *.

"The enactment in controversy does not appear to have reference to
either of the objects here indicated. It can hardly be said that a law which
prevents a person, though indebted, who is substantially able to pay his

272

debts, from selling his property in the same way his neighbors do, and in
accordance with the time-honored custom or usage, either promotes the safety,
health, comfort or welfare of the community or the State.

"If the act referred generally to insolvent debtors it would present a
different question, but it relates simply to debtors and creditors of debtors
of a particular and specified business whether solvent or insolvent; so that
the merchant who is worth a fortune over and above his indebtedness, and who
is able to respond instantly to his creditors, who may be only such because of
convenience in trade and business transactions, nevertheless finds himself,
under the provisions of this act, deprived of the liberty to sell his goods, or
to contract in relation thereto in the same manner that others engaged in
the same business may lawfully do."

Sol Block & Gieff v. Schwarts, 27 Utah, 402.

In a dissenting opinion filed in a Tennessee case hereinafter re-
ferred to, the reasoning of which is much stronger than that of
the principal opinion, it is said of a similar statute :

"No good reason can be given why merchants should be trammeled and
restricted in the sale of their goods, when farmers, traders, manufacturers
and other dealers have the unrestricted right to sell when they please, pro-
vided it is done in good faith.

"Nor is there any good reason why such a sale should, in the case of a
merchant, be presumed to be fraudulent, when in the case of other dealers
the presumption is in favor of good faith, and proof is required to show
fraud. Nor is there any good reason to restrict the merchant who is solvent
from making sale of his goods, as he may deem advisable, in order to prevent
the insolvent merchant from exercising the same option and privilege."
Neas v. Borches, 109 Tenn. 405.

In an able and well-considered case decided by our own Su-
preme Court, the following quotation from Judge Cooley on Con-
stitutional Limitations is cited with approval :

"The doubt might also arise whether a regulation made for any one class of
citizens, entirely arbitrary in its character, and restricting their rights, privi-
leges or legal capacity in a manner before unknown to the law, could be sus-
tained, notwithstanding its generality. Distinctions in these respects must
rest upon some reason upon which they can be defended, — like the one of
incapacity in infants and insane persons; and if the Legislature should under-
take to provide that persons following some specified lawful trade or employ-
ment should not have capacity to make contracts, or to receive conveyances,
or to build such houses as others were allowed to erect, or in any other way
to make such use of their property as was permissible to others, it can
scarcely be doubted that the act would transcend the due bounds of legisla-
tive power even if no express constitutional provision could be pointed out
with which it would come in conflict. To forbid to an individual or a class
the right to the acquisition or enjoyment of property in such manner as
should be permitted to the community at large, would be to deprive them of
liberty in particulars of primary, importance to their pursuit of happiness,
and those who should claim a right to do so ought to be able to show a

273

specific authority therefor, instead of calling upon others to show how and
where the authorities negatived."

The bill under consideration clearly applies, and is intended to
apply solely to those engaged in the sale of merchandise and has
no application to any other class of citizens. It would have no ap-
plication even to one whose business was to buy, sell and exchange
stocks of merchandise in bulk, because this would be a sale in the
ordinary course of such person's business. It can apply only to
those engaged in mercantile business, — merchants.

The merchant engaged in the regular mercantile trade, either
at wholesale or at retail, if he be indebted, though perfectly solvent
and entirely honest, if he meets with an opportunity to sell his
stock of goods, before he can effect such sale and give to the pur-
chaser a clear and perfect title to the property which is the subject
of the sale, must comply with all the regulations of this bill, some of
which are onerous and all but prohibitive, while those engaged in
other lines of business, although they may be indebted, are bound
by no such conditions. Their hands are free. They can dispose of
their property without notice to any one and without requiring of
the purchaser anything except the payment of the consideration
agreed upon. The merchant who happens to be in debt, must, after
finding a probable buyer, wait at least five days and give notice to
his creditors. He must require his purchaser to take an inventory
of his entire stock, whether that is desirable or not; he must fur-
nish such purchaser with a list of his creditors, their addresses and
his indebtedness to each ; his purchaser or himself must give notice
to his creditors not only of the fact of the anticipated sale, but all
its terms and conditions ; and such purchaser finds his contract of
purchase invalid if the list of creditors be incomplete, however
honest the mistake therein ; while the trader, the mechanic, the
farmer, the professional man, the banker or the baker, whether he
be in debt or not, without consulting any one but the buyer, and
the merchant who is not in debt, may sell at will.

By confining the prohibitory terms of the statute to merchants
and exempting all other persons, natural and artificial, from their
operation ; by declaring void the agreements of the merchant and
leaving the same kind of contracts valid as to others ; by imposing
conditions on one class of citizens in their right to dispose of their
property, while there is a total immunity from such restrictions as
to all other classes, an unreasonable, unwarranted and unconsti-
tutional classification of citizens is made.

[lg— 19891]

274

In the light of what has already been said it is apparent that
the provisions of the bill are obnoxious to those provisions of the
State Constitution and of the Constitution of the United States
which are designed to insure to the citizen the right to life, liberty,
property and equality before the law and with which the theory
of our government presumes all men to be endowed by nature.

Article 5 of the amendments to the Federal Constitution pro-
vides, among other things, that no citizen shall be deprived of life,
liberty or property without due process of law.

Article 14 provides, among other things:

"No State shall make or enforce any law which skall abridge the privi-
leges or immunities of citizens of the United States; nor shall any State
deprive any person of life, liberty or property without due process of law,
or deny to any person within its jurisdiction the equal protection of the laws."

Section 21 of Article 1 of the State Constitution provides that
no man's property shall be taken by law without just compensation.

Section 23 provides that the General Assembly shall not grant
to any citizen or class of citizens privileges or immunities which
upon the same terms shall not equally belong to all citizens.

These constitutional provisions are the supreme law of the State
upon this subject. To that law all must yield obedience, — the ex-
ecutive, the legislative, and the judicial departments of the govern-
ment, as well as every citizen from the highest to the lowest. In
them liberty dwells and freedom has her habitation. They repre-
sent the essence of free government as established by our fathers
and given to us in trust for our children. They constitute the law
of the land, aye of the Indiana land, and as such they are sacred.
Under their mandate no person can be deprived of life, liberty or
property without due process of law. Under them every person is
entitled to the equal protection of the law. Under them every one
may acquire property, possess and protect it, as well as defend his
life and liberty. Under them all these rights are the guaranteed,
inherent and inalienable heritage of every citizen. And under them
an enactment which deprives the citizen 0f his property or of any
of the essential attributes of its ownership, or of any part of his
personal liberty, is just as much inhibited as one which would de-
prive him of life.

Equality before the law is the cornerstone of the whole national
fabric, and these provisions of the Constitution of Indiana are, as
we have seen, but the reiteration of tke provisions of the National
Constitution. They require that all citizens in like conditions and

275

circumstances shall stand upon equality of right and privilege un-
der the law.

One of the inherent rights of the citizen intended to be pro-
tected by these provisions of the Constitution of the State and Na-
tion from encroachment by legislative enactment, as has been al-
ready suggested, is that of the acquisition, free use and enjoyment
and the disposition of property. That this is true has been af-
firmed by our own Supreme Court on all occasions where the ques-
tion has in any wise been presented.

Quoting from Judge Cooley, our Supreme Court has said in
the case of Dixon v. Poe, 159 Ind. 497:

"To forbid an individual or a class the right to the acquisition or en-
joyment of property in such manner as is permitted to the community at
large, would be to deprive them of liberty in particulars of primary importance
to their pursuit of happiness."

One of the chief and most valuable attributes of the ownership
of property, is the right to dispose of it, and to take from the
citizen this right, or to so trammel and hamper it as to substantially
impair its use, is to take from the citizen his property as much as
if it took from him the thing itself.

It has been well said :

"To take from property its chief element of value, and to deny to the

citizen the right to use and transfer it in any proper and legitimate manner,

is as much depriving him of his property as if the property itself were taken."

Third National Bank v. Devine Grocery Co., 97 Tenn. 611, (37 S. W.

390).

The effect of the measure under consideration is to restrict and
burden the merchant's property in such a manner as to prevent
its free transfer and a realization of its full value. It takes away
one of the chief elements of its value, to wit, the right to use and
legitimately dispose of it.

Speaking upon this question the Supreme Court of Utah, in
the case already referred to herein, used this language :

"Property has some essential attributes without which we could not con-
ceive it to be property. Among these are use, the enjoyment, susceptibility of
purchase, sale, and of contracts in relation thereto. The taking away of one
of the essential attributes may violate the constitutional guarantee that no
person shall be deprived of his property without due process of law as
clearly as in the case of physical taking without due process of law. An
enactment, therefore, like the one in controversy, which deprives an owner
of his liberty to sell his property, or contract in relation thereto,, in the same
manner as others engaged in the same business might lawfully do, invades his

276

rights guaranteed by the Constitution and cannot be upheld; and to prevent
the free exchange, sale or disposition of property according to the im-
memorial usages of trade is to deprive it of one of its main attributes."

Our own Supreme Court has so clearly stated the law as applied
to this class of legislation as to leave no room for doubt as to what
the law is upon the subject in the State of Indiana.

In the case of Dixon v. Poe, supra, from which I have already
quoted, the court holds an act void as obnoxious to the above pro-
visions of the Constitution of the United States and of this State
because the act imposed conditions upon a merchant in the redemp-
tion of his checks that were not imposed upon citizens engaged in
other callings. And in the case of McKinster v. Sager, decided by
our Supreme Court on the 29th day of December, 1904, and re-
ported in vol. 72, page 51, of the N. E. Reporter, where a statute
enacted upon the same subject and very similar in terms, was un-
der consideration, the court held that the law was unconstitutional
because of the unreasonable classification therein as to the remedy
afforded the creditors of the debtor. The argument of the court
and the reasons upon which the case was decided apply with equal
force to the bill now under consideration. It is there said, quoting
from an opinion in the 20 Mich. 452 :

"But the discrimination by the State between different classes of occu-
pations, and the favoring of one at the expense of the rest, whether that one
be farming or banking, merchandising or milling, printing or railroading, is
not legitimate legislation, and is an invasion of that equality of right and
privilege which is a maxim in state government. When the door is once opened
to it there is no line at which we can stop and say with confidence that thus
far we may go with safety and propriety, but no further. Every honest
employment is honorable. It is beneficial to the public. It deserves en-
couragement. The more successful we can make it, the more does it generally
subserve the public good. But it is not the business of the State to make
discriminations in favor of one class against another, or in favor of one
employment against another. The State can have no favorites. Its business
is to protect the industry of all and to give all the benefit of equal laws."

These expressions of pur own court of last resort leave it clear
to my mind what would be the fate of this measure were it to receive
executive sanction.

I am not unmindful of the fact that in the State of Massachu-
setts a measure somewhat similar in terms to the one under consid-
eration has received the doubting approval of the Supreme Court
of that State, nor that a similar measure has been upheld in the
State of Washington and in the State of Tennessee. The Tennes-
see statute was upheld by a divided opinion of the Supreme Court

277

of that State. An able dissenting opinion was delivered by one of
the members of the court, in which the line of argument pursued
was precisely the same as that followed by our own Supreme Court.
If the case as to this measure stood upon the Tennessee decision
alone, I would feel myself irresistibly impelled to follow the reason-
ing of the dissenting opinion.

The same question that is presented here was presented to the
Supreme Court of the State of Ohio, also to the Supreme Court
of the State of Utah. In each case a very able and exhaustive
opinion was delivered by Shauck, judge, speaking for the Supreme
Court of the State of Ohio, and by Bartch, judge, speaking for the
Supreme Court of the State of Utah, in which these laws were held
unconstitutional. In the Ohio case it is said :

"Applying the familiar and unquestioned rule that the validity of an act
is to be determined by its operations, and not by its title or declared purpose,
this act, under the guise of preventing fraud in such sales, prohibits them
altogether, and thus places upon the enjoyment of property an important
restriction which no public interest requires, and which the Constitution,
therefore, forbids. One who challenges the soundness of this conclusion
should be prepared to maintain the validity of an act expressly forbidding
sales of stocks of merchandise in bulk. By the act the Legislature has
attempted to discriminate unwarrantably among creditors and debtors. * * *.

"Although the act applies to all the creditors of the seller, it applies to
those only who are creditors of the owner of a stock of merchandise, and
thus an unreasonable burden is imposed upon a limited class of debtors for
the supposed benefit of a limited class who are their creditors."

In the Utah case it is said:

"While it is within the province of the Legislature to prevent fraudulent
sales as a protection to creditors, still, when it attempts to do this,— to
remove one evil, — it must not so restrict individual rights and disturb in-
dustrial pursuits and usages as to cause a score of wrongs.

"We are of the opinion that the enactment in controversy abridges some
of the inalienable rights of persons guaranteed by the Constitution; that it
is not a proper exercise of the police power of the State; that it deprives
property of one of its chief attributes, and some persons the liberty to dis-
pose of property as others may; *% *; that it deprives the person to
whom it applies of a right of property without due process of law; and that,
therefore, it is null and void."

As we have seen, the views of the several courts as expressed in
these cases are so clearly sustained by the general principles of law,
and are so much in harmony with the decisions of our own Supreme
Court, as to convince me that whatever the law may be held to be
in the States of Massachusetts, Washington or Tennessee, that
in the State of Indiana laws of this character cannot be upheld.

278

Because the bill arbitrarily despoils the citizen of his property
without due process of law; discriminates between merchants and
other classes of citizens in their right and power to dispose of their
property ; discriminates between solvent merchants who are in-
debted and merchants who are free from debt, in their right and
power to dispose of property ; and gives to citizens, other than
merchants, privileges and immunities that are not enjoyed by mer-
chants who stand upon the same footing as such other citizens, I am
compelled to withhold executive approval from such measure.

If a measure were passed applying only to insolvent persons
selling stocks of merchandise in bulk, I believe it would be a valid
exercise of legislative power, and I would give it my approval.
Respectfully submitted,

J. FRANK HANLY,

Governor.

HOUSE BILL No. 174.

MARCH 6, 1905.

Mr. Speaker and Gentlemen of the House of Representatives :

I return herewith House Bill No. 174 without my approval.

The bill provides for the extension of library privileges to
counties and townships in which free public libraries may be located,
upon the filing of notice by the managing board of any such
library with the board of county commissioners of such county, or
with the advisory board of any such township, as the case may be,
and upon the acceptance by such respective boards of the condi-
tions named in such notice, and the appropriation, out of the gen-
eral fund of such county or township, of a sum equal to the fund
which will be produced by a certain named rate of taxes upon the
taxable property of said county or township, as the case may be,
outside of such city where said library may be located, and in case
of the county, outside of the limits of any township in the county
then maintaining a free public library by a tax under existing
lafws.

Under the provisions of the bill all property within the limits
of any city in such township where such library is located, is omit-
ted from the tax levy required to be made by such township.

In case of the county, all property located within the limits of
such city or within the limits of any township in which a free

279

library is maintained by taxation, is omitted from the tax levy re-
quired to be made by the county.

In other words, the bill provides for the laying of a township
tax for library purposes that is not uniform throughout the town-
ships, and from which certain property in certain portions of the
township, that is, property within such city where such library is
located, is exempt.

It also provides for the levying of a county tax for library
purposes that is not uniform throughout the county, and from
which property within such incorporated city where such library
is situated, or within any township in such county which is main-
taining a library by taxation, is exempt.

The taxing district of a township, for the purpose of laying a
township tax, is the entire township. Any such tax so laid by such
township must be laid upon all the property of the township.

The taxing district of a county, for the purpose of laying a
county tax, is the entire county. It includes all townships and all
cities within the borders of the county. Such a tax laid by such
county must be laid upon all the property of the county.

Such a tax as the one authorized by the provisions of the meas-
ure under consideration, cannot be laid either by the township or
the county.

The Constitution of the State, Article 10, Section 1, provides:

"The General Assembly shall provide by law for a uniform and equal
rate of assessment and taxation," * * *.

The above provision has received judicial construction, and its
meaning relative to the question now under consideration is well-
established.

In an early and well-considered case, it is said, in reference to
this section :

"The section does not require that the rate of assessment shall be uniform
and equal for all purposes throughout the State; and we think its meaning
clearly is, that the rate of assessment and taxation must be uniform and
equal throughout the locality in which the tax is levied. If the levy is for
State purposes, then the rate must be uniform and equal in all parts of the
State; and if the levy be for county purposes, the rate must be uniform
and equal throughout the county in which the levy is made; and so in town-
ships when the levy is for township or road purposes. It was simply intended
that the uniformity and equality of rate should be co-extensive with the
territory to which the tax applies. Taxes are public burdens, which should
be borne by all, and it was evidently the object of the convention, in the
adoption of this and other provisions of the Constitution, to devise a system

280

for the Assessment and levy of taxes that would distribute these burdens
among those liable to them, upon principles of uniformity, equality and j us-
tice. To this £nd the primary principle adopted is, that taxes shall be
assessed on the property liable thereto according to its just value and by
uniform and equal rate."

Bright v. McCullough, 27 Ind. 230.

In the course of the opinion in the above case the court quotes
with approval the following from the opinion by Rainey, C. J.,
in the case of City of Zanesville v. Richards, 5 Ohio St. 589 :

"Without express authority of law, no tax, either for state, county, town-
ship or corporation purposes, can be levied; and we see no reason to doubt
that this section of the Constitution is equally applicable to, and furnishes
the governing principles for, all laws authorizing taxes to be levied for either
purpose. The great object of the provision was to secure equality and uni-
formity in the imposition of these public burdens. The convention was well
aware that much the largest part would be required to answer the purpose
of these local sub-divisions, and equally aware that it could only be levied
as the General Assembly should provide. In establishing this principle of
justice and equality, they have made it the fundamental rule upon which all
such laws must be based ; and its spirit and purpose can only be preserved
by holding that it requires a uniform rate per cent, to be levied upon all
property according to its true value in money, within the limits of the local
sub-division for \vhich the revenue is collected."

Again, it is said in the case of Bright v. McCullough, supra,
in quoting from the opinion in the case of Exchange Bank of Co-
lumbus v. Hiries, 3 Ohio St. 1 :

"Uniformity in taxing implies equality in the burden of taxation, and
this equality of burden cannot exist without uniformity in the mode of
assessment as well as in the rate of taxation. But this is not all. The
uniformity must be co-extensive with the territory to which it applies. If
a state tax, it must be uniform over all the State; if a county, town or city
tax, it must be uniform throughout the extent of the territory to which it
is applicable."

The case of Bright v. McCullough, supra, has never to my
knowledge been overruled, criticised or modified, but has been many
times cited with approval by the Supreme Court of this State.

Henderson v. London, etc., Co., 135 Ind. 37;
Cleveland, etc., Co. v. Backus, 133 Ind. 535;
Pittsburg, etc., Co. v. Backus, 133 Ind. 647.

In the first of these cases the principle here under considera-
tion is expressed in the following language:

"The taxing district of the State, wherein taxes are directed for the
benefit of those serving the State, is the whole State. State taxes are not of

281

uniform and equal rate when they apply to a portion of a class only and
omit a portion of the same class, and this is no less true because the classes
may be divided by county lines."

In the case last cited, the following declaration is made :
"There is uniformity and equality of assessment and taxation when all
the property is to be assessed at its true cash value, and the same rate is
fixed on all property subject to assessment for the tax. If it be a tax for
State purposes, the rate must be the same throughout the State; if for county
purposes or township purposes, the same rule would apply."

The tax authorized to be levied by the county under the provi-
sions of the measure returned herewith, is a county tax for library
purposes, and the tax authorized thereby to be levied by the town-
ship, is a township tax for library purposes. The taxes paid un-
der the county levy go into the general fund of the county, and
those paid into the township levy go into the general fund of the
township, and the sums paid to the library, for the maintenance of
which such tax is levied, are required to be paid from the general
fund of the county or of the township, as the case may be.

It has been said that the reason why the property in the city
where the library is located is exempt from taxation by the county,
is found in the fact that the common council of such city, under
existing law,. may levy a tax for the maintenance of such library
upon the property within the city limits. It is also urged that a
township that has within its borders a free library which it is main-
taining by a tax levy upon the property of such township, ought to
be exempt from the payment of the tax levied, for the maintenance
of a library, by the county in which such township is located. It is
further said that neither the property in such city nor the property
in such township is in fact exempt from taxation for library pur-
poses. This argument, however true it may be in fact, does not
meet the constitutional objection. The city tax is laid by a dif-
ferent authority and is different in rate from the county tax, and
the same is true of the township tax. In neither case would there
be uniformity of rate.

I am in sympathy with the purpose sought to be effected by
the provisions of the bill under consideration, but it is so clearly
within the constitutional inhibition requiring a uniform rate of
taxation that I am compelled to refuse it executive approval.
Respectfully submitted,

J. FRANK HANLY,

Governor.

282
HOUSE BILL No. 226.

MARCH 6, 1905.

Mr. Speaker and Gentlemen of the House of Representatives:

I return herewith House Bill No. 226 without my approval,
because of its defective title.

It purports to amend an act approved February 24, 1899,
which act was an amendment of an act approved March 8, 1897.

The title of the act of 1897 is set out accurately and in full,
but the title of the act sought to be amended, that is the act of
1899, is not set out nor even attempted to be set out.

Section 21, Article 4, of the Constitution provides:

"No act shall ever be revised or amended by mere reference to its title;
but the act revised or section amended shall be set forth and published at
full length."

R. S. 1901, Sec. 117.

The only reference made to the act of 1899, this being the act
which is sought to be amended, either in the title or in the body of
the bill, follows the title of the act of 1897, as set out, and is as
follows :

"And the act amendatory thereof, approved February" 24, 1899, and
declaring an emergency, the same being Section 8075a of the Revised Statutes
of the State of Indiana of 1901."

In the case of Citizens, etc., Company v. Haugh, 142 Ind. 254,
the date of the approval of an act is declared to be no part of its
title. Therefore, the words in the title of the bill under considera-
tion, "and the act amendatory thereof, approved February 24,
1899, and declaring an emergency, the same being Section 8075a
of the Revised Statutes of the State of Indiana," are no part of
the title of the act sought to be amended.

It has also been decided that where the title to an amendatory
statute refers to and sets forth the title of an act which has there-
tofore been amended, and does not refer to or recite the title of such
act as amended, a designation of the statute sought to be amended
is insufficient, although the section attempted to be amended is re-
ferred to as being a designated section of the Revised Statutes of
1881.

Boreing v. State, 141 Ind. 640;
Feibleman v. State, 98 Ind. 516;
Linquest v. State, 153 Ind. 543.

In the last cited case the court announces the rule as follows :
"It is settled by the decisions of this court Hint, iti the revision of an
act or the amendment of a section, two things are required: (1) The title
of the act to he amended must he referred to l.y selling it out; (£) The
aet as revised, or section as fimended, must he set forth, ;md published at
full length" * * *.

"When the act is identified in the manner required by the Constitution,
and it is not certain what act was intended to be amended, the court will
resort to meatas other than the title to determine what act was intended.
But if the act is not identified in the manner required by the Constitution,
the court cannot resort to other means of identification, although a resort
to such other means would point out the act intended beyond any question."

The act of 1897 consisted of a single section other than an
emergency clause. The act of 1899 amended that section. There-
fore, the act of 1897 ceased upon amendment to exist. As the title
to the bill under consideration now stands, it sets out the title to
the act of 1897, and thereby seeks to amend an act not in existence.
An attempt to amend an act not in existence is not valid for
any purpose.

Draper v. Falley, 38 Ind. 465 ;

Blackmore v. Dolan, 50 Ind. 194;

Feibleman v. State, 98 Ind. 516.

The purpose of the bill returned herewith is a proper one, and
if the title were not fatally defective I would give it my approval.
As it is, however, I can not do so.

Respectfully submitted,

J. FRANK HANLY,

Governor.

HOUSE BILL No.

MARCH 6, 1905.

Mr. Speaker and Gentlemen of the House of Representatives :
I return herewith House Bill No. 362 without my approval.
The bill authorizes the common council of cities not operating
under a special charter and the board of trustees of towns, where
such cities and towns own their own system of water works, to or-
der the extension of the water mains of such water works system
and the laying of house connections thereto along, in and upon
such streets as such council or such board of trustees may from
time to time deem necessary, and provides that the cost of con-

284

structing and laying such water mains and the house connections
thereto shall be assessed upon the property abutting upon the
streets where said water mains are laid, in proportion to the bene-
fits derived therefrom.

These provisions are so unfair and unjust to the citizens and
taxpayers of such cities and towns living upon streets where such
water mains may be laid, as to preclude executive approval.

Every water works system owned by any city or town in the
State has been purchased or constructed at the expense of all the
taxpayers in the city or town owning the same. Property owners
living upon streets where no water mains are now located have con-
tributed as much to the payment of the cost of constructing or
purchasing such water works system, in proportion to the value
of the property owned by them, as have any of the other citizens
of such town or city. They have the same right to water privileges
that such other citizens may have and upon the same terms. The
bill under consideration ignores that right entirely, and vests the
arbitrary power in the common council of a city or the board of
trustees of a town to construct and lay such water mains upon any
such street and to assess the entire cost thereof against such prop-
erty owners without their consent and against their wishes. If
such water mains are constructed and laid upon such streets, and
the property owners thereon are compelled to pay special assess-
ments to defray the expense of constructing and laying the same,
they will be compelled to contribute in an unequal and unjust de-
gree to the cost and maintenance of a system of water works which
belongs to the whole people. Such system should be established
from a fund derived from a uniform rate of taxation resting alike
upon all citizens of the city or town, and not in part from a fund
to which all citizens have contributed alike according to the value
of the property owned by them, and in part from a special assess-
ment resting upon a few of such taxpayers. The burden of the
cost of constructing and maintaining such system rests unfairly
upon the citizens whose property is especially assessed, to the ex-
tent of the special assessment laid. This I think ought not to be.

The power to construct and lay water mains upon any of the
streets of any of such cities or towns, is an arbitrary power under
the provisions of this measure, vested wholly in the discretion of
the common council or the board of trustees of such city or town.
The proceeding to construct and lay such water mains upon any
such street is not required to be initiated by any persons owning
property thereon. They have no choice in the premises. The im-

285

provement may be made against their wish and over their protest.
It is theirs only to pay the unequal burden imposed.
Respectfully submitted,

J. FRANK HANLY,

Governor.

HOUSE BILL No. 374.

MARCH 6, 1905.

Mr. Speaker and Gentlemen of the House of Representatives:

I return herewith House Bill No. 374 without my approval.

The bill provides for the construction of court houses in all
counties of the State having a population of not less than 20,870,
nor more than 21,000. In effect, it divides the ninety -two counties
of the State into three classes, viz. : those having a less population
than 20,870 — those having a population of more than 21,000 —
and those having a population between 20,870 and 21,000.

The provisions of the bill apply only to the last named class of
counties. It will be noticed that the difference in population be-
tween the counties of the first class, having the maximum popula-
tion, and those of the second class, having the minimum population,
is only 130, and that the counties of the third class, and to which
the provisions of the bill apply, must be found between that nar-
row limitation.

In terms the bill is general, but no one is deceived thereby. In
effect, it is local and special, and applies to but one county in the
State — Monroe, that being the only county in the State shown by
the last United States census to have a population between 20,870
and 21,000. No other county in the State comes within the limi-
tation named. In all such cases the subterfuge of arbitrary classi-
fication might as well be dispensed with, and the name of the
county sought to be affected boldly written into the bill. The
measure under consideration might as well have contained the
name of Monroe County, and have been entitled, "An act concern-
ing the construction of a court house in Monroe County." Its
meaning would have been exactly the same, and, in addition, it
would have been an honest declaration of its purpose. The ostrich
that hides his head in the sand, believing his body to be thereby con-
cealed, fools no one but himself.

That such acts are local and special in character has been de-

28(5

cided by the Supreme Court so often and so recently that the deci-
sions ought to lie fresh in the minds of even the laity.

In re Application of Hank of Commerce, 15'} Ind. 4>74< ;
Board v. Spangler, 159 Ind. 579;
School City of Rushville v. Hays, 162 Ind. 198;
The Town of Longview v. City of Crawfordsville, No. 20,-
274, handed down January 13, 1905.

In the second case cited above, an act of the General Assembly,
approved March 4, 1899, making an arbitrary classification of
counties between those having a population of 15,000 and 15,050,
according to the last Federal census was under consideration. The
court said:

"This court takes judicial notice of the population of the counties of this
State according to the Federal census of 1890. It is, therefore, advised that
the only county in this State that had a population between 15,000 and 15,050,
according to the Federal census of 1890, was Owen County. As the popula-
tion referred to in said act was to be determined according to a particular
past census, so that other counties could not subsequently enter the class, it
is apparent that by said act the General Assembly, in effect, sought to provide
that the provisions of the general act of February 27, 1899, should not apply
to certain described proceedings to improve gravel roads in the county of
Owen. * * The attempted exclusion of pending proceedings for the

improvement of gravel roads in Owen County from the operation of the
general law was in effect an attempt to provide by a local law not

alone for an issue of bonds, but for the levy of a tax that, under existing
law, constitutes the means of retiring such bonds. We think that it was not
competent for the General Assembly to make such exception. As

the subject of the legislation falls within Section 22, of Article 4, of the
State Constitution, we hold that the proceedings could not be validated by
any act that could properly be characterized as local or special."

The Sixty-third General Assembty enacted nine laws arbitrarily
establishing classifications of counties and cities upon differences of
population varying, as to the classes legislated for, from 5 to 1,000.
In considering one of these acts in a recent case, the Supreme Court
said:

"Its legal foundation is not more secure than if it had been declared
to apply to all cities and towns bearing the name of Rushville, as shown
by the last preceding census. The classification is entirely arbitrary and
artificial, and the plain command of the Constitution cannot be evaded by so
weak and transparent a device.

"Let it be supposed that the act of March 9, 1903, supra, is valid, what
provision of the Constitution cannot be rendered nugatory by similar evasions.
If cities and towns may be classified according to trifling differences in
population, so may counties and townships. By means of statutes, general

287

in form, but local and special in purpose, resting entirely upon slight differ-
ences in population, every provision of Article 4, Section 22, of the Consti-
tution may be successfully evaded.

"Inferior in dignity and force of obligation only to the Constitution of the
United States and the acts of Congress and treaties made under it, the State
Constitution is the supreme law of the Commonwealth. It is to be interpreted
and applied in a reasonable manner; it is to be observed and obeyed, and
not evaded and defeated by distinctions and classifications which rest upon
no rational or natural basis, and which deceive no one. When it declares that
the General Assembly shall not pass local or special laws providing for sup-
porting common schools and for the preservation of school funds, its man-
date cannot be defeated by creating a class of cities differing in no material
respect from scores of others in the State. The mere convenience of local
communities, the financial necessities of particular cities, the conflicting views
of citizens on the subject of the necessity for the erection of school buildings,
are not sufficient to authorize legislation which the Constitution prohibits.
Attempted evasions of the Constitution, the object of which is to meet and
overcome such local and special conditions, cannot be tolerated. A due re-
gard for the highest interests of the citizens of the State requires that all con-
stitutional limitations and restrictions shall be firmly and constantly en-
forced."

The School City of Rushville v. Hayes, 162 Ind. 198.

In the case of the Town of Longview v. City of Crawfofds-
villc, supra, construing another act of the Sixty-third General As-
sembly, in a decision rendered as late as the 13th day of January,
1905, the same court said:

"In jurisdictions where classification is permitted by the organic law, it
is settled that the same, in order to furnish a basis for legislation that will
exempt it from the charge of being special, must be a classification which in
the nature of things suggests and furnishes a reason for, and justifies the
making of the class. The reason for the classification must inhere in the sub-
ject-matter, and the same must be natural, not artificial. Under this rule,
neither mere isolation nor arbitrary selection is proper classification."

In the statute above referred to the classification made was
based on a difference of 1,000 in population. The court held it to
be an arbitrary classification, and in the course of its opinion said:

"Applying these tests, it is evident that the classification in said act is
merely arbitrary and cannot relieve the same from the infirmity of being
special and local. There is no reason inhering in the subject-matter of the
act for giving the power mentioned therein to cities of a population between
six and seven thousand according to the last preceding United States census,
and not giving the same to the other cities in the State."

In the measure under consideration the classification of coun-
ties is based upon a difference in population of only 130, and is,
therefore, clearly within the rule above declared.

288

There can be no doubt of the local and special character of this
bill. That fact is established, and may as well be admitted. To
admit the local and special character of the bill, however, is to ad-
mit its invalidity, if we keep in mind the fact that its purpose is
the construction of a court house in Monroe County.

The Constitution provides:

"The General Assembly shall not pass local or special laws in any of the
following enumerated cases, that is to say : Regulating county and

township business."

Article 4, Section 22, State Constitution.

Constructing a court house is county business. That it is
county business has been clearly and unequivocally decided by the
Supreme Court in an able and well-considered opinion filed Janu-
ary 8, 1904.

Board v. State, 161 Ind. 618.

In the above case the question was fairly presented and point-
edly decided. It involved the validity of an act providing for the
change of the county seat in Newton County and the construction
of a court house in said county. Speaking of the question pre-
sented the court said:

"The decision of the question involves the inquiry (1) is the building of
a county court house for county purposes with county revenue county busi-
ness * * *. If, when the Constitution was adopted, the building of a
county court house, with county means, upon county grounds, for county pur-
purposes, was generally considered and treated over the State as county
business, and was intended by the Convention to be embraced within the classi-
fication of county business, as contained in Section 22, Article 4, then it must
be held that the Legislature had no power to pass a local or special law regu-
lating the same. To regulate is to direct by rule or restriction. The phrase
'county business' has no prescribed or technical meaning, and the definition
must be sought in the previous history and practices of the State."

After a careful and learned review of the history and practices
of the State in this regard, including consideration and review of
the debates in the Constitutional Convention upon the question, the
court continues:

"From these considerations, and others that might be brought, we come
unhesitatingly to the conclusion that the building of court houses in the sev-
eral counties of the State was understood by the people and framers of the
Constitution as being county business, and was intended by the latter to be
embraced by the term as implied in Section 22, Article 4."

I am thoroughly convinced that the provisions of the bill under
consideration, making an arbitrary classification of counties based

289

upon a difference of 130 in population, make it local and special
in character.

I am equally well convinced that providing, as it does, for the
construction of a court house, it is a measure to regulate county
business, and is within the inhibition of Section 22, Article 4, of
the Constitution.

Respectfully submitted,

J. FRANK HANLY,

Governor.

HOUSE BILL No. 65.

MARCH 8, 1905.

Mr. Speaker and Gentlemen of the House of Representatives:

I deposit herewith House Bill No. 65 with the Secretary of
State without my approval, pursuant to the provisions of the Con-
stitution of the State, and submit herewith my reasons for so doing.
The bill concerns gravel and macadamized roads on township
lines, and provides for the construction of such roads on petitions
signed by a majority of the freeholders of the townships affected
by the proposed road. The same subject-matter is covered by
Senate Bill No. 77, which has this day received executive approval,
except that in the Senate bill the question of constructing such
roads on township lines is required to be submitted to the people of
the townships affected at an election to be held for that purpose.

I believe the provisions of the Senate bill are better than the
provisions of the bill herewith deposited. I therefore withhold
executive approval from said House Bill No. 65.
Respectfully submitted,

J. FRANK HANLY,

Governor.

[19—19891]

Senate Veto Messages, Sixty-Fifth
General Assembly

(291)

293
SENATE BILL No. 110.

FEBRUARY 15, 1907.

Mr. President and Gentlemen of the Senate:

I return herewith Senate Bill No. 110, the same being a bill
to amend section 470 of an act entitled "An act concerning pub-
lic offenses," approved March 10, 1905, without my approval.

The section sought to be amended makes the visiting or fre-
quenting of a house or houses of ill-fame or assignation by a male
person, except as a physician, a misdemeanor and provides pun-
ishment by fine and imprisonment upon conviction.

The vice sought to be reached and restrained is one of the
most hateful and demoralizing known to society. The section re-
ferred to is sought to be amended in two particulars. First: The
punishment provided is changed from fine and imprisonment to
fine or imprisonment, in the discretion of the court. It may be and
perhaps is advisable to make this change. If this were the extent
of the amendment I would have approved it. The other amend-
ment sought, however, is of a different character. The statute
now reads: "Whoever being a male person frequents or visits a
house or houses of ill-fame or of assignation, except as a physi-
cian, * * * shall be fined," etc. The amendment adds an
additional exception to the inhibition of the statute by inserting
after the word "physician" the following words: "Or other per-
sons upon legitimate business." The effect of this amendment
would be to throw the burden of disproving the exception upon
the State. This is well settled by judicial authority.

The following is a clear statement of the law applicable to the
case:

"The law in relation to exceptions in a statute is, that if the exception
he contained in a subsequent clause or statute, it is a matter of defense, and
need not be negatived in the indictment; hut if it be closely connected with
the enacting clause, or if it be in the same clause of the act which creates
an offense, it is necessary to show, by negative averment, that the defendant
is not within the exception."

Russell v. State, 50 Ind. at 174 ;

Cleveland, etc., Railway Co. v. Gray, 148 Ind. at 275 ;
Chicago, etc., Railway Co. v. Vert, 24 Ind. App. at 80:
Turner v. State, 151 Ind. at 248.

Under the rule here declared it is clear that the effect of the
exception of "other persons upon legitimate business" would be

294

to require the State to aver, in every affidavit or indictment charg-
ing the offense described in the section, and upon the trial to prove
beyond a reasonable doubt, that the defendant was not visiting or
frequenting the forbidden house upon legitimate business. Such
a requirement would put an unnecessary burden upon the State in
every such case. It would make the proof difficult in all cases and
impossible in many. Efforts to make the proof in criminal cases
more difficult are to be looked upon with concern and apprehension
rather than approval.

Our criminal laws do not need amendment in this regard. This
is especially true of the present statute. There is no need of the
amendment. No person visiting any such house on any lawful *mis-
sion is in danger of conviction under the present statute. Its ef-
fect would be nullification and not amendment.

For these reasons I am compelled to withhold executive ap-
proval.

Respectfully submitted,

J. FRANK HANLY,

Governor.

