Inaugural Address - William H. McMaster

              INAUGURAL ADDRESS
========== OF==========
GOVERNOR W. H. McMASTER
TO THE SOUTH DAKOTA LEGISLATURE
SEVENTEENTH REGULAR SESSION
1921

Governor W. H. McMaster's Inaugural Address

Gentlemen of the Legislature:
The world, with costly sacrifice, has reaffirmed its faith in legislative assemblies. Seventy thousand American boys in the late war dedicated their lives to the cause of liberty. The essence of that liberty, the principle around which the fury of the struggle raged, was the right of people, through representative government, to govern themselves. I therefore congratulate you upon your election to this position of legislative responsibility, for trials and suffering have dedicated and emphasized anew the dignity, solemnity and sacredness of the trust reposed in you of enacting laws that vitally touch the destiny, welfare and happiness of the people. You meet in serious times. You are confronted with grave and stern problems. Patriotism and whole-hearted allegiance to the state should bar selfish purpose or unworthy motive. Let us openly, fearlessly and without subterfuge unite in forming honest policies and honestly execute these policies. Let legislative and executive action square with the axiom that government should be in the interest of all parties and all classes. Our achievements and accomplishments in the past have been truly marvelous, but victories have been won and the state has been builded by men of all parties and all classes, and therefore the government must be in the interest of all.
You are meeting at a very strange and unusual time in the history of the state, being in the midst of a severe financial depression. You have grave and disconcerting problems to face, but knowing the type and character of the men here assembled, I feel confident that South Dakota made no mistake in entrusting to you the burden of her problems.
I wish to extend heartiest felicitations to the retiring Governor and wish to congratulate him and all of his co-workers upon the splendid record made during the past four years, much of which will be of lasting benefit to the state.
At the last election, for the first time in the history of the state, women participated in politics. The women of all parties are to be highly commended and complimented on the thorough-going interest which they manifested in public affairs and the careful and conscientious consideration they gave to problems of the state and nation.

THE MARKETING PROBLEM
The one material interest in South Dakota that overshadows and transcends in magnitude and importance all other material interests is agriculture. Outside of our mining interests, which are confined to a relatively small area, the ebb and flow of the tide of agricultural prosperity is instantly and universally felt throughout the state. The barometer of every profession, of every kind of business and of every industrial activity, foretells fair skies or dull times strictly according to the rise or fall of the fortunes of the farmers. Our agricultural prosperity is the very breath and life of our commercial activity. Consequently all classes in the state heartily concur in any plan for the betterment of 

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our agricultural interests that is safe and sound, or which does not jeopardize the best interests of the state. The one great problem of the agricultural interests, not only of South Dakota but of America, is the marketing problem. This problem is of gigantic proportions and its full solution involves many complex and perplexing questions and a co-ordination of the activities of innumerable units composed of millions of farmers, while its monetary phase involves, annually, billions of dollars.
No single business in America is comparable to it in magnitude or importance. To discuss this question in all of its intricate and complex phases, or to set forth in a comprehensive way all of the proposed solutions, emanating from many sources, time will not permit. The consensus of opinion is that the following constitute the essential factors of the problem: First, opening of foreign markets for our surplus products; second, transportation; third, cost of production; fourth, storage facilities; fifth, credits. The leading representatives of the agricultural interests in one state may have very definite and pronounced views in regard to the ways and means to be employed in the solution of this problem, but until the various ideas have been thoroughly co-ordinated and a comprehensive plan agreed upon, a complete solution of the problem cannot be attained.
Out of this nation-wide agitation and discussion there is slowly crystallizing the central idea that the problem is a business one; that its solution must rest upon sound business principles; that while the federal government and state governments may pass legislation of a helpful nature, yet the problem must be solved through a nation-wide co-operation of the farmers.
The fundamental thought in its ultimate solution is the control of the flow of grain to the market to meet actual market requirements and the power of control should be vested in the producers. It rests now with the market manipulators and speculators, who make use of sudden market fluctuations to repell or attract grain shipments. Regulation of the flow of grain to markets is a powerful factor in price regulation and stabilization. Two instrumentalities are necessary to effect this regulation: Credit and terminal facilities for handling grain, with the right, in addition, of having full memberships on the grain exchanges of the country. The governor of Minnesota is recommending• to the legislature that a law be passed granting farmers ' companies the right to acquire memberships on the grain exchanges of Minnesota, which immediately would lend encouragement to the organization of farmers' co-operative terminal elevators. If that law passes in Minnesota, it is not unlikely that the farmers of South Dakota will wish to avail themselves of the opportunity of co-operating with the farmers of Minnesota and other states, or may wish to conduct and operate, by themselves, a co-operative elevator at some terminal point.
Through a system of cooperatively-owned elevators throughout the nation there would be given to the farmer a powerful leverage in determining what the price of his product should be. Cooperatively-owned elevators, in addition to being effective instruments in price regulation, would confer other advantages that are very apparent. It would give the farmer the opportunity of cleaning, drying and re-mixing his grain at cost. It would give him the further opportunity of selling his product in lots of one million to five million bushels, which

