lowered, and where no competition exists, railroad rates will probably remain as they now are.

If an adequate waterway were opened between Lake Michigan and the Gulf of Mexico, an immense commerce would, in my judgment, develop between points on the Illinois River and points at or near the Great Lakes through the Sanitary District Canal from Chicago to Lockport and thence through a waterway from Lockport to the Mississippi River. At the present time, a navigable depth of over seven feet exists normally for a distance of 262 miles out of a total of 327 miles between Chicago and the Mississippi River. Sixty-five miles between LaSalle on the Illinois River and the Chicago Drainage Canal at Lockport is now limited to a draft of four and one-half feet through the old fossilized Illinois and Michigan Canal, with its inadequate locks constructed three-quarters of a century ago. A channel of eight feet in depth is now maintained in the Mississippi River from Cairo to St. Louis with no early prospect of being further deepened. If an eight-foot depth could be provided for an adequate waterway in the Illinois River and a portion of the Illinois and Michigan Canal between the cities of Utica and Lockport, we would have a waterway of eight feet in depth from Chicago to the Gulf of Mexico.

Such being the situation, I invited last summer, the eminent engineer, Lyman E. Cooley, and E. J. Kelly, Assistant Chief Engineer of the Sanitary District of Chicago, Walter A. Shaw, engineer member of the Illinois Public Utilities Commission, and LeRoy K. Sherman, engineer member of the Illinois Rivers and Lakes Commission, to accompany me down the Illinois and Michigan Canal from Joliet to LaSalle. On that trip of inspection, these gentlemen and myself examined the physical condition of the Illinois and Michigan Canal and the Illinois and Des Plaines Rivers between Joliet and LaSalle, and as the result of that inspection and after a careful inquiry into the practicability of at least an eight-foot channel between Joliet and Utica, these gentlemen have reported, in writing, several schemes or projects for the construction of an eight-foot waterway between Utica and Joliet. One of these schemes or projects, known as project No. 3, they have unanimously endorsed as being entirely feasible and capable of construction within two years at a cost of $3,075,000.00.

It contemplates the use of the Illinois River for approximately 45 miles and the development and enlargement of about 20 miles of the Illinois and Michigan Canal. A copy of this report which has been endorsed by the Rivers and Lakes Commission of this State will accompany this message, and I herewith recommend it to you for careful examination.

I am convinced that the scheme is entirely feasible; that, considering the immense advantages to be obtained therefrom, it is exceedingly economical, and that it possesses the advantage of not, in any way foreclosing or preventing the creating of a deeper waterway hereafter, if a deeper waterway can be secured in the Mississippi River. If the science of engineering in the future will be able to bring about a greater depth in the Mississippi River than the eight feet which now exists, such depth can also be secured in the proposed channel without in any way impairing the efficiency of the work done under project No. 3. In other words, the construction of this channel in the Illinois River and the Illinois and Michigan Canal between Utica and Joliet will open up within two years, if constructed, a splendid waterway of eight feet in depth from Chicago to the Gulf of Mexico, at a cost of $3,075,000 or thereabout, and give to the people of this State, as well as those tributary to the Great Lakes, a commerce to New Orleans and the Panama Canal.

I would further call the attention of the Legislature to the fact that, if this waterway be constructed as outlined in project No. 3, $1,000,000 is available in the treasury of the United States for the dredging and deepening of the Illinois River to an eight-foot depth between Utica and the mouth of the Illinois River where it enters into the Mississippi River. Project No. 3 has been investigated by such influential bodies as the Associations of Commerce, of Chicago, Joliet, LaSalle, Peoria, and other cities and towns along the Illinois and Mississippi Rivers, and, so far as I am informed, it has their unanimous approval,

I therefore recommend the passage of a law providing for the construction of a channel, as recommended by these engineers, and authorizing the issuance of bonds not to exceed in amount the sum of $3,500,000.

REGULATION OF FIRE INSURANCE RATES.

