Inaugural Address - Coe I. Crawford

              Coe L. Crawford, January 8, 1907

STATE HISTORICAL SOCIETY
MEMORIAL HALL
PIERRE, SOUTH DAKOTA

10th Session

INAUGURAL ADDRESS
Gentlemen of the Senate and House of Representatives:-

Pursuant to a requirement of the Constitution of the State, I desire at the commencement of your session to communicate to you such information as may be helpful and to recommend such measures as I deem expedient and important.
The retiring executive in his address, and the several departments, and state institutions in their reports give information in detail respecting the conduct of the public business of the state during the past two years. That address and these reports will be laid before you and should be carefully examined as they undoubtedly contain much valuable information and many he1pful suggestions. 
Before entering into the discussion of the material things to which this address is devoted, I may be allowed to pause a moment for the purpose of joining with you in congratulating all of our people upon the prosperous conditions which so generally prevail
throughout this commonwealth. 
Recent years have been marked by increasing growth and prosperity in all lines. Last year was at the head. Land values have steadily increased and so has the rainfall.  The problem of drainage is now quite as serious as the problem of irrigation. The net profits in all lines of business from that of public service corporations to that of the unskilled laborer and household domestic exceed all previous records. A new era of railroad building is upon us and the extensions now projected and being built are working a revolution in the commerce of the state. Our towns and cities are pushing forward. Everywhere one sees an abounding life and energy which fear no obstacle. What is still better, this growth in things material is accompanied by growth in things spiritual, and we find everywhere a deeper appreciation of the obligations of man toward his fellow man, and a growing demand for square dealing in the business and political world; also a demand for higher and purer ideals in the administration of all institutions supported by the state for the education of the people and the care of the defective and unfortunate. We are finding that education fails of its purpose unless it promotes the highest development of character, and contributes to the best citizenship.
You have much important work to do and it is my earnest hope that you may enter upon that work in a spirit of fairness toward each other, with a determination to be open and frank in all your differences, and to make all personal and selfish interests subordinate to the highest welfare of the state. Candor, courtesy, courage, frankness, kindness and open and fair dealing will help a good cause pending before a legislature just as effectually as these traits will help a good cause anywhere else, while intrigue, stealth, deception, trickery, ill temper and intolerance will hurt a cause here just the same as such traits will hurt a cause elsewhere. May I not indulge the hope that loyalty to principle and duty may be the dominant influence with every member of this legislature, and that considerations of partisanship, personal ambition, hope of personal reward, and personal aggrandizement, will give way to the command of duty received from the people? I shall be glad to co-operate with you upon such a basis, and here and now offer to join heartily with you in the faithful performance of the duties which have been placed before us.

EDUCATIONAL, PENAL, AND CHARITABLE INSTITUTIONS.
The development of intellectual power and physical strength alone may produce men without scruple and without conscience. The man who wins first place in a rowing club or foot ball team and takes the first prize in mathematics, may, nevertheless, be as cold, heartless and selfish as Nero. We sometimes meet men of this kind from admiration for intellect and nerve, but who, at the same time, shock us by low and brutal standards of morality; of utter lack of sympathy; by contempt for the weak; by sneers at all that is pure and sweet and unselfish and by a low estimate of mankind; men who have brains without heart; power without scruple; force without sympathy; who believe that the end justifies the means, and that the only aim worth considering in life is to achieve what the world calls success, no matter how; who measure other men by what they are worth in dollars and cents, or by what they can accomplish without reference to principle or conscience; but schools and universities are not maintained by the state to create such heartless human engines of force and power. They are maintained for the purpose of developing men who will be just and humane as well as intellectual and powerful. So likewise our penal and charitable institutions are maintained, not only to restrain unfortunate men and women and helpless children, and to provide for their necessary physical wants, but also, wherever possible, to help them back to a lost estate, and to bestow upon them the charity which is kind and suffereth much.
I have very recently visited the educational and the penal and charitable institutions maintained by the state, including the Soldiers' Home, which is under the control of a special board, and to me these visits were filled with intense interest. No where else can one get so close to the innermost life and purpose of the State.
Here and there in the management of these institutions, I found men and women at the post of duty and responsibility doing the work before them with splendid fidelity and efficiency. In some instances they were heroically contending with difficulties and embarrassments that are very trying, but were pushing forward with tact and courage.
Here and there I found others who did not impress me so favorably, but take them all in all, I believe there is a fairly good order of ability and faithfulness employed in these institutions. The two most prominent defects which are apparent in their management are the following:
First. In practice there are no sufficiently clear and well defined limits as to the scope within which a given educational institution is confined to its work. As a result, there is a growing tendency to overlap and to work at cross purposes; a constant temptation on the part of one to enlarge its plan so as to receive students, who more properly belong to the other. This condition should not exist between institutions which belong alike to the State and which are maintained by taxes imposed upon all the people.
Each institution should be given strong support in the work it is designed to do and built up to the highest point of efficiency, but there should be a clearly marked line fixing the limits within which it is to perform that work.
I am looking at the matter with perfect impartiality and with a desire to be just and fair to each institution, and I submit that it will be better for each and all of them to have their several courses of study and lines of work so clearly defined, that each will perform its functions in the most acceptable manner to the state without overlapping the work of another, and that they be held strictly to the channels, and the expenditure of public funds in their aid be kept strictly within the limits, prescribed by law. Great care, of course, should be used in fixing these limits so as not to impair the usefulness of each, but they should be made clear and specific and when made, should be strictly adhered to.
Second. There is a feeling of uncertainty and insecurity among many who are connected with these institutions, which grows out of a fear that, regardless of merit and faithful service, their tenure of position is in constant danger from political intrigue and partisan politics; and that merit and faithfulness must yield to favoritism and the political "pull". There should be no ground for concern on this account. The time has come when it should be made clear and emphatic that the fixed and permanent policy of the State is to place the management of these institutions entirely above all questions of political expediency and favoritism. A rule of civil service should be applied to the administration of the public institutions of the State. They are maintained by taxation upon all the people and their patrons and beneficiaries come from all political parties. The purpose of the state to deal with them along non-partisan lines should be declared so emphatically that no faithful and efficient president, superintendent, professor, or employee need have any fear of losing his place through intrigue, favoritism, factionalism or changing political fortunes. He should be made to feel that he can rest implicitly upon the assurance that the only test of his right to continue in the service of the State is his faithful and efficient performance of duty and his worthiness.
I found that in the management of the Soldiers' Home, the Reform School and the Hospitals for the Insane and Feeble Minded, much difficulty is experienced in securing efficient help, such as matrons, laborers, attendants, cooks and household servants, because the wages which the management is permitted to pay are not high enough to meet the competition from the outside. This is not right. The best service must be secured for the comfort of the inmates of these institutions so that they may be attended with the utmost care and solicitude. The appropriations to pay for help of this kind should permit the State to pay wages high enough to secure the best service, and hold it against outside competition.
I shall not discuss in this connection the demands for appropriations for new buildings and improvements in these institutions, further than to refer you to the reports made by the several Boards and by the several heads and to say that while the utmost care should be exercised to see that no needless or wasteful expenditure is authorized, they should be dealt with fairly and such sums granted as will enable them to efficiently do the great and noble work to which each and all are dedicated.
I find that the state already has on its hands at Brookings, Madison, and Rapid City buildings which are in a worn out and dilapidated condition and are fast becoming untenantable. These buildings were illy constructed and illy planned, and the time is near when they will have to be torn down.
Considering the short time that has elapsed since these institutions were established, one is hardly prepared to find buildings in this condition. It is evidence of the fact that in erecting buildings for use by the state, more regard should be paid to permanency. In the long run economy is promoted by doing what is done well. Besides this, more attention should be paid to architecture, to landscape and the proper placing of the buildings upon the grounds where located.
In some places I found that much care and good taste has been used in these respects, while in others they have been almost entirely disregarded and the buildings are placed in all kinds of out of the way places with homely exteriors, poorly planned interiors and undeveloped surroundings.
I believe that a permanent plan of the grounds, with drives, parks, fountains, walks, lawns, trees, and locations for buildings to be erected in the future as the institution grows, should be carefully made in advance and every new improvement should be so placed as to harmonize with such plan. These public institutions reflecting, as they do, the highest sentiment and finest culture, should be so fashioned and developed as to leave upon all who come within their reach lasting impressions of their beauty.
Another matter which I find to be the cause of some dissatisfaction in the administration of these institutions is the curtailment of the power of the head of the institution to act within his sound discretion upon matters of detail in the administration of the institution under his care in the absence of the supervising member of the controlling board. I believe that the head of the institution, if worthy to have it in his charge and keeping at all, should be entrusted with the power to take the initiative in matters of local administration, subject, of course, to the right of the controlling board to overrule him in case of abuse of discretion. I have not yet seen the report of the Board of Regents and do not know what is recommended therein. Some changes might be made materially improving the present laws for the control of the public institutions of the state.
	In the management of the Soldiers’ Home, complaint is made that men who are habitual drunkards are denied admission. The position of the Commandant is clearly defined in his report. You should examine this subject and either sustain him by legislative provision prescribing a rule in such cases, or by enacting such legislation as may be necessary to make provision for caring for inebriate soldiers in some manner, that will not cause discomfort to the other inmate.