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is a great advantage. It would also afford storage facilities and the opportunity of borrowing money on warehouse receipts at a low rate of interest.
I therefore recommend to the legislature that in the event the farmers express a desire, through their co-operative organizations, to organize a co-operative terminal elevator company, or centralized selling agencies for livestock, wool and other agricultural products, you make an appropriation to defray the necessary expenses of employing an expert to make a thorough preliminary investigation of the enterprise. A report thereof should thereupon be submitted to the association making such request and, provided such association decided to organize, the state marketing department could and should render valuable assistance to the organizers. I further recommend that if an organization of this nature shall so request, the accounting department of the state of South Dakota shall be placed at their disposal, and that this service be rendered free of cost.
Pursuant to the provisions of an amendment to the Federal Reserve Bank Act, there is in process of organization a corporation of one hundred million dollars capital, the object of which is to open foreign markets to the agricultural products of America and extend credit to foreign governments for the purchase of our raw materials. This corporation may accept the securities of a foreign country, subject to the approval of the Federal Reserve Board, and issue bonds or certificates of indebtedness upon such security to the extent of ten times the capital of the corporation. In the event that this corporation should be able to function, it will be of great advantage in opening markets for the agricultural products of America.
This immediately suggests the advisability of organizing a similar corporation in the state of South Dakota, under state supervision, for the purpose of extending additional credit facilities to the agricultural and livestock interests of the state, and I recommend suitable legislative enactment for the organization of such a corporation in the State of South Dakota so that, in the event the agricultural interests of the state should deem it advisable to engage in such an enterprise, they will find provided for them legislation of a suitable nature.
While the claim is made that the Federal Reserve Bank is issuing a large amount of credit to agricultural interests, yet it is very evident to one familiar with the actual conditions under which these loans are made, the requirements in regard to the maturity of paper exacted by the Federal Reserve Bank and the character of the assets which the borrower must possess, that the methods at present employed are wholly inadequate to meet the requirements and needs of the farmers. No one questions that the Federal Reserve Banks have rendered an invaluable service to the country and have materially assisted agricultural interests, yet the exactions required by the Federal Reserve Banks are unreasonable and are not in harmony with the laws of agricultural activity, but rather conform to the customs and usages of commercial activities. I therefore recommend that the legislature of South Dakota memoralize our members in congress to use their influence to the end that the credits of the farmers be given more liberal consideration by the Federal Reserve Banks.
I further recommend that suitable legislation be enacted which will give to co-operative associations the right to buy, own and have full privileges of membership on the grain and livestock exchanges in the state of South Dakota.

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It is apparent that the co-operative system is just beginning to take semblance of definite form and, as it is only in its incipiency, no man is able to forecast accurately along just what lines of development may be the solution of this problem. The services, sympathies and support of some of the ablest and strongest men of America have been enlisted, and congress is giving the matter very thorough consideration, though at the present time we have no way of forecasting what definite action or assistance congress may render in the matter. However, the state of South Dakota should be in readiness to serve in whatever capacity it may, and I therefore recommend that an ample appropriation be made so that the state of South Dakota may, if necessary, employ experts, in conjunction with our marketing department, to assist the various farmers' organizations in devising ways and means to solve the problem. I further invite your earnest consideration of the advisability of defraying the expenses of a representative at Washington, selected by the farmers' organizations of South Dakota, for the purpose of obtaining legislation helpful to the agricultural interests of the country. The state must not be passive in this matter but must prepare itself to be aggressively active.

LIVESTOCK
Great losses and inconvenience are annually inflicted upon shippers of livestock in the state through neglect of the railroads to promptly transport livestock from shipping point to final destination. Increased power should be given to the railroad commission for the purpose of enforcing prompt shipment, when both starting point and destination are within the state of South Dakota. Furthermore, all feeding stations en route should be either placed under the jurisdiction of the marketing department or the railroad commission, with power to regulate the charges made for this service. My attention has been called to the fact that even very recently, since corn has been selling at forty-five cents a bushel, one of our feeding stations has been charging the farmers two dollars and twelve cents per bushel. Such charges are exorbitant and unjust and should not be tolerated. 
I also wish to call your attention to the fact that during the drouth in the western part of the state, when feed for livestock became exhausted, in many instances our stock growers were forced to ship immature livestock to market because high freight rates made it impossible to supply the necessary feed by shipment. As a result many were obliged to ship their cattle at a heavy loss. 
This matter is of vital importance because it concerns the question of food production, and I would therefore recommend that the railroad commission be given power in times of emergency to compel the railroads to lower their rates during such period, and thus protect the cattle industry as well as conserve the food supply of the nation. I would further recommend that all terminal stockyards in the state of South Dakota and all commission merchants operating therein be placed under a state license system to afford a greater measure of protection to the shippers of the state.

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FARMERS' CO-OPERATIVE ASSOCIATIONS
In view of the fact that we are entering upon an era which will witness a great stimulation in farmers' co-operative societies, and for the reason that in many instances the farmers organizing these societies have had no previous experience in accounting systems or the adoption of certain rules fundamental to the conduct of such-business, I would suggest that upon the request of a farmers' organization the state provide for it an experienced accountant, to assist in introducing a proper accounting system and to make such suggestions as would be valuable to it in the conduct of its affairs, and that this service be rendered at a very reasonable cost. Assistance of this nature would serve to keep many of these organizations from being involved in financial difficulty, and in many instances would save them from heavy loss.

INCREASED CREDIT TO WESTERN STOCKMEN
The great industry west of the river is the livestock industry. One of its chief obstacles in the past has been the difficulty of procuring credit. The limited reserve of the banks has rendered them incapable of coping with the situation, and in times of financial stress, on account of the character of the paper, eastern money lenders call their loans, and untold hardships have been worked upon the small ranchman, until today in some sections the situation is almost tragic. It occurs to me that with proper legislation there might be organized mutual associations for the purpose of increasing and stabilizing their credit facilities.
In days gone by, with a plethora of money in the east, competition among lenders resulted in unwise loans and the easy procuring of credit at times tempted the local ranchman to venture beyond his depth, and the suave, persuasive speech of cattle salesmen oftentimes lured the ranchman to purchases of cattle that were bound to result in loss. It is apparent that through the influence of mutual associations, because of a mutual interest created, greater wisdom would be employed in the purchase of cattle and more careful selection made in the individual loans, greater attention paid to the resources and feed facilities and to shelter necessary for the cattle. The ultimate purpose is to take care of the average sized farmer, and it would seem that if a system of this nature or some similar plan could be devised, it would tend to stabilize the industry and place it upon a sounder basis, by offering to the money lender a higher class of investment not only because of the increased security but because the business would be handled and directed upon a more intelligent basis, and the paper would have the atmo-sphere of conservatism and soundness. I suggest that you call into conference representative Stockmen from the west and local and eastern bankers. After a thorough discussion of the subject in the light of the experience of these men, you may be able to evolve some reasonable plan that will be of material assistance to the industry.