SENATE BILL No. 126.

FEBRUARY 15, 1907.

Mr. President and Gentlemen of the Senate:

Senate Bill No. 126 is herewith returned without executive ap-
proval.

The purpose of the bill is to authorize certain cities to make
appropriations of money and to levy a special tax for the support
of hospitals in certain instances named.

The title of the bill is defective, in that only one of these pur-
poses, that of authorizing such cities to make appropriations of
money for the support of such hospitals, is named. The other
purpose, that of authorizing such cities to levy a tax for the sup-
port of such hospitals, is wholly omitted.

Section 19 of the Constitution requires the subject of every
act to be expressed in the title and declares void so much of any
act as is not expressed in the title.

R. S. 1901, Sec. 115.

295

Upon this subject the Supreme Court of the State, in a well-
considered opinion, declared the rule to be as follows :

"If the subject is composed of two or more essential elements, the expres-
sion of one of such elements in the title would not suffice. The absence of
one of such elements in the title would be as misleading, and might be as per-
nicious, as the evils sought to be obstructed by the Constitution. * * *

"In State v. Young, 47 Ind. 150, a test was prescribed for determining if
the subject is expressed in the title. It was said, in speaking of that element
of the subject claimed to be absent from the title: 'Suppose that there was
no other provision in the act. * * * If the section could not thus stand
alone under the title, it must fall.' We apprehend that this is always true
where only a part of the subject is expressed, and that it is especially true
where that part of the subject omitted from the title is not naturally or or-
dinarily connected with that part of the subject which is expressed in the
title. * * *

"The requirement that the subject expressed should apprise the people of
the subject of legislation, in order that an opportunity for a hearing or for
petition may be had, is far from being complied with in the act before us. No
notice whatever to those expected to contribute to such fund is given."
Henderson v. London, etc., Insurance Co., 135 Ind. 31.

The rule laid down in the above case is clearly applicable to the
bill under consideration. Here the purpose to authorize cities to
make appropriations is expressed in the title, but the purpose to
authorize such cities to levy a tax is not expressed in the title, and
no notice whatever to those who may be expected to pay such tax
is given. The title to the bill relates solely to the making of ap-
propraitions.

The purpose of the bill is an important one. Any law carrying
in it authority to levy a tax upon the citizens is important, and
every act having within it such purpose should clearly set that
purpose out in the title.

I believe the bill is a meritorious one. If the title of the bill
is amended and the bill re-enacted, I shall be glad to give it ex-
ecutive approval. •

Respectfully submitted,

J. FRANK HANLY,

Governor.

296
SENATE BILL No. 249.

FEBRUARY 22, 1907.

Mr. President and Gentlemen of the Senate:

I return herewith Senate Bill No. 249 without executive ap-
proval.

The bill authorizes boards of school trustees in cities of the
second class to issue, negotiate and sell bonds of the school city or
corporation, for the purpose of procuring means "for school uses
and purposes ; to purchase real estate ; to erect buildings and suit-
ably equip them for use for school purposes, including the cost of
lighting, heating and sanitation; also for the purpose of paying
any sums due for buildings already erected ; also to fund and pay
any indebtedness of such school city or corporation" ; also to em-
power such trustees to levy and collect taxes for the payment of
such bonds.

The present statute, Section 5915v, R. S. 1901, Vol. 4, author-
izes such boards to issue bonds for the purpose of procuring means
to purchase grounds, erect school buildings and pay for the cost
of repairing school buildings heretofore erected, limiting such in-
debtedness to two per cent, of the taxable property of the city, and
the tax levy for their retirement to 25 cents on each 100 dollars of
such taxable property. It further provides for the submission of
the question of issuing the bonds to the qualified voters of the city
in case the proposed issue exceeds three-fourths of one per cent, of
the taxable property of the city.

The proposed bill repeals all laws in conflict with its provisions,
and, if enacted, it will strike down all restrictions in the present law
limiting the authority of such boards to issue bonds and to levy
taxes for their payment.

At present the bill if enacted woulS affect but two cities, Evans-
ville and Fort Wayne. Two other cities, however, Terre Haute
and South Bend, will, no doubt, soon be included among the second
class cities of the State, in which event the bill, if enacted, would
apply to them.

It authorizes boards of school trustees to issue bonds and incur
indebtedness and to levy taxes for the retirement of such bonds and
the payment of such indebtedness without limitation and without
the submission of the question in any case to the qualified voters of
the city, except the provision that there shall not be issued and

297

outstanding at any one time more than $150,000.00 face value of
such bonds. It provides that bonds issued shall not run for a
greater period than ten years, and that they shall fall due in equal
proportions each year after their date until the last one matures.

This limitation, however, is in effect no limitation at all, since
any board of trustees who desire might issue $150,000.00 of such
bonds to be paid in any number of years less than ten. They
could all be made payable in one year, or they could be extended
over a term of two, three, four or other number of years not more
than ten; $150,000.00 of such bonds could be issued today to be
paid and retired in a single year and a tax levied to retire them,
or they could be issued to run a period of three years, payable
one-third each year, and a tax levied to retire them. If issued for a
year and a levy made to retire them, upon their payment another
issue of $150,000.00 could be made for another year, or running
over a period of two, three, four or five years up to ten years, as
the board might elect, and a new issue made upon their payment.

Such a power is a dangerous one to confer upon the board of
trustees of any school town. One board might administer it in
good faith and with conservative care ; the next one might abuse
its power and the people of the city be helpless to stay its hand.
In enacting this bill into law you legislate not for today and not
for existing boards of trustees, but for other days and years to
come and for other boards of trustees.

I know of no other statute upon this subject authorizing the
hoards of school trustees of any town or city, great or small, in all
the State of Indiana, to incur indebtedness and levy taxes without
limitation.

I can not give my approval to a bill the terms of which strike
down existing limitations in this regard and which provide no re-
strictions to take the place of those stricken down.

The purpose of the bill, as I am advised, is to furnish relief
to the city of Evansville, by conferring upon its board of trustees
power to issue bonds to retire a present indebtedness. The relief
desired is essential to the welfare of the schools of that city. The
purpose of the bill is, therefore, a proper one, and if proper re-
strictions were thrown around the authority conferred upon the
trustees, limiting their power to issue bonds and levy a tax for
their retirement, I would approve it.

Respectfully submitted,

J. FRANK HANL.Y,

Governor.

298
SENATE BILL No. 128.

FEBRUARY 26, 1907.

Mr. President and Gentlemen of the Senate : .

I return herewith, without executive approval, Senate Bill No.
128, the same being "An act to amend section 15 of an act en-
titled 'An act in relation to voluntary associations,' in force March
9, 1901, Acts 1901, page 289."

The bill purports to amend an existing statute, but "there is no
such act as that named in the title, to wit : "An act in relation to
voluntary associations," in force March 9, 1901.

By reference to the session laws of 1901, page 289, this being
the book and page referred to in the title of this bill, we find an
act entitled "An act concerning the organization and perpetuity
of voluntary associations, repealing all laws in conflict therewith,
legalizing the organization of certain associations organized un-
der former laws, and declaring an emergency." This act was ap-
proved March 9, 1901, and in all probability is the act sought to
be amended by the present measure.

By comparison of the two titles, that of the amendatory act
and that of the act sought to be amended, it will be seen that no
substantial part of the title of the act sought to be amended is set
out in the title of the amendatory act.

Section 21 of Article 4 of the Constitution, provides :

"No act shall ever be revised or amended by mere reference to the title;
but the act revised or section amended shall be set forth and published at full
length."

The most that can be said for the present bill is that it con-
tains a mere reference to the title of the act sought to be amended.
There is a total failure to set out the title.

In the case of O'Mara v. The Wabash Railroad Company, 150
Ind. at 650, the title of the amendatory act referred to the title
of the act sought to be amended as "being an act concerning civil
procedure," when the actual title of the act sought to be amended
was "An act concerning proceedings in civil cases."

In this case the court said:

"The title of the act of 1897 seems to have been possibly intended to apply
to either an original or an amendatory act, but the enacting clause and section
so clearly give the act character as an amendatory act that an intention to
enact an original statute is not probable. We see no escape from the con-

299

elusion that the act does not express the subject thereof in its title by refer-
ence to the act or the title of the act to be amended. It is therefore invalid."
O'Mara v. The Wabash Railroad Company, 150, Ind. at 650.

In another recent case the title of the amendatory act read as
follows : "An act to amend section 359 of an act concerning trial
by jury, in force September 19, 1881, the same being Section 525
of the Revised Statutes of 1881." The actual title of the act
sought to be amended was "An act concerning proceedings in
civil cases." The court held the reference in the title to Section
359 insufficient, saying:

"It will be observed that the amendatory act of 1891 does not refer to the
title of the act to be amended by setting it out, as required by said Section 21
of Article 4 of the Constitution, but refers to the act to be amended as, 'An
act concerning trial by jury,' which is not the title of the act in which said
Section 359, supra, may be found. When the act or section to be amended is
identified in the manner required by the Constitution, and it is not certain
what act or section was amended, the court will resort to means other than
the title to determine what act or section was amended. But if the act or
section is not identified in the manner required by the Constitution, the court
will not resort to such other means of identification, although the act intended
would thereby be ascertained beyond question. It follows that as the title of
said act of 1891, supra, fails to identify the section to be amended by setting
the same out in the title thereof, as required by Section 21 of Article 4 of the
Constitution, the same is unconstitutional and void."

Mankin v. Pennsylvania Co., 160 Ind. at 453.

In a yet more recent case the title of the amendatory act omit-
ted from the title of the act sought to be amended the following
words: "Providing for town, city and county boards of health,
prescribing penalty for the violation of the provisions thereof."
The title of the act sought to be amended was quite lengthy and
was otherwise correctly set out in the title of the amendatory act,
but the court held the omission of the words quoted to be fatal to
the validity of the amendatory act, saying :

"It is doubtful if this title would be sufficient in an original act to sup-
port legislation concerning town, city, and county boards of health; and it is
entirely clear that in the office of identifying a particular statute relating to
town, city, and county boards, for purpose of amendment, under Article 4,
Section 21, of the Constitution, it must be held inadequate. The absence of
the omitted words from the title makes such a radical restriction and change
in the general import of the title of the act of 1891 that we cannot attribute
it to a clerical error, as is suggested."

Hendershot v. State, 162 Ind. at 72.

It has been uniformly held by the Supreme Court of this State
that two things are required by the Constitution in the amendment
of a section of an act:

300

"(1) The title of the act to be amended should be referred to by setting
the same out in the title to the amendatory act; and (2) the section as
amended should be set forth and published at full length."
Mankin v. Pennsylvania Co., 160 Ind. at 453.

The failure of the present bill to set out in the title any sub-
stantial part of the title of the act sought to be amended, brings
it so clearly within the inhibition of the Constitution that the ques-
tion does not admit of argument. I am, therefore, compelled to
withhold my approval.

Respectfully submitted,

J. FRANK HANLY,

Governor.

SENATE BILL No. 227.

FEBRUARY 27, 1907.
Mr. President and Gentlemen of the Senate:

Senate Bill No. 227 is herewith returned without executive ap-
proval, because of its defective title. It is an amendatory act. It
fails to correctly set out, either in the title or in the body of the
bill, the title of the act it seeks to amend. It is therefore invalid.

In support of this position I beg to call attention to the au-
thorities cited in the Executive message filed yesterday relating to
Senate Bill No. 126. I believe the authorities there cited to be
conclusive of this question.

The purposes of the bill are important and entirely proper
and I am in full sympathy therewith. I beg, therefore, to urge the
preparation and passage of a new and corrected bill.
Respectfully submitted,

J. FRANK HANL.Y,

Governor.

301
SENATE BILL No. 61,

FEBRUARY 27, 1907.

Mr. President and Gentlemen of the Senate:

Senate Bill No. 61, a bill "declaring the lien of all taxes upon
real estate and limitation of said lien," is returned herewith with-
out executive approval.

The effect of the bill, if it became a law, would be to divest
real estate of all liens on account of taxes after ten years. Under
existing law taxes are a lien upon real estate until paid. Such
lien can be released only by payment.

I am thoroughly convinced of the necessity of the law as it is,
and am unable to conceive of any ligitimate reason why the lien of
the State for taxes should ever be divested except by payment. To
do so would be to put a premium upon the evasion of the payment
of taxes. It would be unfair to the State and unfair to every citi-
zen who pays his taxes without evasion or delay. The man who
owns property, who receives the benefits of organized government
and the protection of its laws, and who accepts the privileges of
citizenship, owes it to the State to pay all taxes lawfully levied.
The fact that he has escaped such payment for ten years, either
through his own connivance or the neglect of the public officials
through whom the State alone can act, is an insufficient reason for
divesting the real estate he owns, of liability. On the contrary, it
is a cogent reason why the lien of the State should continue until
actual payment is made. It will not do to say that such lien en-
cumbers such person's real estate and hinders the sale thereof, for
all this can be removed by the payment of the taxes which con-
stitute the lien. The equality of taxation enjoined by the Con-
stitution, the protection of the State's revenues, and the orderly
and honest administration of its taxing laws preclude the Execu-
tive from giving his assent to this measure, and I venture to ex-
press the hope that these considerations are of such, weight as to
preclude the members of the General Assembly, upon further
thought, from insisting upon its enactment.
Respectfully submitted,

J. FRANK HANLY,

Governor.

302
SENATE BILL No. 89.

MARCH 9, 1907.
Mr. President and Gentlemen of the Senate:

Senate Bill No. 89, a bill concerning life insurance, is hereby re-
turned without executive approval. The bad in it so far out-
weighs the good that I can not give my assent to its enactment.

Early in the present administration events which are now fa-
miliar to all, and which I need not again detail, culminated in the
enforced resignation of the Auditor of State and in an investiga-
tion of the affairs of the office of Auditor of State by a non-parti-
san commission, of high character and ability, appointed by the
Executive. The work of this commission exposed a condition
which startled and aroused the people of the entire State, and
which justified a further examination of the insurance department
of that office in its relations to and dealings with insurance affairs.

When the dominant political party of the State held its State
convention last April the investigation of this department, though
not then finished, had proceeded far enough to make it morally
certain to the Executive and those familiar with the work of the
commission that certain Indiana life insurance companies were
mismanaging their affairs and systematically plundering their
policy holders. These facts were such as to impress the repre-
sentatives of that party, assembled in convention, with the need
of additional insurance legislation, having for its purpose the
reformation of the abuses then in practice. With this knowledge
before it the convention made the following pledge to the people
of the State :

"We are in favor of a law to further regulate the business of life insur-
ance companies, the organization and business of fraternal benefit societies,
mutual benefit associations and investment companies, both foreign and do-
mestic, for the purpose of better protecting the policy holders therein. A
law should be enacted that will designate and more closely restrict the kind
and character of securities that may be deposited with the Auditor of State,
limit the expense of such companies, societies and associations, and provide
for complete publicity of their affairs."

The convention adjourned. The delegates thereof returned
to their homes, and the people of the State were given to under-
stand that the party, if successful at the polls, would redeem the
pledge made.

Events of the preceding two years had been such as to center
the campaign which followed upon the State administration. Na-

303

tional issues were but incidental. It was stated by all, friends and
foes alike, that the party would necessarily stand or fall upon the
record made, upon the things done, and the things promised to be
done by the State administration. By the time the campaign really
opened the work of the investigating committee was completed and
the facts laid before the people.

The condition in relation to life insurance revealed by the re-
port of the committee was unusual and startling. Certain recom-
mendations, having for their purpose the accomplishment of the
things pledged to the people by the dominant party in its plat-
form, were made by the commission. Believing in the good faith,
integrity and ability of the gentlemen who composed that commis-
sion, and knowing the care with which they had made the investi-
gation and the long and sincere consideration they had given to
the subject of insurance, the Executive took up these recommen-
dations and presented them to the people of the State in connec-
tion with a frank and full discussion of insurance conditions from
more than half a hundred platforms.

One of the things, and, in my judgment, the first and most
essential thing, recommended by the committee was the establish-
ment of a separate insurance department to be administered by
an insurance commissioner who should be appointed by the Ex-
ecutive. That was logically and necessarily the first step toward
reformation. The department in all its history had never been
more than a neglected adjunct in the office of the Auditor. With
a single exception, no Auditor in twenty years had been qualified
to administer the insurance department, and with the same excep-
tion no one who had held the office in twenty years had adminis-
tered the department with good faith or integrity. Throughout all
the discussion, from the beginning to the end of the campaign, the
people were assured that if a legislature were elected the majority
of which should be composed of members of the dominant party a
separate department of insurance would be established.

The present Auditor of State and many other of the present
State officers were candidates before the people for election. They
attended many of these public meetings, heard the pledge made
in their behalf, applauded its utterance and gave the people to
understand that they were in accord therewith. In many instances
the Executive was appealed to by gentlemen now members of this
General Assembly, and then candidates for election, to come into
their districts and make the pledge in their behalf to their people.

The election was won by a most substantial plurality, largely,

304

I am compelled to believe, upon the issue raised and the promises
made in this behalf. They were made by the Executive in good
faith. He supposed the pledge was intended to be redeemed.
Therefore, after further and most careful consideration of the
rights of all the interested parties — insurance companies and pol-
icy holders — he recommended to this Assembly legislation which
would have redeemed that pledge. Today, on the eve of your
adjournment, he is compelled to say to you and to the people of
the State, "The pledge is broken ; faith has not been kept."

The bill I return to you provides for a department of insur-
ance, but leaves it still an adjunct in the office of the Auditor of
State, to be presided over nominally by the Auditor, but actually
by a deputy with a salary so inconsequential as to preclude the
securing of the services of a man calculated either by knowledge or
experience to administer its affairs. The expense of the department
will be fully $15,000 a year, but it will be administered in the same
old way, with the same neglect, the same lack of initiative that has
characterized its administration through former years. It is left
to be the football of politics, its deputyships to be prizes to be
handed out every two years by the successful nominee of the domi-
nant party as a reward for personal political services.

A section of the bill requires an annual report to the Governor,
but it gives him no power or authority to correct or to require the
correction of any abuse disclosed. In this regard the bill utterly
fails to keep the party's pledge. The department was retained as
a bureau in the office of the Auditor of State at the behest and upon
the orders of the very men whose acts it is the duty of the com-
missioner to investigate and supervise, and this, too, in the face of
the fact that the deeds of a number of these men then being ex-
posed wrere such as to shame the State and bring reproach upon
every insurance company in the Commonwealth.

Our pledge was : "A law shall be enacted that will designate
and more closely restrict the kind and character of securities that
may be deposited with the Auditor of State." The hour of legis-
lation has gone by, and that pledge is not redeemed. The terms
of our bond also ran : "A law shall be enacted that will limit the
expense of such, companies, societies and associations." The day of
adjournment is upon us, and that pledge is also unredeemed. The
legislation you have passed, instead of providing for the limitation
"of the expense of such companies, societies and associations," pro-
vides with scrupulous care that the commissioner shall have no
power to supervise or correct abuses which are the offspring of ex-

305

isting unwise, and in many instances, unfair and fraudulent con-
tracts. It is carefully provided, "That nothing in this act shall be
construed to interfere in any manner with the execution, carrying
out and fulfillment of the contracts of life insurance companies ex-
ecuted prior to the taking effect of this act."

What are these contracts that are so carefully preserved from
supervision? They are special contracts made with favored policy
holders, prominent personages of the different communities of the
Commonwealth, in some instances State officers and members of the
General Assembly — contracts which, in 1905, cost the State Life
Insurance Company $136,523.84, and in 1906, $179,299.72, for
which it received no service or thing of value. In this connection
it is well to remember that from 89 per cent, to 98 per cent., and
in some instances 100 per cent, of all the insurance written by
some of the Indiana companies is of this character.

What are these contracts that are so carefully preserved ? They
are contracts with agency companies organized as "go betweens"
between the insurance companies, their policy holders and the pub-
lic, the terms of which are extortionate, and, in some instances, ac-
tually fraudulent. Every moral and prudential reason requires
that an insurance company should retain direct conteol of its
own agents ; that there should be direct responsibilty of the agency
force to the company itself, and that the company should be in a
position to exercise the closest supervision over the work of its
agents. Under the contracts so carefully preserved by this bill the
agency force of every company is responsible to the agency com-
pany alone. The officers of the insurance companies are relieved
from the work and responsibility of obtaining business. They are
contracts which in many instances provide for the payment of 80
and 90 per cent, of the first premiums to the agency company, and
for the payment of 71//> to 11 per cent, of all subsequent renewal
premiums on the insurance written by such companies, and in one
instance of 71/> per cent, of all renewal premiums upon the busi-
ness in force within certain territory, composed of large and popu-
lous States, written prior to the organization of the company or
the execution of the contract. Every such company is an open
door to extravagance and fraud, and you were not wanting of evi-
dence of this fact. A striking example was being laid bare, under
executive direction, beneath the roof of this Capitol, even while
you were passing the present emasculated and sexless measure.

As before suggested, our pledge to the people ran: "A law
shall be enacted that will limit the expense of such companies, so-
[20—19891]

306

cieties and associations." But all power of the commissioner to
supervise or limit salaries is absent from the measure you have ten-
dered the people. It is said, in justification, that the question of
salaries of mutual life insurance companies is one for the policy
holders of the company and not one with which the State may prop-
erly concern itself. This position, however, is untenable. A mu-
tual insurance company is in the nature of a partnership. Profits
and losses are to be shared alike by all their policy holders. There-
fore, every policy holder has a direct and vital interest in the cost
of the administration of the affairs of the company. It is not
enough to say that if the individual policy holder is dissatisfied with
extravagance and peculation in administration he may elect new
officers or bring suit to restrain further dissipation of the com-
pany's funds. Every thoughtful man knows this to be impractica-
ble. The policy holders of these companies, in many instances, are
men of limited means. They are widely scattered throughout many
States. They do not know, and in many instances have no means
of knowing, the character of the administration. In every
such instance it is the duty of the State to intervene. It has the
legal power to intervene, and common justice and the welfare of
the people impose upon it the obligation to do so.

An instance of this character well in point is afforded by the
savings banks of the State. Under the law all savings banks are
mutual. The profits made belong to the depositors. There is no
capital stock. The depositors are, in many instances, people of
small means, who save by mites, little by little. That these de-
positors may be protected, the law of the State, since March 7,
1873, has limited the salaries of the trustees and officers of every
savings bank in the State. The reasons for the intervention of
the State in limiting the salaries and expenses of the administra-
tion of mutual life insurance companies are stronger and more nu-
merous than in case of savings banks. Their policy holders are
far greater in number and more widely scattered in residence than
are the depositors of savings banks, and have less opportunity to
know the character of the administration of the companies. A
savings bank operates within narrow limitations as to territory and
patronage. An insurance company operates throughout the State,
throughout the "country .'

You were tendered a measure giving the commissioner power
to supervise these expenses. You struck it down. You took out of
this bill every provision giving the commissioner authority of this

307

character. And this, too, at a time when you were being told by
confessions wrung from the officers of a life insurance company, on
the witness stand, under oath, that they for years had been draw-
ing double, triple and sometimes quadruple salaries, aggregating
in some instances more than $20,000 annually ; at a time when you
were being told by men on the witness stand, under oath, and at
whose behest you struck out of the measure the provision author-
izing the supervision of salaries and expenses of the administration
of such companies, that they, in eight years, had drawn severally
$116,660.25, $118,870, $117,852 and $78,809 in the way of sal-
aries and compensations, and that together they had drawn in
eight years, almost a half million dollars in this way.

Our pledge was -to limit the expenses of the administration of
these companies. In answer you tender a measure which has no
limitation whatever upon administrative expenditures and which
leaves open every door to extravagant salaries, extortionate con-
tracts and fraudulent bargains by which the treasuries of Indiana
companies have been depleted. By its enactment you break the
pledge of a great party whose glory has been its redemption of
the pledges made ; break faith with the people whose rights are
profoundly involved, and betray the interests of the widow and
the orphan. To do this you turned down the recommendations
of the commission which investigated the wThole question with care
and painstaking industry, executive suggestion oft repeated and
insisted upon, and the report of your own committees, whose mem-
bers had given the subject every consideration possible for many
weeks.

No man in either chamber of this General Assembly more great-
ly desires effective legislation than I. No man has contributed
more to that end, in proportion to his ability, than I have done.
From the date the investigation of this question was begun to this
good hour I have stood for such legislation, for the redemption of
the party pledge and for the protection of the thousands of men
and women who own policies in these companies. I can not now
persuade myself that it is either wise or honest to sign this written
evidence of broken faith.

As for myself, I prefer th.it the bond be returned to the people
unfulfilled rather than to become a party to the enactment of a
measure which is in itself a false pretense, whose purpose is to de-
ceive and whose only service will be to furnish cover for the further
plundering of the people. I believe it wiser and fairer to go back

308

to them, confess our failure and ask another letter of direction,
than to seek to deceive them with the pending measure.
Respectfully submitted,

J. FRANK HANLY,

Governor.

SENATE BILL No. 298.

MARCH 9, 1907.
Mr. President and Gentlemen of the Senate:

I return herewith, without my approval, Senate Bill No. 298,
the same being a bill concerning sewers and drains in cities having
a population of more than 16,000 and less than 20,000.

The bill in substance provides that all cities in this State hav-
ing a population of not less than 16,000 and not more than 20,000,
which shall have built a sewer or drain under any past, present or
future law, and which shall be unable, for any reason, to pay its
assessment, then, under the bill, the title to the sewer, as against the
city, shall vest in the contractor, and that any such city shall have
the power to grant a franchise to such contractor to operate the
drain or sewer in the streets and alleys of the city ; and that the
city shall have power by contract to lease the sewer or drain, or
otherwise provide for the use of the sewer or drain by the city "for
the drainage of its streets, alleys and public grounds and other
municipal purposes, upon such terms as may be agreed upon be-
tween such city and such contractor."

The bill is clearly within the inhibition of Section 68, Article 1 ,
of the Constitution, forbidding the General Assembly to grant to
any citizen or class of citizens privileges or immunities which upon
the same terms shall not equally belong to all citizens. It pro-
vides for an arbitrary classification of cities and confers upon
those within that class privileges denied to other cities similarly
situated. The classification created is of cities having a population
of not less than 16,000 nor more than 20,000 inhabitants, and can
apply only to the cities of Lafayette, Logansport, Marion and
Richmond.

The well settled rule of construction in this State is that where
the Legislature undertakes to classify the objects or subjects upon
or against which legislation shall operate, the classification must
be natural and reasonable and must inhere in the subject matter
thereof.

309

The last utterance of our Supreme Court upon this subject was
handed down by Monks, Judge, in Case No. 20,849, the Bedford
Quarries Co. v. Martin S. Bough, on March 1, 1907. In that case
the court says :

"The Legislature may make classification for legislative purposes, but it
must have some reasonable basis upon which to stand. It is evident that the
differences which would serve for a classification for some purposes would
furnish no reason for a classification for legislative purposes. Such legisla-
tion must not only operate equally upon all within the class, but the classi-
fication must furnish a reason for and justify the making of the class; that
is, the reason for the classification must inhere in the subject-matter and rest
upon some reason which is natural and substantial, and not artificial. Not
only must the classification treat all brought under its influence alike, under
the same conditions, but it must embrace all of the classes to which it is
naturally related. Neither mere isolation nor arbitrary selection is proper
classification."

Dickson v. Poe, 159 Ind. 492;

School City of Rushville v. Hayes, 162 Ind. 200;

Street v. Barney Elec. Supply Co., 160 Ind. 338;

Town of Longveiw v. City of Crawfordsville, 164 Ind. 671 ;

McKinster v. Sager, 163 Ind. 671;

Sellers v. Hayes, 163 Ind. 422.

In School City of Rushville v. Hayes (cited above), our Su-
preme Court quotes with approval from the Supreme Court of
New Jersey, as follows :

"There must be substantial distinction having a reference to the subject-
matter of the proposed legislation between the objects or places excluded.
The marks of distinction upon which the classification is founded must be such,
in the nature of things, as to in some reasonable degree, at least, justify or
account for the restriction in the legislation."

In the case of the Town of Longview v. City of Crawfordsville
(cited above), our Supreme Court quotes with approval from the
Supreme Court of New Jersey, as follows :

"The rule is that in any classification for the purpose of a general law,
all must be included and made subject to it, none omitted that stand upon the
same footing regarding the subject of legislation."

And quoting again from the same court, the following lan-
guage is approved :

"Interdicted local and special laws are all those that rest upon a false or
defective classification. Their vice is that they do not embrace all the classes
to which they are naturally related; they create preferences and establish
inequalities; they apply to persons, things or places possessed of certain quali-
ties or situations, and exclude from their effect other persons, things or places
which are not dissimilar in these respects."

310

The difference of 4,000 in population, or the maximum limit of
20,000, or the minimum limit of 16,000, bears no relation whatever
to the subject of legislation contained in this proposed act, and
under the authorities cited and the uniform rule of construction
throughout the entire country, the proposed law is invalid under
our Constitution.

In addition to the fact that the proposed law is special legisla-
tion, and for that reason unconstitutional, the bill is subject to
criticism on account of the fact that it seeks to provide a means
whereby other provisions of the Constitution of the State may be
evaded. Section 1, of Article XIII, of the Constitution of the
State, prohibits municipal corporations from incurring an indebt-
edness in excess of two per centum of the value of its taxable prop-
erty, and it is a fact, well known in connection with this proposed
legislation, that the city of Longansport, undertaking to proceed
under the laws of the State for the construction of sewers, over-
reached its authority under the Constitution to incur debts, and on
account thereof was unable to pay the assessments properly charge-
able to the city on account of the construction of sewers. And now
it is proposed by this bill to give to the contractor, who knowingly
entered into an invalid contract — one which could not be enforced
— all the right and title which the city would otherwise have in
the sewer contracted for, and to authorize the city to grant to the
contractor a franchise to operate the sewer upon the streets and
alleys and public places of the city, and to authorize the city to
lease the same from the contractor. The purpose of the bill cannot
be other than to give to the municipality the right to grant the
franchise and to enter into a contract for the lease of the sewer,
which would eventually pay the debt which is now condemned by
the Constitution. It has repeatedly been held by the Supreme
Court that cunningly devised schemes of this sort will not meet
with judicial approval, although they may meet with the approval
of the General Assembly.

In the case of Voss v. Waterloo Water Company, 163 Ind. 89,
the Supreme Court of our State, in speaking of the authority of
the town to grant a franchise to a water company to construct a
water plant, and for the town to lease the same or pay water rents
in such manner as to liquidate the indebtedness created for the
purpose of constructing the plant, in a case where the town itself
could not, on account of constitutional limitations, construct and
own the plant, uses these words :

311

"The Waterloo Water Company is merely a dummy corporation, owned
by the town, but making contracts and incurring liabilities which it is ad-
mitted the town cannot make or incur in its own name without violating the
provisions of the Constitution restricting its power to become indebted. In
other words, the town is attempting to do by a corporation practically owned
by it what it has no power to do, and is prohibited from doing. Said arrange-
ment is a palpable violation of said Article 13 of the Constitution, for what
a town cannot do directly it cannot do indirectly through a dummy corpora-
tion controlled and practically owned by it. The Constitution cannot be
evaded in this manner. 'It is the duty of the judge to make such

construction as shall suppress all evasions for the continuance of the mischief.
To carry out eifectually the object of a statute, it must be so construed as to
defeat all attempts to do or avoid in an indirect or circuitous manner that
which it has prohibited or enjoined. When the acts of the parties

are adopted for the purpose of effecting a thing which is prohibited, the parties
have done that which they have purposely caused, though they may have done
it indirectly. When the thing done is substantially that which was prohibited,
it falls within the act, simply because, according to the true construction
of the statute, it is the thing thereby prohibited. Whenever courts see such
attempts at concealment, 'they brush away the cobweb varnish,' and show the
transaction in its true light. They see things as ordinary men do, and see
through them. Whatever might be the form or color of the transaction, the
law looks to the substance of it. In all such cases it is, in truth, rather the
particular transaction than the statute which is the subject of construction;
and if it is found to be in substance within the statute, it is not suffered to
escape from the operation of the law by means of the disguise under which
its real character is masked."

In addition to the constitutional objects above noted, the pro-
posed act is ill-advised and dangerous for many reasons and should
not meet with executive approval, even though it might be valid
if enacted. The bill provides that the title to the sewer shall vest
in the contractor, and that a franchise may be granted to the con-
tractor, and that the town may enter into a lease of the sewer with
the contractor. It will be observed that there are no restrictions or
limitations whatever in the proposed act to safeguard the public
interests. A designing contractor might agree with the municipal
authorities to construct a sewer for a much less price than for
which any other individual would be willing to perform the work,
knowing that under this law the city, not being able to pay for its
proportion of the assessment, would be divested of all interest in
the sewer when constructed, and that it would be compelled to
grant him a franchise and enter into a contract with him for its
lease. There is no provision in the proposed law as to how long
the title to the sewer shall remain in the contractor, nor is there any
provision whereby at any subsequent time the city may acquire

312

ownership in the property. Neither is there any provision in the
bill as to what length of time the city may grant a franchise for
its operation and use by the contractor, or for what length of time
the city may enter into a contract for its use. In short, by the
terms of the bill the man who builds a sewer under a void contract
acquires a monopoly of sewer rights in the streets and alleys of
the city where the sewer is constructed. By virtue of this bill he
becomes master of the situation. The sewer belongs to him. There
can be no competition in granting the franchise; no competition
in entering into the lease for its use. A franchise granted for the
use of the sewer constructed by virtue of this bill, or a lease en-
tered into for the use of a sewer constructed by virtue of this bill,
could be perpetual, without any power or authority in the munici-
pality to get clear of the obligation or resume its functions as a
municipal government.

While our Supreme Court may have never held that a perpetual
franchise granted by a municipal government in this State is void,
or that an exclusive privilege granted by a municipal government
to a citizen under legislative sanction to exercise authority over the
streets and alleys of the city is void, I am unwilling to agree that it
is advisable that the Legislature should approve, at this time, any
legislation which places a municipality of the State in the hands of
a single individual, as this bill attempts to do.

The Supreme Court of the United States, in New Orleans Gas
Company v. Louisiana Light Company, 115 U. S., page 667,
quotes the following language with approval :

"No Legislature can bargain away the public health or public morals.
The people themselves cannot do it, much less their servants. The supervision
of both these subjects of governmental power is continuing in its nature and
tney are to be dealt with as the special exigencies of the moment may require.
Government is organized with a view to their preservation and it cannot divest
itself of the power to provide for them. For this purpose the largest legisla-
tive discretion is allowed, as the discretion cannot be parted with any more
than the power itself."

In speaking of this general subject, Cooley, Judge, in the case
of Gale v. Kalamazoo, 23d Mich. 344, says :

"If a municipal corporation can preclude itself in this manner from estab-
lishing markets whenever they may be thought desirable or abolishing them
when thought undesirable, it must have the right also to agree that it will not
open streets or grade or pave such as are open or introduce water for the sup-
ply of its citizens except from some specified source, or buy fire engines of
any other than some stipulated kind, OF contract for any public work except
with persons named; and if it might do these things it is easy to perceive that

313

it might not be long before the incorporation itself, instead of being a con-
venience to its citizens, would have been used in various ways to compel them
to submit to innumerable inconveniences and would itself constitute a public
nuisance of the most serious and troublesome description. Individual citizens
looking only to the furtherance of their private interest, might, in various di-
rections, engage it in permanent contracts, which, while ostensibly for the
public benefit, should impose obligations precluding further improvements and
depriving the town prospectively of those advantages and conveniences which
the municipality was created to supply, and without which it is worthless.
For if the village might bind itself to one market house for ten years, it might
do so for all time to come; and if it might agree that improvements and con-
veniences of one class ought to be confined by contract to one quarter of the
town, a reckless or improvident board might agree with a greedy or unscrupu-
lous proprietor of town lots, that all improvements of every description should
be so located or made as to conduce to his benefit, irrespective to the general
good. It is impossible to predicate resonableness of any contract by which
the governing authority abdicates any of its legislative powers, and precludes
itself from meeting in the proper way the emergencies that may arise. Those
powers are conferred in order to be exercised again and again, as may be found
needful or politic, and those who hold them in trust today are vested with dis-
cretion to circumscribe their limits or diminish their efficiency but must trans-
mit them unimpaired to their successors. This is one of the fundamental
maxims of government, and it is impossible that free government, with re-
strictions for the protection of individual or municipal rights, could exist
without its recognition."

I am, therefore, obliged to withhold executive approval from
the pending measure on account of its unconstitutionally and be-
cause of my belief that it contravenes sound public policy.
Respectfully submitted,

J. FRANK HANLY,

Governor.

SENATE BILL No. 370.

MARCH 11, 1907.

Mr. President and Gentlemen of the Senate:

I return herewith, without my approval, Senate Bill No. 370,
a bill to authorize cities and towns having a population between
20,000 and 35,000, according to the United States census of 1900,
to pay each member of the veteran volunteer firemen association a
pension of $3.00 per month.

The bill, in my judgment, is invalid. The population is based
upon the census of 1900. It therefore creates a class of cities into
which no other city can come, though it may attain the same popu-

314

lation and have every essential characteristic belonging to the class
so created.

• Speaking of a similar law, the Supreme Court has said :

"Counsel for appellants argue with much earnestness that the act in ques-
tion must be regarded as special legislation, for the reason that, by the express
provisions of its first section, it is limited in its application to cities only of
30,000 for the year 1870. Therefore, they insist that the city of Indianapolis is
the only one in this State which, at the time of the passage of the act, had
attained to the standard of population fixed by its provisions.

"Of this fact we have taken judicial notice, as all courts are required to
take judicial knowledge of the census of the United States. It is contended
that no matter how many cities of the State might, under the federal census of
1880 or 1890, or any other future census, have 30,000 or more inhabitants,
the act in controversy would not be applicable to any of them, because they
did not and could not in reason have such population according to the census
of 1870. * * *

"Were it not for the express declaration in section one, which absolutely
fixes the census of 1870, and confines it to that alone, as the one by which
the population is to be determined, it might be viewed as one general in its
operation, applying alike to all cities within the classification of 30,000 or
more inhabitants. But this express declaration upon the part of the legisla-
ture would seem to countervail or destroy whatever general features the act
possesses by restricting its operation to such cities as had the required popu-
lation according to the census of 1870. Any and all other cities, which might
by a future census be shown to be within the classification of 30,000 inhab-
itants or more, by this express provision of the statute would necessarily be
excluded from its operation. That, under such circumstances, a law of this
character must be regarded as special, and not general, legislation seems to
be, according to the authorities, a well-settled proposition."