CONDITION OF STATE FINANCES
It appears from the report of the State Auditor for the fiscal year ending June 30, 1906, that state finances are in good condition. There were outstanding in revenue warrants the sum of $250,000 and in bonds less than $50,000, the constitutional limit to bonded indebtedness since the payment of the territorial debt assumed by the state, being $100,000, and it appears that since that time, all the bonds have been paid. The Auditor recommends that the legislature appropriate funds to enable the State Board of Assessment to perform the duty imposed upon it by Chapter 40, Session Laws 1905, making it the duty of that board "to take such means and measures as they shall deem proper and expedient to ascertain, discover and place upon the proper assessment rolls and tax lists all taxable property in any county omitted from such assessment rolls and tax lists or which has been omitted or concealed from assessment", calling attention to the fact that the legislature of 1905, which enacted this law, made no provision by appropriation for carrying it into effect. I heartily join in the recommendation of the Auditor.

SCHOOL AND PUBLIC LANDS
The opening paragraph in the very interesting report of the Commissioner of School and Public Lands for the biennial period ending June 30th, 1906, is as follows:
''On the 30th day of June, 190(5, there were only seven cents of the permanent school fund uninvested and lying idle in the state treasury, the balance of said fund consisting of $3,267,489.52, loaned in the several counties of the state, and $1,540,097.56 in deferred payments on school lands sold, making a grand total of $4,807,587.08, which is drawing interest. Of this amount $998,403.19 in loans, and $1,540,097.56 in deferred payments, is drawing six per cent interest and the balance, $2,269,086.33 is drawing five per cent interest."
The keeping of this large fund safely invested requires great watchfulness and activity.
While the unsold school lands are steadily advancing in value, it is very doubtful wisdom to go on selling them. In my judgment, the best of these lands should be taken from the market, and I heartily agree with the recommendation of the Commissioner that the minimum price be raised to $20.00 per acre. It appears from his report that the average price per acre of these lands sold from 1891 to 1894 was $13.56; from 1895 to 1898, $12.76; from 1899 to 1902, $15.86; from 1903 to 1906, $26.85. These figures show the wisdom of witholding from the market the most desirable of these lands and of raising the minimum price.
It also appears from this report that there is considerable dead and fallen timber upon the state lands situated within the Black Hills Forest Reserve and that several hundred dollars has been received by the state during the past two years for such timber. The Commissioner recommends that a law be passed at this session authorizing that officer to sell all matured timber belonging to the state within this Reserve under such safeguards as may be deemed best. I request that you give this recommendation careful consideration.
He also calls attention to the fact that the lands of the state in Lawrence, Pennington and Custer counties are exposed to loss through contests by mineral claimants and that state lands within the Black Hills Forest Reserve are exposed to loss through the claims of squatters to homesteads.
The utmost vigilance must be used to protect the state against wrongful claims of this character and ample means provided to enable the attorney general to take whatever action is necessary in the premises.

SECRETARY OF STATE
This officer in his report for the biennial period closing June 30th, 1906, calls attention to the fact that in the enactment of the Revised Code of Civil Procedure by the legislature of 1903, a part of section 108, all of sections 109 to 116, inclusive, of Chapter 9, all of Chapter 10, all of sections 153 to 204, inclusive, and part of section 205 of Chapter 11, were inadvertently omitted from the law as passed. This omission should be remedied by enactment with the least possible delay. The Secretary recommends that the legislature authorize him to turn over to the College of Law at Vermillion fifty copies of the Revised Codes and fifteen copies each of the Session Laws of the several sessions, which recommendation I commend to your careful consideration. To facilitate the work of the
State Brand and Mark Committee of which this officer is a member, he recommends that the law be amended so that the same shall consist of three members with the Secretary of State, one member to be a resident of the City of Pierre and the other of that portion of the state west of the Missouri River; that the law be so amended as to authorize the Secretary to distribute to the Governor, Secretary of State, Superintendent of Public Instruction and Reporter of the Supreme Court each, in addition to the officers among whom they are now distributed, copies of the reports of the Supreme Court; that an act be passed defining what shall constitute the state law library. All of these recommendations merit the most careful consideration at your hands.

PUBLIC PRINTING
It appears from the report of the Secretary of State and State Auditor that the expense to the state for printing and binding amounts each year to not less than $25,000. While under the law the contract for the larger part of this work is let to the lowest bidder, the evidence is convincing that through a combination among the bidders the purpose of the law is evaded and in many instances the prices paid have been exorbitantly high. The class of work done has been very poor, the binding in many instances, being a disgrace to the state. For what it pays out for printing and binding in one year, the state could install a good printing and binding outfit of its own. By owning its own plant and by placing this work under the charge of a state printer and binder, the state could save thousands of dollars in the future and secure a better grade of work than it is now getting. Your attention is called to this matter as a subject for effective legislation.

REVISION OF THE SCHOOL LAW
It appears from the report of the Superintendent of Public Instruction that steps have been taken to present for consideration and enactment a thorough revision of the school law of the state, a matter of the greatest importance to all, which is referred to you for the highest consideration. A bill for this purpose has been prepared by an efficient committee appointed by my predecessor and will be introduced.

CLERK OF THE SUPREME COURT
This is the only office in all the state which is without regulation. Section 12 of Article V of the Constitution provides that the duties and emoluments of this officer shall be prescribed by law and by the rules of the Supreme Court not inconsistent with law. Section 628 of the Political Code provides that, "He shall receive such fees as are now, or may hereafter be fixed by law". But no law has ever been enacted fixing his fees.
Rule 3 of the Supreme Court requires that an appellant or plaintiff in error on bringing a cause to the Supreme Court, shall, at or before the filing of the record, deposit with the clerk of said court the sum of ten dollars to apply on costs therein; and in all cases, (except habeas corpus), originally brought in that Court, the plaintiff or petitioner, at or before the filing of the first papers in the case, shall deposit with the clerk the same amount for the same purpose. Whenever the sum so deposited is exhausted, but not before, the clerk shall require from such party, as a consideration of further service in the cause, an additional deposit of not to exceed ten dollars, for the purpose and application aforesaid. Any balance remaining after the determination of the cause shall be returned to the party depositing the same. This seems to be all that has ever been promulgated for regulating the compensation of the clerk. He is required to make no accounting to the public; how much he receives in the aggregate for fees collected from litigants, for certified copies of records, for fees in state cases, for copies of opinions furnished law book publishers, is not known to the public. There is an impression abroad that his revenues exceed the salary of any other state officer, but whether that is true or not, I am unable to say. Members of the Supreme Court and the Governor are paid a salary of $3,000 per year. Circuit Judges, $2,500 per year, the Attorney General,-filling an office of great responsibility and crowded with work, $1,000 per year; the other state officers, $1,800 per year. All these are prohibited by the constitution from receiving perquisites or any indirect increase in salary. Clerks of the Circuit and County Courts are required to make a strict account to the county for all fees received and to pay the excess over the salary allowed to them by law to the county treasurer. No other officer in the state is allowed the privileges as to fixing and collecting his own compensation that are enjoyed by the Clerk of the Supreme Court.
No good reason can be given for this. I earnestly recommend that this office be put upon a salary basis; that a fee bill be enacted and that the officer be required to give an official bond and to strictly account for all fees collected and to pay the excess over and above his salary into the state treasury.
His duties are merely clerical and there is no reason why his salary should exceed that of the Attorney General of the state.