DRAINAGE
The amount of damage resulting from floods during the last few years to various lands located adjacent to the Big Sioux, James River, and other streams, 

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is a matter of very great concern to the landowners who have suffered, and in many instances have lost their total crops, aggregating in value hundreds of thousands of dollars. The magnitude of the problem is such that it is utterly impossible for local communities to cope with the situation. There will be various delegations coming from the different sections of the state who will give you detailed information in regard to this matter. I trust that you will be able to formulate legislation that will bring relief to the situation.

GOOD ROADS
To dwell at length upon the importance of good roads, especially in an agricultural state, would be superfluous. The value of good roads from an economic standpoint and their influence upon the life of the state in giving wider opportunities to the individual are immeasurable. In this state, where it is imperative that agricultural products be hauled long distances, good roads are a necessity, and we must not overlook the fact that roads well built and suitably maintained are not to be considered as an expense but are to be viewed from the standpoint of an investment. The highways are of the same relative importance to the state today as were the railroads thirty years ago.
There can be no argument as to the wisdom of adopting a comprehensive building program that fully takes into consideration the present and future needs of the state. The roadbuilding programs of older and more thickly populated states are evolving toward a system of hardsurfaced roads. However we must squarely meet and face the program of road building in South Dakota according to the conditions with which we are confronted. It is not possible that a state with a wide area and a comparatively small population can move forward as fast or do things in as big a way as an older state that has many times our wealth and a much larger population. Some of the older and larger states have enacted special laws in regard to automobile taxes, taking the annual income from that source, capitalizing it, and issuing bonds in accordance therewith, the annual revenue from the automobile fund being used to pay the interest-carrying charge and to create a sinking fund. In states of large population, having a correspondingly large number of automobiles in operation, the income from that source is very large, and by capitalizing it they are able to enter into a very comprehensive program of hardsurfaced road building. But from such data as I am able to acquire in reference to the state of South Dakota, the income from a special automobile tax, used exclusively for a state building program, could not be capitalized to an amount that would be sufficient to permit the state to engage in a comprehensive hardsurfaced road program, and to enter into such a program would entail a burden of taxation that would be almost unendurable.
Therefore it would seem to be the dictate of sound business judgment that South Dakota continue with the present road building program, building dirt roads, constructing 'bridges and doing a limited amount of gravelling, in order that there may be brought to the state as great advantages for all sections as may be possible with the means which we have at our command, and that the present system of highway construction be continued. In the meantime, we are

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laying the foundation for hardsurfacing in the future. From present indications we may safely assume that congress will continue its program of federal aid, and in that event it should be the policy of the state to raise funds to meet federal appropriations. Upon investigation I find that the state has practically enough money left from the sale of bonds, together with the money to be received from the federal government, to maintain the present program of road building for two years, but if the system is to be perpetuated, it is necessary to devise new ways and means of raising money. It would hardly seem wise at this time to increase our bond issue or to levy by direct taxation any unusual amount. Therefore, I would suggest that you carefully consider the advisability and feasibility of following the example of other states and devising a new system of taxing automobiles and of placing the total amount of that tax in a fund, the larger part of which should be used by the state highway commission to continue the present program. While it is true that the present funds will not be entirely exhausted for a period of two years, yet it is necessary that action be taken at this time to devise new methods of revenue, for the reason that if the road program is to be continued in the future, definite assurance must be had in advance, as it requires on an average a year of preparation in the way of surveying and of drawing plans and specifications before actual construction begins, and an interruption of the work would involve additional expense in the way of maintaining the present organization or it would necessitate the disbanding of same so that in either event it would be costly.
I wish also at this time to emphasize as strongly as words can emphasize the importance of perfecting an effective system of maintenance of roads already built. The consensus of opinion of the best engineer’s and ablest road builders of the country is that the factor of maintenance is just as important as the original building of the road, and unless we devise a plan which will effectively carry out a maintenance program and see to it that it is properly enforced, millions of dollars will be wasted.
Our highway department has been organized for approximately two years and it has accomplished very definite results. It has entered into a comprehensive program and unquestionably has acquired experience that is valuable. I would suggest to the legislature that you review the work of the highway commission and that you draw freely on their experience by consulting and advising with them.
It is evident that in the near future the cost of road building will materially decrease. The people of South Dakota need and desire good roads and it is our duty to provide for their construction, taking into consideration at all times their cost; to utilize plans that will give to the state the greatest value for the money invested, and to see to it that each dollar invested brings lasting and permanent benefit to the state.

BANK GUARANTY ACT
The bank guaranty act was pioneer legislation in the state of South Dakota. It has been subjected to a severe strain and thus far has weathered successfully the storm of a great financial crisis. The underlying principle of the act was to

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protect bank depositors. The authors of the bill had in mind two distinct factors in the protection of deposits: First, the creation of a definite reserve for the purpose of paying depositors in case of loss. The second factor is an outgrowth of the first, namely, the creation of confidence in banks, which is a strong, sustaining influence in time of financial depression, keeping in banks thousands of dollars which would otherrwise seek secret hiding places. The second factor, largely of a psychological nature, exerts a powerful influence by keeping this additional money in the banks and has worked, in these strenuous times, untold benefits to the agricultural and business interests of the state.
With the above analysis, it is readily seen that any measure taken to prevent bank failures is not only a protection of the bank guaranty fund, and thus a protection to the depositors, but is a great benefit and boon to the business interests as well. For every bank failure, hundreds of borrowers are forced to pay their loans at costly sacrifices, and oftentimes they are financially ruined. 
It would be the part of wisdom, under certain legislative limitations, to empower the guaranty commission to use a portion of the guaranty fund to prevent bank failures. For example, if a bank of $500,000 of deposits finds that its reserve is depleted and it cannot obtain further credit, it now becomes the duty of the bank examiner to close the bank and draw on the deposit guaranty fund for $500,000. If, on the other hand, the bank examiner were empowered by suitable legislation to tide over banks whose assets were sound, by drawing for a limited amount upon the guaranty fund, valuable institutions might be saved without loss and at slight expense.