Being special legislation, I take it to be within the inhibition
contained in Section 68, Article 1, of the State Constitution, for-
bidding the General Assembly to grant to any citizen or class of
citizens privileges or immunities which upon the same terms shall
not equally belong to all citizens.

Respectfully submitted,

J FRANK HANLY,

Governor.

315
SENATE BILL No. 9.

MARCH 13, 1907.
Mr. President and Gentlemen of the Senate:

Senate Bill No. 9 is respectfully returned herewith without ex-
ecutive approval. The bill is an act to amend section 50 of an act
of May 12, 1869, relating to the compensation of trustees of sav-
ings banks.

Under the present law such banks may compensate their trus-
tees (other than officers of such savings banks or members of the
financial committee) only "for special personal services beyond the
ordinary duty of attending meetings and serving upon its com-
mittees." The present bill authorizes the compensation of such
trustees who render personal services though such services consist
only of attending meetings and serving upon its committees. Sav-
ings banks are not stock companies. They are mutual affairs. Sal-
aries to officers and the expenses of administration ought to be
closely limited. No difficulty in obtaining the services of efficient
persons as trustees is experienced under the present law. The
duties of such trustees are not arduous and unless they render
some service other than the nominal service required in attending
meetings and serving upon committees, compensation ought not
to be authorized.

Respectfully submitted,

J. FRANK HANLY,

Governor.

SENATE BILL No. 432.

MARCH 13, 1907.
Mr. President and Gentlemen of the Senate:

I return herewith without executive signature, Senate Bill No.
432, "fixing the compensation of the members of the common coun-
cil of cities of the first class."

The measure provides for an increase in the salaries of the
members of the common council of the city of Indianapolis from
$200.00 to $900.00 per annum. I do not believe conditions war-
rant an increase of 450 per cent, in the salaries of these officials.
The office of councilman was never intended to be a position of
substantial profit. Its duties do not require daily application,
either of time or attention. I recently had occasion to refuse ap-

316

proval to House Bill No. 359 to increase the salaries of members
of the board of safety of the city of Indianapolis. The reasons
given for executive action in that matter obtain with increased
force in the present instance. I have since seen no reason to change
the views there expressed, and I therefore withhold executive as-
sent to the provisions of the present measure.
Respectfully submitted,

J. FRANK HANLY,

Governor.

SENATE BILL No. 484.

MARCH 13, 1907.
Mr. President and Gentlemen of the Senate :

I return herewith Senate Bill No. 484 without executive ap-
proval.

The bill seeks to legalize and declares valid "all assessments of
banks in this State made as provided by Section 59, Acts of 1891,
approved March 6, 1891, upon blanks prescribed by the State
Board of Tax Commissioners of the State of Indiana."

The act under which these assessments were made has been held
unconstitutional and void by two successive Attorneys-General of
the State, and I believe correctly so. The reasons upon which the
opinions are based are constitutional ones. If such act is within
the inhibitions of the Constitution it cannot be legalized by the
General Assembly and any measure seeking to do so would be in-
valid for the same reasons that the act sought to be legalized is
invalid.

If assessments made under such act are invalid because of its un-
constitutionally, they cannot be legalized by any act of the Gen-
eral Assembly.

Believing that the banks in question were not lawfully assessed,
that the act under which assessments were made is invalid and that
such assessments are therefore invalid, and that the General Assem-
bly has no authority to legalize an unconstitutional enactment or
any proceedings thereunder, I am compelled to withhold my ap-
proval of this bill.

Respectfully submitted,

J. FRANK HANLY,

Governor.

317
SENATE BILL No. 498.

MARCH 18, 1907.
Mr. President and Gentlemen of the Senate :

Senate Bill No. 498 is respectfully returned herewith without
executive approval.

The bill seeks to amend section £ of the act regulating the
practice of medicine, surgery and obstetrics, providing for the
issuing of license to practice, for the appointment of a State Board
of Medical Registration and Examination, and for the revocation
of licenses to practice in certain instances.

The present law provides that a physician whose license has
been revoked by the Board of Medical Registration and Examina-
tion shall not practice his profession pending an appeal from the
decision of the board. The proposed amendment grants the right
to such physician to engage in the practice of his profession pend-
ing the appeal.

I do not believe the change would be beneficial to the public in-
terests. The present law imposes no hardship. Before the license
of a physician can be revoked, charges must be filed with the board.
The accused must be given a hearing. If, upon the hearing, the
board finds him guilty of the charges made, it may revoke his
license. From this judgment he may appeal to the circuit court,
and from the judgment of that court to the Supreme Court of the
State. I j ! ! -1 I

There is little danger of abuse under this, law. The Board of
Medical Registration and Examination would be slow to revoke the
license of a fellow practitioner, except for substantial reason. If
the amendment were made, physicians whose licenses should be re-
voked would be privileged to continue in practice until final deci-
sion in the Supreme Court, no matter how great the offense of
which they were guilty, or how unfit they might be.

For these reasons I believe it best to withhold executive ap-
proval.

Respectfully submitted,

J. FRANK HANLY,

Governor.

House Veto Messages, Sixty-Fifth
General Assembly

(819)

321
HOUSE BILL No. 327.

FEBRUARY 1, 1907.

Mr. Speaker and Gentlemen of the House of Representatives:

I return herewith, without my approval, House Enrolled Bill
No. 327, the same being a bill for an act to amend sections 1 and
3 of an act to incorporate Young Men's Christian Associations or-
ganized in this State.

The bill is a meritorious one, and I have withheld approval
therefrom solely on account of its failure to comply with the re-
quirements of the State Constitution.

Section 19 of the Constitution requires the subject of every act
to be expressed in the title and declares void so much of any act
as is not expressed in the title.

R. S. 1901, Sec. 115.

The act sought to be amended is clearly valid. It applies to
the incorporation of Young Men's Christian Associations organized
in this State. By the amendment sought to be made in the present
bill, the provisions of the act are made to include Young Women's
Christian Associations organized in the State. It also provides :
"That any Young Women's Christian Associations heretofore or-
ganized under and by virtue of said act, approved March 4, 1893,
be and the same are hereby legalized and rendered valid and de-
clared legally and regularly incorporated." Neither of these ad-
ditional subjects or purposes is expressed in the title to the origi-
nal act, and the title to the present act in this respect remains un-
changed.

Speaking to this point the Supreme Court of the State has
said:

"If the subject is composed of two or more essential elements, the expres-
sion of one of such elements in the title would not suffice. The absence of one
of such elements in the title would be as misleading, and might be as perni-
cious, as the evils sought to be obstructed by the Constitution. The subject
of this act, as we have indicated, is to gather funds from foreign insurance
companies, and to dispose of such funds for the relief of firemen. The title
expresses the first of these objects included within the subject, but wholly
omits the other of such objects.

"In State v. Young, 47 Ind. 150, a test was prescribed for determining
if the subject is expressed in the title. It was said, in speaking of that element
of the subject claimed to be absent from the title: 'Suppose that there was no
other provision in the act. * * * If the section could not thus stand alone

[21—19891]

322

under the title, it must fall.' We apprehend that this is always true where
only a part of the subject is expressed, and that it is especially true where
that part of the subject omitted from the title is not naturally or ordinarily
connected with that part of the subject which is expressed in the title.

"Omitting that part of the act relative to the bestowal of such fund upon
firemen, the provision requiring such companies to contribute to such fund
could not stand alone, under the title of the act, as the subject is expressed.
The requirement that the subject expressed should apprise the people of the
subject of legislation, in order that an opportunity for a hearing or for peti-
tion may he had, is far from being complied with in the act before us. No
notice whatever to those expected to contribute to such fund is given."
Henderson v. London, etc., Insurance Company, 135 Ind. 31.

The title to the bill herewith returned relates solely to Young
Men's Christian Associations, and does not include that part of
the subject which relates to Young Women's Christian Associations,
or that part which relates to the legalization of such incorporations
as have been heretofore made. While the title to the act sought to
be amended sufficiently covers the subject and purposes of that act,
it does not sufficiently cover the subject and purposes of the act as
it is sought to be amended. If the statute as amended contained
only that portion which relates to Young Women's Christian Asso-
ciations or which seek to legalize past organizations of such asso-
ciations, the title would be clearly insufficient. It therefore fails
to meet the constitutional requirement.

Section 21 of the Constitution also provides that "no act shall
ever be revised or amended by mere reference to its title ; but the
act revised or section amended shall be set forth and published at
full length."

R. S. 1901, Sec. 117.

In a recent decision referring to this section of the Constitu-
tion, the Supreme Court said :

"It is settled by the decisions of this court that in the revision of an act
or the amendment of a section, two things are required: (1) The title of the
act to be amended must be referred to by setting it out; (2) the act as re-
vised, or section as amended, must be set forth and published at length."
Lingquist v. State, 153 Ind. at 543.

. In the present bill the title of the act sought to be amended is
inaccurately set out, the word "estate" being interpolated therein.
In the light of these constitutional provisions, and in view of
the defects in the present measure, I deem it best to withhold ap-
proval therefrom. The act relates to an important subject. The
present law is free from defects. Its amendment should be equally
so. I therefore suggest the enactment of a statute which shall be

323

so drawn as to avoid constitutional inhibitions If this is done I
shal] be glad to give executive approval thereto.
Respectfully submitted,

J. FRANK HANLY,

Governor.

HOUSE BILL No. 230.

FEBRUARY 25, 1907.

Mr. Speaker and Gentlemen of the House of Representatives:

I return herewith, without executive approval, House Bill No.
280, the same being a bill "to enable owners of land bordering on
Lake Michigan to acquire title to submerged lands belonging to
Indiana," and lying in front of said abutting land and between the
shore line of said lake and the dock or harbor line thereof now es-
tablished or hereafter to be established by the Government of the
United States.

The lands affected by this measure vary in width from a few
rods to three-fourths of a mile.

The only requirements exacted of the owners of the lands de-
scribed to obtain title to the submerged lands in question are, that
they shall cause a survey and plat of such lands to be made by
the county surveyor, showing the number of acres thereof and the
location of the dock line, which survey and plat shall be filed with
the Secretary of State, and that they pay to the State Treasurer
$25.00 per acre for the acres shown in such plat. No other condi-
tion is imposed. The survey made, plat filed and $25.00 per acre
paid, the State, through the Governor and Secretary of State,
must execute a patent to the lands therein described, conveying to
such owners the fee simple title thereto.

The legislation proposed is said to be necessary to the opera-
tion of a large number of industries either now removed or to be
removed from the city of Chicago to the Indiana boundary of the
lake. There is much merit in this contention. These industries
are desirable. If established they will add millions of dollars to
the taxable property of the State and furnish employment to
thousands of laborers. This section of the State is destined to be
a vast industrial center and to be peopled by a great population.
Here industries can be established by the side of navigable waters
with immediate access to water carriers of all draughts, lengths and
breadths, without obstruction from bridges or other structures. I

324

am heartily in accord with the suggestion that the State should
treat these industries with kindly consideration.

The present measure, however, I believe to be unfair to the
State and calculated to ultimately defeat the very purpose it seeks
to effectuate. Under its provisions any person owning lands abut-
ting upon the lake may obtain title to the submerged lands lying
in front of his lands and between the lake shore and the harbor
line by merely causing a survey to be made and paying $25.00 per
acre to the State for the lands described in such survey. He is not
required to fill in these lands nor to improve them in any way. He
simply causes the survey to be made, pays the stipulated price
and takes his title. This puts it in the power of speculators to
buy up the lands bordering on the most advantageous points of the
lake front, cause the submerged lands in front to be surveyed and
get title thereto by the payment of $25.00 per acre, and hold them
indefinitely, or to compel those who seek to establish industries
upon the lake front to pay extortionate prices therefor. Such an
opportunity ought not to be given by legislation.

It is said that the United States Steel Company and other per-
sons desiring to establish industries upon the lake shore, desire
to fill these submerged lands out to the dock line that vast furnaces
and other manufacturing establishments may be established there-
on and in such proximity to the dock as to permit the unloading of
ores and other cargoes at the furnace or factory doors.

This can be obtained with safety to the State and with like
convenience to such persons without making these lands the toy
of speculators. It should be provided that any person owning
lands abutting upon the lake shore may have the submerged lands
in front thereof lying between the shore line and the harbor line
surveyed and upon the filing of the survey and the plat of such
lands with the Secretary of State, he may receive authority from
the State, issued by the Governor and the Secretary, to fill and
improve the same, and upon the completion of such filling and im-
provement and the filing of satisfactory evidence that the same has
been done, he may receive from the State a patent vesting in him
the title to so much thereof as he may have filled and improved.

This, I believe, will meet every requirement of these industries
and save the State its rights in other lands that are not filled and
improved, and keep the lands that are not so used and are so
saved, from the hands of speculators. I am sure the State having
reserved the title to itself until the lands are filled and improved
will deal more liberally and fairly with those seeking to establish

325

industries on the lake shore in the future than real estate specula-
tors could be expected to do.

There is, however, doubt of the constitutionality of such legis-
lation in the form of the present measure, and any bill drawn
should be carefully drawn in the light of such objections and with
a view of avoiding constitutional questions.
Respectfully submitted,

J. FRANK HANLY,

Governor.

HOUSE BILL No. 134.

FEBRUARY 27, 1907.

Mr. Speaker and Gentlemen of the House of Representatives:

I return herewith, without executive approval, House Bill No.
134.

This bill seeks to amend the law relating to the organization
and incorporation of loan and trust and safe deposit companies.

The present law authorizes the organization of such com-
panies in cities of 50,000 inhabitants or over with a capital of
$100,000; in cities under 50,000 and over 25,000 inhabitants a
capital of $50,000 is required; in cities less than 25,000. inhabit-
ants a capital of not less than $25,000.

The amendment, proposed permits such companies to be organ-
ized in cities having a population of less than 15,000 with a capi-
tal stock of only $15,000. I believe $15,000 capital to be insuffi-
cient for any corporation possessing the powers and responsibili-
ties authorized and devolved upon trust companies. There is grave
question about the propriety of permitting even commercial banks
to be organized with a capital as meager as $15,000, however
small the community may be. When applied to trust companies
the question becomes one of such grave import as to challenge the
most thoughtful consideration.

These companies are the depositories of trust funds and savings
accounts possessing more or less permanency of character. They
may act as executors, administrators, trustees, receivers or as-
signees, and when so appointed serve without bond. In any such
case the only security the beneficiaries of the trust have is the capi-
tal stock of the company, plus the statutory liability of the stock-
holders, which, in case of failure of the company, is usually greatly
impaired by the insolvency of some of the stockholders.

32(5

It is not unusual for such companies, acting in the various ca-
pacities suggested, to have in charge estates and trusts of great
value, or at least far beyond the nominal capital proposed in this

bill.

In addition to the powers and functions already suggested, such
companies are authorized by the law to execute surety bonds, and
many of them are now doing so.

All these powers, privileges and functions will be devolved upon
the companies to be created under the amendment here proposed.
They are too great and too far-reaching and affect the interests of
too many people to be devolved upon institutions or corporations
possessing a nominal capital of only $15,000.00.

The minimum capital permitted under the present law is $25,-
000.00. So far as I am advised the present limitation works no
hardship upon any community in the State. Wherever there is
need of such an institution, sufficient capital can readily be found
to meet the present requirement.

These considerations lead me to withhold my approval from
the bill, and to express the hope, that upon reconsideration, the
General Assembly will not insist upon its enactment.
Respectfully submitted,

J. FRANK HANLY,

Governor.

HOUSE BILL No. 216.

FEBRUARY 27, 1907.

Mr. Speaker and Gentlemen of the House of Representatives:

House Bill No. 216, the same being a bill "to provide for the
inspection and analysis of and to regulate the sale of concentrated
commercial feeding stuff in the State of Indiana," is returned
herewith without executive approval.

I am in accord with the general purpose of this bill and believe
many of its provisions ought to be incorporated in the law, but the
measure as drawn ought not to be enacted. Some of its provisions
arc unnecessary and would impose unjustifiable hardship upon
many people of the State.

In effect it provides that before any person may sell or offer
for sale any linseed meals, cocoanut meals, gluten feeds, gluten
meals, germ feeds, corn feeds, maize feeds, starch feeds, sugar
feeds, dried brewers' grains, malt sprouts, dried distillers' grains,

327

dried beet refuse, hominy feeds, cerealine feeds, rice meals, rice
bran, rice polish, peanut meals, oat feeds, corn and oat feeds, corn
bran, wheat bran, wheat middlings, wheat shorts and other mill
products, ground beef or fish scraps, dried blood, blood meals,
bone meals, tankage, meat meals, slaughter house waste products,
mixed feeds, clover meal, alfalfa meal and feeds, peavine meal, cot-
ton seed meal, velvet bean meal, sucrenc^ mixed feeds and meals
made from seeds or grains, and all materials of similar nature used
for food for domestic animals, condiment al feeds, poultry feeds,
stock feeds, patented, proprietary or trade and market stock and
poultry feeds, he shall file with the State chemist a statement that
he desires to offer the same for sale in this State, with a certificate
stating the name of the manufacturer, the location of the principal
office of the manufacturer, the name, brand or trade-mark under
which the commodity will be sold, the names of the towns in Indi-
ana where it will be offered for sale, the ingredients from which it
is compounded, the minimum percentage of crude fat and crude
proteine and the maximum percentage of crude fiber which such
manufacturer guarantees such product to contain, and cause a tag
or tablet to be attached to every one hundred pounds or fraction
thereof of the product, containing the information above referred
to, together with a stamp to be furnished by the State Chemist at
a cost of $1.00 per hundred stamps. These stamps cannot be pur-
chased in less quantities than 500.

These provisions apply to every miller and every farmer who
sells or offers for sale corn feeds of any kind and would impose
unusual and unnecessary restriction »pon the sale of products
that are well known and which are rarely, if ever, adulterated.

The provision that the State Chemist shall be notified of the
towns in the State where such products wrill be offered for sale is
a fair sample of the many unnecessary requirements of the measure.

It is provided that the money paid for the stamps required to
be used shall be paid to the State Chemist and by him paid to the
director of the Indiana Agricultural Experiment Station and by
such director into the treasury of the Indiana Agricultural Experi-
ment Station ; it is also provided that the board of control of such
experiment station may expend the same in necessary expenses in-
curred in carrying out. the provisions of the bill and other expenses
for the station. No accounting is required of the board of con-
trol to any department of Hie State government. All such fees
\\lien paid become public moneys, and their disbursement should
only be made upon proper voucher and under provision that an

328

accounting shall be made either to the Auditor of State or to the
Executive Department. Failure to provide for this is so important
as to alone preclude executive approval of the present measure.

There is also a provision authorizing the State Chemist to
adopt standards for all the feeds described in the bill. This I be-
lieve should not be left to his discretion. Standards of each of
these feeds are readily obtained and if in purity and nutriment
any of them measure up to such standard, it should be sufficient.

After enumerating all the feeds hereinbefore named, it is pro-
vided that "concentrated commercial feeding stuff" shall include
"any other feeds which the State Chemist decides should be in-
cluded in the class of concentrated commercial feeds." This is an
unusual and dangerous power to confer upon any administrative
officer. What feeds are within the law is made dependent upon his
whim or will. It gives him a world-wide commission and lodges in
his hands unwarranted and arbitrary power, which may be misused
to the annoyance and disadvantage of many people.

As hereinbefore suggested, I am heartily in favor of legislation
that will require all persons engaged in selling commercial feeds
or compounds to give full information as to the purity and char-
acter of such feed where such persons are engaged in the sale of
such products as a business, but the legislation should be drafted
with care so that unreasonable restriction may not be imposed;
that all fees collected by officers charged with the enforcement of
the law shall be accounted for to the proper executive authority,
and that the feeds included be definitely fixed by the law and not
left to the will or whim of any administrative officer.

There is yet another and conclusive reason why executive ap-
proval should be withheld from this bill, found in the following
provision :

"In all litigation arising from the purchase or sale of any concentrated
commercial feeding suff, in which the composition of the same may be involved,
a certified copy of the official analysis, signed by the State Chemist, shall be
accepted as conclusive proof of the composition of such concentrated commer-
cial feeding stuff."

The determination of what shall be conclusive proof of any es-
sential fact in the trial of a cause before a judicial tribune is a
judicial and not a legislative function. The Legislature cannot
declare an act to be a crime, and then provide that a specific item
of evidence shall be conclusive proof of guilt.

Under the above provision of this bill one charged with the
violation of any of its provisions could introduce no evidence in

329

his own behalf where the issue involved the composition of any of
the feeds named. The mere introduction of a certified copy of the
State Chemist's analysis would end the case. The court could ex-
ercise no judicial discretion, but would be bound to find the defend-
ant guilty whether the analysis of the State Chemist was in fact
correct or not.

If the power to say what shall be conclusive evidence of any fact
in issue in the trial of a cause were vested in the General Assembly,
a co-ordinate branch of the government would be struck down and
the judiciary become a machine without power to do more than
register the legislative will.

Such statutes have, without exception, been held invalid by the
Supreme Court of this State.

In an early case it is said:

"It has been held, and it would seem that the decision must be cor-
rect, that it is not competent for the legislative power to declare what shall be
conclusive evidence of a fact."

Wantlan v. White, 19 Ind. at 472.

In another case it is said :

"The statute enacts that the deed shall be conclusive evidence of the facts
recited. Now, we do not suppose the Legislature could make such an enact-
ment."

White v. Flynn, 23 Ind. at 47.

The rule is again declared in a later case :

"Besides, it has several times been decided that the Legislature cannot
declare what shall be conclusive evidence."

Scott v. Brackett, 89 Ind. at 420.

In another case the Court said:

"It is very doubtful whether the Legislature can enact a statute declar-
ing what shall constitute conclusive evidence, but we do not find it necessary
to make any decision upon that point."

Heagy v. State, 85 Ind. 262.

Speaking to the same point, in a later case, in construing sec-
tion 1811, R. S. 1881, concerning prosecutions for obstructing a
highway, it is said:

"This section should not be construed as undertaking to make such proof
conclusive of the fact that the way alleged to have been obstructed is a public
highway. The Legislature cannot thus make any item of evidence conclusive."
Johns v. State, 104 Ind. at 561.

In yet a later case the rule is restated as follows :

330

"If the controversy were one between individual citizens, it could be dis-
posed of without difficulty, for it is well settled that the Legislature cannot
declare that an official report or document shall be conclusive evidence of the
matters contained in it."

Board v. State, 120 Ind. 282.

This decision relates to the official statement of county auditors
as to the amount of school fund held in trust by the respective
counties under the act of 1865 providing that such statement
"shall be taken as conclusive evidence of the facts therein con-
tained." The act was held unconstitutional.

Again, in a well-considered case, it is declared :

"A law which would in effect exclude the evidence of a party and thereby
deny him the right to be heard, would deprive him of due process of law. A
law which provides that certain facts are conclusive proof of guilt would l>e
unconstitutional, as also would one which makes an act prima facie evidence
of crime which has no relation to a criminal act, and no tendency whatever
to establish a criminal act."

State v. Beach, 147 Ind. at 79.

It has been held competent for the General Assembly to de-
clare what shall constitute prima facie evidence, but when it does
"this it reaches the limit of its authority in that direction.
Respectfully submitted,

J. FRANK HANLY,

Governor.

HOUSE BILL No. 359.

FEBRUARY 27, 1907.

Mr. Speaker and Gentlemen of the House of Representatives:

House Bill No. 359, a bill to increase the salaries of the mem-
bers of the Board of Safety of the city of Indianapolis, is here-
with returned without executive approval.

Under the present law the salaries of the members of this board
are placed at $600.00 per annum. This bill increases them to
$1,200.00 per annum, an increase of 100 per cent. It may be that
the present salaries are too low, but I am impressed with the con-
viction that the increase here provided for is unreasonable and
unjustifiable from any proper point of view. The Board of Public
Safety is one of a number of departments in every citw govern-
ment, honorable and responsible in character, but never intended
to be positions of substantial profit. The duties of the members of

331

this board arc not of a continuous character. They do not require
daily application of time or attention. While they may to some
extent interrupt the business affairs of those who hold such posi-
tions, they do not preclude the incumbents from pursuing their
usual vocations. The department is divided into and has jurisdic-
tion over a number of minor departments, but each of these de-
partments has an executive officer or chief whose duty it is to ad-
minister the affairs of his department, the board having only gen-
eral supervision or direction. As a rule meetings arc held only at
fixed periods and are of brief duration. If membership on this
board is attended with a salary of $100.00 per month it will be-
come a prize for place hunters and cheap politicians — men whose
qualifications and motives arc, to say the least, subject to question
and criticism. The present salary is not tempting from the stand-
point of compensation. No business man of capacity accepts a
place on this board because of the salary, nor would the increase
of $600.00 a year be a substantial inducement to any such man to
accept a position thereon. The increase, however, would be a
standing temptation to unfit and incapable men. The city of In-
dianapolis has for years been able to fill these positions at the pres-
ent salary. I am convinced it will be able to continue to fill them
though the salary remains unchanged. Men of character and ca-
pacity will still continue to be willing to serve the city from civic
pride and unselfish motives in the future as they have in the past.
A trust so accepted is in safer hands and is better administered
than it is or can be when accepted from sordid motives.

While the views here submitted arc the personal views of the
Executive, they arc founded upon and supported by information
received from the present Comptroller of the city of Indianapolis.
Respectfully submitted,

J. FRANK HANLY,

Governor.

332
HOUSE BILL No. 344.

MARCH 4, 1907.

Mr. Speaker and Gentlemen of the House of Representatives:

House Bill No. 844 is, in my judgment, unconstitutional, be-
cause of its failure to set out the title of the act sought to be
amended. It is therefore returned without executive approval.

The title of the bill purports "to amend Section 36, Chapter 29,
of the Acts of 1903, concerning taxing real estate incumbercd by
mortgage." In the body of the bill the act sought to be amended
is referred to as follows : "Section 36, Chapter 29, of the Acts of
1903, of an act concerning the taxing of real estate incumbered by
mortgage, and repealing all laws in conflict therewith, and declar-
ing an emergency."

By reference to the session laws of 1903, page 49, we find
Chapter 29, referred to in the title of the pending bill, but the title
of the act there set out is not "An act concerning taxing real
estate incumbered by mortgage" ; nor is such title "An act con-
cerning the taxing of real estate incumbered by mortgage, and
repealing all laws in conflict therewith, and declaring an emer-
gency." On the contrary, the title to the act contained in Chap-
ter 29 of the session laws of 1903 is an unusually long and com-
plex one, covering fully two pages of the volume in which it is
found.

There is in this act a section 36 relating to the taxation of real
estate incumbered by mortgage. It is evident that the purpose
of this bill is the amendment of this section. The section sought
to be amended, however, is itself an amendment of section one of
an original act upon this subject, which became a law without the
Governor's signature March 4, 1899, the title of which is "An act
concerning the taxation of real estate incumbered by mortgage
and declaring an emergency."

It will be observed that the present measure does not attempt
to amend section one of this original act. On the contrary, it is
quite clear that its purpose is the amendment of the amended
section of said act. This being true, it is necessary to the validity
of the bill that its title set forth the title of the amendatory act
in full. Setting out the title to the original act is not sufficient.

It has been uniformly held by the Supreme Court, in cases in-
volving the amendment of a section of an act, that "the title of the

333

act to be amended shall be referred to by setting the same out in
the title to the amendatory act."

Mankin v. Pennsylvania Co., 160 Ind. at 453.

By comparing the two titles, that of the pending bill and that
of the act sought to be amended, it will be seen that no substantial
part of the title of the act sought to be amended is set out in the
title of the pending measure. In fact, there is no attempt to do so.
A title covering more than two pages of the session laws of 1903
can not be crowded into the seven words : "Concerning taxing real
estate incumbered by mortgage," found in the title of the pending
measure. Nor can such title be crowded into the words : "An act
concerning taxing of real estate incumbered by mortgage, and re-
pealing all laws in conflict therewith, and declaring an emergency,"
found in the body of the pending measure.

Section 21 of Article 4 of the Constitution, provides :

"No act shall ever be revised or amended by mere reference to the title;
but the act revised or section amended shall be set forth and published at full
length."

The most that can be said for the present bill is that it con-
tains a mere reference to the title of the act sought to be amended.
There is a total failure to set it out.

In the case of O'Mara v. The Wabash Railroad Company, 150
Ind. at 650, the title of the amendatory act referred to the title
of the act sought to be amended as "being an act concerning civil
procedure," when the actual title of the act sought to be amended
was "An act concerning proceedings in civil cases."

In this case the Court said:

"The title of the act of 1897 seems to have been possibly intended to apply
to either an original or an amendatory act, but the enacting clause and sec-
tion so clearly give the act character as an amendatory act that an intention
to enact an original statute is not probable. We see no escape from the con-
clusion that the act does not express the subject thereof in its title by refer-
ence to the act or the title of the act to be amended. It is threfore invalid."
O'Mara v. The Wabash Railroad Company, 150 Ind. at 650.

In another recent case the title of the amendatory act read as
follows : "An act to amend Section 359 of an act concerning trial
by jury, in force September 19, 1881, the same being Section 525
of the Revised Statutes of 1881." The actual title of the act
sought to be amended was "An act concerning proceedings in civil
cases." The Court held the reference in the title to Section 359 in-
sufficient, saying:

334

"It will be observed that the amendatory act of 1891 does not refer to
the title of the act to be amended by setting it out, as required by said
Section 21 of Article 4 of the Constitution, but refers to the act to be amended
as, 'An act concerning trial by jury,' which is not the title of the act in which
said Section 359, supra, may be found. When the act or section to be amended
is identified in the manner required by the Constitution, and it is not certain
what act or section was amended, the court will resort to means other than
the title to determine what act or section was amended. But if the title or
section is not identified in the manner required by the Constitution, the court
will not resort to such other means of identification, although the act intended
would thereby be ascertained beyond question. It follows that as the title of
said act of 1891, supra, fails to identify the section to be amended by setting
the same out in the title thereof, as required by Section 21 of Article 4 of the
Constitution, the same is unconstitutional and void."

Mankin v. Pennsylvania Co., 160 Ind. at 453.

Ill a yet more recent case the title of the amendatory act omit-
ted from the title of the act sought to be amended the following
words: "Providing for town, city and county boards of health,
prescribing penalty for the violation of the provisions thereof."
The title of the act sought to be amended was quite lengthy and
was otherwise correctly set out in the title of the amendatory act,
but the court held the ommission of the words quoted to be fatal
to the validity of the amendatory act, saying:

"It is doubtful if this title would be sufficient in an original act to sup-
port legislation concerning town, city, and county boards of health; and it is
entirely clear that in the office of identifying a particular statute relating to
town, city, and county boards, for purpose of amendment, under Article 4,
Section 21, of the Constitution, it must be held inadequate. The absence of
the omitted words from the title makes such a radical restriction and change
in the general import of the title of the act of 1891 that we cannot attribute
it to a clerical error, as is suggested."

Hendershot v. State, 162 Ind. at 72.

The failure of the present bill to set out in the title any sub-
stantial part of the act sought to be amended, brings it so clearly
within the inhibition of the Constitution that the question does not
admit of argument. I am therefore compelled to withhold my
approval.

Respectfully submitted,

J. FRANK HANLY,

Governor.

335
HOUSE BILL No. 201.

MARCH 5, 1907.

Mr. Speaker and Gentlemen of the House of Representatives:

I return herewith House Bill No. 201 without executive ap-
proval.

The first section of the bill authorizes the assessment of the
property of counties, townships, towns, cities and municipalities,
for the cost of public improvements in proceedings for the con-
struction of such improvements hereafter begun, and makes the
same a lien upon the property of such municipalities.

There is doubt in my mind as to the propriety of a law creating
a lien against any public property, but if this section of the bill
stood alone I wrould not refuse approval.

The second section of the bill goes far beyond that purpose.
It legalizes all payments heretofore made by any such municipali-
ties in any such proceeding. It then goes yet a step further, and
legalizes all assessments made in any such proceeding where pay-
ment has not been made, and makes the same a lien upon all public
properties abutting any such improvement.

It is impossible for the Legislature or for the Executive to
know the details of the many proceedings for the construction of
such public improvements heretofore instituted. In the absence of
such knowledge we can not judge of the merits of the claims grow-
ing out of such proceedings.

The bill exempts pending litigation, but I am advised that there
are a number of instances in the State where disputes exist concern-
ing the merits of some of these claims, in which litigation has not
yet been commenced.

The General Assembly has no legal or moral right to pass upon
the validity of such claims. The determination of such disputes
is peculiarly within the jurisdiction of the judicial department and
wholly outside the domain of the Legislature.

All such contracts were entered into by the persons holding
them with full knowledge of the law as it at the time existed. Such
persons made their contracts with full knowledge, and they now
have no right to ask this General Assembly to make a new contract
for them. Some of their claims may be meritorious ; if so, the
courts will so decide.

Validating acts should always be scanned with care, and should

336

receive favorable consideration only when it is clear that no sub-
stantial rights will be affected thereby.

There is, it seems to me, no process of reasoning by which an
act can be justified which creates a lien upon public property be-
cause of a past transaction, where none exists by reason of the law
now in force.

Very respectfully submitted,

J. FRANK HANLY,

Governor.

HOUSE BILL No. 79.

MARCH 7, 1907.

Mr. Speaker and Gentlemen of the House of Representatives:

I am unable to give executive approval to House Bill No. 79.
I therefore respectfully return the same to you, together with my
objections thereto.

The bill seeks to repeal the metropolitan police law, under
which the police departments of the cities of Anderson, Elkhart,
Elwood, Hammond, Jeffersonville, Kokomo, Lafayette, Logans-
port, Marion, Michigan City, Muncie, New Albany, Richmond and
Vincennes are now administered. It divests the Governor of au-
thority to appoint police commissioners for these cities, and de-
volves the power to make such appointments upon the mayors and
common councils of such cities.

The advocates of the measure contend that the right of the city
to self-government is fundamental and absolute; that the State
has no right to interfere in its affairs ; that to do so is to do vio-
lence to the spirit of our institutions, if not to the letter of the
Constitution itself; that the people of each municipality know
what they want, and are entitled to free rein to administer their
own affairs, in their own way, and to suit their own desires ; that
the present law, in so far as it vests in the Chief Executive of
the State the power to appoint members of the boards of police
commissioners in the several cities named, invades this sacred and
long-established principle and ought to be repealed.

Much else has been said and much noisy declamation indulged
in, but this constitutes the only argument made in behalf of the
bill worthy of respectful consideration. All else is beside the is-
sue, and is unworthy of this forum.

This argument, however sincere its advocates may be and how-

337

ever eloquently it may be presented, is based upon an erroneous
conception of both the spirit of our institutions and the letter of
the Constitution.

Ours is neither a despotism nor a democracy, but a representa-
tive government. Our fathers never intended that it should be a
despotism or a democracy. They intended that it should be a* rep-
resentative government, with barriers and limitations sufficient in
number and in strength to protect us from the perils of both. In
forming the National government they made it supreme in all mat-
ters vital to its own existence or affecting the interests of all people.
In matters involving the interests of the people of the several States
and relating exclusively to their own domestic affairs, the States
were made sovereign. The National government reserves to itself
the enforcement of its laws everywhere throughout its borders.
That responsibility is never committed to the States. The time
was when some of the people of the Union did not understand or
accept this theory of the Federal government. Calhoun never un-
derstood it or accepted it, but Andrew Jackson did and had the
courage to enforce it, and Abraham Lincoln understood it and en-
forced it at frightful cost of blood and treasure.

In forming our State government our fathers did not intend
that it should be composed of "a coterie of independencies, with a
body of local laws, like so many countries palatins," each sovereign
within itself. They had before them the National Constitution and
the Constitutions of many sister States. They understood the
form and theory of free government as instituted upon this con-
tinent, and they made no such mistake as that. They made the
government what they intended it to be, what it should be, aye,
what it is — a single entity — a unity — sovereign throughout its bor-
ders on all subjects of common interest, taking care to provide in
the fundamental law itself that its laws should run throughout its
borders and should never be suspended except by authority of the
General Assembly/5 They declared in that instrument that "No
law shall be passed, the taking effect of which shall be made to de-
pend upon any authority except" as therein provided. In framing
the government they knew there were certain things which they
could not trust to the choice of the several municipalities of the
commonwealth they were creating, such as the levying and collec-
tion of the State's revenues, the establishment and preservation of
the common school fund, the establishment of a uniform system of
common schools, and the exercise of the police power.

They believed, without reservation, "that all power is inherent
[22—19891]

338

in the people," and so declared. But they knew that many essen-
tial powers must be surrendered by them and delegated to the State
they were creating to be exercised by it as a sovereign within cer-
tain defined and prescribed limitations, if a truly representative
form of government was to be established. They therefore pro-
vided for departments of government, legislative, executive and
judicial, made each co-ordinate and independent of the other, ex-
cept as in the Constitution provided, and invested them with every
power necessary to the accomplishment of the duties devolved upon
them.

The government thus created was instituted "by the people of
the State * * * for their peace, safety and well-being."
Every power necessary to preserve this purpose was by them dele-
gated to the government they created.

One of the fundamental and essential powers vested in the
State is the right to enforce its laws everywhere throughout its
borders, in every county, in every city, in every town, in every
hamlet, and in every township. The right to enforce its laws car-
ries with it the right to select all necessary instruments and means
for their enforcement. This is fundamental.

It foUows, therefore, logically and necessarily, that the law
clothing the Chief Executive with the power to appoint police
commissioners to administer the police departments of the cities of
the State contravenes neither the letter of the Constitution nor
the spirit of our institutions; but, on the contrary, it is clearly
within the letter of the one and in harmony with the other.