APPROPRIATIONS FOR STATE OFFICERS
In making appropriations for the expenses incurred by the state officers during the next two years, you should take into consideration the fact that it has been determined by the people by means of platform declarations of every political party in the state and by the results of the recent general election that the officers in the service of the state shall not use free transportation or accept courtesies in the form of franks, passes, or free tickets in any manner. This legislature is in honor and decency absolutely bound to enact a strict and effective law abolishing the pass evil, and will undoubtedly do its duty at an early date. Provision must be made by appropriation for the payment of the transportation of the state's officers necessarily incurred while transacting the business of the state. The Circuit
Judges of the state are compelled in the necessary performance of their official duties to be absent from their homes a considerable portion of the time. It is not the intention of the Constitution to compel these men out of the small salary which they receive, to pay their hotel bills and railway fare. The allowance of such necessary expenses incurred while in the service of the state is not either directly or indirectly an increase in their salary, but merely enables them to have the benefit of that salary for the support of their families without being required to pay out a large part of it for expenses.
It is a well known fact that heretofore state officials have enjoyed the use of free transportation and while using it when traveling on behalf of the state, have frequently omitted the charge for mileage from their accounts. In making appropriations for these officers, you should grant such allowances for expenses as will enable them to purchase transportation when traveling in the service of the state.
Section 3 of Article XII of the Constitution provides as follows:
"The legislature shall never grant any extra compensation to any public officer, employee, agent, or contractor, after the services shall have been rendered or the contract entered into, nor authorize the payment of any claims, or part thereof, created against the state, under any agreement or contract made without express authority of law, and all such unauthorized agreements or contracts shall be null and void; nor shall the compensation of any public officer be increased or diminished during his term of office; PROVIDED, however, that the legislature may make appropriations for expenditures incurred in suppressing insurrection."
Section 2 of Article 21 of the Constitution fixes the salaries of each of the state officers and ends with these words :
They shall receive no fees or perquisites whatever for the performance of any duties connected with their offices. It shall not be competent for the legislature to increase the salaries of the officers named in this article, except as herein provided.
Section 4 of Article XII of the Constitution provides that, "An itemized statement of all receipts and expenditures of the public moneys shall be published annually in such manner as the legislature shall provide and such statements shall be submitted to the legislature at the beginning of each regular session by the governor with his message."
Under these provisions I consider it my duty to call your attention to what I am convinced has been an unconstitutional attempt of prior legislatures to circumvent the above plain and emphatic inhibitions of the constitution.
The legislature of 1903 in the general appropriation law of that year made the following appropriations for the expenses of the Governor's office:

							1903		1904
For Salary of Private Secretary……………………...$1500		$1500
For Stationery, Office Supplies, Incidentals and
Stenographer ..............................................................  1800		  1800
For Contingent Fund .................................................  1800		  1400

The last section of that act reads as follows:
“All amounts herein appropriated shall be used for the specific purposes herein mentioned, and no other, and the state auditor shall issue his warrant on certified itemized vouchers and proofs filed in his office except that all items of appropriations for salaries and compensation for state and judicial officers, deputies, clerks and employees thereof, and the item of contingent fund for the executive office shall be payable in equal monthly installments on certified vouchers being filed in the office by the person or department entitled to the same.''
Exactly the same provision is found in the general appropriation act passed by the legislature in 1905, which made the following appropriations for the expenses of the governor's office: 
1905		1906
For Salary of Private Secretary ..................................$1500		$1500
For Stationery, Office Supplies, Incidentals and
Stenographer………………………………………….1500 		  1500
Contingent Fund……………………………………...1400 		  1400

You will notice on page 44 of the Auditor's Report for the year ending June 30th, 1906, and from the reports of his office for the past four years that this "Contingent Fund" has been paid to the governor in equal monthly installments, and without any itemized voucher being produced and filed with the auditor. If this is a constitutional method of paying out money, it was never discovered until in 1903.
In 1890, 1891 and 1892 the appropriations for the governor's office for each year were as follows:

Private Secretary and Clerk…………………………$1200
Stationery, Office Supplies and Incidentals…………...500

In 1893, 1894, 1895 and 1896, they were as follows:

Private Secretary…………………………………….$1200
Stationery and Incidentals……………………………..600
Stenographer (1893 and 4) $300: 1895 and 1896……...480

In 1897, 1898, 1899 and 1900 they were as follows:

Private Secretary…………………………………….$1200
Stationery, Incidentals and Stenographer…………….1000

In 1901 they were as follows:
Private Secretary…………………………………….$1400
Stationery, Incidentals and Stenographer………….....1000
Contingent Fund……………………………………….500

The "Contingent Fund" makes its first appearance in 1901.

If the legislature can give to me in twelve equal installments $1800 or $1400 each year, after allowing me my salary of $3000 per year and paying $2400 per year for the salary of my private secretary, stenographer, and for stationery and incidentals, upon my mere certificate made under a provision like that in the general appropriation act of 1903 and 1905, and without my being required to file an itemized voucher showing what I used the "contingent fund'' money for, it can do the same thing for each of the other state officers, and these barriers erected by the Constitution are mere sand.
It seems to me that it is perfectly apparent that the provision in the general appropriation acts referred to are subterfuges of the most transparent kind, and are absolutely void, and that the officers who received this money in the manner indicated can be required to give an accounting for it in a civil action.
I shall request the Attorney General to carefully examine this feature of the case.
Certainly it is your duty to omit any such provision from the appropriation acts of 1907 for the expenses of the governor's office or that of any other officer of the state. We are coming to realize that public funds are trust funds and public officers are trustees.
No indirect and illegal misappropriation of such fund can be tolerated, and there can be no distinction between offices in applying the rule.

PLATFORM PLEDGES MUST BE KEPT
The dominant political party in this state which is entrusted with the responsibility for its government and each of the other political organizations in the state, have, by platform resolutions, emphatically declared in favor of the enactment of the following laws:
1st. The enactment of a law making it a penal offense in this state for any person, or corporation to give to, or for any public officer, party delegate or committeeman to receive any free pass or free transportation over any railroad within the State or any telegraph, telephone or express frank.
2nd. The enactment of a law that will prevent representatives of corporate and special interests from attempting to influence legislation except by open and public oral, written or printed argument before public meetings of legislative committees.
3rd. The enactment of a comprehensive and practical primary election law for the nomination of all congressional, state, judicial, legislative and county officers by a direct vote of the people. 
4th. The enactment of laws prohibiting corporations from making contributions in any form to any political party.
5th. The enactment of a law requiring an accurate record of all campaign contributions to be kept and publication of the same to be made. They have also declared that the interference of public service corporations in the politics of this state shall be entirely eliminated.
These pledges must be redeemed by thoroughgoing and effective legislation. We could not go home and face our constituents as honest men after all that has occurred in this state during the last three years, and be chargeable with having disregarded the plain mandates thus received from the people.

ANTI-PASS LAW
The National Congress has recently enacted a law absolutely prohibiting common carriers from directly or indirectly issuing or giving any interstate free ticket, free pass, or free transportation, to any person or persons whatsoever, except the following:
Its employees and their families; its officers, agents, surgeons, physicians, and attorneys at law; ministers of religion; traveling secretaries of railroad Young Mens' Christian Associations; inmates of hospitals and charitable and eleemosynary institutions; and persons exclusively engaged in charitable and eleemosynary work; indigent, destitute and homeless persons and to such persons when transported by charitable societies, or hospitals, and the necessary agents employed in such transportation; inmates of National Homes or State Homes for Disabled Volunteer Soldiers, and of Soldiers and Sailors Homes, including those about to enter and those returning home after discharge; boards of managers of such Homes; necessary care takers of live stock, poultry and fruit; employees on sleeping cars, express cars and linemen of telegraph and telephone companies; railway mail service employees, post office inspectors, custom's inspectors, and immigration inspectors; newsboys on trains; baggage agents; witnesses attending any legal investigation in which the common carrier is interested; persons injured in wrecks and physicians and nurses attending such persons.
While this law prohibits common carriers from giving away inter-state transportation, it does not reach the giving of such favors within the limits of the state. The measure passed by Congress was very thoroughly discussed from every standpoint by men of great ability and it may be that you cannot do better than to enact it as the law of this state. If so, I suggest that the words “agents" and "attorneys at law'' as used in the excepting clause be clearly defined so as to prevent the issuance of passes for political purposes to persons who were not in truth and good faith agents or attorneys of the company issuing them.
Experience, observation and exceptional opportunities for noticing the effect of these favors upon men have thoroughly convinced me as they have many others, that the most seductive and dangerous influence at work in the field of politics and in official life today is the pass. It benumbs sensibility and acts like an opiate in dulling the edge of conscience.
It is the equivalent-nay it is more than the equivalent-of the money its possessor would otherwise have to pay for the privilege it confers because the recipient is flattered by the compliment paid him and persuades himself that receiving or using the pass is not in any sense a bribe but rather an act of courtesy due to him because he has become a distinguished citizen of the state. Its influence is everywhere, in caucuses, conventions, legislative halls, courts and juries. Administrative, executive and ministerial officers, as well as party organizations and committeemen come within the range permeated by its mystic power. Congress recognized the necessity of abolishing it and the states are rapidly following with effective legislation. No half way measure should be passed; the evil must be abolished root and branch. Deal with it as men acting under your oaths to execute the commission given you by the people who sent you here.