THE BLUE SKY LAW
Our blue sky law is not adequate to give proper protection to the investing public of South Dakota. Our citizens have invested millions of dollars in undesirable investments, many of which have resulted in total loss. There should be a system devised which completely checks and wholly regulates the issue of stock certificates, and a wider latitude of discretion should be given to the Securities Commission in the matter of barring from the state stock-selling concerns. Many stock salesmen who have operated in South Dakota during the past two years, oftentimes employing trickery and downright fraud, should today be breaking stone behind prison walls instead of living in luxury in expensive hotels. Any provision for protection along these lines, made by the legislature, will be heartily welcomed by the people of South Dakota.

LICENSE TAX ON F'OREIGN CORPORATIONS
There are many corporations whose principal places of business are in other states, which operate branches in the state of South Dakota and are annually taking out of the state hundreds of thousands of dollars of profit. I recommend that the legislature pass suitable legislation for their control and imposing a license tax upon these corporations for the privilege of conducting their business in this state. A number of states have for some time past imposed a similar tax.

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SALARIES OF COUNTY OF'FICIALS
I invite your earnest consideration and thorough investigation of salaries paid to county officials. If your investigation leads to the conclusion that there should be an adjustment of salaries, I trust that you will be able to evolve a salary schedule that will be both fair to officials and just to taxpayers.

RATE OF INTEREST ON STATE WARRANTS
The hail insurance warrants, bearing a maximum rate of interest of six per cent, are unsalable. This is a matter that needs prompt attention by the legislature. Temporarily, at least, the rate of interest must be increased so these warrants may be sold and hail claims promptly paid. The revenue and general warrants also are limited to five per cent interest and at the present time are unsalable at that rate. The finances of the state make it imperative that this rate be immediately changed for the time being, in order that the state may maintain its credit and promptly meet its obligations.

EFFICIENCY EXPERTS
During the years of statehood our growth and development have been phenomenal. The business of the state has increased to proportions of great magnitude. Less than a million dollars was required a few years ago to take care of all our needs during a biennial period, but now it requires several millions. Demands for the enlargement of our educational institutions, the extension of our charitable and penal institutions, and increased activities along other lines have demanded ever increasing appropriations. The annual expenditure of several millions of dollars is a very grave responsibility. Approximately five millions are biennially expended by our educational, charitable and penal institutions. The business of our educational institutions is to educate boys and girls. That is their primary object and purpose. They were not instituted for the purpose of developing a faultless business machine, therefore it would not be strange if in their management imperfect methods of business should creep in, and the same would naturally apply to the charitable and penal institutions, as well as other departments of the state's activities. That these various institutions and departments are functioning in a most creditable and admirable manner, in fulfilling the purpose for which they were created, is attested by their splendid achievements. During the thirty-one years of statehood, with all the millions of expenditures made, there has been hardly so much as a suspicion of graft. No finer, cleaner record of honest administration was ever made by any state in the Union. But honest administration is not enough, for that is giving to the public only half measure. With a biennial budget of several millions of dollars, the question arises, as it always does arise in every great business institution, do we employ a business system which complies with all the rules of efficiency? The question arises, have we uniform business methods throughout, or are the business methods of each institution or department the product of a

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number of factors, sometimes resulting from careful thought, sometimes from accident, sometimes from doing a thing in a certain way because it was always done in that way before, and sometimes from methods that just happened? To the question, are our business methods one hundred per cent efficient, answer can be made only by efficiency experts, after investigation and survey. These men, trained by experience, are able to examine in detail, all the intricate, complex ramifications of a great business. They have the power of cold analysis to grasp the situation as a whole, and out of its complexities and intricacies to bring order, directness and dispatch. Their examinations are thorough—going into all departments, accounting systems and purchasing systems. They go into myriads of details and throw innumerable side lights on the affairs of the state.
Every big business concern in the country, notwithstanding the fact that it employs as managers men of the highest type of business efficiency, nevertheless every few years employs efficiency experts to examine its business methods, with the result that large sums of money are annually saved by adopting the most approved and advanced methods of business administration. I therefore recommend that you make a reasonable appropriation in order that we may employ the ablest experts in America to do this work. I am under the impression that many thousands of dollars can be annually saved through improved business methods, and that your appropriation made for this survey will be returned to the state many times over.

ECONOMY
Great business depression prevails throughout the nation. The crop values of the farmers during the past six months have shrunk by more than five billions of dollars. The state of South Dakota, like many other states, is passing through a financial crisis comparable only to the distressing years of the period between 1893 and 1896. The farmers are in the depths of despondency and discouragement and this depressing influence has been felt throughout every line of business. By necessity the farmer, the business and professional man, are exercising the most rigid economy in the conduct of their business as well as in their personal affairs. '
It is the solemn bounden duty of a legislator or public official to conduct governmental affairs with the same prudence and careful consideration he would apply to his own business affairs. In times of great emergency and distress no undue, unjust or unnecessary burdens should be placed upon the taxpayers of the state. It should be the taxpayers' hour in court. I therefore recommend, because the times demand it, that in your appropriations you exercise thorough, rigid and. old-fashioned economy, but to the extent only that no injury be worked to the best welfare of the state.
On the subject of economy I wish to be specific in one reference, i. e., that no appropriation be made for the building of a governor's home. While a suitable home would be a source of pleasure and delight to the present incumbent and his family, yet if the chief executive recommends a program of economy he should gladly meet and face the inconveniences hereof. The argument may be advanced that for twenty years the appropriations have constantly increased,

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and at each succeeding election have met with the approval of the people. That is true, but during this period we have been constantly borne forward on the rising tide of prosperity and the people of South Dakota, fair, just and honest in their verdicts, in prosperous times do not object to liberal appropriations for worthy objects. But in emergency times, in a financial crisis, we cannot follow the familiar and beaten pathway of the past. You must pioneer amid new and strange conditions and formulate strong policies to meet those conditions. I trust that you will permit no influence or appeal to swerve you from the course of plain and unmistakable duty, bearing in mind the essential and vital needs of the state.