Complaints of excessive rates in fire insurance premiums and of combinations between fire insurance companies to prevent competition in the establishment of reasonable rates in this State have reached me for some time past.

In the spring of 1914, I instructed the Insurance Superintendent, Hon. Rufus M. Potts, to make an investigation into the subject, the result of which investigation he has embodied in a comprehensive report, to which I respectfully request your earnest attention.

In substance, this report declares that there exists a widespread and comprehensive combination among the fire insurance companies doing business in the State, and their annexes and rating organizations and appendages, the effect of which has been to stifle competition and to establish in many lines of insurance unreasonably excessive rates of premiums; such rates being in excess of rates established and charged in other states, although the State of Illinois is favorably situated in reference to fire insurance risks. The report discloses, as the result of investigation into premiums paid and losses sustained, that, for twenty years past, the insured citizens of this State have been paying for insurance premiums approximately twice as much as has been paid to the insured for fire losses. The report also states that the profits earned by the insurance companies upon their capital stock have been enormous, amounting in some cases to over 100 per cent. The report shows that, owing to the fact that it is impossible to obtain the dividend figures of European companies, the total profit percentage of all companies doing business in the State cannot be calculated. This can be done, however, for companies domiciled in the United States. The average profit percentage of these companies for 1913, exclusive of dividends, as shown by this report, was 32.8 per cent. They paid an average dividend of 12.3 per cent, so that the total annual profit for 1913 of all the American fire insurance companies doing business in Illinois, as stated in the report, was 45.1 per cent of their capital stock, which is enormous and unreasonable. The fire insurance companies dispute the conclusion of the report in some particulars, but there are sufficient 'facts set forth in said report to justify me in reaching the conclusion that the time has come in the history of the State, for effective control by the State of the rates charged for fire insurance. Legislation along this line is imperative. I have been in correspondence and in conference with representatives of the fire insurance interests of the State in the endeavor to agree upon the outlines of a law under which the State shall be empowered to make a thorough and exhaustive examination into the rates charged for fire insurance, and to enable the State further, if it is found that such rates are unreasonable and excessive, to fix and proclaim just and reasonable rates, which shall be charged in the future by all the fire insurance companies doing business in this State. I am pleased to announce that gentlemen, representing very important and influential fire insurance interests of the State, have declared their willingness to cooperate with the Insurance Superintendent and his legal staff in and about drafting a bill, under which the right of the State to make such investigations and to fix such rates is recognized, and that they are willing to have such provisions incorporated in a law to be enacted by this Legislature. The Insurance Superintendent and his counsel and the counsel for these insurance interests have been engaged for some time past in endeavoring to agree upon the details of such a bill. If such an agreement is reached, such a bill will be presented to this Legislature for its action. Should they not agree upon the details of the bill, one will be presented to the Legislature by the Insurance Superintendent, embodying the fundamental principles of investigation and regulation by the State, hereinbefore referred to, and such other provisions as may be agreed upon between the insurance interests and the Insurance Superintendent, leaving the other details of the bill, which may not be agreed upon, to the careful consideration of this

Legislature. Such a law is now in force in the State of Kansas, and has been pronounced valid and constitutional by the Supreme Court of the United States in the case of the German Alliance Insurance Company v. Lewis, decided April 20, 1914.

In that case the court held that, "the business of insurance so far affects the public welfare as to invoke and require governmental regulation." * * "In assimilation of insurance to a tax, the companies have been said to be the mere machinery by which the inevitable losses by fire are distributed, so as to fall as lightly as possible on the public at large, the body of the insured, not the companies, paying the tax"; and again in the same case, the court declares that fire insurance has "become clothed with a public interest, and, therefore, subject, to be controlled by the public for the common good."

I earnestly recommend the passage of a bill providing for such investigation and regulation in the interest of the citizens of Illinois.

Insurance Superintendent Potts in his report, after an exhaustive examination into insurance conditions, has made certain recommendations with reference to the codification and amplification of the general insurance laws of this State to which I hereby direct your earnest attention.