THE LEGISLATIVE LOBBY
The legislature of the State of Wisconsin enacted an excellent law two years ago defining the rights and limitations of persons desiring to be heard upon measures pending before the legislature of that state and prescribing penalties for violations thereof. Governor
Folk of Missouri has recently recommended identically the same measure to the legislature of that state, and I am pleased to recommend the same measure to you.
This act makes it unlawful for any person employed for a pecuniary consideration to attempt personally and directly to influence any member of the legislature to vote for or against any measure pending therein otherwise than by appearing before the regular committees thereof when in session, or by newspaper publications, or by public addresses, or by written or printed statements, arguments, or briefs, delivered to each member of the legislature, provided, that before delivering such statement, argument or brief, twenty-five copies thereof shall be first deposited with the Secretary of State. All persons appearing for private or special interests, or for public service corporations, must first register, giving their names and addresses and the name of their employer. No officer, agent, appointee, or employee in the service of the state is permitted to use his influence with a member of the legislature to vote for or against any measure pending therein affecting his pecuniary interest except in the same open and public manner. Persons appearing for special interests for a pecuniary consideration whether exmembers of the legislature or not, are not allowed to go upon the floor of either house reserved for the members thereof, except upon the invitation of such house. The violation of the act is made a misdemeanor punishable by imprisonment in the county jail not exceeding six months, and by a fine not exceeding two hundred dollars.
No one desires to prevent the freest public discussion before committees of all measures presented to the legislature, and the fullest hearing to legitimate representatives of all interests affected thereby. When appearing in this public manner to discuss the merits of a pending measure, such representatives are entitled to the most courteous and fair treatment.
The vice of the lobby lies in its more secret and exparte machinations, whereby it seeks to acquire undue advantages by unscrupulous and sinister means.
The man who holds midnight conferences with members singly in his room at the hotel and who prefers to work in the dark, avoiding as far as possible the open light of day, and who uses any and every means to carry his point, no matter how unscrupulous nor how corrupt, is the man who has made the name "lobbyist" a word of reproach and scorn. He becomes a sort of human spider, hideous and ugly in the eyes of all who believe in dealing openly and above board. He impregnates the very atmosphere about the legislature with impurity. Plausibility, cunning, flattery, trickery, falsehood, slander, political influence and sometimes threats are used to carry his schemes. This is the man whom the proposed law seeks to banish from legislative surroundings; while it protects the reputable attorney or agent, who is willing to make the character of his business known and to advocate the cause he represents in an honorable, open and public manner.