EDUCATION
There is no state activity of greater importance or of more far-reaching influence than education. The question of what is the greatest thing that can be done for a state has been propounded time and time again, and invariably the ablest men of the country have answered, education.
The achievements of today, our opportunities and privileges, had their foundations laid in the past, and the force set in motion in days gone by have, to a very large extent, determined present conditions. So we of today are laying the foundations, shaping the mold, creating forces that are going to determine, in a very definite manner, what the condition of the state will be twenty-five years hence. '
Investments made in education pay dividends far in excess of any other form of investment. Every child in the state of South Dakota should receive a good common school education; nothing is more essential to the welfare of the state. Common school education is necessary for the protection and preservation of our institutions and, in addition, it is a duty we owe to the children for their own sakes. They are helpless to help themselves. It is a cruel injustice to childhood to permit its future opportunities and best interests to be dwarfed and curtailed through lack of a common school education.
This matter is of such paramount importance and strikes so deeply into the very life of the state, that the state government must, without equivocation or hesitancy, stand squarely for forward-looking policies along educational lines. At the present time there are communities in the state which are levying less for educational purposes than the amount they are receiving in the way of state aid and there are instances where school facilities are wholly inadequate. I would suggest and recommend that the legislature enact measures to remedy this evil.
The present method of selecting county superintendents is wrong in principle. The selection should be entirely removed from politics. No city, town or country district would consider it at all feasible to elect by a popular vote city superintendents, high school principals or teachers in the country schools, because experience has proven that teachers should be chosen by a careful process of selection, taking into consideration only qualifications, and this can best be done by some representative board selected for that purpose. I therefore recom-

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mend to the legislature that you submit a constitutional amendment empowering the legislature to provide suitable methods of selection.
We have made much progress and as a matter of fact during the past two years the number of consolidated schools in the state has been trebled, the number of accredited high schools has been more than doubled, as well as having their efficiency raised, and the educational qualifications of our teachers have been raised to a standard that now compares favorably with any state in the union. Night schools have been instituted. There have been nineteen agricultural high schools established under state and federal aid and sixteen home economic high schools. The enrollment and attendance in our common schools have been greatly increased, and in many respects South Dakota is now looked upon as a leader along educational lines.
However, there is still much to be done and in addition to the recommendations made above I especially recommend that the policy of state aid, as instituted in the past, be continued in the future. Let us bear in mind that arsenals and forts bristling with guns, standing armies and navies, cannot compare in strength with the citadels and strongholds established through thorough education.

RECREATIONAL PLEASURES
It is manifestly fitting and proper that due energy and effort be expended to further the material interests of the state, but we have possessions that are of infinitely more value than lands or stocks or bonds or gold. The greatest asset in the state of South Dakota is our boys and girls. Probably there are four or five cities in the state which have made suitable provision for the recreational pleasures of boys and girls, under proper supervision, but the fact remains that practically all over the state boys living in both town and country must of necessity seek pleasure in their own way and oftentimes they fall into an environment that is vicious.
In the juvenile courts of Chicago the records show that out of ten thousand boys brought into those courts for some misdemeanor, ninety-five hundred of them were there because of vicious environment. I feel, if this problem were more widely discussed and agitated, the people would arouse themselves and make greater effort to provide suitable surroundings and recreational pleasures, under proper supervision, for the young people of the state. Summer recreational camps for boys from both country and city have been of great benefit and have exercised an influence of immeasurable value. There is no problem that strikes deeper into the heart of things than that of providing proper environment for young boys and girls. I would, therefore, recommend that a reasonable appropriation be made to the Child's Welfare Board for the purpose of inaugurating a publicity campaign along these lines, in order that a wholesome interest may be stimulated in this vital problem.

CITIZENSHIP DAY
The recent war, with its sacrificial suffering and outpouring of treasure of blood and gold, has deeply impressed upon the American people the value, the

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dignity, the privilege and the glory of American citizenship. Heretofore, indifferent to its intrinsic worth, we all have been in some measure too unmindful of the value of our citizenship and have fai1ed to properly appreciate this high privilege. It is eminently fitting and proper that we endeavor to impress upon the minds of our young people the dignity of this great heritage. Therefore I would suggest that a day be set aside to be known as Citizenship Day, and that on that day young men and women becoming of age each year should, at the county seat towns, be duly presented with certificates of citizenship and that appropriate exercises be conducted in honor of the event, which it seems to me would leave a deep and lasting impression upon the minds of those receiving the certificates. There is no heritage in all the world more precious than the right of American citizenship.

VOCATlONAL REHABILITATION
Congress has passed an act to provide for the promotion of vocational rehabilitation of persons disabled in industry or otherwise, and their return to civil employment. This is an advance step in the science of social betterment and an acknowledgment that society owes a duty to the toilers and producers who have become disabled while engaged in their respective occupations. It is true that while every man engages in some occupation prompted by the desire for personal gain, he is yet a factor in the machinery which is necessary for the welfare of all, and on that account society owes him certain duties and obligations when he is rendered unfit through no fault of his own. Governor Norbeck has accepted the provisions of this act on behalf of the state of South Dakota until such time as the Legislature has an opportunity to take definite action in the matter. I recommend this to your serious consideration and trust that you will make such suitable provision as is due the laboring man and others in the state.

WORKMEN’S COMPENSATION LAW
The workmen's compensation law has been in operation for a period of two years, and its results are highly gratifying. A large number of cases have passed through this department, the great majority of which have been settled and adjusted to the satisfaction of all concerned. However, experience has shown that there are several features of the law that should be changed to make it more effective and of greater service. One of the main features that should receive your very careful consideration is the provision as to the weekly minimum of twelve dollars per week. This amount of money is not adequate to properly care for an injured employee and his family. Justice demands that this allowance should be increased so that it will more nearly meet the ordinary expenses of maintaining a man and his family when his earning power has been destroyed through injury or accident. I trust that you will give this matter your earnest and careful consideration.

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STATE PENITENTIARY
The sanitary condition of the prison cells in the state penitentiary is revolting and is a disgrace to the state of South Dakota. This condition is not the fault of the present management of the penitentiary, for it requires legislative appropriation to correct this evil. The responsibility for the continuation of this condition rests squarely upon the members of this legislature. I trust you will give this matter your earnest consideration.