AMENDMENT TO THE AMENDING CLAUSE OF THE CONSTITUTION OF 1870.

The Constitution adopted by this State in the year 1870 is in many respects an admirable instrument. Its bill of rights is broad and comprehensive, and its distribution of powers of government is in accord with the fundamental laws of most of the states of the Union.

In the march of events, however, it has been found that some few amendments are advisable. So proud of their work were the framers of this Constitution that they framed the article relating to amendments of the Constitution in such a way as to make amendments to the Constitution most difficult, by declaring that, "The General Assembly shall have no power to propose amendments to more than one article of this Constitution at the same session, nor the same article oftener than once in four years." This provision is archaic, inelastic, and unduly onerous. It is so restrictive as at times to operate in practice as a prohibition against amendment. This amendment should be amended so as to permit at least three different articles to be amended at the same session.

Because of the difficulty in amending the present Constitution, some sentiment exists in favor of the adoption of a new Constitution. Whether a new Constitution is adopted or not, in my judgment, the amending clause of the present Constitution should be amended. The amendment of the amending clause could be adopted within two or three years, so as to permit several amendments of the present Constitution to be adopted thereafter. A new Constitution cannot be adopted by the people in the ordinary course of such matters within five or six years.

What the new Constitution, when framed may be, and whether the people will approve of it or not, cannot be known. In the meantime we must proceed, before the adoption of a new Constitution, upon the lines of the old Constitution, and that Constitution should be amended, in its amending clause, so as to permit the people to suggest amendments from time to time to meet the demands of modern progress in legislation.

If a new Constitution be framed and submitted to the people and disapproved, we should have our present Constitution in such shape as to permit it to be more readily amendable than at the present time. If a new Constitution is adopted after the amendment of the present Constitution, the much needed amendment heretofore suggested would not operate in any way to interfere with a new Constitution, as the present Constitution, and all amendments thereto would be displaced by the new Constitution.

Whatever action be taken in reference to a new Constitution, I, therefore, recommend the amendment of the amending clause of the present Constitution as herein before suggested.

In the past the struggles between the advocates of the initiative and referendum and the advocates of revenue reform for paramount recognition

have operated to prevent the adoption of either. With the amending clause amended, as suggested, it will open the way for an early amendment of the Constitution along the lines of revenue reform, the initiative and referendum, and other necessary amendments, all of which could be voted for at the same session and submitted to the people at the same election.

RE-DISTRICTING OF SENATORIAL AND CONGRESSIONAL DISTRICTS.

Senatorial.

The Constitution provides that, "The General Assembly shall apportion the State every ten years into 51 senatorial districts, each of which shall elect one senator and three representatives.

The last senatorial apportionment was made in the year 1901. The new senatorial apportionment should have been made, pursuant to the Constitution, in 1911. Nearly four years have elapsed since the senatorial apportionment should have been made.

I, therefore, recommend, in compliance with the Constitution, that the Legislature re-apportion the senatorial districts of the State.

Congressional.

The last congressional apportionment in this State was made on May 13, 1901. Since that time Illinois has become entitled to two additional congressmen, who are now elected in the State at large.

A new congressional apportionment should also be made at this session to provide for 27 congressional districts.

COST OF ELECTIONS.

Elections for city, village, township, school districts, counties and State are unnecessarily frequent and too costly. In the city of Chicago alone a single primary election costs $275,000 and a single final election $320,000.

I would respectfully recommend the passage of bills requiring all city, village, township and school elections to be held on the same day, and have only one such election every two years, and that all county, State, congressional and national elections should be held upon the same day every two years. If the State, county, congressional and national elections are held in the even year, the city, village, township and school elections might be held in the odd year, thus having only one election day each year.

This will considerably reduce both the cost and number of elections and be for the public interest.

I further recommend that elections for all judicial offices be held on a date when no other officials are voted for. The primary election for judges might, however, be held on the same day as a general election, had for other offices.