Indeed, one of the two fundamental purposes for which mu-
nicipal corporations are instituted is, that they "as state govern-
mental agencies" may "assist the State in their localities in the ad-
ministration and execution of such laws as pertain to the people of
the State at large."

This is so clearly and forcefully put by Mr. Justice Hadley
of the present Supreme Court, in an opinion passing upon the
constitutionality of one of the metropolitan police acts, that I am
impelled to submit what he says for your consideration :

"There are important powers delegated to municipalities which concern
every citizen of the State, and for the proper exercise of which the State can-
not abdicate responsibility by committing them to local officers.

"It is very clear from the tenor of the whole instrument that the Consti-
tution makers never intended that the territorial divisions recognized — that is,
counties, townships, and towns, should govern themselves, independently of
State supervision or of State supremacy, but in every matter which affects the
safety, morals, health, or general welfare of the people at large, or of a con-

siderable number of them, there is undoubtedly reserved in the State the
power to supervise, control, and even coerce, local officers in the discharge of
public duties, and even to send its own agents into any organized district,
if necessary, to enforce a public right, or accomplish a public benefit. . * * *
"The enforcement of the State's criminal and revenue laws are of equal
importance to all. In all these, and kindred things, the setting up of corpora-
tion lines forms no harrier to the strong arm of the State in safeguarding
every public interest."

State v. Fox, 158 Ind. at 136.

In another case involving- the constitutionality of the metropoli-
tan police act of 1891, Mr. Justice Elliott, speaking for the Su-
preme Court, said :

"The act here assailed does not trench upon the right of local

self-government. In providing for the appointment of officers con-

nected with the constabulary of the State, there is not an invasion of the right
of local self-government, but simply the exercise of the power to provide for
the selection of peace officers of the State."

State v. Kolsem, 130 Ind. at 437.

And finally, within the last thirty days, while the present law
was being denounced upon the floor of this Assembly as uncon-
stitutional and, therefore, an illegal invasion of popular rights,
the same court, through Mr. Justice Gillctt, handed down a deci-
sion, in which the constitutionality of the law is redeclarcd in the
following decisive words :

"The maintenance of peace and quiet and the suppression of crime and
immorality are matters of general interest, and to the attainment of these
ends the cities and towns of the State are legally subject to its control.

"As the Commonwealth is a unity in respect to its interests in such matters,
the regulation thereof is a proper subject of legislation. * * * Matters of
general interest are not necessarily required to be submitted to the judgment
and discretion of the people of the locality. * * * The essential elements
of what is known as the metropolitan police system in the government of
municipal corporations have been so often vindicated as against constitutional
objections that the question should now be considered at rest."
Arnett v. State, No. 20,748.

The enforcement of the laws of the State vitally concerns all
the people. This is as true of the laws touching public morals as
it is of the laws relating to the greater crimes, such as murder,
rape, arson or burglary.

Gambling, drunkenness, licentiousness and kindred crimes de-
stroy public morals, degrade citizenship, impair the health of the
people and lead to profligacy and dependency. And, in the end,
the public purse is taxed either to support the victims of these
vices as paupers or to punish them as felons, Taxation to meet

340

the expense of pauperism and crime falls upon all the people. The
tendency of both is to destroy the "peace, safety and well-being of
the people," to secure which the Constitution was adopted and this
free government established. To say that the State may not legally
or with propriety put its hand upon the causes which produce them,
with a view of minimizing or entirely ending such causes, is to
deny the State the power to preserve itself or to accomplish the
purposes for which it was created.

While every community should govern itself, when it fails, or
to tl^e extent that it fails, to do so, the State has a right to inter-
fere. Indeed, in any such case it becomes its solemn duty to inter-
vene and end the violation of its laws.

That some of the cities now subject to the operations of the
law sought to be repealed have signally failed in this regard, is a
notorious fact, a part of the history of the State and of the times.
In one city in particular, officials now in authority are themselves
engaged in the retail sale of intoxicating liquors and are not in-
frequently violators of the law relating thereto. One of them is
now running a dive known as the "Bucket of Blood," because of the
many crimes there committed. Can it be said that the police de-
partment of such a city may be safely turned over to him and his
associates ? Has the State no concern in such case ? Have the peo-
ple of a city anywhere within the Commonwealth a right to daily
and openly transgress the law and suspend its operation? If they
do thus violate the law and suspend its operation, has the State no
interest in the condition thus created? Is the State an impotent,
helpless thing, compelled to sit supine while its laws are broken and
its authority trampled under foot? These questions it seems to me
suggest their own answers. Indeed, the doctrine embraced in a neg-
ative answer to any one of them is so monstrous as to be undebatable.
There is, there can be, no escape from the conclusion that the
whole people are interested in such matters and that all are pro-
foundly and vitally concerned.

That this is true, I call to witness recent history. Last year
the people of the whole State were concerned and shocked by the
revelations made of conditions existing at French Lick and West
Baden. These conditions were such as to shame the Commonwealth
and bring upon it just criticism from the press, both at home and
in sister States. The demand that these conditions should cease
was general and imperative, and, in my judgment, properly so.
The people of that community, however, preferred that such con-
ditions continue. They were satisfied to keep the profit and the

341

shame that flowed from them. They were willing that the criminal
laws relating thereto should continue to be suspended. But the
State was not satisfied, and their fellow-citizens were not satisfied.
And yet, if the doctrine contended for by the adherents of this bill
is correct, either from the standpoint of law or of public policy,
the people of that community had a right to say to the State and
to their fellow-citizens, "Keep your hands off. We are entitled to
govern ourselves. You shall not interfere. To do so is to violate
the Constitution and invade the spirit of free institutions."

Again, a gambling establishment was instituted at Dearborn
Park, in Lake County, within a stockade, in a rural community,
where a thousand dissolute and profligate characters daily assem-
bled in violation of the law. The place became notorious. The
Executive called upon the local officials — the sheriff and the prose-
cuting attorney of Lake County — to enforce the law, but they
would do nothing. Then, under a provision of the metropolitan
police law authorizing the police department of a city to be used
to suppress violations of the law anywhere within the boundaries
of the county, the Executive directed the police department of the
city of Hammond to be ready to swear in a sufficient number of
special policemen to put an end to the gambling institution at
Dearborn Park, and advised those who were conducting it that
the violation of the law must cease, and that if the police officers
were resisted the militia of the State would be sent to their support.
This led to the immediate and unconditional abandonment of the
stockade and ended the unlawful practices that had been conducted
there. But under the doctrine of "home rule" contended for by
the supporters of this bill the State had no right to interfere if
the people of Lake County were content.

As before suggested, the Constitution provides that "the opera-
tion of the laws shall never be suspended, except by the authority
of the General Assembly" ; that "no law shall be passed, the taking
effect of which shall be made to depend upon any authority except
as provided in this Constitution." It will be observed that it no-
where appears in the Constitution that the citizens of any com-
munity may suspend the law or that its taking effect shall depend
upon their will. The Supreme Court of the State has held the
term "operation of the laws," as used in the Constitution, to mean
the "taking effect and continuing in force" of the laws.

In that$ the State, acting through the General Assembly, is
sovereign. This is fundamental. It must needs be so.

That its laws may be enforced, the Constitution imposes upon

.•ML!

the Governor solemn care in that regard. Its words are : "He shall
take care that the laws be faithfully executed." The present Kx-
ecutive has accepted these provisions of the Constitution in good
faith. He has believed, and still believes, it was intended that
he should. When the people become satisfied that that provision of
the Constitution is a mistake, let them meet in their sovereign ca-
pacity, strike it from their organic law, and insert the contrary.
Then the Executive will be free of responsibility.

Acting through the several police boards in the fourteen cities
included in the existing law, the Executive has consistently sought
to secure the law's substantial enforcement within their boundaries.
In the last two years great progress has been made in this direc-
tion. Taken as a whole, these police departments have been better
administered and the laws more impartially and consistently en-
forced than ever before in their history. The effect of the policy
pursued in these cities has been beneficial throughout the State. It
has acted as a call to cities not within the metropolitan police law
to the better performance of official obligation and to the accept-
ance of higher ground in the administration of their police affairs.
These facts are written in the history of the past two years, and
no amount of invective, calumny or abuse can change them. They
are a part of the history of the State. They are not to be rea-
soned away.

At such a time and under such circumstances, it is proposed to
strike down the law that makes this possible ; to turn these depart-
ments over to local influences whose only grievance against the law
is that under it the laws of the State touching public morals have
been enforced; to subject these departments to the temptations
and exigencies of local politics ; to put them up as prizes to be
striven for by those who wish the law's lax enforcement or its en-
tire suspension.

The matter of the repeal of this law is of wider and far greater
significance than the simple repeal of a statute, and its consequences
more vital. It is really a test of strength between the moral forces
of society on the one side and the law defying forces of vice and
crime on the other. Its repeal will mean a "wide-open" policy in
these fourteen cities. Vice and evil, for a time repressed, will find
in it warrant for unwonted excesses and will become more difficult
of control and regulation. Cities not now under the law will be
affected, and the ground gained in behalf of good morals and de-
cent administration of government in the last two years will be
largely lost.

343

The present law, in some form, has been upon the statute books
of the State since 1883, a period of 24 years. It ought not now
to be repealed for light or transient reasons. We have shown that
it does not contravene the Constitution or violate the spirit of our
institutions. The contention that it does is without foundation
and has been used only to excite popular prejudice.

The shibboleths of "home rule" and "self-government" are
alluring and seductive. They constitute an enticing battle-cry.
They are specious calls to prejudices strong and long imbedded,
and are often used to obscure a lack of merit and a wickedness of
purpose which, if not concealed, would bring swift and sure defeat
and condemnation. In the present instance they are but a pretense,
a mask, a cloak, beneath which are marshaled the real enemies of
free government in Indiana.

I freely grant the sincerity of those who believe in the mistaken
doctrine that the existing law violates the spirit of our institutions.
But these are few in number compared with those who are imbued
with other purposes. Every brewery and distilling interest in the
State is back of this bill ; every gambler, every midnight marauder,
every keeper of a saloon, of a brothel, of a wine-room ; every fre-
quenter of a bawdy house; all who are opposed to the just and
fair enforcement of the laws touching public morals, or who claim
for themselves the right to choose what laws they will obey. These
have met in more than one city since this measure was introduced,
in secret conclave, and there levied assessments and collected
moneys with which to prosecute this fight. With the repeal of the
present law they see open to them in these fourteen cities inviting
fields, containing an aggregate population of 250,000 people,
where the laws touching public morals will be either feebly enforced
or their operation entirely suspended. They see opportunity for
the return of slot machines, the re-establishment of wine-rooms,
gambling joints and bawdy houses ; the return of saloons with un-
closed doors, where intoxicating liquors may be sold on Sundays,
on legal holidays, at unlawful hours, to minors and to drunken
men, without fear of punishment.

These represent the real enemies of the State. They are al-
ready ratifying the repeal of this statute with acclamations of ap-
proval and delight. The act, however, is not yet completed. There
is still time for reconsideration. It is well that you stop and think
before you take the final step ; that you consider and make sure
that the deed when done can be justified in character of intent and
result; that it will stand the sober second thought of the public

344

after the excitement of the hour has passed away, the pressure of
the moment has been lifted, and the passion engendered by the
heat of debate has closed ; that it will square itself with the crystal-
lized and enduring judgment of the people whose servants you are.
If you repeal it, the responsibility must be yours and yours
alone. I will bear no share of it. You may march with the ene-
mies of the State if you like. You may, if you choose, make fel-
lowship with the saloon-keeper, the brewer, the dive-keeper and the
gambler, but I prefer to cast my lot with the law-abiding, with the
friends of the home, of the family circle and of orderly govern-
ment honestly administered.

Respectfully submitted,

J. FRANK HANLY,

Governor.

HOUSE BILL No. 456.

MARCH 7, 1907.

Mr. Speaker and Gentlemen of the House of Representatives :

I return herewith, unsigned and without my approval, House
Bill No. 456, entitled, "A bill for an act entitled an act provid-
ing for the issuing of bonds and coupons of the State of Indiana
for the liquidation and payment of the claim of the board of trus-
tees for the Vincennes University against the State, in full and
final settlement of said claim and all other demands."

I regret exceedingly that I am unable to give my assent to this
legislation. Vincennes University is the oldest institution of learn-
ing in the State. Its career has been long and honorable. It was
founded before the Commonwealth was organized. Its life has been
one of vicissitudes. It has come up "through much tribulation."
Its present trustees are and have long been my personal friends
and supporters, and I would that I could give executive approval
to the demand it makes. But, after long consideration and thrice-
repeated investigation, I find my mind coerced to a different con-
clusion. The facts and the law compel adverse decision. I can not
sign it without being false to my sense of duty and official obliga-
tion. I therefore return it. It is due your honorable body, the
University and the public that I give the reasons which impel me
to this action.

The bill provides for the issuing by the State of $120,548 of
bonds, bearing 3 per cent, semi-annual interest, payable to "The

345

board of trustees for the Vincennes University" ten years from
the date thereof. The alleged claim of the University grows out
of transactions occurring more than a half-century ago.

In 1804 the United States Congress granted to the Territory
of Indiana, for the use of a "seminary of learning," 23,040 acres
of lands, which were subsequently located in Gibson County. In
1 806 an act of the Territorial Legislature incorporated the Univer-
sity of Vincennes and named a board of trustees. This board, by
the terms of the act of incorporation, was "authorized to sell,
transfer, convey and dispose of any quantity not exceeding 4,000
acres of the lands" so granted "for the purpose of putting into
immediate operation the State University, and to lease or rent
the remaining part of said township to the best advantage for the
use of the said public school or university."

The board of trustees named organized in 1807, and subse-
quently sold 4,000 acres of said lands and erected a building at
Vincennes for the use of the University.

In 1824, by an act of the General Assembly, the University
was "adopted as the county seminary of Knox County," and
placed "under the direction and control of the board of trustees of
said University."

The preamble of this act makes the following reference to the
building theretofore erected by the board of trustees: "Said
building is rapidly decaying for want of funds to repair the
same," and the second section of the act provides that "the funds
due the public seminary of Knox County be paid to said board of
trustees for repair of buildings and to maintain school."

After the enactment of this law there is no further record of
the meetings or proceedings of the board of trustees until after
the enactment of a law in 1838 reviving such board. The pre-
amble of this act recites that "it is reported that from neglect to
supply the vacancies occasioned by death or removal from the
State, in the board of trustees of said University, it is now doubted
whether a lawful board of trustees can be assembled."

By a joint resolution of the General Assembly, approved Jan-
uary 22, 1820, a superintendent of the 19,040 acres of said lands
remaining unsold was appointed and authorized to rent the same
and to "collect all arrears of rent that may be due the State." So
far as I have beene able to learn, this was the first act of the Gen-
eral Assembly asserting ownership of these lands on behalf of the
State.

In 1822 an act was passed providing for the sale of the lands

346

and appointing a commissioner to superintend the same. In 1824
a further act was passed appointing a superintendent of said
lands.

Under these acts the State took possession of the lands and
sold from time to time 16,840 acres of the same, leaving 2,200
acres unsold and still in its possession. No protest or remonstrance
by the board of trustees against these acts of the State are in evi-
dence, and no action was taken by them to recover the lands sold
until 1843, when suits were begun against the several purchasers
thereof for their recovery.

These suits were the source of much contention and great ex-
citement, and feeling among the defendants thereto became so
high that in 1846 the trustees of the University importuned the
General Assembly to pass, and finally secured the enactment of a
law authorizing them to bring suit against the State "for the pur-
pose of trying the right of the said board of trustees to said town-
ship of lands," in the Marion Circuit Court, giving the said court
"full and complete jurisdiction to try said suit between the said
parties," and that "the final decision of said action, whether in
favor of or against said board of trustees, shall be, final and con-
clusive in the premises, reserving, however, to each of the parties
to said suit the right to appeal as in other cases," and providing
"that if, upon the final hearing of said suit, the same shall be de-
cided in favor of said board of trustees for the Vincennes Univer-
sity, upon said board of trustees relinquishing to the State, for
the use and benefit of the purchasers thereof, so much of said
township of land as the State hath sold, then, and in that case,
there shall be set apart for said board of trustees, the funds arising
from the sale of said township of lands, as also the amount yet
due from the respective purchasers thereof."

The trustees of the University availed themselves of the right
created by this act and began a suit in said court against the State,
which tereminated in a judgment against the State May 21, 1849.

By this decree the University was given a judgment on account
of principal and interest received by the State for such of said lands
as were sold up to December 3, 1847, in the sum of $30,099-96,
on account of moneys still due the State from purchasers of said
land on December 3, 1847, $13,249.19; on account of interest on
moneys held by the State from the date of filing the suit to May
21, 1849, $5,428.87; a total of $48,778.02, and Hu> costs of I lu-
ll tigat ion.

This decree among other things provided "That on compliance

347

with the terms of the said act of the Legislature, that is so soon
fis the complainants shall file in the office of the Auditor of State
a relinquishment, under their common seal, to the State of Indi-
ana, for the use of the purchasers from the State of the lands in
the said township, of and for all the right of the complainants of
and to the lands so sold, then the said sum of $30,099.96 so paid
into the treasury as aforesaid shall be forthwith set apart by the
Auditor of State and Treasurer of State, and, with all the interest
which from the date of this decree may accrue thereon, shall, by the
said officers, be paid to the complainants. And then, also, the said
officers shall transfer to the complainants the evidences or security
for the said sum of $13,249.19 due as aforesaid on the 3d day of
December, 1847, or, if any part thereof or any interest thereon
shall have been paid into the State Treasury since the said 3d day
of December, 1847, the said officers shall pay over the said money
and transfer the balance as aforesaid.

"And it is further ordered, adjudged and decreed that on filing
the relinquishment aforesaid, the complainants are entitled to have
and receive from the said State the amount of interest aforesaid,
to wit: The sum of $5,428.87, with interest thereon from this
date until paid, to be paid in such manner as by law may be pro-
vided."

It is important at this point to give consideration to the fact
that this decree and judgment of the Marion Circuit Court was a
complete and final adjudication of the rights of both the State and
the University as to all the lands sold prior to the beginning of
the suit, December 3, 1847. The judgment required payment by
the State of all money received on account of any such sales prior
to said date, the turning over to the University of all securities for
moneys due the State and unpaid on account of any such sales, and
the payment of interest on all such moneys from the date of filing
the suit to the hour of the decree. The law under which the suit
was brought was more than fair; it was liberal in its provisions.
The State, believing in good faith that it had legal right to sell
these lands and that the title thereto was vested in it, appealed
from the decree of the Marion Circuit Court to the Supreme Court
of the State, and there obtained a reversal of such decree. From
this judgment of reversal the University appealed to the Supreme
Court of the United States, where, in 1855, the decision of the
State Supreme Court was reversed, and the title to the lands in
question held to be in the University.

The decision of the United States Supreme Court reversing

348

that of the State Supreme Court was by a divided court. The
dissenting opinion was prepared by Chief Justice Taney, and ap-
peals to me as being a sounder exposition of the law than the ma-
jority opinion. It is important here to give consideration to the
fact that the question of law involved in the issue concerning the
title of the lands was so close as to cause disinterested, impartial and
able judges to entertain radical and irreconcilable opinions regard-
ing it. In such a case, involving important interests, the State can
not be censured by any just man for having stood upon what
seemed to its officers to be its rights.

By the decision of the United States Supreme Court the case
was remanded to the Supreme Court of the State, where the error
of its former judgment was corrected and the judgment of the
Marion Circuit Court affirmed.

The General Assembly of 1855 passed an act, approved Feb-
ruary 13, 1855, providing for the settlement of this judgment.
This act was passed at the request and in answer to the importunity
of the University and its friends. This is evidenced by the pre-
amble itself, which recites :

"Whereas, It is represented that, for the purpose of settling finally all of
said litigation, as well as of assuring to the said Vincennes University a safe
investment, the board of trustees thereof are willing to accept, in full satis-
faction of all their claim to the said lands, and to the proceeds thereof, in
pursuance of the said act and decree, State bonds to an amount equal to the
amount which might be found due them, according to a fair and equitable con-
struction of said act of January 17, 1846, that is to say, all the money yet due
from the purchasers of said lands, and all the money paid into the treasury
on account of the sales of said lands, and the interest which, under the laws
of the State, has accrued thereon, with the costs of lawsuits and litigation,"
as the basis of such act.

The act itself provided that

"The Auditor and Treasurer of State forthwith proceed to ascertain
the amount for principal and interest equitably due to the said trustees for
the said Vincennes University, by virtue of said act of 1846, and of said de-
cree in equity, and of the claim therein set up, having proper regard to the
decision of the Supreme Court of the United States thereon, so that in no
event the amount determined by them shall be more than that allowed by the
said decree, with interest thereon and the costs, the said interest to be com-
puted to December 31, 1854."

Section 2 of the act provided that

"Auditor and Treasurer shall cause to be prepared and issued to the said,
the board of trustees for the Vincennes University, State bonds, signed by
them as such Auditor and Treasurer, in sums of five and of one thousand dol-
lars each, with a like bond for any fractional sum, payable, principal and

349

interest, to the said board of trustees, or bearer, at the State treasury; the
principal at the pleasure of the State, after thirty years from the date, and
the interest at the rate of 6 per cent, per year, payable semi-annually, on the
first days of July and January hereafter. The said bonds shall bear date the
first day of January, 1855."

Section 3 provided:

"The receipt of the said bonds by the said, the board of trustees of the
Vincennes University shall be deemed and taken to be a release, in law and
fact, by the said board, to the State and to all persons whatever, of said de-
cree and of all right and claim on the part of said board to or on account of
the lands in said Gibson Seminary township, sold by the State, and to all
money being the proceeds thereof or interest thereon, and to all costs and
damages therefor, as fully as a release, under their corporate seal, could in any
manner operate."

Under the authority of this act the Auditor and Treasurer of
State proceed to adjust this claim. The Auditor's report of 1855
contains the following reference to their acts in relation thereto :

"For the purpose of adjusting the claim of the Vincennes University
against the State, on account of the appropriation of the proceeds of the
Seminary township of Gibson County to the State University at Bloomington,
the General Assembly passed an act, approved February 13, 1855, directing
the Auditor and Treasurer of State to ascertain the amount equitably due to
the trustees of the Vincennes University by virtue of a decree of the Marion
Circuit Court, limiting the same to the amount of the judgment, interest and
costs, and having ascertained the amount due to issue to the board of trustees
of the State University (Vincennes University), in full payment of the same,
State bonds bearing 6 per cent, interest, the principal payable in thirty years
from date and interest payable semi-annually on the first days of July and
January. The Auditor and Treasurer accordingly, as required by this act.
investigated the subject and ascertained the amount due under the decree to
be $66,585, for which amount bonds of the description aforesaid were issued
and delivered to the parties claiming them under the law."
Auditor of State's report, 1855, page 17.

In this settlement the University participated, by its counsel,
Samuel Judah, a lawyer of eminent ability, who had represented
it throughout the litigation incident to this claim. Evidence of
this fact is furnished by the record of the proceedings of the
board of trustees itself, an entry therein, under date of May 19,
1855, containing the following:

"On motion of Samuel Judah, Resolved, That Mr. Judah forthwith settle
with the Auditor and Treasurer of State on the part of this board for the
amount due this board from the State, under the act of February 13, 1855."

From these facts it unquestionably appears that the amount of
the decree of the Marion Circuit Court, with interest upon the same

B50

to December 31, 1854, and the costs of the litigation, were the
basis of this settlement. That was what the act of 1855 author-
i/e<{ as Hie maximum amount for which settlement should he made.
It, therefore, follows that as to the lands sold by the State prior to
December 3, 1847, the date of commencing the suit in the Marion
Circuit Court, full and final settlement was made, after the rights
of the parties had been ascertained by trial and decree. As be-
tween individuals such an adjudication and such a settlement
would be conclusive and forever binding. I am unable to conceive
any reason why it should not be equally conclusive and binding
upon this University.

As to so much of the claim, settlement for which is provided
for in this measure, as is based upon the lands sold by the State
prior to* the date named, I am in full accord with my predecessor,
who, as a member of the commission especially appointed to in-
vestigate and pass upon the question, found himself impelled by
sheer force of the law and facts in the case, to decide as follows :

"After making diligent search for historical data and weighing the mat-
ter at hand, I am of the opinion that the University has been fully compen-
sated for the lands taken in hand and sold by the State, applying the pro-
ceeds for the purpose for which the township was set apart by the Federal
Government, as well as making an accounting to the University of Vincennes
for the full amount of the lands sold, plus interest thereon and court costs in
addition thereto. * * * rpne State, as I have said, accounted to and paid
over to them every dollar received from the sale of the lands, and I can not
feel that there has been a dishonorable act on the part of the State. Thc_
State believed the title to the township of land was vested in the State, and
it could make such disposition thereof as was thought best, keeping in view
and carrying out the provisions of the Government in setting apart the land
for the higher school of learning."

In this connection, it is urged that while there is no legal claim
in behalf of the. University against the State on account of the
lands sold prior to December 3, 1847, and while the decree and
settlement thereunder is conclusive and final in law, the settlement
itself "was not a fair, honest or just settlement;" that it was "a
settlement on the State's own terms, a stand-and-deliver settlement,
without equity or justice." If this were true, it would not change
the legal aspect of the case nor add to the authority of the Gen-
eral Assembly to incur a debt against the State. It has no author-
ity to provide for the payment of a debt which has no legal exist-
ence. But the statement itself is without foundation. Both the
act of 1846 and the act of 1855 were passed in answer to the de-
mands and upon the importunity of the University.

351

The records of the University show that in 1843 the board of
trustees entered into a contract with Mr. Judah, one of their num-
ber, and their counsel, by the terms of which he was to prosecute
this claim, and evidence is not wanting that he was earnest and
effective in his efforts to secure the passage of the act of 1846, au-
thorizing the University to sue the State. December 17, 1854, the
trustees adopted the following resolution :

"Resolved, That Samuel Judah, Thomas Bishop and A. T. Ellis be a com-
mittee with full power to make any arrangement they may think proper with
the Legislature concerning the said suit and funds, and in case of the absence
of either, or both Ellis and Bishop, from Indianapolis, Mr. Judah have all
such power; and that the President sign a copy of this order:

"Ordered: That said committee, Judah, Ellis and Bishop, be authorized to
use means, of the proportion of said funds as they may deem necessary to
secure a settlement of these claims."

Subsequently, in a suit involving his fees for this service, Mr.
Judah averred in an answer to the complaint of the trustees, that
lie used $4,500 of the funds of the University "in procuring the
passage of the act of 1855 * * * and that he did so under
and by virtue of the order of said" trustees. In their reply to this
answer the trustees, to quote the language of the Supreme Court,

"Without directly admitting or denying that the expenditures so made
were necessary for the purposes stated in the answer, averred that without the
consent of Ellis and Bishop, Judah fraudulently and corruptly expended such
sums in hiring persons to aid him (Judah) in influencing members of the
Legislature and in bribing members to procure the passage of said act; * * *
that the passage of said act was procured by the joint eiforts of the friends
of the State University and others who contributed as much as defendant
to its passage."

This statement was made by the trustees when the facts were
fresh in their minds, and solemnly written into their reply in their
case against Mr. Judah. I cite it as a complete and final refuta-
tion of the charge that the State, in its sovereign capacity, im-
posed a harsh and undesired settlement upon the University. If
their pleading is true, the representatives of the State were, by
their agent, bribed and coerced into the passage of the law. It
was of their seeking. Let it not be forgotten that the act of set-
tlement "was procured by the joint efforts of the friends of the
State University and others who contributed as much as defend-
ant to its passage," and that the defendant to whom they refer
was their agent mid counsel.

It. is also urged that tlie lands sold by the Stale prior to De-
cember 3, 1847, were of great value, and that the proceeds of such

352

sales, together with interest thereon, was not sufficient compensa-
tion to the University for such lands; that the University, be-
cause of the action of the State, was deprived of the use and
rental of such lands for a term of years. This statement is also
fallacious. The truth is that these lands were of little value ; that
they were sold by the State for what they were reasonably worth,
and for aught that appears for as much as the University received
for the 4,000 acres sold by it. The act authorizing the sale of the
lands was passed in 1822. The finding of the Marion Circuit Court
shows that the State received for them $43,348.15, an average of
$2.57 per acre. Between the date of the organization of the board
in 1807 and 1820, the trustees of the University memorialized Con-
gress on at least three several occasions to be permitted to sell said
lands. From one of these petitions (that of November 15, 1817),
I submit the following :

"Your petitioners would further respectfully represent that with a view
of obtaining an active fund for the benefit of the institution the board of
trustees, conformably to the provisions of the act of incorporation, offered to
lease, in quarter sections, the remaining part of the township. The country,
however, must be settled and improvements considerably advanced before any
reliance can be placed upon a fund derived from that source. Those possessing
the means will purchase. Those confiding in the indulgence of the govern-
ment will spread themselves along the frontiers on the public lands^ and
thousands now prefer the latter to a lease on liberal terms of the land appro-
priated for the use of the University. Few leases being taken, and believing
the arrangement likely to prove unproductive, at least for many years, the
board have, for the present, abandoned the measure."

From another petition, dated January 12, 1818, I submit the
following :

"The trustees are also authorized to rent out or lease the remaining part
of the township for the use of the said University. It appears, however, that
from causes incidental to a new country, where the price of land is low and
the quantity for settlement disproportionate to the population, that the trus-
tees have not been able to make any advantageous disposition of the lands
by granting leases, nor to derive effective resources from rents for the sup-
port of the seminary, and that the unfavorable prospect of their unproductive-
ness for years to come when disposed of in that way has induced the trustees
for the present to abandon the measure."

From yet another petition, dated December 17, 1818, I submit
the f ollowing evidence touching the rental value of these lands :

"It is also observable that this township of land is situated in the vicinity
of the village of Princeton, and that on two of the quarter sections within it
sawmills have been erected with no other means of supply but from the timber
of the seminary lands, and that daily depredations are committed upon the

353

most valuable of this timber. Your memorialists need hardly suggest the idea
that this circumstance will not only prevent an increase of the value of these
lands, but must gradually diminish its value, a circumstance which the utmost
vigilance of your memorialists will not be able to prevent."

The legislation now presented purports to be based, in part at
least, upon a finding made by the Secretary, Auditor and Treasurer
of State, as members of a commission appointed by the General
Assembly of 1903 to make investigation of said claim. Such find-
ing is set out in one of the whereases in the preamble to the bill.
It is as follows :

"After a full consideration of this case, and in view of all the facts, we
are convinced that this University has sustained losses and damages beyond
any reparation that has been made by the State. We therefore recommend
that the sum of $120,548 be appropriated to Vincennes University as a just
and equitable settlement of this matter."

The report filed by the majority of said commission absolutely
and wholly fails to set forth any tangible or specific basis for this
finding.

Governor Durbin was a member of this commission. He par-
ticipated in its deliberations. He was familiar with the arguments
presented to the commission and with the discussion between its
members. He could not concur in the finding of the majority of
the commission, and filed a minority report February 13, 1905.
From his report it becomes apparent that the report of the ma j ority
of the commission, though not disclosing that fact, is based in part
upon the fact that Mr. Judah, counsel for the University, retained
as his fee $25,000 of the proceeds of the bonds issued to the Uni-
versity in settlement of the judgment of the Marion Circuit Court.

The present Executive has personal knowledge, from conver-
sations held with at least two members of the commission who signed
the majority report, immediately after the filing of the same in
January, 1905, that their report is based in part upon this at-
torney's fee. They so stated and sought to justify their finding in
part upon that ground.

It may be true that Mr. Judah charged the University and re-
ceived from it $25,000 for his services as its counsel in the liti-
gation with the State concerning these lands. It may be that the
fee charged was exorbitant. But with that we have nothing to do.
The State is not bound, either in law or in equity, to pay the coun-
sel fees of the University. The question of law involved in the
issue between the University and the State, as hereinbefore sug-
gested, was so close as to cause able jurists, to disagree concerning
[23—19891]

354

it. The State acted in good faith. It thought it was defending its
own. And in such a case it is under no legal or moral obligation
to pay the counsel fees of its adversary. This is especially true
if, as stated by the trustees in their suit against Mr. Judah, he
had used a portion of the funds so retained by him to corrupt the
General Assembly of the State to secure the passage of the act of
settlement.

There is yet another reason why so much of the claim as is
based upon the sale of lands made prior to December 3, 1847,
should not now be considered. The law under which the settle-
ment was made especially provided that "the receipt of the said
bonds by the said, the board of trustees for the Vincennes Uni-
versity, shall be deemed and taken to be a release, in law and fact,
by the said board, to the State and to all persons whatever of said
decree and of all right and claim on the part of said board to or
on account of the lands in said Gibson, Seminary township, sold
by the State, and to all money being the proceeds thereof or in-
terest thereon, and to all costs and damages therefor, as fully as a
release, under their corporate seal, could in any manner operate."

This law, as we have seen, was in fact the University's own cre-
ation. It accepted the terms of settlement there provided, and re-
ceived the $66,585 worth of bonds in final and complete settlement.
On the day it did that it finally and forever estopped itself from
further claim against the State on account of the sale of all lands
prior to December 3, 1847.

On the 3d day of December, 1847, there remained unsold of
the lands granted to the University 2,200 acres, the University
itself having sold 4,000 acres and the State 16,840 acres.

There appears to have been no effort on the part of the board
of trustees to reopen this settlement for a period of forty years.
The matter was presented to the General Assembly of 1895, and
an appropriation of $15,000 was made as an item in the general
appropriation bill, "in full settlement of all claims against the
State." This money was paid to and received by Joseph L. Bay-
ard, treasurer of the board of trustees of the University, under au-
thority of the following resolution adopted by the board, April 1,
1895:

'Resolved, That Joseph L. liayard, treasurer of the board of trustees of
Vincennes University, Vineennes, Fnd., be and is hereby 'authorized and
Urected to m-dve and receipt for the .$15,000 appropriated to the said board
by the Legislature of Indiana at its last session, 1895, and for any and all
warrants issued therefor, and that he notify the secretary and report to
this board as soon as such payment is made."

355

The above resolution followed a report of a committee ap-
pointed by the board of trustees, in which the trustees were ad-
vised "that the acceptance by the University of the amount so ap-
propriated can not prevent the University from presenting the bal-
ance of the claim for payment to a future Legislature, nor pro-
hibit such Legislature from allowing and paying such further sum
as may be justly owning to the University for the reason that the
Legislature at one session can not bind nor control the action of a
future session in matters of this kind."

October 31, 1895, Mr. Bayard receipted the State "in full set-
tlement of all claims of Vincennes University against the State of
Indiana."

After having accepted this appropriation made by the General
Assembly upon the condition that it should be received by the
board of trustees as full settlement of the claim, an effort was im-
mediately set on foot to secure an additional appropriation, and
in 1899 a bill providing for the issuance of $120,000 of bonds of
the State to be turned over to the University, passed the General
Assembly and was vetoed by Governor Mount, from whose mes-
sage I submit the following:

"It will be seen that the State of Indiana, by act of the Legislature, paid
in good faith all the money derived from the sale of these lands to a uni-
versity of learning, and that in addition they paid Vincennes University the
amount of the judgment aforesaid, which was, as shown by the act of the
Legislature and by the receipts, to have been, and was understood to have
been, a full settlement of all claims against the State.

"From this transaction it would appear that there remains no claim in
equity or in law against the State of Indiana by reason of the sale of the
aforesaid 16,845.95 acres. If there remains a claim against the State of
Indiana it must be for 1,584.75 acres, as set out in the report of the Auditor
of State, the value of which the commissioner placed at from 25 cents to 50
cents per acre.

"I have been unable to find what became of that land, for what it was
sold, or what disposition was made of the money. For this 1,584.75 acres it
would seem that the University has a claim, and how far the $15,000 voted by
the General Assembly four years ago goes toward settling that claim, or
whether it oversettles the claim, is a matter I do not know. Four years ago,
when this money was appropriated, it was expressly stipulated in the appro-
priation that the payment of the $15,000 was to be a settlement in full of
all claims against the State of Indiana growing out of the sale of the lands
belonging to the University, and the receipt so stipulated. For the foregoing
reasons I cannot approve this bill."

In 1901 a similar bill to that vetoed by Governor Mount in
1 899 was introduced in the Senate, passed that body, went to the
House, but was defeated iii the House. In 1903 a similar bill was

356

introduced, but not passed, A concurrent resolution, however, ap-
pointed the Governor, Secretary, Auditor and Treasurer of State
as a commission to investigate the claim and report to the Sixty-
fourth General Assembly. That report I have heretofore adverted
to. The Secretary, Auditor and Treasurer of State joined in a
majority report, recommending the appropriation carried in the
present bill. The finding of the majority of the commission does
not disclose the basis upon which it is made, but the minority re-
port filed by Governor Durbin discloses that one of the substantial
elements entering into it was the 2,200 acres of land unsold at the
time of the beginning of the suit against the State in the Marion
Circuit Court in 1847.

As heretofore shown, another element entering into such finding
was the counsel fee paid by the University to its attorney, Mr.
Judah. These are the only two items which give even a semblance
of foundation for the finding of the majority of said commission.

Governor Durbin, in the course of a separate report, speaking
of so much of the claim as is based upon the 2,200 acres of land in
question, said:

"I at one time during the consideration, felt the State should account. for
the 2,200 acres, and agreed with my associates therein, but further light be-
ing shed upon the matter, I am convinced the State should not be held to
account for the neglect to look after and protect their own interests and
property. A century has passed since the land was set apart by the Gov-
ernment and a half century since the settlement made upon the findings of the
court. Naturally the question arises, and quickly so, why has the University
permitted so much time to elapse without seeking to be reimbursed? Why
did not the University take possession of the 2,200 acres? If it had been
sold and not accounted for at the time of the settlement in 1855, why did the
University not at that time ask for the proceeds turned over? If sold by
the State at any time since 1855, why did not the University interpose an ob-
jection and stop the sales or ask for an accounting? It stands out con-
spicuously that the University has not used due diligence in looking after
her own property and protecting her rights, and in this she should not ask the
State to make good to her for any loss sustained. The representatives of the
University have not traced the 2,200 acres to see what disposition has been
made thereof, and displayed no disposition to assist the commission in fer-
reting out who sold them or if they were ever sold. * * * I sincerely
wish I could take a stand for the claim and maintain it with suitable argu-
ment and facts, but I cannot."