REFORMATORY FOR BOYS
To adequately solve the problem of segregation of boys committed to the penitentiary for their first offense from hardened criminals will eventually mean the establishment of a reformatory. However, upon investigating the methods employed in handling prisoners in South Dakota, I find that we have thirty-four paroled prisoners who are employed in the State Park, and many of these are boys, and I believe that this system should be enlarged as speedily as possible so that practically all of the boys in the penitentiary may be paroled in the State Park. It is an ideal place. The environment is wholesome to the mind and health-giving to the body. 
I wish to commend the outgoing administration for the splendid work accomplished along this line, and trust in the future that it may be carried on to a still greater extent. In the meantime it will save the state the necessity of maintaining a separate reformatory institution. However in this connection I do earnestly commend to your attention the value and necessity of a parole officer, especially in view of the fact that we have no reformatory for such boys and are using the State Park, to a certain extent, for this purpose.

TRAINING SCHOOL AT PLANKINTON
In days gone by the meager resources of the state, making imperative an economy of the most rigid nature, was the dominant factor in locating a boys' and girls' training school on the same premises, within a stone's throw of each other. The principle is fundamentally wrong. It is not a debatable question because its fallacies are self-evident. If the argument is advanced that rigid supervisional care of the girls meets the requirements of the situation, the argument condemns itself, because rigid, supervisional care means discipline savoring of the prison, curtailment of personal liberty, limitation of opportunity to enjoy the privileges of outdoor air and sunshine. It means, in other words, placing chains about these girls, causing revulsion and hatred in their hearts and making impossible a proper environment for the growth and development of their lives. It seemed, at first glance, feasible to build cottages on the same property, but if you give the matter your careful investigation, I am sure you will come to the conclusion that complete segregation is necessary for the best interests of these unfortunate girls. •
In recommending complete segregation for these boys and girls, it is with

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no thought of making criticism of the present management of that institution, for I have only words of praise and commendation for the superintendent. His heart and soul are in the work, and he is possessed of those peculiar and rare qualifications of heart and mind that eminently fit him for the work. 
It is wrong, cruelly wicked, to house these girls in what may be termed prison dormitories. While we may not be versed in the intricate science of caring for young people of this type, yet common sense and our own instincts borne of our love for children, immediately dictate that cottages should be built, and in charge of each cottage should be placed a big-hearted, generous matron in whose heart throbs a mother's love and whose personality radiates warmth and kindliness, whose character commends the respect, admirrution and love of each unfortunate girl.
Additional facilities are needed for the segregation of boys of various ages. The very young boys, of tender years, should be entirely separated from the older boys and especially from boys of vicious tendencies. The dormitory now occupied by the girls could be used as a home for these young boys, for the time being, at least, solving this problem. However, cottages for the boys will eventually replace the present system.
A great majority of the members of this legislature were elected upon a platform that solemnly pledged them to take definite and decisive action in this matter, and I recommend that you give it your prompt and careful consideration.

MOTHERS’ PENSION
The mothers' pension is one of the most humane laws ever passed in the state. It is a fine, splendid, beautiful expression of the duties of society toward the home, and a generous tribute to that greatest name in all the world—mother.
No tragedy is sadder or darker than when poverty compels the separation of mother and children. Those last tender farewells melt the heart of stone. South Dakota, guided not only by lofty sentiment, but with a vision and wisdom that comprehends the supreme importance of preserving intact the home, giving to children the sheltering protection and care of a mother's love, passed the above named law. Increased cost of living has rendered its provisions inadequate.
I recommend that you enlarge the provisions of the law so as to fully meet the needs of a dependent mother and her children. If you permit your conscience to be your sole guide in this matter, your decision will meet the approbation of all thoughtful and right-minded citizens.
In revising this law, it would be the part of wisdom and an act of humanity to include assistance in the way of nursing, medical and hospital care for needy, expectant mothers. The administration of these provisions could be accomplished through the same agencies that now administer the mothers' pension law. Home, mother and child are the profound fundamental facts of society, and a state should not be neglectful nor unmindful of the days of nativity.

DR. MEAD
Twenty-nine years of unselfish and ceaseless devotion to the unfortunate of South Dakota is the record of Dr. Mead as superintendent of the hospital for the

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insane. Desire for wealth, craving for power, ambition for honor and praise of men, all those impulses and motives that drive men into the fury and heat of conflict for place and position, were submerged by this noble soul into a consuming desire to serve, by bringing peace and quiet and healing to those broken and bruised in mind. He was architect, builder, dreamer, diplomat, scholar and physician. These talents combined with high character and lofty ideals made him a choice and rare genius—the force and power of which were dedicated to the service of those who were ill in mind. To those unfortunates he was as a rock in a weary land. He was one of South Dakota's greatest and most gifted sons. In his chosen line of work he had no superior in America. Will South Dakota fail to pay tribute and honor to this illustrious man, fail to publicly acknowledge this life of beautiful service? He sleeps today under the fallen snow of stainless white, his grave marked by a simple slab of stone. Shall we so soon forget and pass him by? Shall we fail to commemorate his memory by a suitable memorial? Surely South Dakota will never neglect to honor and cherish her worthy ones and will always perpetuate their memory, not only for the sake of the service they have rendered but for the sake of holding high the lessons of their lives as a light and an inspiration to all, and as an example to be emulated by the children of tomorrow.