A COMPREHENSIVE AND PRACTICAL PRIMARY ELECTION LAW
It has been the practice in nearly all of the Southern States for many years to nominate party candidates for State and Congressional offices by a direct vote of the people.
In recent years this method of making party nominations has gained a foot hold in a number of Northern States and the sentiment in its favor is rapidly spreading over the entire country. New Jersey, Pennsylvania, Michigan, Illinois, Wisconsin, North Dakota, Oregon, and Minnesota have enacted laws applying the direct vote in one form or another in the making of nominations.
In Iowa, Nebraska and South Dakota, in their party conventions held in 1906, both the republican and democratic parties declared in favor of nominations by state wide primaries. The demand for legislation of this character arises from the abuses which have become intolerable under the old caucus and convention system. The aim of this legislation is to overthrow the party boss and dictator and to shake off the hold of the corporation upon the great political organizations of the state. The great enterprises of today are carried on by artificial creations of law known as corporations, and combinations of corporations. Frequently they become so powerful that they attempt to fix and control the prices of the necessaries of life, the prices of what the masses have to sell, as well as the prices of what the masses must buy in order to live.
We have come to the point where they have destroyed healthful and legitimate competition, and where they stubbornly resist all attempts upon the part of the law making power to check abuses of which they are guilty, or to place them under regulation and control. They enter the field of politics for the purpose of controlling the declarations of political platforms and the selection of candidates for public office and by many and diverse ways, use their vast power to corrupt the action of public officials. This is a matter of common knowledge. They usurp the right of choice belonging to the average voter and manipulate caucuses, control nominating conventions and bring about the nomination of candidates for public office for the selfish purpose of controlling the conduct of such officers touching all matters in which they have an interest. The question confronting the people of this state, and indeed the people of all the states, is whether they shall in fact rule by selecting their administrative, legislative and judicial officers, and whether such officers shall be sufficiently free from undue influence by public service corporations, to enable the state to control and regulate these interests; or whether such officers shall be selected by such corporations and the state ruled by them. This is the question.
No amount of sophistry and evasion can set it aside. It is the issue before the American people today. No reasonable and fair-minded person desires to treat the corporations unjustly, nor in a spirit of prejudice and demagogism, but on the contrary, wishes to give them a square deal. The trouble is not with the corporation in its rightful place. It begins when the great corporate interests refuse to submit to regulation by law; when they seek to prevent control by unfair means, by granting special favors to public servants for the purpose of placing them under obligations which hinder a faithful discharge of public duty; by going into nominating conventions and establishing partnership relations in politics with party nominees for mutual co-operation, by controlling party organizations by such means as free transportation dealt out lavishly to convention delegates and party committeemen; by large contributions to campaign funds, so that they may claim immunity from legislative restriction. These abuses exist. Any man who affirms otherwise is either blind or reckless of the truth.
The political machine and the public service corporations are in partnership everywhere. The purpose of the primary election in nominating a ticket is to get a direct expression of choice of candidates from the people.
Under such a law the power of directly expressing his choice, remains in the hands of the voter, who is allowed to say by his ballot who should be placed upon the ticket of his party as its candidate for congress, and for state, legislative and county officers; also who should be selected as the candidate of his party for United States Senator.
The object is to preserve the right of choice in its purity in the individual voter. It gives him a weapon of defense against the encroachments of the machine-corporation alliance.
You will find that the principal objections urged to a state wide primary are the following: 1st, that it is too expensive and bars poor men from office; 2nd, that there is no limit to the number of candidates and the person receiving the highest number of votes may notwithstanding, receive only a minority of the votes cast; 3rd, that voters of the opposition party vote at the primary of a party of which they are not members and force weak candidates upon it whom they will afterwards help defeat at the polls; 4th, that in county politics it results in bunching the candidates in the larger towns and denies to the country a fair representation upon the ticket.
As to the question of expense: There is no reason why a candidate standing upon his own merits should be at any more expense in securing a nomination under a fair primary election law than a candidate standing upon his own merits under the caucus and convention system. If a candidate is willing to go into a deal with and become politically indebted to the corporate machine influence which is most apt to control the convention, he may avoid expense; but should he refuse to do this and make his contest with some independence upon individual merit, he cannot hope to win before the convention without making a vigorous campaign in every county and fighting for delegates in every precinct in the state. This means a very large personal expense. Under a practical primary law he can be required to pay to the state or county a comparatively small fee at the time of filing his nominating petition and this will entitle him without further expense, to have his name printed upon the primary election ballot, and to have that ballot placed by a non-partisan judge into the hands of every voter at his party primary in every voting precinct in the county, district, or state, as the case may be, and to have every vote cast for him honestly counted and returned, the expenses of delivering the ballot boxes, receiving the votes, canvassing and making returns, all being paid by the county and state.
This in itself saves the candidate a large expense. The primary law should be followed by a law restricting the expenditure of money for campaign purposes before primaries as well as before general elections so as to prevent the extravagant and corrupt use of money in such campaigns. In this way all reasonable objections as to expense can be obviated.
As to minority nominations and number of candidates:
Under the provisions of the primary laws of Pennsylvania, Oregon, and Wisconsin, before a candidate is entitled to have his name printed upon a primary election ballot, he shall, at least thirty days (or some other specified period) before the primary is held, file with some designated public office a nominating petition duly signed by a specified number of voters of his party (the number being sufficient to show that he has a following large enough to make him a material factor in the contest). This provision tends to prevent the encumbering of the ticket with the names of candidates who have no appreciable following. A further provision might be added fixing a fee to be paid by the candidate to the county or state at the time of filing his nominating papers, to be used towards paying the expenses of the primary, ranging from fifty dollars for candidates for Congress, United States Senator, and Governor, down to one dollar for county Justices of the Peace, the amount to be governed by the amount of salary connected with the office. The payment of such a fee would not be at all burdensome or unfair to any candidate strong enough to be considered, and would, to a considerable extent, relieve the county and state of the expense of holding the primary.
Where only two candidates are contesting for a nomination, the candidate receiving the highest number of votes will, of course, receive a majority and be nominated; where three or more candidates are contesting for a nomination the law should provide that the candidate receiving the highest number of votes and not less than one third of the total votes cast for all the candidates, should be the nominee. Delegates to a county and state convention should be selected at the primary by direct vote and such conventions should be given the power to make party platforms in connection with the candidates and committeemen chosen by direct vote, and the power to make nominations from among the candidates whose names were submitted to the primary in cases where the candidate receiving the highest number of votes did not receive thirty per cent of the total vote cast for all the candidates.
To require a candidate to receive a majority of all the votes cast for all the candidates would defeat the object of the primary, because it would enable the machine manipulator to bring out enough "favorite sons" as local candidates to prevent a strong candidate before the people from receiving a majority over all, and to defeat him by having the matter thrown into a convention where the cards could be more easily manipulated.
The making of a ballot is a very important thing, but it is no more so than the casting of a ballot. In all our elections the candidate receiving the highest number of votes is elected and installed into the office. This is true even though he receives only a minority of less than one third of the total vote cast. A rule which for years has successfully prevailed in elections, will not be unfair if applied to nominations by primary election. At any rate, in cases where there are three or more candidates, one should be successful if he receives the highest number of votes cast for any one candidate, and not less than one third of the total vote cast for all the candidates for the same office in the primary of his party. A carefully drawn law covering the above points will answer the objection that there will be too many candidates and that the successful candidate may not have a sufficient endorsement to entitle him to the nomination and a provision therein providing for a convention to take part in making the party platform and to make nominations in cases where no candidate has received a third of the total vote, will prevent disintegration and decrease in party interest.
As to voters of an opposition party assisting in making nominations and afterwards voting against the nominees:
Each party should have its separate primary ballot, and when a voter asks for a ballot, he should be required to name in a distinct and audible tone of voice, the political party of which he is a member. Each party should be required to furnish official challengers, and in case of a challenge, the voter should be required to make oath that since prior to the last general election he has, in good faith, been a member of such party and a believer in its principles, and that he intends in good faith to support the candidates nominated by it at the primaries in which he is participating. Severe penalties should be imposed for the punishment of members of one political party who vote or attempt to vote the primary ticket of another. With proper safe guards of this kind, there will be less voting of this character at the direct primaries than there is now at party caucuses.
As to the objection that in making nominations for county offices, the country will be denied fair representation:
County nominations by direct primary until the caucus law of two years ago was enacted had been voluntarily adopted by the dominant party and maintained in Hughes, Hyde, Beadle and Codington Counties for years. Several times the question was submitted to the voters in one or more of these counties whether they should not abolish the primary and return to the convention. In every such case, a decided majority was in favor of retaining the primary. The law, however, can easily contain a provision giving to each county the option to decide by a popular vote whether candidates for county offices should be nominated in such county where the large towns are disposed to take more than their share of the offices under the direct primary, should that ever be the case, the option to suspend the application of the law in that county as to county nominations and to make such nominations by convention the delegates to the same being elected by vote at the primary election. All of these objections go to some matter of detail which legislation can obviate. No objection to the fundamental principle involved in the primary will stand for a single moment. The duty is upon you, gentlemen, with all the light and assistance you can get, to formulate and enact a practical and comprehensive primary election law. It should be made effective by an emergency clause, because its enactment has been demanded from authorative sources without conditions. Nearly nine thousand of your constituents petitioned for its enactment and submission two years ago. Its enemies were opposed to submission then. This year every political organization in the state by overwhelming majorities in party conventions have emphatically declared in favor not of the enactment and submission of the law, but in favor of the enactment of the law. Its enemies who two years ago opposed its submission may now attempt to defeat its enactment with an emergency clause on the plausible claim that the right to invoke the referendum should not be barred by such a clause.
Enemies of the referendum two years ago may now-if they receive encouragement-pose as its most zealous defenders. Under the cloak of pretense, however, will be found enmity on their part to the proposed law and a desire to defeat the demands made in party platforms by delay and covert opposition. You were commissioned not to enact a primary and allow its enemies to suspend its effect for two years, but to enact a primary and make it at once a live and effective statute.
If time shall prove that it is defective, it can be amended; or if experience with both satisfies the people that the convention and caucus system is better, it can be repealed. Our duty is plain. We must in good faith execute our commission which is clear and unequivocal.

A LAW PROHIBITING CORPORATIONS FROM MAKING CONTRIBUTIONS FOR POLITICAL PURPOSES
As a fitting sequel to the political upheaval in the State of Pennsylvania, the legislature of that state in extraordinary session last year enacted a law making it a crime for an officer, agent, or representative of a corporation for profit, whether incorporated under the laws of that state or of any other state or of a foreign country, to pay, give or lend, or authorize to be paid, given or lent, any money or other valuable thing belonging to such corporation, to any candidate or to any political committee for the payment of any election expense whatever. The law thus passed has received the specific endorsement of President Roosevelt and a similar measure is pending before Congress at this time. In keeping with the pledge made in the party platform upon which I was elected, I most earnestly recommend that such a law be carefully drawn, considered and passed by this legislative session. Everything good can be said in favor of such a law. Nothing can be said against it.

PUBLIC ACCOUNTING FOR CAMPAIGN FUNDS
The corrupt use of money to influence voters and to carry elections is a danger which attacks the very foundation of representative government. When assessments are made and money collected for the purpose of carrying on political campaigns, the public welfare is involved in its expenditure. 
If it is used to buy votes, make bets upon results, pay for whiskey and treats, and debauch the morals of men, it sows the seeds of a rottening cancer. If no responsibility to account is placed upon the men who receive and disburse it, they may collect it for one purpose and spend it for another; they may embezzle it with impunity, or use it against the very men who paid it. To assert that no legal checks or restraints should be placed upon the use of money in political campaigns and elections, is to take a position that is little less than monstrous.
The legislature of Pennsylvania at the same session to which reference has already been made, by law limits the use of money in political campaigns by candidates and committees to the following: Printing, travelling expenses, and personal expenses incident thereto, stationery, postage, expressage, freight, telegraph and telephone messages, expenses for public political meetings, demonstrations and conventions; transportation of speakers, rent, maintenance and furnishing headquarters and halls, payment of clerks, stenographers, and messengers actually employed, for men at the polls to check off voters to and from the polls. Paying out money for any other purpose in connection with campaigns and elections is made a crime. All funds used for the purposes named must first go into the hands of a treasurer who must keep a complete record thereof, which must be kept open for inspection and within a given period after the election, a specified, full, true and detailed account of all receipts and disbursements must be made by him under oath and filed with one of the public officers of the county or state. A similar law has been enacted in New York and in a number of other states and the dominant political party in this state has demanded the enactment of such a law here. The necessity for it has been emphasized by conditions which exist in the state, all demands by the legitimate successor of a preceding organization for an accounting for campaign funds being contemptuously disregarded.