It is due to Governor Durbin and to the then Secretary, Aud-
itor and Treasurer of State to say that at the time of the filing of
their report no definite information had been obtained as to what
disposition had been made of the 2,200 acres of land in question.

357

Fortunately, we are now in possession of definite information. I
am advised by the present Auditor of State, under date of Febru-
ary 18, 1907, that the State sold 2,141.75 acres of said lands be-
tween the 13th day of January, 1848, and the 9th day of Novem-
ber, 1864, and that it received therefor the sum of $1,547.30. This
leaves but 58.25 acres of the entire congressional grant unac-
counted for, and which in all probability have never been sold. The
2,200 acres remaining unsold in 1847 are situated in the bottoms
of the Wabash and Patoka rivers, and it is entirely probable that
in so large a tract so located, a shortage of 58.25 acres exists. I
do not believe the University ever had either a legal or an equitable
claim against the State for anything more than the State received
for these lands $1,547.30, with interest thereon. Interest on this
sum at 6 per cent, for fifty-two years amounts to $4,827.57, and
the principal and interest aggregate $6,374.87.

We have already seen that in 1895 the University was paid
$15,000. Interest on this sum at 6 per cent, for twelve years is
$10,800. Principal and interest aggregate $25,800. This sum
less the principal and interest of the money received from the sale
of the 2,141.75 acres of land— $6,374.87 — discloses that the State
has paid the University for these lands, $18,425.32 more than was
due it.

If it is contended that to the $1,547.30 received by the State
from the sale of the 2,141.75 acres of land should be added com-
pound interest, the University is still overpaid. Compound interest
at 6 per cent, for fifty-two years on $1,547.30 is $30,444.46. The
principal and interest aggregate $31,991.76. Compound interest
for twelve years at 6 per cent, on the $15,00,0 paid the University
in 1895 is $20,785.14. Principal and interest aggregate $35,-
785.14. The difference between this sum and the proceeds received
by the State for the lands in question compounded at 6 per cent,
interest for fifty-two years is $3,792.38, and represents the amount
the University has received in excess of what was due it.

It has been said that these lands were worth more than the
State received for them. I have already adverted to this question,
and have shown by evidence taken from petitions and memorials
addressed to the Congress of the United States by the trustees of
the University themselves that this is not true, and in addition to
what I have hereinbefore said upon this subject, I submit that it is
entirely probable that the 2,200 acres of land remaining unsold in
1847 from the 23,040 acres granted by Congress, was the least
desirable of all the lands in the grant. With Government land on

every side purchasable at mere nominal prices, it is reasonably cer-
tain that the lands within this grant first sold were best in quality
and Hint Hie poorest remained. The location of the 2,200 acres
supports this view. They li<' in Hie northwest corner of the town-
ship, in the Wabash and Patoka river bottoms. They, were badly
timbered and inundated, and the commmissioner reports their value
at from 25 cents to 50 cents per acre. The State received an av-
erage of about 70 cents per acre.

I am advised through what I believe to be reliable sources that
at the time the lands were sold they were marshy and wet the year
around, a tangle of vines and timber, and that it was well worth
them to reclaim them. I am also advised that two of the men who
purchased a part of them after paying taxes on their purchase for
years sold it for less than it cost them. These facts taken together
make it morally certain that the State has paid and overpaid the
University ; that there remains no legal obligation. It is equally
clear that there is no equitable or moral obligation that has not al-
ready been generously met and satisfied.

It, therefore, follows that the issuing of the $120,548 of bonds
and their delivery to the trustees of the University provided for
by the pending measure is a gift to the University outright and
without consideration. As I shall hereafter show, the General
Assembly has no authority under the Constitution to give away
public moneys raised by tax levies upon the property of the people
of the State either to individuals or to private corporations, how-
ever meritorious their purpose and however deserving they may be.

It is important in this connection to remember that this bill
does not carry an appropriation of money. It provides for the
creation of a bonded indebtedness against the State, through the
issuing of its bonds, which are to be given away. This is clearly
in contravention of Section 5 of Article 10, of the Constitution of
the State, which provides:

"No law shall authorize any debt to be contracted on behalf of the State,
except in the following cases: To meet casual deficits of the revenue; to pay
the interest on the State debt; to repel invasion, suppress insurrection, or, if
hostilities be threatened, provide for the public defense."

Can it be said that the bonds provided for and the debt created
by this bill are to meet casual deficits in the revenue? Can it be
said that they are to pay the interest on the State debt? Can it
be said they are to repel invasion, to suppress insurrection or to
provide for the public defense? If not, the legislation is invalid.

359

It is not enough to say that the bonds are issued to liquidate a debt
created by the measure which authorizes them. That could be said
in any case.

The word "debt" as used in this section of the Constitution
means a debt within legal contemplation, a valid existing obliga-
tion to pay, which is enforceable in law ; something due from the
State which it is bound to pay. Even the friends of the University
admit that this claim is not a legal obligation ; that it is not such
a debt as could be enforced in the courts. The most they have been
able to say in its behalf is that it is a "sentimental or moral obliga-
tion." To my mind it is clear that it is not even that ; but if it
were, it would not be a sufficient claim upon which to predicate the
issuing of bonds under the above provision of the Constitution.

That the General Assembly has no constitutional power to
make an appropriation of public funds raised by taxation for a
private purpose is agreed by all authorities. In its last analysis
this bill is an attempt to make an appropriation of public funds
for a private purpose, and in effect to take the property of one
citizen and bestow it upon a private corporation through the ap-
propriation of public funds which are to be raised by taxation.
Such an attempt is unconstitutional, and therefore invalid.

McClelland, etc., v. The State, 138 Ind. 321 ;
State, etc., v. Tappan, 29 Wis. 664;
People v. Supervisor, etc., 16 Mich. 253 ;
Bristol v. Johnson, 34 Mich. 123;
Hoagland v. City of Sacramento, 52 Cal. 142 ;
Lowell v. City of Boston, 111 Mass. 454;
Thorndyke v. Inhabitants of Camden, 82 Me. 39 ;
Cooley on Constitutional Limitations, pp. 332-341.

The passage of this law will be of no benefit to the University.
Its provisions are invalid. It can only involve the University in
losing litigation. Believing that the University has estopped itself
by the two several settlements of its claim against the State from
asking for further contribution fcom the State; that its claim
has been already more than paid, and that the present attempt to
compensate it further is an unconstitutional exercise of legislative
authority, I am compelled to refuse executive approval.

J. FRANK HANT.Y,

Governor.

360
HOUSE BILL No. 237.

MARCH 8, 1907.

Mr. Speaker and Gentlemen of the House of Representatives:

I return herewith, without executive approval, House Bill No.
237, relating to the establishment of flag stations on the line of
steam railroads within the limits of towns or cities of more than
2,500 and less than 2,800 inhabitants and of more than 1,750 and
less than 1,850 inhabitants.

The classification sought to be made is unreasonable and arbi-
trary. The act covers one of the subjects inhibited by Section 22,
Article 4, of the Constitution.

. The only basis for the classification is the difference in popula-
tion of the towns sought to be classified. This difference is 300 in
the first classification named and 100 in the second.

The Supreme Court of the State has held that cities and towns
may be classified, under the Constitution, upon the basis of differ-
ence in population and that such laws applicable to a single class
may be regarded as general in their character and not local or
special. But they have recently held that such classification must
be natural and reasonable and not arbitrary ; that it must be found-
ed upon real and substantial differences in the local situation and
necessities of the classes of cities and towns to which it applies.

In a recent case it is said:

"Where such a classification excludes from its operations cities and towns
differing in no material particular from those included in a class, the statute
cannot be upheld."

School City of Rushville v. Hayes, 162 Ind. at 200.

The difference in population in the case cited was but 5, but
the principle involved is the same as that presented in the bill re-
turned herewith.

In a more recent case, where the basis of classification was a
difference in population of a thousand, the reason for the rule is
declared with clearness and force:

"Plainly, a law may be general in its provisions, and may apply to the
whole of a group of objects having characteristics sufficiently marked and
important to make them a class by themselves, and yet such law may be in
contravention of this constitutional prohibition. Thus, a law enacting that in
every city in the State in which there are ten churches there should be three
commissioners of the water department with certain prescribed duties, would
present a specimen of such a law, for it would sufficiently designate a class

361

of cities, and would embrace the whole of such class, and yet it does not seem
to me that it could be sustained by the courts. If it could be so sanctioned,
then the constitutional restriction would be of no avail, as there are few
objects that cannot be arbitrarily associated, if all that is requisite for the
purpose of legislation is to designate them by some quality, no matter what
that may be, which will so distinguish them as to mark them as a distinct class.
But the true principle requires something more than a mere designation by
such characteristics as will serve to classify, for the characteristics which thus
serve as the basis of classification must be of such a nature as to mark the
objects so designated as peculiarly requiring exclusive legislation. There must
be substantial distinction, having a reference to the subject-matter of the pro-
posed legislation, between the objects or places embraced in such legislation,
and the objects or places excluded. The marks of distinction on which the
classification is founded must be such, in the nature of things, as will, in some
reasonable degree, at least, account for or justify the restriction of the legisla-
tion. Principles of this sort can be best elucidated by examples. I have
already given a sample of a mere arbitrary classification, founded on no
casual relation between the subject-matter of such legislation and the things
so classified. A sample of the other, or legitimate kind, would be signified
in a law that 'should give to all cities in the State situated on tide water the
privilege of using such waters in connection with their sewers. In such an
enactment but a part of the cities of the State would be embraced, but
the classification would be lawful and proper, inasmuch as the places em-
braced would be possessed of a characteristic distinct from those possessed by
the excluded places, such characteristic being of such a nature as to afford a
reasonable ground for such special legislation. In the two classes of instances
thus exemplified, the basis of the classification of the one would be by refer-
ence to marks of distinction having no connection with the substance of the
supposed statute; in the other the opposite of this would obtain — so that, in
the former, the classification would be formal and arbitrary; in the latter,
substantial and springing out of the nature of the subject of this legislation.
"Applying these tests, it is evident that the classification in said act is
merely arbitrary, and cannot relieve the same from the infirmity of being
special and local. There is no reason inhering in the subject-matter of the act
for giving the power mentioned therein to cities of a population of between
6,000 and 7,000 according to the last preceding United States census, and not
giving the same to the other cities in the State."

These decisions are so decisive of the question here presented as
to preclude my approval of this measure.

Respectfully submitted,

J. FRANK HANLY,

Governor.

362
HOUSE BILL No. 286.

MARCH 11, 1907.

Mr. Speaker and Gentlemen of the House of Representatives :

I return herewith House Bill No. 286 without executive ap-
proval.

It provides that highways on township, county and road dis-
trict lines shall be apportioned between the trustees of townships
or road districts separated by such lines, by giving to each of
such trustees an equal one-half of such line of road. It then pro-
vides "that all persons living on or near such township, county or
road district lines may be permitted to work their land and poll
tax on such division line roads fronting their lands or as near their
lands as practicable under the direction of the trustee in whose
township such persons reside, and such trustee shall have jurisdic-
tion over such division line roads whether the same be in his divi-
sion or not, to the extent of working such taxes."

This, provision impairs the division of such highways made in
the first part of the proposed bill and divides the jurisdiction over
the highways so apportioned between trustees of the two townships,
and will lead to conflict of authority and much confusion. There
is no especial necessity for legislation upon this subject, as the law
already provides for a division of such highways between the trus-
tees of the townships through which the same run, giving to each
exclusive jurisdiction over the portion assigned to him.
Respectfully submitted,

J. FRANK HANLY,

Governor.

HOUSE BILL No. 473.

MARCH 11, 1907.

Hon. Fred A. Sims, Secretary of State, Indianapolis, Indiana:

Sir — I file herewith House Bill No. 473, without executive ap-
proval, together with my objections thereto, the House of Repre-
sentatives having adjourned at the hour of 5:15 p. m., March 11,
1907, before the expiration of the three days allowed by the Con-
stitution for executive consideration thereof.

Respectfully,

J. FRANK HANLY,

Governor.

Mr. Speaker and Gentlemen of the House of Representatives:

I return herewith, without executive approval, House Bill No.
473.

The bill provides that "options and leases held by persons who
are non-residents of the State, or by foreign corporations, or by
persons for the use of such non-residents or foreign corporations,
on real estate in this State," shall "be recorded in the recorder's
office of the county in which such land is situate within thirty
days from the time of the execution thereof, and all such options
and leases that shall not be recorded writhin such time shall be void
for any purpose whatever." Township assessors are authorized
to list and appraise, for purposes of taxation, "all leases and op-
tions on real estate held by persons who are non-residents of said
State, and leases and options held by foreign corporations, or
for the use of such persons and corporations."

The leases and options referred to relate to leases and options
of real estate taken "for the purpose of prospecting for, and the
development and working of wells for gas, oil, mineral water, or
minerals of whatever nature."

The bill contravenes Section 2 of Article IV of the Constitution
of the United States, which provides that "The citizens of each
State shall be entitled to all privileges and immunities of citizens
in the several States." It also contravenes the Fourteenth Amend-
ment to the Federal Constitution that "No State shall make or en-
force any law which shall abridge the privileges or immunities of
a citizen of the United States ; nor shall any State deprive any
person of life, liberty or property without due process of law ;
nor deny to any person within its jurisdiction the equal protec-
tion of the laws."

Under existing law in this State a resident owner of any in-
strument vesting in him any interest in real estate, is given forty-
five days in which to file such instrument in the office of the recorder
of the county where the land lies. If such instrument is never
recorded, it remains a valid contract as between the grantor and
grantee, and is only void as between the grantee and third parties
acquiring interest in the land subsequent to its conveyance and the
time limit for recording without notice.

The present bill requires non-residents to record such instru-
ments within thirty days from the date thereof and declares all
such as are not thus recorded to be void "for any purpose what-
ever."

This is clearly a discrimination in favor of resident citizens as

364

against the citizens of other States. This is equally true of those
provisions of the bill which require the leases and options in ques-
tion to be listed for taxation.

I am in accord with the evident purpose of the author of the
bill to reach and tax the interests accruing to all persons, resident
or non-resident, in real estate in Indiana, because of any such con-
tracts. It can only be effectively reached, however, by a provi-
sion of law which shall require the taxation of such interest in real
estate as is created by the instrument or instruments in question.

An ordinance of the city of Indianapolis licensing breweries,
distilleries and their depots and agencies established in the city,
with other wholesale dealers in malt liquors, but excepting from
its operation residents of the city doing a wholesale business in bot-
tled beer, was held void for discrimination by the Supreme Court
of this State.

City of Indianapolis v. Bieler, 138 Ind. 30.

An act of the General Assembly providing that "It shall be un-
lawful for any person, association or corporation to nominate or
appoint any person a trustee in any deed, mortgage, or other in-
strument in writing (except wills) for any purpose whatever, who
shall not be, at the time, a bona fide resident of the State of In-
diana ; and it shall be unlawful for any person who is not a bona
fide resident of the State, to act as such trustee," was held invalid,
the court saying:

"Reluctant as we are to hold a statute regularly enacted by the General
Assembly unconstitutional, we cannot avoid the conclusion that the act under
consideration is in conflict with those provisions of the Constitution of the
United States which guarantee to the citizens of each State, and of the
United States, all the privileges and immunities of the citizens of the several
States."

Roby v. Smith, 131 Ind. at 347.

The Supreme Court of the United States held invalid a statute
of the State of Maryland, prohibiting persons, not permanent resi-
dents in that State, from selling, offering for sale or exposing for
sale within a certain district of the State any goods whatever other
than agricultural products and articles manufactured in the State,
either by card, sample or other specimen, or by written or printed
trade-list or catalogue, whether such person be the maker or manu-
facturer thereof or not, without first obtaining a license so to do.
Speaking to the question raised by such act, the court said :

"Inasmuch as the Constitution provides that the citizens of each State
shall be entitled to al] privileges and immunities of citizens in the several

365

States, it follows that the defendant might lawfully sell, or offer or expose
for sale, within the district described in the indictment, any goods which the
permanent residents of the State might sell, or offer or expose for sale in
that district, without being subjected to any higher tax or excise than that
exacted by law of such permanent residents."

Ward v. Maryland, 12 Wall, at 430.

Non-residents are for like reasons entitled to purchase leases
and buy options on real estate in the State of Indiana, and to hold
them subject to the same terms and conditions that residents of the
State purchase and buy and hold them. Restrictions imposed upon
non-residents in this behalf which are not imposed upon resident
citizens, are clearly within the inhibition of the Constitution.

A statute of the State of Oregon, providing for the assessment
of the interest vested in non-resident mortgages on account of
mortgages taken upon real estate in such State, was held valid by
the Supreme Court of the United States ; but the decision is based
upon the fact that the effort of the law was not the assessment of
the mortgage or instrument, but the interest in the real estate
vested by the instrument in the mortgagee, the Court saying:

"The result is that nothing is taxed but the real estate mortgaged, the
interest of the mortgagee therein being taxed to him, and the rest to the
mortgagor. There is no double. taxation. Nor is any such discrimination made
between mortgagors and mortgagees, or between resident and non-resident
mortgagees, as to deny to the latter the equal protection of the laws."
Savings Society v. Multnomah Co., 169 U. S. at 425.

An act of the State of Texas, imposing an attorney's fee in
addition to costs upon railway corporations omitting to pay cer-
tain claims within a certain time after presentation, applying to
no other corporation or individuals, was held unconstitutional,
Mr. Justice Brewer, in the course of the opinion handed down in
the case, stating the rule as follows :

"The act singles out a certain class of debtors and punishes them when for
like delinquencies it punishes no others. They are not treated as other debt-
ors, or equally with other debtors. They cannot appeal to the courts as other
litigants under like conditions and with like protection. If litigation termi-
nates adversely to them, they are mulcted in the attorneys' fees of the suc-
cessful plaintiff; if it terminates in their favor, they recover no attorneys'
fees. It is no sufficient answer to say that they are punished only when ad-
judged to be in the wrong. They do not enter the courts upon equal terms.
They must pay attorneys' fees if wrong; they do not recover any if right;
while their adversaries recover if right and pay nothing if wrong. In the
suits, therefore, to which they are parties they are discriminated against, and
are not treated as others. They do not stand equal before the law, They do

366

not receive its equal protection. All this is obvious from a mere inspection
of the statute."

Gulf, Colorado & Santa Fe Railway Co. v. Ellis, 165 U. S. at 150.

A Tennessee statute, giving preference to resident creditors as
against non-resident creditors in case of insolvency of certain cor-
porations was also declared invalid by the United States Supreme
Court. After citing numerous decisions, it is said :

"If a State should attempt, by statute regulating the distribution of the
property of insolvent individuals among their creditors, to give priority to
ilic claims of such individual creditors as were citizens of that State over the
claims of individual creditors, citizens of other States, such legislation would
be repugnant to the Constitution upon the ground that it withheld from citi-
zens of other States as such, and because they were such, privileges granted
to the citizens of the State enacting it.

"We hold such discrimination against citizens of other States to be repug-
nant to the second section of the fourth article of the Constitution of th '
TuiU'd States."

Blake v. McClunk, 172 U. S. 252.

Respectfully submitted,

J. FRANK HANLY,

Governor.

HOUSE BILL No. 5.

MARCH 13, 1907.

Mr. Speaker and Gentlemen of the House of Representatives:

House Bill No. 5, providing for changes of venue from police
judges to justices of the peace, is herewith respectfully returned
without executive approval.

The present law provides for a change of venue from the police
judge. I know of no substantial reason why there should be pro-
vision for a change of venue from a police court to a justice court.
The police court is a court of much wider and greater jurisdiction
than a justice court. It has power to impose penalties and to ren-
der judgments which justices of the peace do not have. I doubt
the propriety of a change of venue from a court of greater to a
court of less jurisdiction. I believe the enactment of the present
bill would seriously embarrass the administration of the criminal
law in the cities of the State in many instances. The accused, in
criminal cases, would take advantage of the law in order to escape
the danger of substantial punishment.

Respectfully submitted,

J. FRANK HANLY,

Governor.

367
HOUSE BILL No. 75.

MARCH 13, 1907.

Mr. Speaker and Gentlemen of the House of Representatives:

I respectfully return herewith, without executive approval,
House Bill No. 75, providing for the establishment and mainte-
nance of county agricultural and domestic science schools.

As drawn, the bill applies only to counties having a population
between 38,386 and 39,000, a difference of only 614. This is such
a narrow, arbitrary and unreasonable classification as to make the
bill purely local in character and to bring it within the inhibition
of the Constitution.

Reasons and authorities in support of this position have been
given in executive messages heretofore sent to the Sixty-fifth Gen-
eral Assembly relating to the disapproval of other special acts.
For that reason they are not now reiterated.
Respectfully submitted,

J. FRANK HANLY,

Governor.

HOUSE BILL No. 144.

MARCH 13, 1907.

Mr. Speaker and Gentlemen of the House of Representatives:

I return herewith, without executive approval, House Bill No.
144, to authorize and encourage the construction of levees and
dykes and for the straightening and deepening the channels of
rivers and the reclamation of wet and overflow lands by incorpo-
rated associations, and providing for the organization of such as-
sociations and prescribing their powers.

The law creates a system of drainage through the incorpora-
tion of associations, in the board of directors of which is vested,
after the construction of the improvements provided for therein,
the power to keep in repair such improvement and to levy an as-
sessment upon the lands of the persons assessed for the construc-
tion of such improvement, for the purpose of meeting the expenses
of such repair, and makes it the duty of the county auditor of any
county in which any such lands are affected, to spread upon the
tax duplicate such assessments when certified to him by the clerk
of such association. These assessments become liens upon the lands

368

against which they are assessed. In so far as the act relates to as-
sessments for repairs, it provides for no notice of such assessment
to the owners of any lands assessed, and no provision is made for
a hearing or for an appeal.

The levying and collection of such assessments would be the
taking of property without due process of law. Notice and hearing,
a day in court, are fundamental requisites in every law which pro-
vides for the levying of special assessments for the construction of
improvements. Such assessments are justified only upon the
grounds of benefits conferred upon the property assessed. Upon
this question and all kindred questions, the statute to be valid must
provide for notice and for an appeal and a hearing before some
judicial tribunal. The utter failure of this statute in this regard
makes it clearly unconstitutional.

Hille v. Neal, 32 Ind. 341 ;

Davis v. Lake Shore, etc., Ry. Co., 114 Ind. at 369.

In this case it is said, "Notice is an indispensable requisite to
the validity of the proceedings."

In the case of Jordan v. Lewis, 115 Ind. at 492, it is said:
"The, Constitution sanctions no law under which a lien can be
conclusively imposed upon property without first giving the owner
notice, and affording him an opportunity to be heard in some
tribunal competent to administer adequate relief."

See also

Kizer v. The Town of Winchester, 141 Ind. at 696.

Respectfully submitted,

J. FRANK HANLY,

Governor.

HOUSE BILL No. 229.

MARCH 13, 1907.
Mr. Speaker and Gentlemen of the House of Representatives:

I respectfully return herewith House Bill No. 229 without ex-
ecutive approval.

The bill relates to applications for a new trial in civil causes,
and seeks to amend section 422 of an act concerning practice in
civil causes, approved March 7, 1881.

The title, however, wholly fails to set out any part of the title

369

of the act sought to be amended. In fact, the title purports to be
a title to a general bill, but the body of the bill clearly shows that
the bill is wholly amendatory in character.

Section 19, Article IV, of the State Constitution, requires
that the subject of an act shall be expressed in its title. The pres-
ent bill, wholly failing in this regard, would be invalid if enacted.
Respectfully submitted,

J. FRANK HANLY,

Governor.

HOUSE BILL No. 318.

MARCH 13, 1907.

Mr. Speaker and Gentlemen of the House of Representatives:

I return herewith House Bill No. 318 without executive ap-
proval.

The bill provides for the issuing of a State license to teachers
having an average scholarship of not less than eighty-five per cent,
in the branches of study on which such license is issued, who have
taught one hundred months in the public schools of the State. The
present law requires an average scholarship of not less than ninety
per cent, in such branches of study.

The effect of the proposed change would be to lower the stand-
ard of scholarship required for such license. This ought not to
be done. This is especially true at the present time. The legis-
lation recently enacted makes better pay possible for the school
teachers of the State. In exchange for this increased wage the
State is entitled to higher standards and greater efficiency. I
therefore withhold my approval.

Respectfully submitted,

J. FRANK HANLY,

Governor.

[24—19891]

270
HOUSE BILL No. 338.

MARCH 13, 1907.

Mr. Speaker and Gentlemen of the House of Representatives:

I herewith respectfully return House Bill No. 338, relating to
the compensation and prescribing the duties and fixing the fees
to be charged by county sheriffs, without executive approval.

I believe the present law provides ample compensation for the
services rendered by county sheriffs. Certain fees known as "in
and out fees" authorized by law to be taxed by such officers, have
been held to be the property of the respective counties. The mat-
ter, however, is still in litigation. The provisions of the present
bill include these fees and make them the property of the sheriff.
No such fees ought to be provided for in the statute, and I am
fully convinced that where they are provided for they ought to
be returned to the treasury of the county. The matter will prob-
ably be finally settled in the courts without great delay, and such
fees may be construed to be the property of the sheriff. If so,
there will be no need for this legislation even from the standpoint
of the sheriff. If it is not decided that they are the property of
the sheriff, I have no doubt whatever that the people of the State
will be satisfied that they shall be returned to the several local
treasuries.

Respectfully submitted,

J. FRANK HANLY,

Governor.

HOUSE BILL No. 376.

MARCH 13, 1907.
Mr. Speaker and Gentlemen of the House of Representatives:

I return herewith, without executive approval, House Bill. No.
376. From a careful reading of the title of the bill and the word-
ing of the context of the body thereof, it is evident that the in-
tention of the General Assembly was to amend an "Act supple-
mental to an act entitled 'An act to authorize aid to the construc-
tion of railroads by counties and townships taking stock in and
makmg donations to, railroad companies,"5 approved May 12,

' ooV/.

The words "An act supplemental to an act" are omitted from

• »>ry i

o71

the title, causing it to read "An act to amend section one of an act
approved March 9, 1903, entitled 'An act to authorize aid to the
construction of railroads,' " etc.

The effect of the omission is to amend the original act rather
than the supplemental act. This defect I believe to be such as to
invalidate the bill should it become a law, and certainly such as to
prevent it from amending the section of the act really sought to
be amended. I therefore decline to give it executive approval.
Respectfully submitted,

J. FRANK HANLY,

Governor.

HOUSE BILL No.

MARCH 13, 1907.

Mr. Speaker and Gentlemen of the House of Representatives:

I respectfully return herewith, without executive signature,
House Bill No. 393, "to repeal an act entitled an act concerning
the payment of taxes assessed upon omitted property and provid-
ing the manner in which the costs of collecting the same shall be
paid, approved February 17, 1905."

The act sought to be repealed authorizes boards of county com-
missioners in this State to "make contracts for the discovery of,
and report for assessment and taxation, omitted property and cause
the taxes to be collected upon the same," and to deduct "from the
gross amount of said taxes so collected the total cost and expense
of such investigation and collection."

Under the provisions of this act many contracts have been made
by the several boards of commissioners of the State for the dis-
covery anoT report and assessment of sequestered property which
has for years escaped taxation. The aggregate amount of such
property placed upon the tax duplicate in the last two years is
very large. Evidence of the sequestration has not been readily
found. It has been necessary to gather it from many and often-
times distant sources. Little of the property thus discovered would
ever have reached the tax duplicate but for these contracts and the
work done under them. The man who reports his property and
pays his taxes is entitled to have his neighbor do the same. The act
of 1905 lias resulted in compelling the payment of just taxes by
many persons who have been evading the duty imposed upon them
in this regard by the laws of the State.

372

I believe the act to be in the interests of equal taxation and of
sound public policy. I therefore decline to assent to its repeal.
Respectfully submitted,

J. FRANK HANLY,

Governor.

HOUSE BILL No. 443.

MARCH 13, 1907.

Mr. Speaker and Gentlemen of the House of Representatives:

I return herewith, without executive approval, House Bill No.
443, relating to circulating libraries "in any city of this State hav-
ing a population of more than 20,000 as shown by the United
States Census of A. D. 1900."

The limitation to the census of 1900 makes the bill clearly spe-
cial, and brings it within the inhibition of the Constitution as
heretofore shown in other executive messages filed with the re-
spective houses of the present General Assembly, and withholding
executive approval from measures attempting to make similar classi-
fications.

Respectfully submitted,

J. FRANK HANLY,

Governor.

HOUSE BILL No. 518.

MARCH 13, 1907.

Mr. Speaker and Gentlemen of the House of Representatives:

I return herewith House Bill No. 518 without executive ap-
proval.

The bill relates to the raising of funds for the purchase of
school sites and the erection of buildings thereon in towns having
a population of not more than 500, according to the last preceding
United States census.

The classification made is narrow, arbitrary and unreasonable.
The bill is clearly local and special, and within the inhibition of
Section 22, Article IV, of the State Constitution. Reasons and
authorities supporting this view have been given at greater length
in executive messages relating to the disapproval of other local

373

and special measures, sent to each House of the General Assembly
from time to time during its late session, and for that reason they
are not now reiterated.

Respectfully submitted,

J. FRANK HANLY,

Governor.

HOUSE BILL No. 541.

MARCH 13, 1907.

Mr. Speaker and Gentlemen of the House of Representatives:

I return herewith House Bill No. 541 without executive ap-
proval.

This bill is invalid. It is local and special legislation, affecting
taxes levied and collected "for the purpose of building a county
line gravel road between Hobart Township, in Lake County, and
Portage Township, in Porter County, Indiana, said road not be-
ing built because the law was declared illegal," and is inhibited by
Section 22 of Article 4 of the State Constitution. It applies to
Lake County only by name and to a specific township in said
county. The precise question involved is decided in the case of
Board v. Spangler, 159 Ind. at page 582, in which it is declared:

"The attempts to validate the contracts and the assessment of taxes to
pay the bonds upon their maturity were aborted because of the special and
local character of the act."

In this case the Legislature sought to except Owen County
from a gravel road act. The county was not specifically named
as in this instance, but the exception included counties having be-
tween 15,000 and 15,050 inhabitants. The court held the classifi-
cation was so narrow as to apply only to Owen County, and that
it was invalid for that reason.

Respectfully submitted,

J. FRANK HANLY,

Governor,

HOUSE BILL No. 540.

MARCH 13, 1907.

Mr. Speaker and Gentlemen of the House of Representatives:

I return herewith, unsigned, House Bill No. 540, the same
being a bill to authorize and empower the auditor and treasurer
of Lake County, Indiana, "to divert and apply and pay" certain
gravel road taxes levied and collected in said county and now in
the hands of the treasurer thereof "toward the building of the
Swanson et al., gravel road," in Hobart Township, in said county.
The preamble recites that the taxes were levied and collected to
pay the bonds issued for the construction of a public gravel road
in Hobart Township, known as the Swanson et al., road, and
that "said road was not built at said time owing to some illegality
in regard to the bonds issued therefor, which prevented them from
selling"; and that "said road was again voted for and carried in
1906, and bonds therefor were issued and sold, and said road is
now in process of construction in said township."

This statute is in violation of Section 22 of Article 4 of the
State Constitution. It applies to Lake County and Hobart Town-
ship by name. It is therefore clearly local. Under the authority
cited in the message of disapproval of House Bill No. 541, I am
compelled to withhold executive approval.

Respectfully submitted,

J. FRANK HANLY,

Governor.

HOUSE BILL No. 555.

MARCH 13, 1907.
Mr. Speaker and Gentlemen of the House of Representatives:

I herewith respectfully return House Bill No. 555, entitled "An
act for the protection of the sources of supply of water furnished
and used by any municipality and the inhabitants thereof, provid-
ing a penalty for its violation, and declaring an emergency," with-
out executive approval.

The bill makes it "unlawful for any person, firm or corpora-
tion to dig, construct, maintain and operate any well or wells in
State within three thousand feet of any well or wells now or
hereafter constructed, maintained and operated by any municipal

375

water works plant or by any person, firm or corporation holding
the right or privilege to operate a system of water works in and
actually engaged in furnishing water to and for any incorporated
city or town and the inhabitants thereof," except "for household
or agricultural purposes or for use in manufacturing or operating
any railroad where the same does not interfere with the supply of
such water works system."

I doubt both the constitutionality and the propriety of these
provisions, and therefore withhold from them my approval.
Respectfully submitted,

J. FRANK HANLY,

^Governor.

HOUSE BILL No. 602.

MARCH 13, 1907.

Mr. Speaker and Gentlemen of the House of Representatives:

I return herewith House Bill No. 602, "An act concerning the
vacation of plat or plats and any part thereof," without executive
approval.

The title of the bill is defective. I have already signed Senate
Bill No. 133 covering the same subject.

Respectfully submitted,

J. FRANK HANLY,

Governor.

HOUSE BILL No. 603.

MARCH 13, 1907.

Mr. Speaker and Gentlemen of the House of Representatives:

House Bill No. 603 is herewith returned without executive sig-
nature.

The title of the act seeks to amend Sections 1 and 6 and to re-
peal Section 2 of an act concerning drilling, operating, maintain-
ing and abandoning gas and oil wells, approved March 7, 1903.

The body of the act amends Section 3 of the act of March 7,
1903. This is not mentioned in the title. A supplemental section
creating certain misdemeanors and prescribing punishment there-
for is added in the body of the bill, and no mention of this is made
in the title.

376

The Constitution (Section 19 of Article IV) requires that the
subject-matter of an act shall be expressed in its title. The pro-
posed bill fails to comply with this requirement and is, therefore,

invalid.

Respectfully submitted,

J. FRANK HANLY,

Governor.

HOUSE BILL No. 629.

MARCH 13, 1907.

Mr. Speaker and Gentlemen of the House of Representatives:

House Bill No. 629, entitled "An act retaliatory and reciprocal
concerning life insurance companies," is herewith returned with-
out executive approval.

The retaliatory provisions of the bill are unnecessary and un-
called for. The present law provides for reciprocal insurance fees,
and its terms are sufficiently broad to cover every legitimate in-
terest either of the State or of its insurance companies. As a rule,
retaliatory legislation of any kind as between the several States
of the Union is unwise and not in accord with sound public policy.
The examinations of a number of insurance departments consist
simply in a comparison of totals with no expert analysis of the
minutiae of detail that enter into the accountings of insurance
companies, and I do not believe the insurance departments of other
States can justly be required to accept the certificate of the depart-
ment of this State as conclusive evidence, nor do I believe failure
to accept such certificate can justly be made the ground of refusal
to permit companies of such States to do business in the State of
Indiana.

The commissioner of each individual State should be free to
make such examination of the affairs of any company asking ad-
mission to his State, as shall seem to him necessary to a full under-
standing of its affairs. This is especially true as to the amount
and character of its resources, and the extent of its liabilities, and
the integrity of its administration.

Believing the present law to be ample in this respect and its
provisions to be fairer and wiser than the provisions of this bill, I
feel it my duty to withhold executive approval.
Respectfully submitted,

J. FRANK HANLY,

Governor.

377
HOUSE BILL No. 663.

MARCH 13, 1907.

Mr. Speaker and Gentlemen of the House of Representatives:

I return herewith House Bill No. 663 without executive ap-
proval.

The bill relates to fees of county clerks, and provides that all
fees collected from the county treasury as named therein shall be
the property of such clerks. I believe this to be the law now un-
der the decisions of the Supreme Court of the State.

The bill also provides that compensation for making copies of
papers and pleadings required of the clerk of the circuit court, ex-
cept the certificate fee, shall belong to the clerk. These fees un-
der the present law belong to the county, and are required to be
paid into its treasury. The provision seems to me a wise and a
proper one. The several county clerks of the State are well paid
under the provisions of existing statute, and I do not believe their
compensation ought to be augmented. Recent legislation has all
tended toward the elimination of the fee system. It has been sought
to put all officers upon fixed salaries. This tendency is a proper
one. No backward step should be taken. I therefore deem it my
duty to withhold executive approval from the present measure.
Respectfully submitted,

J. FRANK HANLY,

Governor.

HOUSE BILL No. 679.

MARCH 13, 1907.

Mr. Speaker and Gentlemen of the House of Representatives:

I return herewith, without executive approval, House Bill No.
679, amending Sections 1 and 4 of the State tax levy act, approved
March 4, 1905.

By the provisions of that act the State sinking fund levy of
three cents was transferred to the general fund levy, thereby rais-
ing such levy to 12 cents for the years 1905, 1906 and 1907. The
evident intention of the General Assembly, in passing the present
bill, was to leave such levy undisturbed. It fails, however, to carry
out its intention. It seeks to amend the section of the act of 1905
making the levy for the years 1907 and 1908, but the amended
section relates only to the year 1909. The effect of this would be

378

to strike down the levy as fixed in the act of 1905 and leave no
levy whatever for the general fund for the year 1908. I am there-
fore compelled to withhold executive approval.
Respectfully submitted,

J. FRANK HANI.Y,

Governor.

HOUSE BILL No. 711.

MARCH 13, 1907.

Mr. Speaker and Gentlemen of the House of Representatives:

I return herewith, without executive approval, House Bill No.
711, providing "that any person having the ownership of real
estate liable for taxation within the State of Indiana, and being
indebted in any sum, secured by mortgage upon real estate, may
have the amount of such mortgage indebtedness, not exceeding
$1,200.00, existing and unpaid upon the first day of March of
any year, deducted from the assessed valuation of the mortgage
premises for that year * * * provided that no deduction
shall be allowed greater than one-half of such assessed valuation
of said real estate."

The present law exempts $700.00. Under it last year $48,-
048,455 of property was omitted from taxation. The present bill
increases the exemption to $1,200.00. Based on the exemption of
last year, it would mean an increased exemption of $35,000,000,
or a total of more than $83,000,000.