HOME BUILDING
The electorate of the state, scrutinizing five constitutional amendments, selected two which received substantial majorities, the soldiers' bonus and the home building amendments. The matter of home building is receiving the earnest consideration of the principal countries of the world. America is in dire need of seven hundred and fifty thousand additional homes. Europe is in need of more than a million homes. The necessity of providing people with homes in which to obtain shelter is not the only reason why this problem is receiving such serious consideration at the present time. One of the far-reaching aspects of the problem is the betterment of social conditions. The moral value and the uplifting influence of a decent abode for man and its far-reaching benefits to society in general are being realized in a more comprehensive manner by the thinkers of the day. The great state of New York has been shaken from center to circumference over the housing question. Several states have enacted laws relating to the subject. The fundamentals of the proposition are being carefully considered by Congress. 
To bring to a sober, industrious, hardworking citizen a decent and fair opportunity to own and pay for his own home on the installment plan is a very material benefit and moral advantage to him. It stimulates a greater earning capacity and self-respect, revealing to him the dignity and responsibility of property ownership, gives the joy and satisfaction of acquiring and achieving, and unfolds to him the reality of the rewards of thrift and industry. Society and the state also are the gainers, because he thereby becomes a business partner in the government and a greater influence for those things which are wholesome, sturdy and sound.

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There are those who instinctively shrink from any policy that proposes a new system or a deviation from a beaten pathway. The first mental reaction from the home building plan is a vivid picture of the town experiencing a business reaction. I trust that no man has a faltering faith in South Dakota. We are purely an agricultural state and every town and city in the state has its foundations of prosperity and progress resting squarely on the agricultural interests. As a matter of fact the agricultural interests are the very life and breath of every city and town within our borders, with the possible exception of one or two mining cities. We may have financial depressions similar to the one we are now experiencing, and towns and cities may suffer because of these depressions, but the agricultural development of the state will irresistibly move forward and in the end cause the towns and cities as a whole to make constant progress.
The fundamental problem is whether a system of credits can be formulated which meets with the dictates of sound business judgment and complies fully with the rules of business prudence. Personally, I believe that such a system can be devised as will, in that respect, not only meet with the approval of every fair-minded citizen but stand the test of actual experience. While it is true it is not within the province of the state to engage in numerous and miscellaneous business enterprises, yet the principle of government credit has been evolved during nearly one hundred years and there is scarcely an instance on record where government credit was extended to meet a real fundamental need that has resulted in failure or disaster.

FREE LEGAL ASSISTANCE
Legal disputes and contentions involving small sums of money, arising among those of small means, should be settled without cost to the disputants. In many cases the poor man has enforced upon him the payment of small sums of money which are unjust and illegal, but because of the expense involved in protecting his interests he prefers to pay the claim or he is otherwise deprived of his rights on account of the prohibitive expense of litigation. I suggest that you endeavor to devise a system, if you consider it practical, whereby this problem may be solved. When a poor man feels and knows that he can obtain justice and maintain his rights, he has a deeper regard and a greater respect for the government, and a policy of that nature is of sound moral value to society. The plan has been recommended by the American Bar Association.

HYDRO-ELECTRIC PLANT
The development of the hydro-electric power of the state has great potentialities, and the possibilities of its development through the construction of a hydro-electric plant are immeasurable. The great advantages that it would confer upon the agricultural interests of the state in the way of giving them cheap power, the stimulus that it would give to the development of manufacturing interests within our borders, can hardly be estimated. All these matters must be carefully weighed and placed upon the credit side of the ledger, and

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on the debit side must be placed the items of cost, the number and different classes of bonds that can wisely be issued by the state of South Dakota without vitally affecting its credit, and the length of time that the plant would have to be operated before it would be on a paying dividend basis. These are the various factors that should enter into your consideration and final determination of the matter. It is purely a question of the findings of fact and I feel that you will not permit prejudice to influence your decision and your conclusion will be reached after taking into consideration only those things which affect the best welfare of the state from every standpoint.

CEMENT PLANT
It appears from the report of the Cement Commission that they have made a most exhaustive study of the feasibility and desirability of the state engaging in this enterprise but have taken no definite steps in the way of engaging in the business, nor have they taken any action in the way of purchasing sites or erecting plants that would commit the State of South Dakota to the proposition. Their report comes to you largely in the way of recommendations. I suggest that you give these recommendations and their report your careful study and investigation. It would seem, in the event that a re-checking of their figures should prove their conclusions to be correct, the state could engage in this business with advantage and profit. However, in considering the advantages to be derived from the operation of a cement plant, you must take into consideration not only the state's ability to produce cement at a cheaper price than it is being sold upon the market today, but you must also taken into consideration the indirect influence of the plant in regulating the price of cement in the state of South Dakota, and that fact in particular should be thoroughly impressed upon the minds of the people of the state. For instance, in the construction of the municipal-owned plant at Los Angeles for the purpose of manufacturing cement for the use of that city, the record shows that the plant has been in operation but a very short time since it was completed a number of years ago, nevertheless when the matter was put to a vote of the people recently as to whether they would sell the plant to the cement trust, it was overwhelmingly voted down because the people of Los Angeles came to the conclusion that their investment had been returned to them several times over in the reduced price of cement. Therefore I desire to call your attention to that phase of the question, that it might be entirely possible for the state of South Dakota to invest a million and a half dollars in a cement plant and never turn a wheel in that plant, and yet the investment might be returned to the state several times over in the reduced cost of cement. I trust that this matter will be given your earnest consideration.

COAL MINE
The coal mine is now in partial operation and will no doubt soon be producing at a maximum capacity, and from present indications it seems quite

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possible that within a reasonable time a sufficient amount of coal will be mined to supply all state institutions. The coal situation in South Dakota is very acute and no greater injustice has been inflicted upon the people than the imposition of the exorbitant price they have been obliged to pay for coal. Therefore the operation of this mine has a deep significance to the people of the state of South Dakota. If the venture shall prove reasonably successful, it may be the means of opening up greater opportunities to the people of the state in the way of procuring cheaper coal for general use. This enterprise should be fostered with the greatest care.

PURE F'OOD AND DRUG LAWS
There are certain changes that should be made in the Pure Food and Drug Laws relating to the enforcement thereof. The present method provided by the law for enforcement is cumbersome and expensive and results in much delay. This applies particularly to the inspection of hotels. While the larger number of hotels in the state exercise reasonable precautions in reference to sanitary conditions, yet there have been several instances where the law has been flagrantly violated, and under present provisions of the law it is difficult to enforce penalties and thereby make the law effective.