FELLOW SERVANT LAW
Employees of railway companies engaged in the service in this state are discriminated against by our statute when compared with the federal statute and that of other surrounding states. The rule of the old common law that an employer is not liable for death or injury to an employee caused by the negligence of a fellow servant is applied to employees of railway companies in this state.
The rule has been changed by statute in Iowa, Wisconsin and other states.
The present Congress enacted a law approved on June 11th, 1906, providing that common carriers engaged in commerce between the States "shall be liable to any of its employees, or, in case of his death to his personal representative for the benefit of his widow and children, for all damages which may result from the negligence of any of its officers, agents or employees, or by reason of any defect or insufficiency due to its negligence in its cars, engines, appliances, machinery, track, roadbed, ways or works;" also providing that the fact that the employee was "guilty of contributary negligence shall not bar a recovery," where it was slight, "and that of the employer was gross in comparison, but the damages shall be diminished by the jury in proportion to the amount of negligence attributable to such employee. All questions of negligence and contributory negligence shall be for the jury."
This excellent statute should be made the law of this state so that it may be applied to causes which would not come within the jurisdiction of the federal courts. The employees engaged in the operating department of the railways are constantly required to risk their lives to protect property and to save other lives freely entrusted to their care. Their duties are quasi public. They are a faithful, courteous and brave body of men.
Their wives and children should have the same right to recover damages in case of their death, and they should have the same right to recover for injuries, caused by the negligence of others, employed by the company in all cases arising within the exclusive jurisdiction of the courts of this state that is given by the federal statute in cases over which the federal courts have jurisdiction. A bill is also pending before Congress to limit the continuous employment of these men to sixteen hours. A law of the same kind should be enacted here and should provide a respite of eight hours to the employee who has been continuously at work for sixteen hours before he can be again called out. Not only does the bodily health of the men demand this, but the safety of the public requires it.
I earnestly recommend legislation upon both these matters.

RAILWAY FREIGHT AND PASSENGER RATES
The subject of freight and passenger rates is occupying the attention of the people at this time. Under the law of 1897 the Board of Railway Commissioners has full and complete power to make the most thorough inspection and investigation of existing rates and to promulgate and enforce a new schedule of charges for both freight and passenger traffic. It is unfortunate that the board has delayed action in the matter until the last moment, and did not enter upon it in time to give the results to the public before this legislature convened, so that it might supplement the action of the board with any further legislation that might appear necessary.
It is to be hoped that the board will take action sufficiently early to enable you to thoroughly examine the results and to take such further steps as the situation may require.
The average layman of the state has no idea of the remarkable earning power of a mile of railway under the prosperous conditions that have prevailed in this state and throughout the country during the past eight years. The railroads operating in the neighboring state of Minnesota reported gross earnings in that state alone for the fiscal year ending June 30th, 1906, of $76,398,939.06. The Report of the Inter-State Commerce Commission for the year 1905 page 76, shows that the average of gross earnings per mile of line of all the railroads in the United States for the year ending June 30th 1905 was $9,666.00, while the average of net earnings for the same year was $3215.00 per mile. Local freight rates on the lines within this state have remained upon practically the same basis since 1900. The demand for a revised rate schedule is growing stronger and a very thorough investigation of the whole subject must be made by the Board of Railway Commissioners at once, and a new schedule promulgated with such reductions in freight and passenger charges as present conditions require. Otherwise, the duty of taking the necessary steps for relief will rest upon you. It is to be hoped that the schedule when made will be one which an average shipper can understand.
President A. B. Stickney of the Great Western Railroad Company, referring to the Minnesota Commission and the making of new schedules, said:
"The fact seems to be that the Commission like many of the people has been hypnotized by the constantly repeated, absurd and untruthful assertion on the part of the traffic managers that it is impossible to make and publish schedules in the manner that the law requires. They purposely prepare schedules of rates so numerous, so complicated, and so confusing that no layman and but few station agents can understand them. I have had all the schedules in the working files of the Chicago Great Western counted and by actual count on the 9th day of August 1906, these working and live files contained 8,561 separate and disconnected schedules, some of them consisting of a single leaf, but most of them containing from 4 to 130 pages. These schedules repeat the same rates over and over again. But this is not the whole story. Every daily mail brings bushels of schedules issued by other lines which, in some respects, affect the traffic of the line. This is the boasted science of rate making.
It goes without saying that the small shippers pay the highest of such scheduled rates and that the large shippers who employ expert traffic managers, who devote their whole time to the study of schedules, pay the lowest rates. The publication of thousands of separate schedules repeating the same rates over and over again affords the opportunity of manipulating schedules in such a manner as to produce all the evils of the secret rebate under the color of a compliance with law."
This coming from a great railway president, is entitled to consideration. There is no doubt but that the public is often deceived by complicated schedules made up by experts in the interest of the common carriers into the belief that rates have been materially reduced, when, in truth and fact the changes are inconsequential. Let us have a square deal with no juggling. I shall request the Board of Railroad Commissioners to conclude and submit the results of the work which it is now doing in connection with a new schedule to you, at the earliest possible date.
While upon this subject, I desire to call your attention to a provision of the railway law of 1897, which requires amendment to make it effective. The last clause of section 39 of Chapter 110, Laws of 1897, reads as follows:
''Such corporations connecting by intersection aforesaid, shall also, whenever ordered by the Railroad Commission so unite and connect the tracks of said several corporations as to permit the transfer from the track of one corporation to the other of loaded or unloaded cars designed for transportation upon both roads."
The only other statute ever enacted upon the subject is found in the Session Laws enacted by the legislature of the Territory of Dakota in 1889, which reads as follows:
“And in all cases where any line of railroad shall cross or intersect any other line of railroad in this territory, it shall be the duty of the railroad companies owning or operating such crossing, or intersecting railroad lines, within sixty days after being required by the order of the Railroad Commissioners unto them delivered, to provide at such crossing, or intersection, suitable and sufficient facilities for transferring cars and for accommodating passengers and traffic of all kinds or classes from one such line of railroad to the other, and to afford equal and reasonable facilities for the interchange of cars and traffic between their respective lines. The cost of constructing, maintaining and operating all facilities and structures required by this section, or by such order, shall be borne equally, between the railway companies owning or operating such intersecting lines."
The law of 1889 was suspended by the law of 1897, which contained a repealing clause.
In a case which went to the Supreme Court from Brown County in 1902, the validity of an order made by the Board of Railway Commissioners ordering connecting tracks to be made at Aberdeen between the Chicago, Milwaukee and St. Paul, Great Northern and Chicago and Northwestern Railway Companies, was brought into question and the law itself was attacked as void for uncertainty and incompleteness. The order was made in the very language of the statute of 1897.
It was held by the Supreme Court to be invalid for fatal uncertainty. As the law stands, it is impossible to compel intersecting railways to put in connecting tracks. A car load of lumber can be hauled from the Pacific Coast to Watertown or Huron over the Great Northern for 40 cents per hundred. To get it from Huron to Highmore, it must be unloaded and transferred by dray and reloaded into a Chicago and Northwestern car or an additional local rate of 17 cents per hundred must be paid for hauling it from Watertown to Highmore. A car load of potatoes loaded in a Great Northern car at Putney or Claremont, a few miles north of Aberdeen, and destined to any point in the states south of us, must be unloaded at Aberdeen, transferred by dray and re-loaded. The rate for a car load of flour from Huron to Chicago is 19 cents per hundred, while the rate from Huron to Orient over in Faulk county is 21¼ cents per hundred, because the Milwaukee and Northwestern Roads have no connecting track at Faulkton. This is an obstruction to commerce that the public demands shall be removed by an adequate amendment to the law which will enable the commission to compel the intersecting roads to so unite their tracks as to permit the transfer from one to the other of loaded cars, and making the haul over both a continuous haul, and the rate a continuous through rate.
The State of Minnesota has a connecting track law which has been sustained by the Supreme Court of the United States. I refer to Section 3 of Chapter 91 of the General Laws of the State of Minnesota, sustained by the decision of the Supreme Court of Minnesota in 74 N. W. 893, and by the United States Supreme Court in 179 U. S. 288. I recommend that you enact the Minnesota law as the law of this state. The Constitution declares that railways are public highways and that each railway company shall have the right to intersect, connect with or cross any other railroad, and that railway companies shall receive and transport the tonnage and cars loaded or empty of the other, without delay or discrimination. The enactment of such a law is necessary to make effective to the people the above constitutional provisions.