The statute has led to widespread abuse throughout the State.
Many fictitious mortgages have been executed and placed of record
for the purpose of securing this exemption — mortgages from hus-
band to wife, wife to husband, father to son, son to father, have
been frequent. These facts are familiar to the taxing officers of
the State, and especially to the members of the State Board of Tax
Commissioners. If the present bill were to become a law, it would
but increase the temptation in this behalf. A limit to mortgage
exemptions must be reached somewhere, unless the General Assem-
bly intends to provide for the exemption of the mortgage indebt-
edness of all flu- citi/ens of the State, whatever its magnitude.

Believing that this limit should not exceed the sum named in
the present statute, I cannot assent to its incrensv.
Respect fully submitted,

J. FRANK HANLY,

Governor.

379
HOUSE BILL No. 633.

MARCH 16, 1907.

Mr. Speaker and Gentlemen of the House of Representatives:

I return herewith House Bill No. 633 without executive ap-
proval.

The title of the bill reads as follows : "An act concerning the
government of school cities having more than 25,000 and less than
36,500 population, according to the last preceding United States
census, and matters connected therewith, and declaring an emer-
gency."

The body of the act, however, provides : "That all school cities
of this State which have a population of more than 25,000 and
not less than 36,500 inhabitants, as shown by the last preceding
United States census, shall be governed by the provisions of this
act."

It was evidently intended that the bill should apply to cities
having a population of not less than 25,000 and not more than
36,500 inhabitants. The words of classification, however, used in
the body of the act make it apply only to cities having 36,500 or
more inhabitants. This includes all the large cities of the State —
a thing that, in my judgment, was not intended by the Legislature,
and of which the people of these cities had no notice.

The error seems to have crept into the bill upon enrollment. I
am not opposed to the provisions of the bill, and if it applied to
the class of cities to which it was intended to apply, I should
be inclined to give it my approval. I do not believe I am justified,
however, under the circumstances, in signing it.
Respectfully submitted,

J. FRANK HANLY,

Governor.

Senate Veto Message, Special Session
of Sixty- Fifth General Assembly

(381 1

383

SENATE ENROLLED ACT No. 561.

OCTOBER 5, 1908.
Mr. President and Gentlemen of the Senate:

I find Senate Enrolled Act No. 561, the same being "An act to
amend Section 2 of an act entitled 'An act concerning coal mines,
and to provide for the health and safety of persons employed in
coal mines, and matters connected therewith, and providing pen-
alties, and repealing all laws in conflict therewith,' approved
March 9, 1907," to be in every substantial particular identical with
House Enrolled Act No. 374.

I have signed said House act. I therefore withhold executive
signature from said Senate act, as no particular purpose could be
effected by two identical acts upon the same subject.
Respectfully submitted,

J. FRANK HANLY,

Governor.

Proclamations

IL'5— 19891 ] (385)

ARBOR DAY

ARBOR DAY, 1905.

UNITED STATES OF AMERICA, STATE OF INDIANA,
EXECUTIVE DEPARTMENT.

A Proclamation:

The planting of trees is a public benefaction. Whosoever
plants one makes the earth more habitable and a happier place in
which to dwell, and thereby earns the grateful praise of coming
generations.

Believing that systematic and persistent effort wrill restore in
some measure the all but inexhaustible and limitless forest which
once covered the larger portion of the area of this Commonwealth,
but which is now gone; and in conformity to a law solemnly
enacted and approved, I, J. Frank Hanly, Governor of the State
of Indiana, do hereby designate and proclaim Friday, April 21,
and Friday, October 20, 1905, as Arbor Days, to be observed
throughout the State by the planting of trees and shrubs upon
the grounds about all public buildings and public institutions and
upon the public highways, as well as upon grounds about private
homes, for their adornment and beautification.

Each of said days is hereby designated and set apart as a day
of rest and celebration by all the people.

Those in charge of the schools of the State, whether public or
private, are hereby recommended and urged to observe each of said
days, in so far as the same may be practicable, by public exercises
of a character calculated to teach their respective pupils the wis-
dom and necessity of the planting, the culture and the care of
trees.

By so doing we will add to the beauty, the wealth and the
resources of the State and to our own culture and happiness.

Done at the Capitol of Indiana, in the City of Indianapolis, this
first day of April, in the year of our Lord, nineteen hundred and
five, in the year of the Independence of the United States the 129th
and of the State of Indiana the 89th.

J. FRANK HANLY,

[SEAL.] Governor of Indiana.

By the Governor :

DANIEL E. STORMS,

Secretary of State.

(387)

388

ARBOR DAY, 1906.

UNITED STATES OF AMERICA, STATE OF INDIANA,
EXECUTIVE DEPARTMENT.

A Proclamation :

In accordance with custom, and in the interest of forestry cul-
tivation, I, J. Frank Hanly, Governor of the State of Indiana,
do hereby designate and proclaim Friday, April 27, and Friday,
October 26, 1906, as Arbor Days, and earnestly recommend that
each of said days be observed by the people throughout the State
as a day of rest and celebration ; that these days be characterized
by the planting of trees and shrubs upon the grounds about public
buildings and public institutions, upon public highways and about
private homes.

It is further recommended to those in charge of the schools of
the State, both public and private, that each of said days be ob-
served, as far as practicable, by public exercises of a character
calculated to impress their respective pupils with the wisdom and
necessity of the planting, the culture and the care of trees.

Let us add to the beauty and the adornment of our public
grounds, our public highways and our own homes by a general
observance of the recommendations herein made, that those who
come after us may inherit a land of tree and shrub, of flower and
fruit.

Done at the Capitol of Indiana, in the City of Indianapolis,
this 18th day of April, in the year of our Lord, nineteen hun-
dred and six, in the year of the Independence of the United States
the 130th and of the State of Indiana the 90th.

J. FRANK HANLY,

[SEAL.] Governor of Indiana.

By the Governor :

FRED A. SIMS,

Secretary of State.

ARBOR DAY, 1907.

UNITED STATES OF AMERICA, STATE OF INDIANA,
EXECUTIVE DEPARTMENT.

A Proclamation :

The mysteries of the changing seasons are about us. Budding
foliage, bursting flowers and fragrant blossoms are everywhere.
The air is vibrant with the babble of many waters and with the
cries and songs of nestling birds. April — changing, fickle, win-
some April — sits again "At the loom of Spring," weaving of air
and sunlight and of dew and shower a thousand "wonder fabrics."
Unseen but vital and mysterious forces are revivifying the earth
and calling unto us to join in Nature's annual triumph over death.

To this call we can make no more appropriate answer than to
set apart a day for the celebration of the return of this glad new
season, and for the planting of trees and shrubs. Every tree
planted makes the earth more habitable and a happier place in
which to dwell. It adds, also, to the material welfare of the State.

Therefore, in accordance with precedent and custom, and in
keeping with the moving and impelling forces about us, I, J. Frank
Hanly, Governor of the State of Indiana, do hereby designate, set
apart and proclaim Friday, April 26, and Friday, October 25,
1907, as Arbor Days, and recommend that each of said days be
observed by the people of the Commonwealth as a day of rest and
celebration ; that the ceremonies incident to the celebration of these
days be characterized by the planting of trees and shrubs upon the
grounds about public buildings and public institutions, upon the
public highways and about private homes ; that those in charge of
the benevolent institutions of the State give recognition to these
days by fitting observance, and that the schools, public and private,
observe them, as far as practicable, by public exercises of such a
character as will give the children of the State a better understand-
ing and a higher appreciation of tree and bird life.

Let this be done in the interest of forestry cultivation, and with
a view to adding to the beauty and the wealth and resources of the
State, and to our own culture and happiness and the culture and
happiness of our children. To him who understands the life of
tree and bird and the lessons taught by them "The whispering

390

grove a holy temple is," and every bird that lias the gift of song,
God's messenger.

Done at the Capitol of Indiana, in the City of Indianapolis,
this sixteenth day of April, in the year of our Lord, nineteen hun-
dred and seven, in the year of the Independence of the United
States the 131st and of the State of Indiana the 91st.

J. FRANK HANLY,

[SEAL.] Governor of Indiana.

By the Governor :

FRED A. SIMS,

Secretary of State.

ARBOR DAY, 1908.

UNITED STATES OF AMERICA, STATE OF INDIANA,
EXECUTIVE DEPARTMENT.

A Proclamation :

One October morning fifteen hundred years ago the people —
men, women and children — of the little Swiss town of Brugg
marched to the forest and each digged up a young tree and trans-
planted it to the village commons. The trees grew and in after
years made happy the children of those who planted them.

In 1872 this ancient act of tree planting was repeated by the
people of an American commonwealth — Nebraska. Since then it
has become an annual event throughout the Union. In our own
State both law and custom sanction the setting apart of two days
for this purpose each year, one in the Spring and one in the Au-
tumn.

Therefore, I, J. Frank Hanly, Governor of the State of In-
diana, do hereby designate and proclaim Friday, April 24, and
Friday, October 23, 1908, as Arbor Days, and recommend that
they be observed as such by the people of this Commonwealth.

For more than a century we have been a tree-destroying peo-
ple. We have denuded the land, impoverished ourselves and dissi-
pated the patrimony of our children. By planting trees and
shrubs on grounds about public buildings, schoolhouses, colleges
and state institutions, upon public highways, along streams and

391

public parks and on village commons, on farms, in gardens and
about country homesteads, we shall in part atone for the waste
of the past and make some provision for the needs of the future.

The need in this direction for sytematic, well-directed effort
is imperative. A treeless land is a desolate land, exposed to ex-
tremes of heat and cold, of flood and drought.

Nature's grandeur finds its highest expression in

"A living monumental tree,
True type of immortality";

"A nobler object than a king in his coronation robes."

Beauty, strength and majesty all are there. Its drapery of
green, murmuring leaves and whispering boughs invite both youth
and age, the one to "love's millennial morn" ; the other to rest in
solemn contemplation. Religion, poetry and history consecrate
and hallow it as though it were a temple. Amid its clustering
foliage the "low love language" of birds is heard, and "soft,
soul-like sounds" that catch and hold the ear.

Within its cooling shadows lowing, gentle herds of kine seek
content and ease, and tired and weary laborers find repose. Be-
neath its spreading, wind-tossed branches light-hearted, care-free
children laugh and romp.

The observance of these days is helpful now to us, but in keep-
ing them we look beyond the present to future ages. We plant
not for ourselves, but for posterity.

Let us cease to be a tree-destroying people and become a tree-
planting, tree-preserving people. Let those in charge of the edu-
cational and benevolent institutions of the State give fitting recog-
nition to these days ; let all schools, public and private, observe
them. Let memorial trees be planted in memory of the Nation's
departed great, and forests started to adorn and enrich the land.

Done at the Capitol of Indiana, in the City of Indianapolis,
this 13th day of April, in the year of our Lord, nineteen hundred
and eight, in the year of the Independence of the United States
the 132d, and in the year of the admission of the State of Indiana
the 92d.

J. FRANK HANI>Y,

[SEAL.] Governor of Indiana.

By the Governor :

FRED A. SIMS,

Secretary of State.

392

MEMORIAL DAY

MEMORIAL DAY, 1905.

UNITED STATES OF AMERICA, STATE OF INDIANA,
EXECUTIVE DEPARTMENT.

A Proclamation:

In pursuance of established custom, in obedience to formal legis-
lative enactment, in memory of past sacrifices and in acknowledg-
ment of exalted services unselfishly rendered, I, J. Frank Hanly,
Governor of the State of Indiana, do hereby appoint, set apart
and proclaim Tuesday, the thirtieth day of May, 1905, as Memorial
Day.

And I also do hereby sincerely recommend that the day be de-
voutly observed throughout the State by all the people in com-
memoration of the devotion, the valor and achievements of our
soldier dead, wheresoever and in whatsoever war they fell and
wheresoever they may rest.

They are dead. The inanimate soil of a continent, the multi-
plying sands of the islands of the seas, and the solemn waters of
the great deep cover their silent forms, but their memories still live
and are ever present in the thought and heart of a virile and a
mighty people, and their souls still go marching on, inspiring and
impelling us, their countrymen, to acts of patriotism, to love of
country and to obedience to its laws.

They are dead. They died for the rights of man. They died
for free institutions. They died to preserve the solidarity of the
Nation. They died for liberty buttressed by law.

And now, lest we forget the things for which they died, let us
every one desist from our several occupations on this day. Let
business cease. Let public offices be closed. Let us devote the day
to sacred memories and consecrate it to holy purposes. Let it be
a day of tribute to the dead and a day of honor to the living. Let
music and song, oratory and flowers, testify the sincerity of our
gratitude and be-speak the constancy of our love. Let the flag,
beneath whose folds they marched to death and glory, be seen at
half mast on every public building and about the portals of every

393

*,

priyate home. Let the children participate in the public cere-
monies of the day. Let them It-am from what we say and do and
from the sincerity of our devotion the value of free institutions
and of the goodly land in which they live, and which is soon to be
given into their k.eeping.

Let the thoughtless, the careless and the gay refrain from
frivolous and noisy amusements and pastimes and give one day
to the consideration of the verities of life and its obligations.

Let the unworthy and the dissolute remember the day and in-
fract not the law.

Let us all, everywhere and everyone, come with clean hands
and pure hearts, and in shoes of sandalwood make public acknowl-
edgment of the debt of gratitude we owe them, and in the presence
of one another Tet each renew his high resolve to preserve the in-
heritance they have left us.

Such an observance of the day as is herein recommended will
do more than honor the dead — it will be helpful to the living, it will
lift us to higher citizenship, and will go far toward vindicating the
right of popular government to endure.

Done at the Capitol in Indianapolis, and given under my hand
and the Great Seal of the State, this 12th day of May, in the year
of our Lord, nineteen hundred and five, in the year of the Inde-
pendence of the United States the 129th, and in the year of the
admission of the State of Indiana the 89th.

J. FRANK HANLY,

[SEAL.] Governor of Indiana.

By the Governor :

DANIET, E. STORMS,
Secretary of State.

394
MEMORIAL DAY, 1906.

UNITED STATES OF AMERICA, STATE OF INDIANA,
EXECUTIVE DEPARTMENT.

A Proclamation:

In the name of our soldier dead, in acknowledgement of their
transcendent, service, and in memory of their exalted devotion and
unexampled sacrifices, I, J. Frank Hanly, Governor of the State of
Indiana, do hereby designate and set apart Wednesday, the thir-
tieth day of May, 1906, as Memorial Day.

It is fitting that we pause in • the glad springtime, when the
earth is filled with the laughter of children, with the songs of birds
and the murmur of hurrying waters, and beautified by flower and
vine and shrub and tree and field and sky, and turn for one day
from the varied cares and complex activities of our daily lives, to
count again the cost of freedom and recall the valor of those who
saved the land and kept the flag.

Let us make this the holiest day in the calendar of all the years
— sacred as the cause for which they died. Let toil be discontinued.
Let business cease. Let all public offices be closed. Let the flag
be seen everywhere — at half-mast from public buildings, State,
county, town and city ; wrrapped about the portals of our homes,
and planted upon every mound beneath which a soldier sleeps. Let
the people assemble in church and cemetery, and with music, oratory
and song pay tribute to their memory. Let affection's grateful
tears embalm anew

"The turf that wraps their clay,"

and gentle, tender hands spread wide the floral evidences of our
love.

Let us so keep this day that the surviving comrades of our dead
may know we do not forget ; that our children may be assured of
the sincerity of our devotion, and that our young men and women
may be reimpressod with the value of free institutions and the
sacredness of obligations by them about to be assumed.

Standing at the chancel of memory's holy shrine, let us renew
the covenant made with Lincoln at Gettysburg, "That these dead
shall not have died in vain — that this Nation, under God, shall have
a new birth of freedom," — a "new birth" more glorious and abiding
even than the old.

395

That the day be a Memorial Day in spirit and in truth, I urge
that all the people refrain from frivolous and noisy amusements,
and that none infract the law.

Done at the Capitol in Indianapolis, and given under my hand
and the Great Seal of the State, this 16th day of May, in the year
of our Lord, nineteen hundred and six, in the year of the Inde-
pendence of the United States the 130th, and in the year of the ad-
mission of the State of Indiana the 90th.

J. FRANK HANLY,

[SEAL,.] Governor of Indiana.

By the Governor :

FRED A. SIMS,

Secretary of State.

MEMORIAL DAY, 1907.

UNITED STATES OF AMERICA, STATE OF INDIANA,
EXECUTIVE DEPARTMENT.

A Proclamation:

Since the Civil War a generation has been born and reared and
is now nearing the zenith of its power.

This generation will soon govern the country — make its laws
and interpret and execute them and administer its affairs.

The beneficiaries of one hundred and thirty years of unex-
ampled sacrifices, transcendent services and exalted devotion, love
of country and of freedom and thankfulness to those who founded
and to those who preserved the government, should impel us to
make acknowledgment of our obligation, give expression to our
gratitude and renew the covenants of our citizenship.

Moved by this thought, in compliment to the living soldiery of
the Republic, and pursuant to custom grown sacred as the love
we bear the martyred dead, I, J. Frank Hanly, Governor the State
of Indiana, do hereby designate and set apart Thursday, May 30,
1907, as Memorial Day, and proclaim the same a legal holiday
throughout said State.

Universal observation of the day is recommended and urged.
Public offices should be closed. Business should be suspended and

396

toil discontinued. Frivolous and noisy amusements should be
avoided and the law respected.

In the National cemeteries near the great battlefields of the
Southland and about the prison at Andersonville, where gaunt and
glwstlv famine stalked and disease and thirst made death a wel-
come visitor, there — over the graves of all, even of the unknown —
the forget-me-nots are in bloom today in annual commemoration
of their exalted sacrifice. And there each recurring Spring above
their formless dust they spread their fragrance sweet as silence.

These, all these, gave their lives, and the unknown ones gave in
addition their identity forever, that "Government of the people, for
the people and by the people might not perish from the earth."
We, their children, can not forget them. We can not forget what
they did. Nor can we forget why they did it. We can not be
less mindful than the flowers.

Of all the brave and gallant hosts who have marched to battle
in Freedom's cause on this continent and who have died amid its
carnage or in the peace of the intervening years there remains to
us nothing visible — nothing that the sense of sight or touch can
comprehend — save narrow graves in scattered cemeteries. Since
these are all we have let us seek them out on this day wheresoever
they may be and leave upon them some tribute of our love — a
wreath, a flower, a flag. Let these graves be to us as so many holy
shrines at whose portals our own lives shall be consecrated. Let no
idle ceremony there be heard or held. Let neither music, song nor
spoken word give voice or tongue to aught but the heart's resolves.
The dead may not hear ; they may riot know ; it may be that they
will sleep on unconscious alike of both our tribute and our presence.
But we shall hear and we shall know, and our children shall hear
and know, and we and they shall be lifted thereby to higher citizen-
ship and our feet turned into holier ways.

Done at the Capitol in Indianapolis, and given under my hand
and the Great Seal of the State, this 18th day of May, in the year
of our Lord, nineteen hundred and seven, in the year of the Inde-
pendence of the United States the 131st, and in the year of the ad-
mission of the State of Indiana the 91st.

J. FRANK HANLY,

[SEAL.] Governor of Indiana.

By the Governor :

FRED A. SIMS,

Secretary of State.

397
MEMORIAL DAY, 1908.

UNITED STATES OF AMERICA, STATE OF INDIANA,
EXECUTIVE DEPARTMENT.

A Proclamation :

In obedience to the will of the people of this free Commonwealth
as expressed in legal enactment and by long established precedent ;
moved by gratitude and affection and impelled by reverential mem-
ories of the Nation's soldier dead, I, J. Frank Hanly, Governor of
the State of Indiana, do hereby set apart and proclaim Saturday,
May 30th, 1908, a Memorial Day, to be observed in their honor,
and declare the same to be a lawful holiday throughout the bound-
aries of said State.

A grateful Nation cannot forget its defenders, nor the lovers
of liberty cease to remember them that saved the temple of Freedom
from destruction.

They gathered up, each for himself, "all the cherished purposes
of life — its aims and ambitions, its dearest affections — and flung
all, with life itself, into the scale of battle." They died in de-
fense of the rights and liberties of mankind and they should share
for all time in the glory of the cause for which they died. Their
valor immortalized the Nation, their sacrifice ennobled the race.
For four years they and their comrades, from Sumter to Appo-

mattox, became

"The pillar of the people's hope,
The center of the world's desire."

Their faith was flawless, their consecration unselfish and entire,
their daring heroic, their courage sublime. But for them Liberty
would have here no habitation, freedom no temple. Grateful ob-
servance of this day is both our duty and our privilege. Their
graves billow every battle-field, and make shrines of many places.
Let us turn with tenderness to the passionless mounds that hold
their mortal dust — in cemetery, churchyard, lonely lawn, far dis-
tant grove, and national field. Let none be forgotten or overlooked.
Let even the unknown be remembered. Let their sepulchers, how-
ever humble and wherever found, be to us so many baptismal fonts
at which to renew our faith in the cause they defended, and to re-
dedicate ourselves to the service of the government they preserved.

398

Let us on this day above all others respect the law and obey
its mandates. Let us not desecrate the hour with frivolous and
noisy amusements. Let the ceremonies held be the expression of
the heart's sincere affection. Let the occasion be marked with song
and speech and flower and by the silence which alone can charac-
terize the feelings of the soul in its highest hours — a tribute more
eloquent than speech can ever be.

Done at the Capitol in Indianapolis, and given under my hand
and the Great Seal of the State, this 19th day of May, in the year
of our Lord, nineteenth hundred and eight, in the year of the In-
dependence of the United States the one hundred and thirty-
second, and in the year of the admission of the State of Indiana the
ninety-second.

J. FRANK HANLY,

[SEAL,.] Governor of Indiana.

By the Governor :

FRED A. SIMS,

Secretary of State.

399

LABOR DAY

LABOR DAY, 1905.

UNITED STATES OF AMERICA, STATE OF INDIANA,
EXECUTIVE DEPARTMENT.

A Proclamation :

By virtue of the authority vested in me by law, and in con-
formity with long established custom and formal legislative enact-
ment, I, J. Frank Hanly, Governor of the State of Indiana, do
hereby designate and set apart Monday, September fourth, one
thousand nine hundred and five, as Labor Day, and I do hereby fur-
ther proclaim the same as a special holiday and recommend that it
be observed as such, not only by those who toil, but by men and
women everywhere throughout the State, whatever their field of
labor or their occupation.

This Nation, with all it represents or is, is labor's contribution
to the present sum of human peace and happiness. Within little
more than a hundred years, with the aid of her twin servants, capi-
tal and science, she carved it out of the depths of primeval forests
and the solitudes of pathless prairies ; bridged its streams, revealed
the hidden treasures of its fields and mines, builded its villages and
towns, established its cities, reared within its borders homes in-
numerable, and bound them all into one with belts of steel and end-
less threads of wire. Through the divine ministry of toil the full-
ness of the land is ours. We live in favored times. The elements
of the soil, of the air, and of the sky, and the seasons themselves
have conspired with labor to make this a year of immeasurable
plenty throughout the Nation and especially within our own goodly
Commonwealth.

It is therefore meet and proper that we set apart this day to
celebrate labor's triumphs and to do honor to her children.

Therefore, let the flag — emblem of law and order, and of the
equality of our citizenship — be publicly displayed. Let public and
private business be suspended as far as may be consistent with
necessity, and especially let those, so far as practicable, wrho labor
with their hands be released from the performance of their daily

400

tasks in order that they may have one day free from toil and care.
Let the spirit of the occasion be such as becomes a glad and joyous
celebration of the mighty force that has made us great both as a
State and as a Nation, and upon which depends the prosperity and
happiness of our posterity.

In Witness Whereof, I have hereunto set my hand and caused
to be affixed the Great Seal of the State of Indiana, at the Capitol
in the city of Indianapolis, this twenty-eighth day of August, in
the year of our Lord, one thousand nine hundred and five, of the
Independence of the United States the one hundred and thirtieth,
and of the admission of the State of Indiana the eighty-ninth.

J. FRANK HANLY,

[SEAL.] Governor of Indiana.

By the Governor:

DANIEL E. STORMS,
Secretary of State.

LABOR DAY, 1906.

UNITED STATES OF AMERICA, STATE OF INDIANA,
EXECUTIVE DEPARTMENT.

A Proclamation:

It is meet and fitting that a people who believe in the dignity
and sovereignty of labor, in its wholesomeness, and in the glory of
its opportunity, should pause in the rush of affairs, once each year,
to give formal expression to such belief, and to make public ac-
knowledgment of the great part the toilers of the land have borne
in the reclamation of a continent and in the upbuilding of the Na-
tion.

Therefore, I, J. Frank Hanly, by virtue of the authority vested
in me as Governor of the State of Indiana, do hereby designate and
set apart Monday, September 3, 1906, as Labor Day, and do also
further appoint and proclaim the same as a holiday within the
State of Indiana, and do recommend that it be observed and cele-
brated as such by all citizens of the State wherever they may be
and whatever their form of toil or occupation.

Let the flag — emblem of liberty, equality and opportunity-
be everywhere displayed. Let all public and private business be

401

suspended, so far as necessity may permit, that all may join in the
celebration of labor's achievements and of the honorable estate it
has attained in this free land.

In Testimony Whereof, I have hereunto set may hand and
caused to be affixed the Great Seal of the State of Indiana, at the
Capitol in the City of Indianapolis, this twenty-seventh day of
August, in the year of our Lord, nineteen hundred and six, in the
year of the Independence of the United States the 131st, and in
the year of the admission of the State of Indiana the 91st.

J. FRANK HANLY,

[SEAT,.] Governor of Indiana.

By the Governor :

FRED A. SIMS,

Secretary of State.

LABOR DAY, 1907.

UNITED STATES OF AMERICA, STATE OF INDIANA,
EXECUTIVE DEPARTMENT.

A Proclamation :

By virtue of the authority vested in me as Governor of the state
of Indiana, I, J. Frank Hanly, do hereby designate, set apart and
proclaim Monday, September 2, 1907, as Labor Day, and I do here-
by further declare the same a legal holiday and recommend its ob-
servance as such by all the people of the Commonwealth.

It is meet and proper that this day should be set apart by the
Executive and observed by the people. Custom and law contem-
plate its recognition, and duty and privilege prompt its observ-
ance. Labor is the bedrock of our greatness as a State and the
foundation of our civilization. Willingly undertaken and rightly
understood, it is a boon and not a burden ; a blessing and not a
curse. It ennobles and exalts him who performs it, gladdens the
heart, stirs the soul with the exaltation of achievement, and makes
consecrated citizenship a possibility. He who has never known
the joy of creative toil is indeed unfortunate. The man who toils,
without bitterness, to build a home for those dependent upon him,
where family altars may be erected and into which the love of
wife and child may come to sweeten and inspire his life, is an asset
[26—19891]

402

of incomparable value to any people, and especially so to a free,
self -governing people. His well-being and happiness make for the
advancement and security of all we most love, and should consti-
tute our first concern.

That all should share in the annual celebration of labor's worth
and accomplishments is, therefore, but the recognition of a high
and an admitted obligation and the exercise of a grateful privilege.
In this spirit then let the day be celebrated. Let all public offices,
state, county and municipal, be closed and all labor be suspended
wherever possible. Let tasks and burdens be laid aside and the day
be given over to rejoicing, to rest and to thoughtful, sane consid-
eration of how the toiler's present high estate may be yet further
advanced.

The law forbids the sale on this day of intoxicating liquors to
be used as a beverage. It is important that its mandate should be
obeyed. First, because it is the law's word ; second, that the cere-
monies of the day may not be marred, but may be suited to the
presence of women and children.

Done at the Capitol in Indianapolis, and given under my hand
and the Great Seal of the State, this 24th day of August, in the
year of our Lord, nineteen hundred and seven, in the year of the
Independence of the United States the 131st, and in the year of
the admission of the State of Indiana the 91st.

J. FRANK MANLY,

[SEAL.] Governor of Indiana.

By the Governor:

FRED A. SIMS,

Secretary of State.

LABOR DAY, 1908.

UNITED STATES OF AMERICA, STATE OF INDIANA,
EXECUTIVE DEPARTMENT.

A Proclamation :

In recognition of the sovereignty of Toil and of Labor's incom-
parable contribution to the welfare and happiness of the people
of this Commonwealth, I, J. Frank Hanly, by virtue of the au-
thority vested in me as Governor of the State of Indiana, do hereby

403

set apart and proclaim Monday, September 7, 1908, as Labor Day,
and do hereby constitute and declare the same a legal holiday
throughout the confines of said State and recommend its fitting ob-
servance by all citizens everywhere.

Labor is the one source of wealth. The genius both of pro-
duction and of commerce is in it. Through it the mastery of Na-
ture's forces is attained, and the utilization of her resources ac-
quired. Without it science and invention could achieve no tri-
umphs. It is the foundation of society ; the inspiration of gov-
ernment ; the bulwark of civic order. It is more than the law of
life. It is life itself. It is God-appointed.

Let all public offices be closed and all private business wherever
possible be suspended. Let us keep the day here set apart in ap-
preciation of Labor's worth, and in commemoration of its victories.

The women and the children of the Commonwealth are of right
entitled to share in the ceremonies and recreations of the day with-
out disturbance by brawl or carousal. To that end, and to the end
that the peace may not be broken1, and that order may be main-
tained, the sale of intoxicating liquors is inhibited by law on this
day. Civic duty demands respect for and obedience to this man-
date of the law by every citizen — its enforcement by every executive
officer. Let none forget. Let all remember. In such observance
and in such obedience alone can the cause in whose name and for
whose benefit the day is set apart find fitting recognition.

Done at the Capitol in Indianapolis, and given under my hand
and the Great Seal of the State, this 18th day of August, in the
year of our Lord, nineteen hundred and eight, in the year of the
Independence of the United States the one hundred and thirty-
third, and in the year of the admission of the State of Indiana the
ninety-second.

J. FRANK HANLY,

[SEAT,.] Governor of Indiana.

By the Governor :

FRED A. SIMS,

Secretary of State.

404

THANKSGIVING DAY

THANKSGIVING DAY, 1905.

•

UNITED STATES OF AMERICA, STATE OF INDIANA,
EXECUTIVE DEPARTMENT.

A Proclamation:

In accordance with the proclamation and recommendation of
the President of the United States, duly made and published, ap-
pointing a day of national thanksgiving to be observed by the
people of the Nation ; in conformity with sacred tradition and with
hallowed, revered and long established custom ; in continuance of
a practice both beautiful and wise, and in acknowledgment of high
and holy obligation to the Giver of all Good, I, J. Frank Hanly,
Governor of the State of Indiana, do hereby designate and set
apart Thursday, the thirtieth day of this November, as Thanks-
giving Day, to be observed by the people of the State of Indiana.

From the day of its founding to the present hour, this Nation
lias been led by the providences and the wisdom of Almighty God.
For one hundred and thirty years it has been protected by His care
and followed by His mercies. Periods of adversity have sometimes
fallen upon us, but these have been shortened, their vicissitudes min-
imized and their rigors softened by His gracious favor and infinite
tenderness. More largely than in any other land, our way has
fallen "beside the still waters" and through "green pastures." We
have sorrowed, and He has comforted us. We have sinned, and He
has forgiven us. Our annals are replete with His goodness and His
mercy.

The closing days of a most memorable year are quickly passing.
A few weeks and they will have gone into history. It is therefore
meet that we pause ere they are gone to consider the richness of
the largess they have brought to us. Our harvests have been un-
usually abundant. Our granaries are full. The fruits of success-
ful and peaceful toil are about us. Factory, shop, field and mine
liavr contributed shares rich and full. Trade and commerce have
registered increasing volume and augmented profit. Our material
prosperity is without parallel. The social, intellectual and moral

405

life of the Nation has been strengthened and enriched. The pub-
lic conscience lias been stirred and quickened. Civic conditions have
improved. Respect for the law has daily deepened in our thoughts
and hearts. Citizenship has been exalted, and the land kept as
our fathers left it — the habitation of liberty.

Believing that the spirit of thankfulness and of gratitude is
already present in every heart, and that it awaits only an oppor-
tunity for expression, I recommend that all usual avocations be
suspended on this day, that pause.be made in our secular pursuits,
that we assemble in our several places of worship and there make
due and grateful acknowledgment of the beneficence of our Heav-
enly Father to us as a people, whether of State or of Nation, and
that with contrite hearts and penitential souls we seek forgiveness
at- His chancels for past faults and follies and make humble and
sincere supplication for future guidance and deliverance.

Let the arrogance of prosperity give place to the humility of
dependence, and the meanness of self to the altruism of the gospel
of the Christ. Let this be a day of prayer, of praise and of thanks-
giving. Let it be characterized by a revival of love of country and
of fraternal affection, by the reunion of families and of kindred,
and by the renewal of confidence in one another. Let it be marked
by ready benevolence to the homeless, by kindly and simple charity
to the suffering and needy, and by Christian ministry to the sorrow-
ful. Let us especially remember with gracious tenderness the lit-
tle ones whose lives are pinched by poverty by them unearned, and
saddened by neglect by them unmerited, that they too may look up
and be glad.

In Witness Whereof, I have hereunto set my hand and caused
to be affixed the Great Seal of the State of Indiana, at the Capitol
in the City of Indianapolis, this fifteenth day of November, in the
year of our Lord, nineteen hundred and five, in the year of the In-
dependence of the United States the 130th, and in the year of the
admission of the State of Indiana the 89th.

J. FRANK HANLY,

Governor of Indiana.
By the Governor :

DANIEL E. STORMS,

Secretary of State.

406
THANKSGIVING DAY, 1906.

I'NITED STATES OF AMERICA, STATE OF INDIANA,
EXECUTIVE DEPARTMENT.

A Proclamation :

Presidential proclamation, duly made and published ; tradition,
old and hallowed ; custom, revered and long-established ; gratitude,
sincere and deep ; and obligation, high and holy, impel me on be-
half and in the name of the people of this goodly Commonwealth,
to appoint and designate a day for prayer, for praise and for
thanksgiving to Almighty God, in recognition of the protecting
care and the manifold mercies which He has vouchsafed to us as
a people, in both State and Nation.

The annals of the passing year are replete with His goodness
and with His gracious favor. We can not turn their pages and
remain insensible to the wisdom of His ways nor indifferent to the
tenderness of His love. We have prospered in material things be-
yond all precedent. We have written a story of accumulated gain
without purrallel in the life of any people. The fatness of Earth's
most favored land is ours. It has filled our needs and made us rich
beyond compare. The fruits of successful and peaceful toil, of
field and harvest, and the products of shop, of factory and of
mine, of commerce and of the sea are about us everywhere. Gran-
ary, bin and storeroom are big with plenty.

These are good to possess and to have, and for them we ought
to be, and are, profoundly grateful. But there is more than these
to stir our gratitude and to inspire our praise : Unequaled wealth
lias not despoiled us of moral worth, nor the arrogance of riches
displaced the humility of dependence so essential to the soul-life of
a free people. The altruism of the Savior's Gospel rises in our
hearts triumphant over the passions and meanness of self. We are
still God's children. He is still "Our Father." Belief in Him, and
sense of obligation to our fellows, and a purpose to honor Him
through service to them have enabled us in some measure to prove
our faith by our deeds. We have wrought in fear and in trem-
bling, but we have wrought, and with quickened conscience. New
ideals have been born, and new conceptions of civic duty — ideals
-••nd conceptions which promise much for future progress. Better

407

civic conditions have not only been aspired to, but have been ob-
tained. And as was said last year, it may still be said: "Respect
for the law has daily deepened in our hearts. Citizenship has been
exalted and the land kept as our fathers left it — the habitation of
liberty."

Adversities have befallen and vicissitudes come upon us, but
they have not destroyed nor overcome us. We have risen from
among them disciplined and chastened and purer and stronger
than before. Sufficient unto our needs have been His grace and
His guidance. Our burdens have been heavy, but we have been
given strength to bear them. Our grief has been sore and pro-
found and we have sometimes been distraught, but in Him we have
found consolation and comfort. Our sins have been many, but
as often as we have come to Him with contrite hearts and peni-
tential souls, His forgiveness has been full and free. These things
claim our profoundest appreciation and sincerest acknowledgment.

Therefore, I, J. Frank Hanly, Governor of the State of Indi-
ana, do hereby set apart and proclaim Thursday, the twenty-ninth
day of this November, as Thanksgiving Day, to be observed by
the people throughout the State.

Let all usual avocations and secular pursuits be suspended. Let
us repair to our several and accustomed places of worship and fill
the day with praise, with song, with prayer and with thanksgiving,
and with kindly word and generous deed rekindle the memories of
country and of home. Let us renew the ties of family and of
kindred and welcome to our firesides the absent ones returned, and
there give them new assurance of the love we bear them. Let us
remember the homeless and the needy — those who are in want — and
fail not in ministry to the broken-hearted.

Let us be especially thoughtful of childhood. Some of the little
ones among us will be hungry — for these let us find food; some
will be cold — for these let us bring clothing; others will be sad of
heart from unmerited neglect — for these let us have a gracious
tenderness and a touch of sympathy that will satisfy heart-hunger,
recall a smile to thin, wan lips and bring the laughter back to
careworn eyes. Let us do this in remembrance of Him, and in
the doing of it we and our posterity shall be blest.

In Witness Whereof, I have hereunto set my hand and caused
to be affixed the Great Seal of the State of Indiana, at the Capitol
in the city of Indianapolis, this twelfth day of November, in the
year of our Lord, nineteen hundred and six, in the year of the

408

Independence of the United States the 131st, and in the year of
the admission of the State of Indiana the 90th.

J. FRANK HANLY,

Governor of Indiana.
By the Governor :

FRED A. SIMS,

Secretary of State.

THANKSGIVING DAY, 1907.

UNITED STATES OF AMERICA, STATE OF INDIANA,
EXECUTIVE DEPARTMENT.

A Proclamation:

The absence of the growth and bloom of spring; the fading
glow of summer; the ripened fields of corn, wide-spreading and
harvest-waiting; the departing glory of forest and of woodland;
the veiled skies of autumn and the chill of lengthening nights all
remind us of the approaching end of another year and recall to
our minds a custom old as the Commonwealth in which we live, and
sacred as the memory of the men who founded it.