UNIFORM STATE LAWS
The great advantage of uniformity in state laws, so far as practicable, is so manifest that the subject scarcely needs mention. The national conference, composed of the ablest lawyers and jurists in America, gives the most painstaking and careful consideration to this subject. This conference has written and compiled twenty-six laws upon this subject, five of which have already been adopted by the state of South Dakota, and our state commission is now recommending that you adopt at this session the Uniform Sales-Act, the Uniform Stock Transfer Act, the Uniform Act for Extradition of Persons of Unsound Mind, and the Uniform Foreign Deposition Act. The carrying forward of this work deserves your warm and liberal support, and I especially refer you to the report of the state commission having this matter in charge, and suggest that you give careful consideration to the suggestions contained therein.

COURT PROCEDURE
Roscoe Pound, Dean of Harvard Law School, says:
"Our system of courts is archaic and our procedure behind the times. Uncertainty, delay and expense, and above all the injustice of deciding cases upon points of practice, which are the mere etiquette of injustice—direct results of the organization of our courts and the backwardness of our procedure—have created a deep-seated desire to keep out of court, right or wrong, on the part of every sensible business man in the community."

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The supreme court of Oregon, in a report to the legislature, said in part:
"We find that in a very large portion of the cases heard by the courts there is an absolute failure to secure a final adjudication on the merits and according to right and justice."'
Elihu Root and Ex-President Taft, two of the greatest lawyers in America, have strongly emphasized the need of court reform. A bill for the purpose of establishing a committee of investigation of this matter was introduced at the last special session and was reported out favorably by the joint judiciary committee. The bill finally passed one house and failed in the other. I commend this matter to you again for your careful consideration.

SACRAMENTAL WINES
The difficulty and embarassment of many churches of the state in procuring sacramental wines is a matter deserving legislative attention. I trust you will make such legislative provision as would be deemed wise in your judgment, and avoid as far as possible interference with religious custom and forms of worship, the right to enjoy which is guaranteed to every citizen under the constitution of the United States and the constitution of the state of South Dakota.
I wish that time would permit a thorough review of our institutions and departments, going into the forward-looking programs that have been adopted by our educational institutions and the high character of their work, the splendid manner in which our charitable and penal institutions have been caring for the unfortunate of the state, and the very definite manner in which the best interests of the state have been advanced through the activities of the various departments. To dwell upon each of these institutions and departments separately and the work that each is doing, time will not permit. However, I earnestly recommend that you study carefully the reports of the state institutions, as they contain most valuable and helpful information.
It is with a great deal of pleasant anticipation that I look forward to your work of the coming sixty days, feeling deeply conscious of the grave problems and constructive effort that this occasion imposes upon you. I feel there is a determination to squarely meet and accept the challenge of these problems and I have an abiding confildence in the final outcome. I have only the sincerest desire to work in harmony with the members of the legislature and trust that we will heartily co-operate, having the deepest mutual confidence and seeking only the best interests of the state.

SOLDIERS' BONUS
Monuments erected in primitive, ancient, mediaeval and modern times, commemorating illustrious service, are not only the measure of that service but they are the measure of those who builded the monuments, for those monuments breathe with the eloquence of appreciation and gratitude borne of the power to visualize and comprehend the magnitude and importance of the service rendered.

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South Dakota will present her boys not only with a memorial but she brings gifts to them as well. South Dakota, going to the polls, had in mind the vision splendid of the boy in soldier's uniform, and holds in deep, affectionate regard the boy who wore that uniform. She comprehends and understands the great principles for which those boys fought and died. She knows the heroism and bravery displayed, the dangers unflinchingly faced, the homesickness, loneliness and privations endured. The misery and tragedy of it all are indellibly impressed upon and burned into the heart of South Dakota. The silent grief of broken-hearted mothers who, with such costly sacrifice, dedicated their boys to this great cause lends to the picture a tone and color that will render the memory of it imperishable.
When South Dakota voted a soldiers' bonus it was not in a sense of discharging a financial obligation, for all the gold piled mountain high would be inadequate to measure the invaluable service they rendered to civilization, but it was simply an expression of the gratitude and appreciation arising out of a comprehension that when the strongholds of civilization were threatened, these boys threw around our gates and portals a living wall of human flesh. They were the shield and protection of our institutions and liberty, and rendered safe and secure home, mother, wife and child.
They are home again, upstanding and strong. As they defended us when attacked from without, so will they defend us from enemies within. Trial and suffering have made them men, superb and fine. They will indelibly stamp their ideals, their hopes, their courage, their virility, their honest rugged patriotism into the very warp and woof of the 1ife of the state. South Dakota, proud of her boys, believing in them, glorying in their splendid manhood, conscious of their sacrificial suffering, grateful for their splendid part in that terrific struggle, voted a soldiers' bonus, voted it gladly, freely and cheerfully.
It therefore becomes not only the duty of this legislature but a privilege and pleasure to speedily provide for the bonus by legislative enactment, and create the machinery for the disbursement thereof, in order that it may be paid with promptness and dispatch.
Colonel Galbraith, the commander of the American Legion, says that in America ten thousand war veterans, broken in health and wounded in body, are quartered in cellars, poor houses and insane asylums. God forbid that in this Sunshine State a single boy, marred and scarred by war, should be forgotten, neglected or uncared for. It is unthinkable and unbelievable that South Dakota would neglect a single boy whom the blows of war have rendered unfit. Justice, right and conscience demand that appropriations made in the past for the care of these boys should be continued in the future until such time as congress shall make suitable provision for their care.
To those boys who dedicated their lives in hospital or training camp, and those who are sleeping on Flanders' field and who will sleep there throughout the ages, words are empty to express our sorrow and grief. We are powerless to do aught for them, but they have won a crown of imperishable glory. No word, no act, no earthly balm can heal the wounds of brokenhearted mothers and wives left behind, but may tender memories arouse the

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sublime courage of womanhood, and may God, in their hour of grief, give to them the courage and power and strength to will that they would not have it otherwise. For their boys died a glorious, a heroic, a martyr's death and their dead bodies are the stepping stones to a higher and fuller life for all mankind.