ASSESSMENT LAWS
Every one concedes that our revenue laws arc crude and inadequate. The retiring governor two years ago at the close of an administration of four years, devoted a large portion of his address to the legislature to this one subject. In his opening address to the legislature, my predecessor referred to it. It seems to me that the time for action has come.
The Constitution says that "All taxes to be raised in this state shall be uniform on all real and personal property; according to its value in money to be ascertained by such rules of appraisement and assessment as may be prescribed by the legislature by general law, so that every person and corporation shall pay a tax in proportion to the value of his, her or its property. And the legislature shall provide by general law for the assessing and levying of taxes on all corporation property as near as may be by the same methods as are provided for assessing and levying of taxes on individual property."
The report of the Public Examiner shows that at the close of business on September 4th 1906, the following amounts were upon deposit in the banks of this state other than National:

Deposits subject to check ........................................... $14,189,468.92
Certificates of Deposit………………………………...13,951,403.00
Cashiers checks…………………………………………….32,800.85
Total ............................................................................ $28,173,661.77

It shows the following assets belonging to the same banks at the same time:

Capital stock .................................................................. $4,148,175.00
Surplus .................................................................................643,585.23
Undivided profits .............................................................1,457,647.37
     $6,249,407.60
Upon what valuations are these depositors paying taxes?
Let us see.
Table XX page 230 of the Auditor's Report for the year ending June 30th 1906, shows the following total assessed valuation for 1905 and 1906 of “Moneys other than of Banks, Bankers, Brokers and Stock Jobbers."
1906………………………………………………….$783,764
1905………………………………………………….$678,109
and the following total assessment of "Credits of Banks (other than those whose capital is represented by shares of stock), Bankers, Brokers and Stock Jobbers."
1906 ............................................................................ $ 91,156
1905………………………………………………….$123,936
Table XXII, page 232
Shares of Bank Stock:
1906………………………………………………..$2,472,525
1905………………………………………………... 2,351,447
Table XXI, page 231
“Credits other than of Banks, Bankers, Brokers or Stock Jobbers:"
1906………………………………………………….$618,707
1905…………………………………………………...677,722
It will be noted that the enormous figures shown in the report of the Public Examiner do not include the figures of National Banks while the small amounts given to the assessor, as shown in the Auditor's report includes all banks. Attention cannot be diverted from this by dwelling at length upon the small value placed upon household furniture in many counties, a class of property which always sells as second hand goods and has no earning power.
The franchises of public service corporations organized in this state and the privileges to do business and hold property in this state granted by its laws to nonresident public service corporations are of very great value, and the law prescribing a rule for assessing the property of these corporations whose property is a kind possessed of marvelous earning power, omits all reference to the value of the franchises, and in fixing values, no reference is made to increased value of that part of the property of these companies lying within towns and cities, where they have depots, machine shops, enlarged grounds, side tracks, general offices and personal property of great value. The terminal grounds and depot buildings of the Burlington and Missouri River Railroad Company and of the Chicago and Northwestern Railroad Company with rights of way in the City of
Deadwood and Lead, worth thousands of dollars are valued under the law at the same rate per mile as one mile of single track over the open spaces of land in Custer or Fall River or Pennington Counties.
With one of the richest gold mines in the world in its midst, the average value of mineral lands in Lawrence County is only $91.66 per acre; the total number of acres of mineral lands in the county is 44,770 and the total assessed valuation thereof, $3,908,235. 
With 2,734 miles of Western Union Telegraph lines in the state assessed by the state board at $240,000, and 20,723 miles of telephone wires in the state assessed by the same board at $780,293, and the property of the Express Companies assessed at $139,298 and the Pullman Company assessed at $22,500, we find all this property going entirely free of road tax, because the tax levy is made upon it by the State Board exclusively and no equivalent to the road tax is levied at all.
The statements which railway companies are required to furnish as a basis for an assessment, omit all side, passing, and switching tracks, warehouse lots and terminal grounds, and franchises. The assessment must be made by fixing the value per mile of the main line and branches and by a pro rata distribution per mile of such assessment among the counties through which the road passes. For instance, the Burlington and Missouri River Railway from Edgemont to Deadwood is assessed at $3968 per mile, and the assessment of the 106 miles is distributed pro rata among Custer, Fall River, Pennington and Lawrence Counties; the Black Hills Division of the Fremont, Elkhorn and Missouri Valley, (now Chicago and Northwestern Railway), is assessed at $4812 per mile, and the assessment of the 133 miles is distributed pro rata among the counties of Fall River, Custer, Pennington, Meade, and Lawrence. The part of these roads lying within the incorporated cities of Deadwood and Lead, including right of way, road bed, shops, depots, depot grounds, side tracks, yards, and terminals, are assessed at the $3968 and $4812 per mile respectively, thus paying school and municipal taxes in these cities upon a valuation which is so infinitesimal that it amounts to little less than an exemption from taxation for such purposes.
The same kind of exemption is allowed to the roads which have shops, miles of passing tracks, splendid depots and terminals of great value, at Yankton, Sioux Falls, Brookings, Mitchell, Watertown, Huron, Aberdeen and other points.
The State Board levies all the tax which is at all levied upon the property of telegraph, telephone, express and sleeping car companies in the state.
The statute says that the tax so levied shall be equal to the average assessment of the state, county, school and municipal taxes levied upon other property for the preceding year, and shall be apportioned by the State Treasurer between the state and the various counties in which the company so assessed is doing business, the amount to which each county is entitled being determined by the state board of equalization. The statute does not authorize the board to include the average equivalent of the road tax levied upon other property the preceding year. At this time, when a cry is coming up from all over the state for better roads, these corporations are enjoying absolute immunity from road taxes. It is a well known fact that local assessors fail to assess moneys and credits and a vast amount of property never goes upon the tax rolls. The poor man whose only possessions consist of a home, a little household furniture, and a horse or cow, cannot hide his property from the assessor, nor does he attempt to do so. The law should be amended in the respects I have pointed out and then enforced. It should be made the duty of the Board of Railroad Commissioners to employ experts for the purpose and to collect authentic and reliable information concerning the actual value of the railway properties in the state, not only for the purpose of making the same a basis for rate schedules, but for the purpose also of giving the State Board of Assessment some independent and reliable information of the real value of these properties. The law enacted two years ago, giving the State Board of Assessment authority to take such means and measures as may be necessary to ascertain, discover and place upon the assessment rolls taxable property omitted therefrom or concealed, should be made effective by making an appropriation which would enable this board to employ an agent to go out over the state and make a personal investigation of such cases and report the same to the board. I earnestly recommend this subject to you as one of the greatest importance, demanding effective legislation at your hands.