Legislation should also be enacted cutting down the number of elective offices where possible, thus shortening the ballot and providing for the rotation of names of candidates upon the ballot at all elections for all offices. I further recommend that, at all primary elections, each candidate be compelled, on filing his application, to pay to the clerk, where such application is filed, a filing and printing fee sufficient to cover the cost of printing, at least one page of printed matter, relating to his candidacy and that said clerk cause to be printed and paid for out of such fee, copies of such page of printed matter to the amount of twice the number of legal voters in the district from which said applicant is a candidate; said copies to be delivered to the applicant, before the nomination, for distribution by him or mailed to all voters by said clerk upon such candidate paying the cost of the postage thereof, and that all candidates be limited in their election expenditures to a reasonable amount over and above the cost of such distribution of such printed matter. Probably twenty per cent of the legal

salary, paid to the incumbent of the office should be the maximum of expenditure to be permitted.

The election laws should also be amended so as to provide for a report of a candidate's expenditures within a reasonable time after the election and before he be permitted to assume the duties of his office, with effective penalties for violation of the law.

STATE PUBLIC UTILITIES COMMISSION.

The State Public Utilities Commission closed the first eleven months of its administration on November 30, 1914. During that time, the commission was organized, its work systematized, and the administrative, engineering, accounting, rate, and service departments were built up to such a state of efficiency as the limited time and the means at the disposal of the commission would allow. The present working force of the commission, attorneys, engineers, accountants, statisticians, experts, inspectors, clerks, stenographers, etc., numbers seventy-three persons. The Illinois Public Utilities law is probably the most comprehensive measure of its kind ever enacted, and the duties and powers of the Illinois Commission are probably more numerous and greater than those of any similar commission. The multiplicity, variety, and importance of matters coming before it during this period of organization have been so great as to tax to the utmost its ability to investigate, hear, and dispose of the cases.

During the eleven months, there were filed 1,278 formal complaints and petitions, all of which called for investigation and public hearings, and a finding by the commission. In 924 of these cases formal orders were entered. There were also brought to the attention of the commission during this same time about 500 informal complaints, covering almost every conceivable matter about which complaint could be made, some 400 of which have been investigated and disposed of informally by correspondence or conference. In addition to the above, the commission has approved 1,160 leases, made by utility corporations. Orders were issued in sixty-five stock and bond cases, authorizing the issue of $176,917,304.00, par value, of stocks, bonds, and notes. On December 15, 1914, there were pending, applications for authority to issue securities of the par value of $262,185,258.00. On December 22 a majority of the pending applications for authority to issue securities had been heard. The amount of fees paid into the State Treasury for authorities granted up to this time was $505,202.78. The total receipts of the commission at this time was $510,173.89. The total amount of appropriation expended to maintain the commission was $118,548.14.

The beneficent effects of the operation of the Utilities Law are already apparent on every hand. Discriminations in rates and service have been eliminated, and it may now be said that strict rate uniformity prevails among all the utilities of the State. The question of rates has probably been most often brought to the attention of the commission; for while rates and service are fundamentally joined in almost every case, the, majority of complaints coming to the commission thus far have found their expression in terms of rates. In a number of smaller communities settlements have resulted in substantial reductions in rates. In some of the more important cases the determination of reasonable rates has necessitated the making of property valuations, which requires much time and labor.

Standards of service to govern gas and electric utilities have been established by the commission, and service inspectors are now at work inspecting the quality of service furnished by the various utilities of the State.

One of the main objects, sought by the Legislature, in the establishment of the Utilities Commission was to secure to the people of the State adequate service at reasonable rates, and the commission in all its acts has ever kept before it this condition, and has sought to accomplish and is accomplishing this great purpose, for which it was created.

While the operations of the commission have been satisfactory throughout the entire State, including Chicago, and while there seems to be no sentiment, at the present time in favor of local commissions to regulate intraurban utilities down the State outside of Chicago, there is considerable