In deference to this custom, in conformity with the proclama-
tion of the President of the United States, and in humble recogni-
tion and grateful acknowledgment of the goodness and mercy of
Almighty God, I, J. Frank Hardy, Governor of the State of Indi-
ana, do hereby desginate, set apart and proclaim Thursday, the
twenty-eighth day of this November, as a Day of Praise and
Thanksgiving, and as a legal holiday throughout said State, and
do hereby recommend its observance as such by all the inhabitants
thereof.

The sons and daughters of Indiana have much today to stir
their gratitude and to impel its public acknowledgment. The
plentiful goodness of our Heavenly Father is about us everywhere,
and the evidences of His gracious tenderness are written in a
thousand indelible forms throughout the annals of the passing year.

Seed-time and harvest have again been ours. The earth has
been lavish in the production of all things essential to our suste-
nance. The bounties of Nature— prodigal in number and gener-

409

ous in value, enough and to spare — are saved and stored. Material
prosperity — industrial and commercial — has reached and gone be-
yond the tide of other years. Sickness and disease have fallen upon
us only in normal measure, and pestilence and scourge not at all.
Affliction and destitution consequent upon our own weaknesses and
follies have been minimized. Our citizenship is intelligent, liberty-
loving, God-fearing and law-abiding; our people, strong, con-
stant and resolute. The splendor of our institutions remains un-
dimmed. The heritage of the past is still secure. The advantages
and duties of the present are more generally and more clearly seen
and understood, and the possibilities of the future more widely and
sincerely believed in than in recent days. The public conscience
has continued to be, and still is, stirred and quickened. Civic con-
cepts are higher and clearer. Moral worth is more keenly appre-
ciated, and wrongdoing — public and private — and social weak-
nesses of every kind more deeply deplored.

And yet, with all this true, we have sinned and do still sin.
Our faults are still grievous, our follies still many — so grievous
and so many indeed as to humble us and bring us to God's chancels
in repentance and in supplication for forgiveness.

Let us on this day pause in our pursuit of wealth and in our
struggle for gain and meet in devout assemblages in our accus-
tomed and several places of worship and there renew the faith of
our fathers, and in humility and in gratitude unite in meditation
and in prayer, and join in services of song, of praise and of thanks-
giving. Let us consecrate ourselves anew and rededicate our lives
to the practice of the holy teachings of the Christ, to obedience
to the laws of our country and to the defense of its institutions.

Let the day be characterized by deeds of charity and of kind-
ness, to the end that he who has, shall share with him who has not.
In glad gatherings around domestic altars and about family fire-
sides, let us renew past friendships and sweeten and strengthen the
ties of kindred, of home and of family. Let passion be stilled. Let
malice, feuds and hatred be forgotten, the memory of wrongs be
blotted out, and forgiveness be in every heart and upon every lip.
Let us become during this day one people without differences of
sect or creed or party, and amid it all let us remember the children
of village, of countryside and of city with gentle word and kindly
deed, and by acknowledgment of our dependence upon the Great
Father's love and guidance teach them the comeliness of humility,
flic sublimity of Chris! Jan faith.

It Witness Whereof, I have hereunto set my hand and caused

410

to be affixed the Great Seal of the State of Indiana, at the Capitol
in the city of Indianapolis, this eleventh day of November, in the
year of our Lord, nineteen hundred and seven, in the year of the
Independence of the United States the lS2d, and in the year of the
admission of the State of Indiana the 91st.

J. FRANK HANIY,

[SEAL,.! Governor of Indiana.

By the Governor:

FRED A. SIMS,

Secretary of State.

THANKSGIVING DAY, 1908.

UNITED STATES OF AMERICA', STATE OF INDIANA,
EXECUTIVE DEPARTMENT.

A Proclamation:

On Thursday, the 26th day of November, 1908, a day desig-
nated and set apart by the President of the United States for that
purpose, the people of this land, stirred by high impulse and united
by common intent, will pause in the stress and hurry of their busy,
complex life, turn aside from the paths of trade and traffic, gather
around family altars and about public chancels, and there make
grateful and sincere acknowledgment of the tender mercies and
the unfailing care of the Infinite Father.

Believing that the people of the State of Indiana desire to share
in the observance of the day, in its ceremonies, in its reunions, its
renewal of family ties, its joys and its benefits, I, J. Frank Hanly,
as Governor of the Commonwealth, do also designate and set said
day apart as a day of Praise, of Prayer and of Thanksgiving, and
do hereby declare it to be a legal holiday throughout said State.

The year now closing has been crowned with goodness. Ma-
terial possessions have increased. Riches have multiplied. Seed-
time and harvest have been ours. "The pastures are clothed with
flocks and the valleys are covered over with corn." "The earth is
full of the goodness of the Lord." He has shown us His ways.
He has led us into the knowledge of His truth, and has made the
light of His countenance to shine upon us. He has saved us and

411

blessed our inheritance and has taught us the value of integrity
and uprightness.

We have not always understood. Our ways have not always
been His ways. But we are finite and He is infinite. We see but
dimly, are sometimes impatient and often mistake both time and
place. But He sees clearly, is never in a hurry and His purposes
do not fail. His "counsels standeth forever," His "thoughts to
all generations." Time and place are always His.

Therefore, let us publish His mercies "with the voice of thanks-
giving and tell of His wondrous works." With "broken and con-
trite hearts" let us confess our sins. Let us pray that our hearts
may not henceforth turn back, nor our steps depart from the paths
He has set for them. Let us trust Him even as our fathers trusted
Him. Let us "depart from evil and do good."

Done at the Capitol in Indianapolis, and given under my hand
and the Great Seal of the State, this 13th day of November, in
the year of our Lord, nineteen hundred and eight, in the year of
the Independence of the United States the 133d, and in the year
of the admission of the State of Indiana the 92d.

J. FRANK HANLY,

[SEAL,.] Governor of Indiana.

By the Governor:

FRED A. SIMS,

Secretary of State.

412

Declaring the Acts of the General Assembly
to be in Force and Effect

DECLARING THE ACTS OF THE SIXTY-FOURTH GEN
ERAL ASSEMBLY TO BE IN FORCE AND EFFECT.

A Proclamation

By the Governor declaring the acts of the Sixty-fourth General
Assembly of the State of Indiana to be in force and effect from
and after the hour of two o'clock and thirty minutes, p. m., of the
fifteenth day of April, 1905.

WHEREAS, The clerks of the several circuit courts in the State
of Indiana have transmitted to the Secretary of State their respect-
ive certificates, stating the time when the acts of the Sixty-fourth
General Assembly of said State, passed at the regular session
thereof, were received ; and,

WHEREAS, By the aforesaid certificates, it appears that the
final distribution and receipt of such acts took place on the fifteenth
day of April, 1905, at the hour of 2 :30 o'clock p. m., in the office
of the clerk of Madison County, in said State ; and,

WHEREAS, A certificate of said facts of distribution and re-
receipt of said acts was filed in the Executive Office of the State
of Indiana at the hour of four o'clock p. m. of said fifteenth day
of April, 1905, by the Honorable the Secretary of State of said
State ; now,

Therefore, I, J. Frank Hanly, Governor of the State of Indi-
ana, in accordance with said facts as set forth in said receipts of
said several clerks and in said certificate of the said the Secretary
of State, and in conformity with the provisions of the Constitu-
tion and the requirements of the statute in such cases made and
provided, do hereby make proclamation announcing the above date
and time, to wit :

The 15th day of April, 1905, at the hour of 2 :30 o'clock p. m.
as the date at which the latest receipt and distribution of said acts
took place with said several clerks of said circuit courts, and de-
claring said distribution of said acts to have been completed at

413

said hour of^said day, and proclaiming all such laws published and
circulated in the several counties of the State by proper authority,
to be now in full force and effect.

In Witness Whereof, I have hereunto set my hand and caused
to be affixed the Great Seal of the State of Indiana, at the Capitol
in the city of Indianapolis, this fifteenth day of April, in the year
of our Lord, nineteen hundred and five, of the State the 89th, and
of the United States the 129th.

J. FRANK HANLY,

[SEAL.] Governor of Indiana.

By the Governor:

DANIEL E. STORMS,
Secretary of State.

DECLARING THE ACTS OF THE SIXTY-FIFTH GEN-
ERAL ASSEMBLY TO BE IN FORCE AND EFFECT.

A Proclamation

By the Governor declaring the acts of the Sixty-fifth General As-
sembly of the State of Indiana to be in force and effect from and
after the hour of twelve o'clock noon of the 10th day of April,
A. D. 1907.

WHEREAS, The clerks of the several circuit courts in the State
of Indiana, have transmitted to the Secretary of State their re-
spective certificates, stating the time when the acts of the Sixty-
fifth General Assembly of said State, passed at the regular session
thereof, were received ; and

WHEREAS, By the aforesaid certificates, it appears that the
final distribution and receipt of such acts took place on the 9th
day of April, 1907, at the hour of 8:30 o'clock a. m., in the office
of the clerk of Madison County in said State ; and

WHEREAS, A certificate of said facts of distribution and re-
ceipt of said acts was filed in the Executive Office of the State of
Indiana at the hour of 10 o'clock of said 9th day of April, 1907,
by the Honorable, the Secretary of State of said State ; now,

Therefore, I, J. Frank Hanly, Governor of the State of Indi-
ana, in accordance with said facts as set forth in said receipts of
said several clerks and in said certificate of the said the Secretary

414

of State, and in conformity with the provisions of the Constitution
and the requirements of the statute in such cases made and pro-
vided, do hereby make proclamation announcing the above date
and time, to wit :

The 9th day of April, 1907, at the hour of 8 :30 o'clock a. m.
as the date at which the latest receipt and distribution of said acts
took place with said several clerks of said circuit courts, and de-
claring said distribution of said acts to have been completed at said
hour of said day, and proclaiming all such laws published and cir-
culated in the several counties of the State by proper authority
to be in full force and effect from and after the hour of twelve
o'clock, noon, the 10th day of April, 1907.

In Witness Whereof, I have hereunto set my hand and caused
to be affixed the Great Seal of the State, at the Capitol in the city
of Indianapolis, this 9th day of April, in the year of our Lord,
1907, in the year of the Independence of the United States the
131st, and in the year of the admission of the State of Indiana the
91st.

J. FRANK HANLY,

[SEAL.] Governor of Indiana.

By the Governor:

FRED A. SIMS,

Secretary of State.

DECLARING THE ACTS OF THE SPECIAL SESSION OF

THE SIXTY-FIFTH GENERAL ASSEMBLY

TO BE IN FORCE AND EFFECT.

A Proclamation

By the Governor of the State of Indiana declaring the acts of the
Sixty-fifth General Assembly of the State of Indiana, enacted at
the Special Session thereof, convened on the 18th day of Septem-
ber, A. D. 1908, to be in force and effect from and after the hour
of 10 :45 o'clock a. m., of the 20th day of November, A. D. 1908.

WHEREAS, The Clerks of the several circuit courts in the State
of Indiana have transmitted to the Secretary of State their respect-
ive certificates, stating the time when the acts of the Sixty-fifth
General Assembly of the State of Indiana, enacted at the Special

415

Session thereof, convened on the 18th day of September, A. D.
1908, were received; and,

WHEREAS, By the aforesaid certificates it appears that the
final distribution and the receipt of such acts took place on the
20th day of November, A. D. 1908, at the hour of 10:45 o'clock
a. m., in the office of the clerk of the Circuit Court of Wells
County, in said State ; and,

WHEREAS, Certificate of said facts of distribution and receipt
of said acts was filed in the Executive Office of the State of Indiana
at the hour of 2:00 o'clock p. m., of the 23d day of November,
A. D. 1908, by the Honorable the Secretary of State for said
State ; now,

Therefore, I, J. Frank Hanly, Governor of the State of Indi-
ana, in accordance with said facts as set forth in said receipts of
said several clerks and in said certificate of said Secretary of State,
and in conformity with the provisions of the Constitution and the
requirements of the statutes in such case made and provided, do
now hereby make proclamation announcing the above date and
time, to wit:

The 20th day of November, A. D. 1908, at the hour of 10:45
o'clock a. m., as the date at which the latest receipt and distribu-
tion of said acts took place with said several clerks of said circuit
courts, and declaring said distribution of said acts to have been com-
pleted at said hour on said day, and proclaiming all such laws pub-
lished and circulated in the several counties of the State by proper
authority, to be in full force and effect from and after the hour
of 10:45 o'clock a. m., the 20th day of November, A. D. 1908.

In Witness Whereof, I have hereunto set my hand and caused
to be affixed the Great Seal of the State, at the Capitol, in the city
of Indianapolis, this 23d day of November, in the year of our
Lord, 1908 ; in the year of the Independence of the United States
the 133d; and in the year of the admission of the State of Indi-
ana the 92d.

J. FRANK HANLY,

[SEAL.] Governor of Indiana.

By the Governor:

FRED A. SIMS,

Secretary of State.

416

Special Proclamations,

REQUESTING CONTRIBUTIONS TO SAN FRANCISCO
EARTHQUAKE RELIEF FUND.

APRIL 20, 1906.
To the People of Indiana :

A calamity so appalling and awful as to beggar description has
befallen the prosperous and happy people of a sister State. The
splendid and magnificent city of San Francisco lies in ruins, a
charred mass of smoldering embers. Men and women who yester-
day were possessed of affluence and wealth, are today homeless and
in want of bread, and little children, unused to exposure or want,
are shelterless and hungry. These stricken people are our people.
They are bound to us by the ties of commerce, of affection and of
blood. Except as we share their misfortune, we have not been
harmed by the disaster that has come to them. We are rich and
able to give. Let us, therefore, make willing, generous and quick
response, remembering that in giving to them we are but giving to
our own, and arc but bearing an honorable share in a Nation's con-
tribution.

J. FRANK HANLY,
Governor of the State of Indiana.

TELEGRAM SENT TO THE GOVERNOR OF CALIFORNIA.
INDIANAPOLIS, INDIANA, April 20, 1906.

Hon. Geo. C. Pardee, Governor of the State of California, Sacramento, Cali-
fornia:

In the name of the people of Indiana, I send you and your stricken peo-
ple sincere sympathy, MIK! beg to offer every material assistance within the
power of the generous citizen of this Commonwealth.

J. FRANK HANLY,
Governor of the State of

417

REWARD OFFERED FOR THE ARREST OF OSCAR A.

BAKER.

WHEREAS, During the session of the late General Assembly of
the State of Indiana, it was openly alleged, upon the floor of the
House of Representatives, that one Oscar A. Baker had attempted
to bribe a member of that body ; and

WHEREAS, An indictment has been found by the grand jury
of Marion County and returned to the Criminal Court of said
county, charging said Baker with said offense; and

WHEREAS, Said Baker, immediately after the exposure of his
said offense in said House of Representatives and before he could
be apprehended, fled the State of Indiana and has since remained
and is now a fugitive from justice; and

WHEREAS, The said General Assembly, by an act duly passed
and approved March 7, 1905, made an appropriation of public
funds to be expended under the direction of the Governor, for the
purpose of the investigation, apprehension, arrest and prosecu-
tion of any person or persons charged with the crime of bribery
of any member, officer or employe of said General Assembly ; said
appropriation being in the following language:

"For the use of the State of Indiana, to be expended under the direction
of the Governor, the sum of five thousand dollars is hereby appropriated, and
the same or so much thereof as may be necessary is made available for the
purpose of the investigation, apprehension, arrest and prosecution of any
person or persons that may be charged with the crime of bribery of any
member, officer or employe of the Sixty-Fourth General Assembly of the
State of Indiana";

AND WHEREAS, The said Baker is still unapprehended :
Now, Therefore, I, J. Frank Hanly, Governor of the State of
Indiana, in accordance with the foregoing facts and in conformity
writh the provisions of said act of said General Assembly, and by
virtue of the authority thereby vested in me, do now hereby offer
a reward of Three Thousand Dollars for the apprehension, arrest
and return of said Baker to the custody of the sheriff of Marion
County, in the State of Indiana. Said reward to be paid under
and pursuant to the provisions of said act of the General Assembly,
to any person or persons, upon the apprehension, arrest and re-
turn of said Baker by him or them into the custody of said sheriff
as an officer of said court. The said reward shall be and is in lieu

[27—19891]

418

of any and all other rewards offered for the apprehension, arrest
and return of said Baker by or to any officer or person.

In Witness Whereof, I have hereunto set my hand and caused to
be affixed the Great Seal of the State of Indiana, at the Capitol in
the city of Indianapolis, this 5th day of June, in the year of our
.Lord, 1906, in the year of the Independence of the United States
the 130th, and in the year of the admission of the State of Indi-
ana the 90th.

J. FRANK HANLY,

[SEAL.] Governor of Indiana.

By the Governor:

FRED A. SIMS,

Secretary of State.

DESIGNATING SITE FOR A CAMP OF MILITARY IN-
STRUCTION FOR THE INDIANA NATIONAL GUARD.

By virtue of the authority vested in me by law, I, J. Frank
Hanly, Governor of the State of Indiana, do hereby designate the
grounds of the United States Military Reservation, known as Fort
Benjamin Harrison, in Marion County, Indiana, as a site for a
camp of military instruction for the Indiana National Guard, from
the hour of twelve o'clock, noon, instant, until the fifteenth day of
October, 1906.

In Testimony Whereof, I have hereunto set my hand and
caused to be affixed the Great Seal of the State of Indiana, at the
Capitol, in the city of Indianapolis, this eighth day of August, in
the year of our Lord, 1906, in the year of the Independence of
the United States the 131st, and in the year of the admission of the
State of Indiana the 90th.

J. FRANK HANLY,

[SEAL.] Governor of Indiana.

By the Governor:

FRED A. SIMS,

Secretary of State.

419
INDIANA VILLAGE FOR EPILEPTICS.

WHEREAS, Section 12 of an act "authorizing and providing for
the establishment and organization of the Indiana Village for Epi-
leptics," approved March 6, 1905, provides that "When a suffi-
cient number of buildings shall have been completed and equipped
for the admission of patients, the Governor shall be advised of the
fact, and shall thereupon issue a proclamation to that effect" ; and

WHEREAS, I have been advised by the Board of Trustees of the
Indiana Village for Epileptics that a sufficient number of build-
ings have been completed and equipped for the admission of pa-
tients, and that the same are now ready for the reception of
patients as provided by said section and by Section 1 1 of said act :

Therefore, I, J. Frank Hanly, by virtue of the authority vested
in me as the Governor of the State of Indiana, do hereby pro-
claim said Indiana Village for Epileptics to be sufficiently com-
pleted and equipped for the admission of patients, and the same
is hereby declared open to the admission of the same, according to
the terms and provisions of said act.

In Witness Whereof, I have hereunto set my hand and caused
to be affixed the Great Seal of the State of Indiana. Done at the
(\-ipitol, in the city of Indianapolis, this 19th day of August, in
the year of our Lord, 1907, in the year of the Independence of the
United States the 131st, and in the year of the admission of the
State of Indiana the 91st.

J. FRANK HANLY,
Governor of the State of Indiana.

By the Governor:

FRED A. SIMS,

Secretary of State.

420

DECLARING MARTIAL LAW IN THE CITY OF MUNCIE,
DELAWARE COUNTY, INDIANA.

WHEREAS, There has existed for three days and does now exist
within the city limits of Muncie, Delaware County, State of Indi-
ana, and the immediate environments thereof, a state of riot and
lawless insurrection against the laws of the State of Indiana, in-
volving frequent and continuing breaches of the peace, the destruc-
tion of property and personal injury to many peaceable and law-
abiding citizens ; and,

WHEREAS, For said period there has existed and now exists in
said city a certain class of individuals who have been and are dis-
regarding the laws of said State, and are offering violence to prop-
erty and the citizens of said city and vicinity ; and,

WHEREAS, There have been and are upon said streets lawless
assemblages, aided by and under the direction of vicious and law-
less persons; and,

WHEREAS, From time to time within said period property has
been destroyed and citizens assaulted ; and,

WHEREAS, Threats, intimidations and violence are daily and
frequently resorted to by said lawless class of individuals ; and,

WHEREAS, The civil authorities of said city and county, by
reason of such lawlessness, such acts of violence and such disturb-
ances, have been and are unable to cope with or control conditions
therein; and,

WHEREAS, The law-abiding citizens of said county, assembled
in public meeting, have passed the following resolution and request :

"Resolved, That on account of the exhausted condition of the
officials, they having been on duty for several days, and their in-
ability to procure more help, it is the sense of this meeting that
said officials are not able to cope with the conditions that exist,
and that the Governor, through his representative, General Perry,
be asked to bring troops here tomorrow morning to control the
situation," and,

WHEREAS, The sheriff of said county, the mayor of said city
and the superintendent of police thereof and the members of the
Metropolitan Police Board have certified to me the following state-
ment of fact and request :

"In view of the fact that the- city of Muncie, Delaware County,
State of Indiana, is threatened with mob violence, and that said
city has for three days been in a state of riot and lawlessness, and

421

the Board of Metropolitan Police Commissioners and the superin-
tendent of police of said city, and the sheriff of Delaware County
have for three days done all in their power to control the riotous
element and restore law and order within said city, said officers have
reported through the mayor that they have not been and are not
now and will not be able to prevent further unlawful acts of law-
lessness, and restore order and control the law-breaking element,
and said law-breaking element has disregarded the proclamation
of the mayor of said city to desist and refrain from unlawful acts
injurious to life and property, and it is necessary in our judgment
that the state militia be sent to said city to restore law and order,
the persons whose names are hereunto affixed respectfully request
that you send to said city the state militia to quell and suppress
said unlawful acts and protect life and property," and,

WHEREAS, The Constitution of the State constitutes the Gov-
ernor thereof the highest executive authority therein, and provides
that "he shall take care that the laws be faithfully executed" ;

Now, therefore, I, J. Frank Hanly, Governor of the State of
Indiana and commander-in-chief of the military forces thereof, by
virtue of the authority vested in me by the Constitution of said
State, do hereby proclaim and declare said city and its immediate
environments to be in a state of riot and insurrection against the
laws of the Commonwealth, and do hereby proclaim martial law
throughout said city and throughout the territory adjacent thereto
and within a distance of four miles from the Court House in said
city, and do hereby command all turbulent and disorderly persons
to immediately disperse and retire peaceably to their respective
homes and hereafter submit themselves to the lawfully constituted
authorities of said county and city, and hereby do invoke the aid
and co-operation of all good citizens of said county and city to
uphold the law and preserve the public peace.

In Testimony Whereof, I have hereunto set my hand as Gov-
ernor of said State and commander-in-chief of the military forces
thereof, and caused to be affixed the Great Seal of the State, at the
Capitol, in the city of Indianapolis, on this, the 4th day of Jan-
uary, 1908.

J. FRANK HANLY,
Governor of the State of Indiana and

Commander-in-chief of its military forces.

By the Governor:

FRED A. SIMS,

Secretary of State.

422
ORDER TO GENERAL McKEK.

INDIANAPOLIS, IND., January 4, 1908.

To Major-General William J. McKec, Commanding Provisional

Brigade, Indiana National Guard:

Sir — You are hereby advised that I have this day issued a
proclamation placing the city of Muncie and its immediate envi-
ronment under martial law, copy of which proclamation is attached
hereto for your information and guidance.

You are hereby ordered to take command of said city and dis-
trict, and the troops now there assembled or which shall hereafter
be there assembled, for the purpose of carrying out the intent of
said proclamation, subject to the limitations and within the lines
hereinafter stated.

I am sending you Hon. Henry M. Bowling, Assistant Attor-
ney-General of the State, who will act as your legal adviser.

All civil officers, constables, sheriffs, marshals and other police
officers shall be permitted accustomed and necessary arms. No
other person will be permitted to carry dangerous weapons of any
kind, -either concealed or unconcealed.

The persons and property of all law-abiding citizens will be
protected.

All persons who have heretofore engaged in or supported the
lawless acts against persons or property, or who have given aid
and comfort to the persons committing any of such acts, who shall
return to peaceful occupations and preserve quiet and order, hold-
ing no further communications of any kind with the lawless per-
son or persons, will not be disturbed in person or property by the
military forces, except where the exigencies of the public service
may render it necessary.

All rights of property of whatever kind will be held inviolate,
subject to law. All persons in the district are required to pursue
their usual avocations. All shops and places of business (except
those hereinafter mentioned) are to be kept open in the usual m.-m-
ner as in time of peace.

All saloons and places where intoxicating liquors are sold at
retail as a beverage, will be closed and kept closed until further
orders.

Violations of State and Federal law, disorders and disturbances
of the peace, and interference with the military forces, will be re

423

ferrccl to a proper authority for trial and punishment. Misde-
meanors will be subject to the civil authority, if it chooses to act.
Civil causes will await the ordinary, tribunals.

All law-abiding citizens will render aid in restoring civil gov-
ernment and in maintaining the peace.

All assemblages of persons in streets or highways, either by
day or by night, tend to disorder, and are forbidden. Vagrancy
and loitering upon the streets will not be tolerated.

I direct that martial law hereby established be administered
by you with mildness and gentleness, but that it be vigorously done
when occasion demands.

You will call to your aid the mayor of said city, the sheriff of
Delaware County and his legally constituted deputies, the chief
of police and all members of the Metropolitan Police Board and
the Metropolitan Police force, and insist upon their counsel, ad-
vice and active co-operation, making such use of them and of their
kindly offices as in the exercise of sound judgment shall seem to be
necessary.

You will, by proclamation or otherwise, acquaint the citizens
of said city and district with the scope and intent of this order,
and your purpose to act thereunder.

el. FRANK HANLY,
Governor of the State of Indiana, and Commander-in-Chief of its

Military Forces.

424

DECLARING CORRECTIONAL DEPARTMENT OF THE
INDIANA WOMEN'S PRISON OPEN FOR THE RE-
CEPTION OF PERSONS DULY COM-
MITTED THERETO.

WHEREAS, I have been advised by the Board of Trustees of the
Indiana Women's Prison that the correctional department of said
prison, provided for by an act of the General Assembly, approved
March 9, 1907, has been completed and is now ready to receive
inmates.

Therefore, I, J. Frank Hanly, Governor of the State of Indi-
ana, by virtue of the authority vested in me by said act of the
General Assembly, do now hereby proclaim said correctional de-
partment of said Women's Prison to be open for the reception of
all persons duly committed thereto by duly constituted authority
under the provisions of said act.

Said act will be construed by the Executive Department to
provide for the acceptance of only such persons as shall be duly
committed to such correctional department subsequent to the date
of this proclamation.

In Witness Whereof, I have hereunto set my hand as Governor
of said State, and caused to be affixed the Great Seal, of the State,
at the Capitol, in the city of Indianapolis, this 10th day of Jan-
uary, 1908.

J. FRANK HANLY,
Governor of the State of Indiana.

Attest: FREDA. SIMS,

Secretary of State.

ENDING MARTIAL LAW IN THE CITY OF MUNCIE,
DELAWARE COUNTY, INDIANA.

WHEREAS, Riot and lawless insurrection against the laws of
the State of Indiana in the city of Muncie and in the territory de-
fined in the executive proclamation declaring martial law in said
city and district, dated the 4th day of January, 1908, have ceased,
and peace and order have been restored to said city and district,

now.

Therefore, I, J. Frank Hanly, Governor of the State of In-
diana and commander-in-chief of the military forces of said State,

425

by virtue of the authority vested in me by the constitution of said
State, do hereby declare said city and its immediate environment,
as defined in said proclamation, to be in a state of peace and tran-
quility and martial law therein to be at an end from this date.

In Testimony Whereof, I have hereunto set my hand as Gov-
ernor of said State and commander-in-chief of the military forces
therein, and caused to be affixed the great seal of the State, at the
Capitol, in the city of Indianapolis, on this 13th day of January,
1908.

J. FRANK HANLY,

Governor of the State of Indiana, and Commander-in-Chief of its
Military Forces.

By the Governor :

FRED A. SIMS,

Secretary of State.

ORDER TO GENERAL McKEE.

Major-General William J. McKee, Commanding Indiana National

Guard :

Sir — You are hereby advised that I have this day issued a proc-
lamation, as Governor of the State of Indiana and commander-in-
chief of its military forces, declaring martial law at an end in the
city of Muncie and throughout the district defined by executive
proclamation of the 4th inst.

You are hereby ordered to turn over the government and con-
trol of said city to the duly constituted civil authorities thereof,
and to make known by proclamation or otherwise the fact that mar-
tial law has ceased within said city and district.

You will, however, remain in said city with such troops as in
your judgment will be necessary for the purpose of assisting the
civil authorities in maintaining peace and order, and in the en-
forcement of the law throughout said city and said district.

You will advise with the said civil authorities from time to time
as the exigencies of the case may require, and hold the troops under
your command in readiness to render every necessary assistance to
such authorities in the maintenance of peace and order, and the en-
forcement of the law, until in your judgment, such authorities no
longer need military assistance.

J. FRANK HANTA,
Governor of the State of Indiana, and Coiinuander-in-Cliief of i/.v

Military Forces.
[28—19891]

426
DEATH OF GROVER CLEVELAND.

Grovcr Cleveland, twice President of the United States, is dead.
As an executive, he governed wisely and strongly. As a citizen he
loved his country and was ever loyal to his conception of its best
and highest interests.

In deference to the sentiment of all the people of this Common-
wealth, without regard to party affiliation, and in respect to his
memory, to the exalted office be held and the great public service
lu* rendered, I hereby direct that the flag on the Capitol building
be lowered to half mast for a period of thirty days from the date
of his death, and recommend that all public offices of the State be
closed on the day of his funeral.

Done at the Capitol, in the city of Indianapolis, this 25th day
of June, in the year of our Lord, 1908.

J. FRANK HANLY,
Governor of the State of Indiana.

BARRING DISEASED CATTLE FROM THE STATE OF

INDIANA.

WHEREAS, Tuberculosis among cattle in the several States of
the American Union is becoming prevalent, the percentage in some
cases being quite high, and no area being entirely free from the
infection ; and,

WHEREAS, Said disease is increasing, particularly among dairy
cattle ; and,

WHEREAS, Several of the States require that dairy and breed-
ing cattle be free from tuberculosis when shipped into their terri-
tory for dairy or breeding purposes ; and,

WHEREAS, Dairy and breeding cattle affected by said disease
are being shipped into the State of Indiana, and in some instances
where persons shipping them knew they were so affected ; now,

Therefore, In order to prevent the spread of said disease, I,
J. Frank Hanly, Governor of the State of Indiana, by virtue of
the authority vested in me by the laws of said State, do hereby
require and proclaim that all cattle brought into the State of In-
diana for either dairy or breeding purposes shall be accompanied
by a certificate from the authorities of the State from which they
are shipped, showing their freedom from tuberculosis and other

427

contagious diseases; the terms of said certificate to be such as
shall he required and prescribed by Ihe State Veterinarian of the
said State of Indiana.

In Witness Whereof, I have hereunto set my hand and caused
to be affixed the Great Seal of the State of Indiana, at the Capitol,
in the city of Indianapolis, this 9th day of July, in the year of our
Lord, 1908, in the year of the independence of the United States
the 133d, and in the year of the admission of the State of Indiana
the 92d.

J. FRANK HANL.Y,
Governor of the State of Indiana.
By the Governor:

FRED A. SIMS,

Secretary of State.

CONVENING THE GENERAL ASSEMBLY OF THE
STATE OF INDIANA IN SPECIAL SESSION.

EXECUTIVE DEPARTMENT OF THE STATE OF INDIANA.

The Constitution of the State devolves upon the Governor the
duty of calling a special session of the General Assembly whenever
in his opinion "the public welfare shall require it."

In my opinion the public welfare does now require a special
session of the General Assembly of the State of Indiana.

Therefore, I, J. Frank Hanly, by virtue of the authority so
conferred upon me as Governor of said State, do hereby call upon
the General Assembly of the State of Indiana to convene in spe-
cial session on Friday, September 18, A. D. 1908, at the hour of
10 o'clock a. m.

In Witness Whereof, I have hereunto set my hand and caused
to be affixed the Great Seal of the State of Indiana, at the Capitol,
in the city of Indianapolis, this 4th day of September, in the year
of our Lord 1908, in the year of the Independence of the United
States the 133d, and in the year of the admission of the State of
Indiana the 92d.

J. FRANK HANLY,
Governor of the State of Indiana.
B}^ the Governor:

FRED A. SIMS,

Secretary of State.

428

KKASONS FOR CONVENING GENERAL ASSEMBLY IN SPECIAL SESSION.

The Constitution imposes upon the Governor the duty of con-
vening the General Assembly in special session whenever, in his
opinion, the welfare of the State requires it. The responsibility of
decision rests solely with the Governor. He must assume it alone.
No one else can share it. It is indivisible.

I have called others into consultation, most of whom, I am frank
to say, have advised against the calling of an extra session at this
time, but I have not been impressed with their reasoning. They
are sincere, but they are not able to view the matter from the stand-
point of responsibility occupied by the Executive.

In my opinion, conditions now exist which necessitate a special
session of the Sixty-fifth General Assembly. So believing, I have
issued a proclamation calling upon it to assemble.

The condition of the specific appropriations made at the late
session of the General Assembly alone necessitates and justifies my
action.

Specific appropriations were made at the late session as follows :

Indiana University — Power plant, $56,350 ; stacks and equip-
ment of library, $25,000; addition to Maxwell Hall, $18,125.

State Normal School— Library, $99,970.

Purdue University — Agricultural Experiment Station building,
$100,000.

State Soldiers' Home — Hospital, $50,000 ; remodeling old hos-
pital, $15,000.

Girls' School — One new cottage, $25,000.

Southeastern Hospital for the Insane — Eighteen buildings,
equipment, etc., $559,377.82.

School for the Deaf — Boys' and girls' dormitories, equipment,
etc., $367,272.

Anderson ville Monument — $10,000.

Lew Wallace Statue — $5,000.

Vicksburg Monument — $38,000.

These appropriations became available on the first day of Oc-
tober of last year, 1907. Ordinarily they would have remained
available for at least two years. By Section 5 of the act of 1907,
fixing the fiscal year and providing for the covering of unex-
pended appropriations into the general fund of the treasury, it is
mad* the duty of the Treasurer of State "biennially, at the end
of the fiscal year immediately preceding each regular session of
the General Assembly, to cover and transfer into the general fund

429

of the treasury the unexpended balances of all specific appropria-
tion except such as shall have been made available beyond said
time by the act appropriating the same."

CONDITION IMPOSSIBLE TO MEET.

Under this statute all balances of the above appropriations un-
expended on the 30th inst. will lapse. The fact that these appro-
priations were not available until the 1st of last October and lapse
on the 30th of September of this year creates a condition which
it has been physically impossible to meet.

The following unexpended balances of these several appropria-
tions will lapse unless reappropriated :

Purdue University $21,480 00

State Normal School 87,096 29

Girls' School -. 17,982 75

School for the Deaf 225,107 37

Southeastern Hospital for the Insane 500,936 37

Substantially all of the appropriations for the Vicksburg and
Andersonville monuments and the Lew Wallace statue are unex-
pended and will lapse.

Many of these buildings are well under way. The walls of
some are up. Some are ready for roofing. Roofs are on others,
but the interiors are unfinished. Those who hold contracts for
the construction of these buildings have proceeded in good faith,
believing the appropriation made could be had. They can not
proceed with the buildings without payment until the regular ses-
sion of the next General Assembly in January. That will come in
midwinter. I can not consent that hundreds of thousands of dol-
lars of valuable buildings shall stand in their present unfinished
condition until next year. There is ample money in the treasury
to meet all these obligations, there being at the present time $896,-
180.76 available, with the November revenues yet to be received.

By recent legislation the Girls' School and the Women's Prison
were separated, the school removed to a site near Clermont, and the
Women's Prison remodeled and a portion of the building converted
into a workhouse for women. The cost of the administration of the
separate institutions has been of necessity greater than the admin-
istration of the single institution. The appropriation made for the
maintenance of each has been wholly insufficient to meet the new
conditions.

I have paid out of the Governor's emergency contingent fund,
for the maintenance of the Girl's School, up to Aug. 1, $8,944.45.

430

August and September bills for maintenance are yet to be met. Up
to September 1 I have paid out of the Governor's Emergency Con-
tingent Fund, for maintenance of the Women's Prison, $3,236.58,
with September bills for maintenance still to be met. The appro-
priation made for the Boys' School was last year insufficient and is
again insufficient this year. Bills for maintenance for August are
submitted to me unpaid, aggregating $3,153.65, with September
bill for maintenance still to be met. The exigencies of the other
institutions have from time to time drawn upon the emergency
contingent fund during the fiscal year until it is now practically
exhausted. The maintenance appropriations for these institutions,
which become available on October 1 , can not be used under the law
to meet the unpaid accounts of such institutions for the present
fiscal year. There has not been extravagance in the management
of these three institutions. The year has been a hard one in all the
institutions. Provisions have been high. In most cases unusually
so. Gardens, upon which some of them depend very largely for
sustenance during the summer, because of the intense and long-
continued drought, have been wholly inadequate to meet their
needs. The inmates must be fed.

NIGHT RIDERS CAUSE ALARM.

In the early spring numerous raids were made in the part of
the State bordering upon the Ohio River by so-called "night
riders," resulting in the destruction of a number of tobacco beds
where young plants were being grown preparatory to transplant-
ing in the fields, and many threatening letters written warning
tobacco growers of personal violence and burning of property. I
have done what I could, under the limited authority conferred
upon the Governor by law and with the meager funds in my hands,
to apprehend these persons and protect the persons and property
of citizens in that section of the State.

In a few weeks the tobacco crop will be cut and housed in
sheds and barns. Many threatening letters are again being re-
ceived warning, tobacco growers not to cut their crops at peril
of the destruction of crop and barns by fire. The conditions in
Kentucky during the last year, one-third of the State being in an-
archy, with neither life nor property secure ; the conditions along
the Ohio River in Ohio, where, in the last six months, the State
has been compelled to maintain a military patrol at a cost of $40,-
000, and the threats now being made to repeat these crimes in
Indiana, impel me to the action I have taken, in the hope that the

431

General Assembly will give such executive authority and place such
funds at executive disposal .as shall be necessary to meet what may
become at any moment a grave situation.

The protection of property and its peaceful enjoyment and
the preservation of the lives of its citizens are among the primal
reasons for the maintenance of any government. I can not con-
sent that the Government of this Commonwealth shall fail in this
behalf.