A NEW STATE CAPITOL
The present state house was built by the citizens of Pierre in 1889 between the 1st day of October and the 7th day of January, 1890. It was donated to the state. So likewise was the ground upon which it stands donated to the state by the Western Town Lot Company.
This wooden building hastily constructed, without cost to the state has, with some additions and repairs, been used as a state house for sixteen years. All of the records and archives belonging to the state; the splendid Supreme Court library; the state library; the offices occupied by the state officers; the rooms of the several Judges of the Supreme Court and the Senate Chamber and Hall of Representatives, are crowded into this building. A fire once started on a windy day would destroy the entire building and contents before hose cart or fire engine could get within reach. It is doubtful if the contents of the vaults so hastily constructed, could withstand a fire. The loss of the property of the state kept in this old building would be irreparable.
Besides this, it is wholly inadequate for the present needs. The law library is so filled and crowded with books that there is neither light nor room left in it. The Secretary of State in his report says: "The library has entirely outgrown its present quarters. Almost the entire room is occupied with book shelves, and as the library is constantly increasing, it has become practically a necessity that more space be provided, and it is hoped that the next session of the legislature will provide for means for the erection of a complete capitol building". He also says: "The building is old and must be repaired from time to time. Great need exists for more room in all departments, both vault and office room. Also there is need of more committee rooms during the legislative sessions."
The Government of the United States in the Enabling Act of 1889, under which South Dakota was admitted into the Union, made to this state a grant of 82,000 acres of land out of the public domain for public buildings at the capital of the state, the same to be selected under the direction of the Secretary of the Interior from the surveyed and  unappropriated public lands of the United States within the limits of this state. The state selected these lands a number of years ago and, as I understand it, they have been patented to it by the Government.
No restrictions as to the time when these lands may be sold, the price, or terms of sale, were imposed either in the Enabling Act or in the Constitution of the State. Their disposal was left entirely within the power of the legislature.
The legislature two years ago enacted a law creating a board known as the State Capitol Commission, consisting of the Governor, Secretary of State, State Auditor and Commissioner of School and Public Lands, and authorized this board to procure the erection of a capitol upon block 21 Fourth Railway Addition to the City of Pierre, which is owned in fee simple by the state, and to complete the same. It authorized and empowered the board to employ an architect and to do and perform any and all acts necessary to enable it to carry out the provisions of the act. It authorized the Commissioner of School and Public Lands to sell enough of said lands at not less than $10.00 per acre to raise a sum which, with the amount already in the hands of the state from the sale or rental of such lands would make the sum of $150,000, and placed said amount, when realized, at the disposal of the Commission for the purpose aforesaid. It provided that where sales were made for part cash and part on time, none of the evidences of deferred payments should be hypothecated, pledged, sold, or discounted in any manner by the Commission for the purpose of raising cash for erecting a capitol.
Under the authority of this act, the Commission employed architects who have made and delivered to the Commission complete plans and specifications for a beautiful, substantial, commodious and well arranged capitol building, the estimated cost of which, when entirely completed is $500,000. They have had the excavation done and the foundation built for the east wing of the proposed building, and at the end of the fiscal year June 30, 1906, had paid out, including $10,000 to the architects, the sum of $17,286.91. No contract for the erection of the building, nor of the east wing has been let. Commissioner Bach in his report for the year ending June 30th, 1906, among other things, reports that at that time there was on hand in cash and deferred payments to the credit of the public buildings fund the sum of $66,201.58, and states that there is a necessity for caring for the valuable records of his department; that "they should be in a fire-proof vault and the one we now have is entirely insufficient." I notice from a very recent report of Commissioner Bach to the Capitol Commission that on November 10th, 1906, he had sold 12,617.38 acres for the total sum of $130,164, an average of $10.32 per acre, and having realized the amount authorized in the act of 1905 referred to, he was compelled to withdraw the remainder from the market; that there remains unsold 69,380.48 acres.
He recommends that the Commissioner be authorized to continue to sell these lands as rapidly as possible and that the minimum price be reduced for the reason that the capitol lands were the last of the endowment lands selected and in a great many instances are the poorest lands. He adds:
"I believe that it will be to the interest of the state to repeal that part of the law which reads in part, as follows: 'And it is hereby especially provided that none of said time payments or evidences of the same shall be in any manner hypothecated, or pledged, or sold, or discounted in any manner by said Capitol Commission for the purpose of raising cash for the said capitol building fund.'
I see no reason why a law should not be passed allowing the Commissioner to sell for one half cash, and the balance on three and five years time, taking a mortgage back on the land and the Capitol Commission be authorized to sell said mortgage in the market. Why the legislature should want to change the custom of the country and hinder the sale of these lands after authorizing the same, is hardly comprehensible."
I heartily join in the suggestions and recommendation of Commissioner Bach. The act should be amended so as to authorize the Commissioner to go on and sell the lands, leaving the minimum price to be fixed by the Board of Appraisal and allowing mortgages taken for deferred payments to be assigned without recourse and sold at face value, and authorizing the Capitol Commission to go on and complete the entire capitol building according to plans and specifications. In this way, a splendid capitol building can be erected without the expense of one dollar to the tax payers of the state.
As to the building material used in its construction, the hands of the Commission should not be tied further than to authorize it, within reasonable discretion, to give preference to South Dakota materials, if it can be done without detriment to the building and without unduly increasing the cost. It would be unwise to arbitrarily tie the Commission down to any given material and thus place it wholly at the mercy of a few men who might be in control of the material named and prevent fair competition among contractors and material men. A new capitol must be built. If it can be constructed in a creditable manner of South Dakota materials at a fair price and with proper regard for beauty in architecture and durability, it should be. If, after allowing a full and fair chance to those who claim to be able to furnish home materials, no offer is made that is within reason as to price or quality, the Commission should be allowed to go on with the work even though the material come from outside the state.
I have been informed by one of the architects that the plans and specifications can be easily modified so as to permit the use of a South Dakota stone, the only question being whether such stone can be procured in sufficient quantities and of a size and quality necessary in the construction of so large a building and at a price which the state would be justified in paying for it. Of course, discretion must be given to the Commission in the determination of these matters. Legislation that will enable the Commission to go on with this necessary and urgent work is recommended, as necessary for the protection of invaluable property belonging to the state.

TWINE PLANT AT THE PENITENTIARY
At the last general election an amendment to the Constitution was ratified, directing the legislature to provide for a tax in 1907 of not to exceed one and one-half mills on each dollar of the assessed valuation of all taxable property in the state for the purpose of establishing, installing, maintaining and operating a hard fiber twine and cordage plant at the state penitentiary. Under this provision, it becomes your duty to make such levy or to authorize and direct the State Board of Assessment to make it at its annual meeting for the year 1907.

REVISION OF LAW FOR PRESERVATION OF GAME AND FISH
An association known as the South Dakota Game and Fish Protection Association, representing citizens of the state who are concerned in the preservation of game and fish, have been at work in the preparation of a proposed new game law, copied, I understand, substantially from the Minnesota game and fish law. This is an important subject for legislation. Unless our wild game is more carefully protected from the ravages of the hunter, it will be but a short period of time when we shall have no wild game. In the September Number of Recreation is an article from the graphic pen of Clate Tinan, editor of the Kimball Graphic upon "The Vanishing Prairie Hen-Why It Cannot Survive", that touches the heart of every lover of this splendid bird. I hope you may be able to agree upon some good and effective law upon this subject. In whatever law you enact, provision should be made that will permit trustworthy persons to take specimens of game and fish, song, insectivorous and other birds for scientific purposes for colleges and museums.

STATE FAIR, FARMERS' INSTITUTES, LIVE STOCK SHOW
There is vastly more substantial good to the people of the state in maintaining in the highest degree of excellence a state fair and in expending funds for that purpose, and for the purpose of encouraging the production of fine stock and to promote a more perfect and practical knowledge of farming, than in any other form of advertising.
The raising and exhibition of superior products of our soil and of superior live stock is the most telling and effective method of advertising. The South Dakota Board of Agriculture has been doing splendid work. Exhibits of which all who saw them were proud, were made this year both at Huron and Mitchell. Means must be provided which will enable the board to get into the field early and to encourage the raising and preserving and sending to the Fair the best specimens from every county in the state. This cannot be done without means. Suitable buildings of ample size and arrangements must be provided for the housing and care of exhibits when received and for the exhibition of the same to the best advantage. The report of the board should receive your most careful attention and efficient support by appropriations should be made.
For a similar reason the work done in Farmers' Institutes and by the Pure Food and Dairy Commissioner should be loyally supported by you.

ARTESIAN WELLS AND GEOLOGICAL SURVEY
I learn from men of the most wide practical experience in this state, as drillers of artesian wells, and from geologists who have scientific knowledge upon the subject, that the great waste of water from the artesian basin caused by the sinking of numerous wells in close proximity to each other and unchecked and constant flow therefrom, together with the loss of water into upper stratum in cases where the pipe and well casings have rotted out, is materially diminishing the water supply and pressure and threatens to greatly impair, if not to ultimately destroy the invaluable benefits now enjoyed from this great subterranean water reservoir. Legislation is proposed for the purpose of regulating the sinking of these wells and the use of water therefrom. This legislation is entitled to your best thought and care. Another subject worthy of legislative support is a geological survey of the lignite coal beds in the state west of the River so that the public may know their extent and where they are located; also of the "Bad Lands".

CONCLUSION
In addition to the foregoing, which I have presented as measures of great importance pressing upon your attention, are many other subjects which you will be required to consider.
Adequate appropriations must be made for the maintenance of the National Guard in an efficient and creditable manner.
The Department of History suggests several matters worthy of legislative action.
A law providing for the construction, maintenance and supervision of good roads will be proposed.
Measures further regulating the sale of intoxicating liquors; requiring personal service in all actions for divorce; requiring persons practicing the art of healing to procure a license; providing for the appointment of a Fire Warden, defining his duties and fixing his compensation, to be paid by the fire insurance companies doing business in the state; these are some of the other measures you will be called upon to consider. It is my wish that you may have a pleasant and profitable session and that you will make a record for yourselves and for the state which you serve that will always hereafter bring to you that solace and gratification which comes from the faithful performance of duty.

January 8th, 1907
COE I. CRAWFORD, Governor.