FAVORS REPEAL VINCENNES BILL.

At the late General Assembly a bill providing for the issuing
of $120,548 of bonds to the trustees of Vincennes University and
creating a State debt, principal and interest, of more than $156,-
000, was passed and presented to the Executive for signature.
After the most painstaking examination of all the facts in the case
I became thoroughly convinced that the claim had no foundation
either legal or moral. This view was shared by both the preceding
Governors. I vetoed the bill, setting out fully the facts. It was
passed over executive veto. The bonds were prepared and pre-
sented to me for signature. I took them and locked them up, and
refused to sign them. At the time I vetoed this measure I believed
it clearly unconstitutional and pointed out its invalidity. My judg-
ment has since been confirmed by the legal opinion of eminent coun-
sel, after full examination of the question. I shall ask the General
Assembly to repeal this statute. If it will do so it will save the
State enough money to pay the expenses of the session four times
over.

COUNTY LOCAL OPTION URGED.

Three }^ears and a half ago I recommended to the General As-
sembly, and it passed a law giving a majority of the legal voters
of a township or city ward the right to remonstrate against the
traffic in intoxicating liquors at retail, and making it unlawful
for the board of county commissioners, after the filing of such a
remonstrance, to grant a license to any person within such terri-
tory for a period of two years. Under this law 830 townships in
Indiana have inhibited this traffic. More than 1,600,000 of our
people live in this territory. Public sentiment has been created in
behalf of this law and public opinion has advanced under the dem-
onstration of the benefits derived from the inhibition of the dram
shop in these communities until, today, the people of the State
would, in my judgment, overwhelmingly favor the enactment of a
county local option law that shall preserve without impairment the

432

present remonstrance law and be additional and supplementary
thereto.

Personally, I am so fully persuaded of the moral, economic and
financial value of such legislation that I shall recommend and
earnestly insist upon the enactment of such a measure.

J. FRANK HANLY,

Governor.

REQUESTING CONTRIBUTIONS TO THE ITALIAN
EARTHQUAKE RELIEF FUND.

The story of an earthquake disaster, widespread and far-reach-
ing, involving hundreds of thousands of men, women and children,
in the distant Island of Sicily, comes to us with such authenticity
and with such detail of death, of suffering, and of want, as to
touch the hearts of men the world around.

The need is so urgent and so great that the people of Italy
can not meet it alone. They must have the assistance of all peoples.
The emergency is such that I hereby proclaim their need, and call
upon the people of Indiana to contribute to a fund for the relief
of the stricken but surviving inhabitants of the unfortunate Island,
and ask them to act quickly and generously. That the funds con-
tributed may be effectively handled and promptly forwarded, I rec-
ommend that they be sent to the Indiana Red Cross Society, In-
dianapolis, Indiana, in care of the Treasurer of said Society, Mr.
James W. Lilly, Indianapolis, Indiana.

In Witness Whereof, I have hereunto set my hand and caused
to be affixed the Great Seal of the State of Indiana, at the City of
Indianapolis, this 4th day of January, in the year of our Lord,
1909, in the year of the Independence of the United States the
133d, and of the admission of the State of Indiana the 93d.

J. FRANK HANLY,
Governor of the State of Indiana.
By the Governor:

FRED A. SIMS,

Secretary of State.

Miscellaneous

(435)

435
EXECUTIVE ORDER.

IN THE MATTER OF THE INVESTIGATION OF THE OFFICE OF THE
AUDITOR OF STATE.

I, J. Frank Hanly, Governor of the State of Indiana, do now
find that an emergency exists for an examination of the office of
Auditor of State during the term of David E. Sherrick, late Au-
ditor of State, from January 26, 1908, to September 14, 1905,
and that the same shall be conducted under executive authority.
Said emergency exists on account of the defalcation of said David
E. Sherrick, and the unknown condition of the fiscal and insur-
ance affairs of said office under his control during said term.

Therefore, I do hereby designate and appoint James W. Noel,
of the city of Indianapolis, and William B. Durborow, of the town
of Williamsport, Indiana, to make such examination and investi-
gation under the terms and authority of the following order of
appointment this day issued to them :

To Hon. James W. Xocl and Hon. William B. Durborow:
Gentlemen :

WHEREAS, David E. Sherrick, late Auditor of State of the
State of Indiana, by his own confession in writing made to me as
Governor of the State of Indiana, has diverted to his own use the
sum of $145,000 of the funds of the State coming into his hands
as such Auditor; and

WHEREAS, The said David E. Sherrick did, at my request, re-
sign his office on account thereof on the 14th day of September,
1905; and,

WHEREAS, On account of the magnitude of the business trans-
acted by said Sherrick as such Auditor, and the important and
vital relations such office has writh all the fiscal affairs of the State
and the several county governments, and its relation to and con-
trol over the insurance companies doing business in the State, and
the banks, savings institutions, trust companies and building and
loan associations doing business in the State, it is essential that the
exact condition of said office and of its several departments during
the term of said Auditor and his acts in connection therewith be
ascertained and be made known in some authoritative manner;
and,

WHEREAS, An emergency exists, because of said conditions,
which requires all the affairs of such office and of its several de-

4:56

jmrtinents from January 26, 190.3, to September 14, 1905, to be
rxumined and investigated under executive authority.

I do now hereby select and appoint you to perform that duty
in connection with Hon. Warren Bigler, the present Auditor of
the State of Indiana, who will join you in your labors and in your
report.

You will, therefore, proceed at -once to make such examination
of said office and of each of its several departments. You may
meet upon your own adjournment, if you do not thereby unneces-
sarily delay said examination and investigation and the report of
your proceedings and findings relative thereto.

You will include in your investigation and report all the busi-
ness of such office for such time, including methods of keeping the
books and conducting the affairs of said office, the finances thereof,
the sufficiency and solvency of such securities there on deposit, ,«is
are required by law, the dealings of the office with the State treas-
ury, and the correct statement of the balance due from said David
E. Sherrick as such Auditor to the State of Indiana on account of
moneys belonging to said State and received by him for whatever
purpose during his said term, at the time he retired from said
office on the 14th day of September, 1905.

In connection with your said examination and investigation,
you may take the evidence of such parties, under oath, as you
may think necessary and may be able to induce to appear before
you, and such evidence as you may take and such information as
you may obtain you will not make public except in your report
to me.

You will pursue your investigation and make examination of
said office and its several departments uninfluenced by fear, favor
or affection, and without any purpose to shield any person or
party 6r to advance the interests of any person or party, to the
end that the whole truth touching the affairs of said office for said
term may appear in your report ; that the guilty be exposed and
the innocent vindicated.

The Auditor of State and the Treasurer of State are directed
to furnish you every aid and facility in the making of said inves-
tigation and examination of said office.

Should clerical or other aid become necessary to the successful
prosecution of your labors, you will report that fact to me, and the
necessary assistance will be provided.

If , m your investigation, legal questions arise about which you
may wish to be advised, you will submit them to me in writing and

437

I will furnish you with the opinion of the Attorney-General
thereon.

Your compensation is hereby fixed at twenty-five dollars, each,
per day, each of you to bear your own personal expenses while
engaged in such service.

When your services arc concluded, you will make report in
writing, under oath, and file the same with me. You are also di-
rected to prepare and file, separately from your report of the facts
found touching the conditions of said office, such recommendations
as may occur to you and seem advisable to make concerning the
methods in vogue in such office, and needed legislation touching
said office, if necessary. Your report of facts will be required to
contain a full account of the finances of the office during said
term ; also, such evidence as you shall take, together with any
finding of facts you may make which shall be based upon such
evidence.

Witness my hand and the Great Seal of the State of Indiana.
Done at the Capitol in the city of Indianapolis, this 24th day of
October, in the year of our Lord, 1905, in the year of the Inde-
pendence of the United States the 130th, and in the year of the
admission of the State of Indiana the 89th.

J. FRANK HANLY,
[SEAL.] Governor of the State of Indiana.

EXECUTIVE DECISION

IX Till: MATTER OF THE APPLICATION FOR THE PARDON OF DAVID
E. SHERRICK, AND REASONS THEREFOR.

APRIL 7, 1906.

Petitions signed by several thousand citizens of the State, re-
questing the pardon of David E. Sherrick, late Auditor of State,
have been filed in the executive office and have been presented for
executive consideration and action.

Mr. Sherrick 4s in the State Prison under sentence of the Crim-
inal Court of Marion County, for embezzlement of the funds of
tile State coming into his hands while Auditor of State. An appeal
from the judgment of the trial court to the Supreme Court of the
State has b(.jeri prayed and granted. The cause is, therefore, still
pending in the courts. Most of these petitions were formally pre-

438

sen ted to me on the 2d inst, by Mr. Smiley N. Chambers, Mr. John
H. Conner, Mr. William D. Cooper, and the Rev. D. R. Lucas.

While the petitions themselves ask for the pardon of Mr. Sher-
nVk, the gentlemen who presented them did not do so. They made
"no other recommendation than to ask that Mr. Sherrick be paroled
until such time as his case might be determined by the Supreme
Court."

The petitions are said to contain 21,000 signatures, more than
1 1 ,000 of which are said to be the signatures of citizens of the city
of Indianapolis. The large number of signatures has been urged
upon my consideration as an evidence that the people of the State
desire favorable executive action in this case. It has been also urged
that executive clemency ought to be extended in response to "this
general sentiment of the community."

In giving consideration to these petitions as an index or evi-
dence of public opinion, it is well to recall the facts and circum-
stances under which they were circulated and signed. It is com-
mon knowledge that they were circulated simultaneously in almost
every section of the State and the signatures obtained by an or-
ganized, systematic and well-directed campaign, and at a time and
in a manner best calculated to appeal to the sympathy of those to
whom they were presented. They were circulated and most of the
signatures obtained in the interval between the return of the ver-
dict of the jury and the ruling of the Court upon the motion for a
new trial, and before sentence was pronounced. In fact, quite a
number of them were on file in the executive office before the judg-
ment of the Court was rendered. Many persons to whom they
were presented did not know the facts of the case, and. would not
have signed them had they been conversant with the facts. That
this is true is evidenced by personal statements made to me by many
persons who signed them, and by letters received from the several
communities in the State where they were circulated. The answers
to the questions propounded to the gentlemen who presented the
petitions, disclose the fact that even some of these gentlemen did
not know the facts. Others to whom the petitions were presented,
signed them upon impulse and without consideration either of the
facts, of the attendant circumstances, or of the importance of the
issue involved in the action requested.

It is well also to remember in this connection that the defend-
ant was until recently the incumbent of a high office and that he
possessed a wide acquaintance throughout the State. The fact
that less than 10,000 persons outside of the city of Indianapolis

489

signed the petitions, in view of the campaign and the extraordinary
effort made to secure signatures, and of the facts and circum-
stances surrounding the case, is strong evidence that the great
mass of the people of the State are not in sympathy with the
purpose of the petitions and do not desire favorable executive ac-
tion thereon. Many hundreds of letters have been received at the
executive office from points throughout the State, and from per-
sons of high standing and character, urging me to refuse the
prayer of the petitions. These letters are not prompted by im-
pulse, nor are they the result of an organized or well-directed
campaign. They are the voluntary expressions of thoughtful men
who appreciate the great public interests involved in the case, and
are a much surer and safer index of the sober, thoughtful and en-
during sentiment of the masses of the people than these petitions
are.

The power to pardon is an executive function and under the
constitution belongs exclusive!}7 to the Chief Executive of the
State. It is a high power, and is to be exercised with great care.
It was vested in the Governor because of the great responsibility of
the office, and in the belief that it would be used only upon mature
deliberation, and never from impulse or caprice. It was not in-
tended that it should be exercised in any case merely in response
to what, for the moment, might appear to be public sentiment. The
man who happens to be, for the time, vested with this power, has
no right, either legal or moral, to use it in a personal way. He
may not use it to save his friend, nor may he refuse to use it be-
cause his enemy would be the beneficiary of its use. It is vested
in him for public purposes alone.

Where the guilt of the beneficiary of the exercise of such
power is clear and without palliating fact or circumstance, public
opinion, however strong it might be, would not be a sufficient jus-
tification for its exercise, and this is especially true where the crime
is great and involves grave public interests affecting the adminis-
tration of affairs of state. The crime of which Mr. Sherrick has
been adjudged guilty is a grave one. It strikes directly at the
administration of public affairs. It involves the betrayal of pub-
lic confidence, and is, therefore, doubly dangerous to the State.
If it were conceded that a widespread sentiment favorable to the
exercise of the pardoning power exists in the present case, that
does not of itself justify the use of such power, unless there is sub-
stantial doubt of Mr. Sherrick's guilt, or some palliating circum-
stance or fact of controlling importance.

440

No such doubt exists, ,-ind no palliating fact or circumstance
is called to my attention cither by the petitions themselves or by
the words of those who presented them to me. The only basis for
executive clemency offered in the petitions is found in the following
paragraph :

"David E. Sherrick is a victim of circumstances and a practice followed
by practically all state, county and township officers within our State for
fifty years past, however vicious such practice may have been, rather than any
deliberate criminal intent upon his part."

There is in this statement one fundamental defect. It is not
true. One of the gentlemen who presented the petition to me, in-
formed me in the course of his remarks on the occasion of the pre-
sentation of the petitions, that he had refused to sign them because
they contained this statement and because the statement was false.
He himself had been a State officer. He knew he had not been
guilty of such crime as that of which Mr. Sherrick was convicted.
He could not sign the petition without indicting himself, and he
therefore declined to do so. This statement, since it contains the
only facts mentioned in the petitions upon which executive clemency
can be predicated, challenges consideration and analysis. If it
is not true, then no basis for favorable executive action is
offered by the petitions. While it is well known that Mr.
Sherrick was convicted of the crime of official embezzlement,
the facts of his embezzlement have been so often misstated as
to deceive the general public. It has been said that his crime was
a technical one ; that he did no more than loan the public funds
coming into his hands and appropriate the interest, and that all
public officers — state, county, township and municipal — have done
the same thing for many years. The statement in the petitions
quoted above is predicated upon this contention, but the conten-
tion is absolutely without foundation either of fact or circum-
stance. For these reasons it is important that some official public
statement be made of the facts as they actually are. In what I am
about to say, I do not speak from the record in the trial of the
cause. I do not have that before me, but I do speak within the
purview of the indictment upon which Mr. Sherrick was convicted,
and within the facts of the case; facts, too, which are without
dispute, and which cannot be successfully disputed. When the
Supreme Court reviews the record of a cause on appeal, it is bound
by the record. It cannot go beyond it. But this rule does not
apply to a case when it reaches the Governor upon an application

441

for executive clemency. It is the duty of the Governor to con-
sider all the facts in the case of which he has or may obtain any
knowledge. He may consider the guilt or innocence of the appli-
cant. He may consider the character of the crime itself, with all
its attendant circumstances ; the effect it has had, or the effect its
repetition may have upon society, and the administration of public
affairs. He may consider the fairness of the trial, and the charac-
ter of the defense made, if any. He may consider any new evidence
discovered after the trial, which goes to the question of the guilt
or the innocence of the applicant. He may consider the habits,
character and the past life of the applicant. All these things are
proper subjects of consideration in the exercise of the high power
of executive clemency.

Mr. Sherrick entered upon the duties of the office of Auditor
of State in the month of January, 1903. He was without property
and without other income than his official salary. This salary is
fixed by law at $7,500 per annum. He was indebted at the time in
the sum of $20,000. Immediately upon coming into office he took
$20,000 of the public moneys coming into his hands, with which
to pay his personal indebtedness. Within four months after his in-
duction into office, he visited French Lick Springs, where he lost
in less than thirty days, more than $9,900 of money in gambling.
At that time he had received but one quarter's salary. Other than
that, he had no money of his own. His gambling debts at French
Lick were paid by checks drawn upon banks where the public funds
in his care were deposited, and they were paid by these banks out
of the public funds. From that day to the day of his resignation,
he was a defaulter to the extent of many thousands of dollars. The
use of the public funds in the payment of his individual debts was
not "loaning the funds and using the interest accruing thereon,"
as it is charged other public officials have done. It was a criminal
conversion of these funds to his own use. It was embezzlement.
The use of more than $9,900 of public funds, and their loss at the
gaming table, was not "the loaning of the funds." It was the
conversion of them to his own use in an unlawful and criminal busi-
ness. It was embezzlement. Under the law as construed by him,
himself, it was his duty to make semi-annual reports to the Treas-
urer of State, in January and July, of the fees and moneys com-
ing into his hands as Auditor of State, and thereupon to pay to
the Treasurer of State all such fees and moneys. By far the
greater portion of the money coming into his hands each annual
period, was paid to him in the months of January and July of the
[29—19891]

442

respective settlement periods. When the first semi-annual settle-
ment period came, Mr. Sherrick did not have the funds on hands
with which to make settlement. He did not have these funds, not
because he had loaned them, but because he had used $20,000 of
them to pay his own individual debts, and had lost $10,000 of such
funds in gambling. His report was therefore delayed until the
23d day of July, and the moneys coming into his hands for this,
the first month of the new semi-annual settlement period, were used
to make up the shortage occasioned by his embezzlement of the
funds coming into his hands during the first semi-annual settle-
ment period, and to enable him to make the settlement required by
law. But that was not payment to the State. On the contrary, it
was an affirmative, deliberate act of official malfeasance, resorted
to for the purpose of concealing and covering up his embezzlement
of the public moneys coming into his hands during the preceding
semi-annual settlement period. It was in no sense an accounting,
to the State for the money he had received during the time covered
by his report. The use of the State's money coming into his hands
during the first month of the second semi-annual settlement period
to make good the defalcation occurring during the first semi-an-
nual settlement period, did not change in any way his position or
his relation to the State. He was still a defaulter. The second
semi-annual settlement, due in January, 1904, was delayed until
February 4, 1904, and delayed to enable him to use the funds com-
ing into his hands during the month of January to meet an in-
creased defalcation in the second semi-annual settlement period.
His third semi-annual settlement was delayed for a like reason
until August 1, 1904; his fourth until January 31, 1905, and his
fifth until August 26, 1905. This last settlement was made in
answer to the imperative, persistent and oft-repeated demand of
the Governor of the State, and to make it he used $144,141.49
of the money coming into his hands after his settlement was due.

In each of these semi-annual reports and settlements, the law
required him to account for and pay over to the Treasurer of
State all fees and moneys coming into his hands and for whatever
purpose received. These reports were required to be verified. Prior
to his resignation he made five reports. In that time (that is, from
the month of January, 1903, to September 14, 1905), he collected
miscellaneous fees in the sum of $6,978.07, which he sequestered,
converted to his own use and omitted from his reports. Of most
of these fees no public record whatever was kept, and not a dollar
of them was reported or paid to the Treasurer while Mr. Sherrick

443

was in office. When he resigned, his total defalcation, exclusive of
interest, amounted to $151,119.56. His defalcation did not grow
less, but on the contrary, it constantly increased.

In addition to the money used in riotous living and lost at the
gaining table, he invested the public funds in mining stocks, in
oil well stocks, and in other speculative securities, which were bear-
ing no interest, and from which he had no right to expect any
substantial return during his term of office. These facts conclu-
sively prove, and none of them are the subject of dispute, that Mr.
Sherrick is guilty of something more than a technical violation
of the law. They demonstrate beyond doubt that he systematically
and constantly from the day of his induction into office until the
day of his resignation, converted to his own use, squandered, gam-
bled away and embezzled the public funds. And it is, therefore,
not true that he is the victim of "a practice followed by practically
all state, county and township officers within our State for fifty
years past." Indeed, there is not even a semblance of truth in such
a statement. Many of those who have urged this false statement
of fact with most vehemence and have made loudest outcry about
it have known its falsity from the beginning. Others have been
imposed upon and have used it innocently, but have thereby con-
tributed to the deception of the public.

It is quite proper, in considering this application for executive
clemency, to inquire how Mr. Sherrick administered the other af-
fairs of his office. In the month of December, 1904, previous to
the convening of the General Assembly in January, 1905, Mr.
Sherrick, as Auditor of State, addressed a letter to the officials of
certain railway companies doing business in the State of Indiana,
asking them to forward to him for distribution among the mem-
bers of the General Assembly, all railroad passes which such com-
panies intended for the use of members of the General Assembly,
stating that he had some prospective legislation of personal con-
cern to himself, and that he would see to it that the interests of
the companies were cared for along with his own. In many in-
stances this was done, and the office of the Auditor of State be-
came for weeks a broker's office for the distribution of free rail-
way transportation to members of the General Assembly.

At the meeting of the Board of State Tax Commissioners, held
in July and August of 1905, the question of the valuation, for the
purpose of assessment, of the Monon Railway, came before the
members of the Board for their consideration in executive session.
Some of the members of the Board believed the existing valuation

444

of the road to In- too low, and desired that the valuation should be
raised. Mr. Sherrick very vigorously opposed any increase in the
valuation. He supported his position with such poor logic and
reason as to excite remark. After the adjournment of the Board,
and in the presence of the members of the Board, he was asked by
the Governor for an explanation of his conduct. He said that his
act was due to the fact that an attorney, then residing in Chicago,
who was his warm personal friend, and to whom he was under many
obligations, had requested him to keep the valuation of the Monon
Railway Company where it then was as a personal favor to him,
and had said that if such valuation could be kept without increase,
that he, the Chicago attorney, would be able to get permanent
employment as counsel for said railway company.

Those are only two instances of many that could be cited where
the official conduct of Mr. Sherrick was such as to deserve the con-
demnation of every honest citizen of the State, and, taken in con-
nection with his systematic, studied and long-continued embezzle-
ment of the public funds, they are such as to preclude absolutely
executive clemency.

I am compelled to believe that many men who signed the peti-
tions on file in this case would have refused to do so had they known
all the facts connected with Mr. Sherrick's administration of his
office.

It is said in the petitions that Mr. Sherrick was the victim of
circumstances. If so, they were circumstances of his own making.
The system of loaning the public funds for the individual profit
of public officers, which has grown up in Indiana, is not responsible
in any substantial degree for Mr. Sherrick's crime. There was
nothing in this system, however devotedly he might have followed
it, which compelled him to take public funds to pay his private
debts, or to take public funds for investment in speculative mining
stocks, or to hazard public funds at the gambling table. The sys-
tem referred to is bad enough ; • so bad, in fact, as to be a reproach
to an honest people such as ours, and it will have sins enough to
answer for without charging it with the crimes of Mr. Sherrick.
A bad system rarely, if ever, destroys an honest man, or one fifc
to be clothed with the responsibility of high office. If Mr. Sherrick
had been looking for precedent, he could easily have found one in
the record made by his immediate predecessor, whose reports were
made on the day the law required, and who paid, without the delay
of an hour at each of the semi-annual settlements, every dollar of
the moneys of the State he had collected. It is apparent from the

445

facts in the case that Mr. Sherrick was not searching for precedent.
On the contrary, he was engaged in blazing a new way — a path at
the end of which shame and disgrace inevitably lay.

It has been said that he intended no wrong, and that he had no
criminal intent, but no impartial and fair-minded man can read
the record of his acts and believe such a statement. How can it be
said he intended no wrong when he took public funds with which
to pay his private debts ? How can it be said he intended no wrong
when he took public funds and invested tl^em in speculative securi-
ties from which he had no right to expect a return within his term
of office? How can it be said he intended no wrong when he took
thousands of dollars of the public money and gambled it away, or
when he expended other thousands of such funds in riotous living?

A man must be held to intend the reasonable and probable
results of his acts, and he may not, after having committed great
crimes for a long period of time, escape punishment upon the plea
that he intended no wrong in the commission of them.

It was suggested by those who presented these petitions that
Mr. Sherrick and his friends have made good his defalcation, prin-
cipal and interest, and that this fact should be considered as a
palliating circumstance. This statement also deserves considera-
tion. It has the same fundamental defect as the statement hereto-
fore quoted — it is not true. The defalcation has been made good
and the State has lost no money, but the credit for this is not due
either, to Mr. Sherrick or his friends. When Mr. Sherrick resigned
his office, certain securities were turned over by Mr. Reed, a deputy
in his office, to the Governor of the State, and afterward placed
in the hands of Mr. Reed as Receiver in the suit upon Mr. Sher-
rick's official bond. These securities consisted of a few promissory
notes and a number of speculative mining stocks, in which Mr.
Sherrick had invested the public funds. Information came to the
Governor and to the Attorney-General of the State, which dis-
closed the fact that the State's funds had been invested in these
securities and that they had been used to pay Mr. Sherrick's private
obligations; that the men who received them knew them to be
State funds when they so received them and so applied them.
Under these facts and the law of the land, the title to the money
was not divested, it still remained in the State, and the State had
the right to follow and recover its funds. The Attorney-General
was instructed by the Governor to require the persons who had
thus received the moneys of the State to return it to the State,
and to proceed to do so without fear or favor. This the Attorney-

446

General did, and, in case after case, the persons who had received
these funds paid them back because they were compelled to do so to
escape prosecution. Two banks which had received the public
funds in satisfaction of a personal indebtedness due to them from
.Mr. Sherrick, paid back $25,000. A number of other persons
from whom mining and other stocks had been purchased, returned
the money they had received, and took back their stocks. W. S.
Wickard and the Murray Lumber Company had received a large
stun of the State's monoy, ostensibly as a loan, amounting in the
aggregate to more than $50,000. The greater portion of this
money was used by Mr. Wickard to take up his notes, upon which
Mr. Sherrick was security, in a certain bank in the city of Indi-
anapolis. The bank knew when it received these funds that it was
receiving public funds. The Attorney-General was directed to
prepare, and he did prepare, a complaint to which he made the
bank a party, and in which he charged these facts. A copy of it
was served upon the officers of the bank, and they were informed
that it would be filed the next day at the hour of two o'clock unless
the money of the State was returned to it. This money was re-
turned within forty-eight hours. More than three-fourths of the
defalcation was made good through collections made by the Attor-
ney-General in the manner stated above. Therefore, it is not true
that either Mr. Sherrick or his friends made good bis defalcation.

{"5

The zeal, the ability and the courage and integrity of the Attor-
ney-General, acting under the direction of the Governor, alone
saved the State from loss. After all this was done, there was still
a shortage of something like $25,000 or $30,000. Of this sum, the
surety of Mr. Sherrick's official bond paid $6,000. The balance
was raised by the friends of Mr. Sherrick. The sum thus raised-
some $25,000 or $30,000 — represents substantially the amount of
the public funds which Mr. Sherrick had gambled away in two
years and a half, and lost in midnight orgies, or in other criminal
practices. And, in the face of these facts, I am asked to extend
him executive clemency, on the ground that he intended no wrong
and had no criminal intent.

It has been urged that executive clemency should be extended
to him, at least to the extent of a parole, because of the high posi-
tion he held, because of his prominence in public affairs, and be-
cause of the shame and disgrace that would come to him through
the execution of the sentence pronounced by the court. Sitting as
the Governor of the State he has so deeply wronged, this plea does
not appeal to me. The fact that he held high position, that he was

447

prominent in affairs, and that he had great opportunity to serve
the people whose commission he had obtained and whose confidence
he held, does but aggravate his crime and magnify his offense.

It is said that the law has been vindicated by the conviction and
sentence of Mr. Sherrick, and that the execution of the judgment
ought to be suspended or stayed. If this be true in the present
case, there is no reason why it could not be said or why it would
not be true in every case. Conviction and sentence do not vindicate
the law. Without the execution of the law's judgment, conviction
and sentence would be a sham. They would not deter infractions
of the law ; they would not protect society. Few of the persons
who signed these petitions would believe in or would be willing to
defend this doctrine if it were applied to cases of robbery, child
stealing, burglary, entering a house to commit a felony, obtaining
money by false pretense, counterfeiting or manslaughter. And
yet the penalty in each of these cases is less than the penalty im-
posed for the crime of which Mr. Sherrick is guilty. In each of
the cases named the maximum punishment is fourteen years. In
official embezzlement it is twenty-one years. Therefore, it must
be held that official embezzlement is, in the eyes of the law, a graver
crime than any of the offenses named. How, then, can it be said
that the law is not vindicated by verdict and sentence in such -cases,
but is vindicated in the graver and more far-reaching offense? The
position is not tenable. This case more profoundly concerns the
public welfare than any of the cases named, and the law is not
vindicated until its sentence has been executed. The minimum pun-
ishment is two years. The maximum punishment is twenty-one
years. It may be that executive clemency may be properly exer-
cised somewhere between these periods. That I do not now decide.

The law — the law of Indiana — is made for all men, for the rich
and the poor, the great and the small, the prominent and the ob-
scure, and, in so far as I have a voice in its administration, it shall
fall upon all men alike, while I am Governor, without regard to who
they are, or what position they hold or may have held. The man
in the lowly walks of life is required to abide by the law. He may
never have had a fair chance or opportunity in life ; he may be a
waif upon the street; he may know little of his relation to his
fellows, of his duty to society, or to the State ; he may be hungry
and cold, but if he breaks the law and does but take only so much
of another man's property as to satisfy his hunger, or to protect
him from the cold, he is made to feel the weight of the law he has
broken. To obtain his pardon no campaign is organized. As to

448

him the law is left to take its course. I see no reason why a differ-
ent rule should obtain where the man who infracts the law holds
high position or is the child of great opportunities.

As an individual my heart is heavy with grief that Mr. Sher-
rick betrayed the trust confided to him by a generous people, and
is guilty of the crimes of which he has been tried, convicted and
sentenced. I am grieved beyond measure that the circumstances
and facts of the case do not permit executive clemency. If this
were a personal matter, Mr. Sherrick should go free now. But it is
not. Decision in this case is not the act of an individual, it belongs
to the office, it is the act of the Governor of the State. I am com-
pelled to eliminate from my mind all questions of friendship, of
party ties, of public sentiment, or of personal sympathy, and to
decide the question upon its merits alone, with a view only to the
public good, to the welfare of society and of the State, and to the
maintenance of a proper standard of administration of public
affairs. Viewed in this light, and in the light of the undisputed
facts and circumstances of the case ; my oath of office, the law and
my official duty coerce me into the denial of the application. I
believe Mr. Sherrick had a fair trial. The facts were and are with-
out dispute. The jury could not have done less under their oaths
than they did. The case is still pending in the courts. If error
of law has been committed, it will, no doubt, be corrected. But even
though error of law shall be found to have intervened in the trial
of the cause, the fact will remain unchallenged and unchallengeable,
unchanged and unchangeable, that Mr. Sherrick is guilty of one of
the gravest crimes known to the law. The application is therefore
denied.

J. FRANK HANLY,
Governor of the State of Indiana.

449

APPOINTMENT OF A COMMISSION TO INVESTIGATE

AND REPORT CONDITIONS AND NEEDS OF THE

PEOPLE OF FONTANET, AFTER THE

POWDER-MILL EXPLOSION.

OCTOBER 18, 1907.

There is need of assistance at Fontanet. The people of the
State ought to make quick and adequate response. The DuPont
Powder Company has placed $5,000 in my hands for distribution
and as a basis for a relief fund. I have appointed Messrs. W. C.
Van Arsdel, Hilton U. Brown, of the Indianapolis News, and
B. F. Lawrence, of the Indianapolis Star, as a commission to take
charge of the distribution of this fund. These gentlemen have
gone to Fontanet to ascertain exact conditions. They will report
to me cither this evening or in the morning and will then be able
to give the people of the State definite and accurate information as
to the necessities and the extent of their obligation in this saddest
of all calamities.

I have urged upon the DuPont Powder Company the duty of
repairing injured and replacing destroyed houses at the company's
expense. This, they have undertaken, at least to some extent,
and by morning I will be advised definitely as to the exact extent of
relief the company will give in this direction.

I hope contributions to the fund already started will not be
delayed, but that they will be begun at once. The people whose
houses were destroyed at Fontanet are poor people. In many
instances all they had in the world was invested in their little homes.
These have been utterly destroyed. In other instances, the bread-
winners of families are dead. The survivors are destitute. The
duty of a rich, generous and Christian people in such an emergency
is too clear for comment. At such a time he who gives quickly gives
twice.

J. FRANK HANI,Y,
Governor of the State of Indiana.

450

KEMAKKS BY GOVERNOR HANLY AT THE INAUGURA-
TION OF GOVERNOR MARSHALL.

JANUARY 11, 1909.

Four years and three days ago I stood here in your presence
and took upon myself an obligation to support the Constitution
of this Commonwealth and to faithfully discharge the duties of
the high office of Governor. Through the vicissitudes of a full con-
stitutional term I have kept that oath as best I could. How well
I have kept it I leave to posterity to decide. This much, however,
I claim for myself : My purpose has been pure ; my effort sincere ;
my zeal untiring. I have sought only the public good — the welfare
of the many. I have not finished the work you gave me to do, but
I have fought a good fight. I have not obtained all I sought or
all you desired, but I have not quailed in battle nor run away from
any duty seen and understood. My heart has not been divided. I
have held no commission but yours. I have had no master but my
conscience. I would have served you better if I could.

And now within the hour I shall cease to have to do officially
with public affairs, perhaps forever. The obligation I then took
passes even now to another. A moment and I shall be free. Grate-
ful forever to you for the opportunity of service the great office
brought, I am glad to lay it down and seek opportunity for further
service in humbler sphere. I go contented and happy. Private life
has no terrors for me. But the welfare of the State — the happi-
ness of her people — can never while I live be without interest to me,
and from my place in the ranks I shall not cease to speak and write
and fight for her and for them.

He whom you are about to clothe with authority to administer
the government for the next four years is here ready to take the
oath of office and assume the responsibilities of the position.
Though differing in political faith and affiliation from him, I
bespeak for him your sincere and loyal support in the discharge of
the grave duties of the great office upon which he is about to enter.
I shall support him in all things where differing convictions of
fundamental principles and policies do not separate us. He will
be the Governor of my State, and I shall uphold his hands in every
effort he makes in behalf of the people and the public welfare.

Mr. Justice Roby of the Appellate Court will now administer to
the Governor-elect the oath of office prescribed by the Constitution.

(Justice Roby here administered the oath.)

Ladies and Gentlemen : The Governor of the State of Indiana !

INDEX.

PAGE.

INAUGURAL ADDRESS 5

MESSAGES—

Babcock Insurance Bill 184

Binder Twine Plant ITS

Charges made by Luther W. Knisely 207

Fairbanks, Senator Charles W., resignation of 171

Flood in Southern Indiana 177

Gemmer, Fred L., appointment as Secretary 177

Hunt, Union B., appointment as Secretary 171

McCoy, Ella B., appointment of 172

"Night Rider" situation in Indiana 201

Senate Enrolled Act No. 248, returning 197

To the 64th General Assembly « 5, 172

To the 65th General Assembly ' 28

To the 65th General Assembly, Special Session 109

To the 66th General Assembly 122

Van Arsdel, Wrn. C., appointment of 171

MISCELLANEOUS—

Fontanet Explosion 449

Inaugural of Governor Marshall 450

Investigating Committee 435

Sherrick Decision 437

PARDONS, ETC. 106, 163

PROCLAMATIONS—

Acts of General Assembly in force 412

Arbor Day 387

Baker, O. A., Reward for return of 417

Camp of Military Instruction 418

Cleveland, Death of Ex-President 426

Convening Special Session of General Assembly 427

Diseased Cattle 426

Earthquake 416, 432

Labor Day 399

Martial Law at Muncie 420, 424

Memorial Day 392

Thanksgiving Day 404

Village for Epileptics 419

Women's Prison 424

VETO MESSAGES—

Agricultural schools 367

Banks — assessment of 316

(451)

452

\ KTO MESSAGES— Continued.

Board of Safety, City of Indianapolis ron.prns.itioii of 330

( 'liild desertion 367

City and county allowances — publication of 245

City of Indianapolis

Civil cases, etc. — proceedings in 237

Civil causes— new trial in 368

Coal mining 383

Court expenses, Spencer County — unpaid 265

Court Houses, etc. — construction of 285

Council Members, City of Indianapolis — compensation of 315

Defective title 282, 300

Feed stuff 326

Fees of county clerks 377

Fees of county sheriffs 370

Gas and oil wells 375

Gas and oil well leases and options 362

Gravel road proceeding in Orange County 217

Gravel road, Lake and Porter counties 373

Gravel road taxes, Lake County 374

Gravel roads — Location and construction of 236

Gravel roads on township lines 289

. Highways — j urisdiction of , 362

Lakes— level of 269

Levees and dykes 367

levies for hospitals 294

Libraries — circulating 372

Library privileges — extension of 278

Life insurance bill 302

. Life insurance companies 376

Loan and trust companies 325

Medicine, etc. — practice of - 317

Merchandise — sales of 270

Metropolitan police law — repeal of 336

Michigan road lands 264

Mortgage exemptions 378

Plats— vacation of 375

Pleading and practice— matters .of 229

Printing account of G. A. R . '. 248

Property of municipalities— assessment of 335

Public offenses 393

Railroads— authorization of construction of 370

Railroad flag stations , 360

Railroad grade crossings — elevation of 235

Real estate encumbered by mortgage 332

Relief of H. J. Hostettler, Trustee, Lagrange County 220

Relief of William Watters, Treasurer, Lagrange County 228

Relief of George Willenar, Treasurer, Steuben County. 262

Relief of Ex-Trustees of Dekalb County * 255 ,

Relief of Ex-Trustees of Jasper County 263

YF/IO MESSAGES— Continued. PAGE.

Sewers and drains 308

School cities — government of 379

School city or corporation bonds 296

School sites— purchase of 372

Soldiers — preference of for appointment 211

Spite fences 215

Street improvements, etc 235

Submerged lands — title to 323

Surety companies 243

Tax levy act — amending- 377

Tax liens on real 'estate 301

Taxes on omitted property 371

Teachers' State licenses 369

Trustees of savings banks — compensation of 315

Veteran Volunteer Firemen's Associations — compensation of members . 313

Venue — change of in city courts 239

Venue — change of from police j udge 366

Vincennes University bonds 344

Voluntary associations 298

Water mains in cities — extension of 283

Water supply — protection of 374

Young Men's Christian Association incorporations 321

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THE UNIVERSITY OF CALIFORNIA LIBRARY