second session of the same Congress the bill was passed in the Senate but the House failed to act upon it. It is probable that the subject will be this winter further pressed upon the attention of Congress. The State should render all assistance in its power for the relief of the Des Moines River Land Settlers who entered upon the same with good reason to believe they were public lands. I earnestly commend the matter to your consideration.

RAILROAD LANDS.

The report gives a list of 26,017.33 acres of land patented to the State as railroad lands, but which in accordance with provisions of chapter 71, acts of the Twentieth General Assembly, were relinquished and reconveyed to the United States, the list being certified by me on the 12th of June, 1887, as directed in section 2 of said act. I also patented to the C., M. & St. Paul Railroad Company under provisions of chapter 21, acts of the Seventeenth General Assembly, 3,342.86 acres in Dickinson county, and 34,197.36 in O'Brien county; total, 37,540.22. The whole amount of public lands in the State received by the railroad companies as donations is 4,393,436.78 acres, or about one eighth of the entire acreage of the State.

INSURANCE.

During the year 1887 two hundred and seventy-five insurance companies were legally doing business in this State. Of these, fourteen fire companies, four life companies, and ninety-three co-operative fire companies were organized in Iowa. In 1886 the amount of risks written by fire companies was $194,964,393; premiums received, $3,030,902; amount of losses paid, $1,325,062. In 1886 the life companies wrote 7,421 new policies, and had at the close of the year $47,532,751 of insurance in force on the lives of citizens of Iowa. The total premiums received were $1,054,542, and the losses paid were $398,483.

The State Auditor has been as vigilant in his examination of the affairs of insurance companies as his other duties would permit, and has done all in his power, under present laws, to place the business upon a sound basis. Iowa affords a good field for legitimate insurance companies but has no room for fraudulent concerns. No companies of doubtful standing should be permitted to do business. Home companies should be encouraged. Authority should be given the Auditor and means placed at his disposal to enable him to exterminate

illegitimate companies, and to compel legitimate ones to do a strictly lawful and safe business. Co-operative associations are furnishing cheap insurance and generally giving good satisfaction. The whole subject of insurance is one of very great importance to the people of the State and should have the most careful attention of the General Assembly. The magnitude of the interests involved is so great that they should be placed in the hands of a separate department, where they could receive the undivided attention of those charged with their supervision.

The revenue to the State in taxes and fees from this source amounts to nearly $100,000 a year, and it should be, by proper amendments to the law, somewhat increased. A separate department, while securing better service, would be but little more expensive than the present method. The duties of the Auditor of State, aside from those connected with insurance, are varied and of great importance and responsibility, and sufficient for his entire time; while the business of supervising insurance companies is not germane to his office and has no natural connection with it. He cannot indeed attend to insurance properly, without neglecting to some extent his other duties. The Legislature undertakes to protect the people from the imposition of worthless insurance companies, and it should, both by its laws and the supervision it secures, make that protection as perfect as possible. In these particulars much yet remains to be done. An insurance department should be created at the present session of the General Assembly.

BANKS.

The latest returns at hand give the following figures as to the number, capital, and deposits of the State and National banks:

The report of the Railroad Commissioners shows that the number of miles of railway in the State, June 30, 1887, was 7,997. The number of miles built last year was 432. The amount of stock represent

ing the roads in Iowa is $147,350,517.48. Amount of bonds for the same $150,296,919.87. Stock per mile $19,347.21. Debt funded and unfunded per mile $25,350.52. Total stock and debt per mile $43,697.73. The cost of the roads and equipment in Iowa is placed by the Commissioners at $261,747,197.44. The gross earnings of the roads in Iowa, passenger, mail and express, $10,208,086.72; freight and miscellaneous, $27,321,643.05; total, $37,529,730.62. Increase over previous year, $1,436,624.08. Expenses of roads $24,152,990.71. Net earnings after paying all expenses $13,376,739.91. Net earnings per mile $1,672.73. Taxes paid in Iowa $1,011,530.85. Total number of employes in the State 29,078. Amount paid employes $15, 146,234.84. Locomotives in State 1,177. Cars, passenger, 638; baggage, mail and express, 255; box freight, 18,681; stock, 3,116; coal and platform, 7,973; other cars, 2,479; total, 33,142. Number of stations in Iowa, 1,379. Number of miles in operation January 1, 1888, 8,263. During the year 132 persons were killed, 8 of whom were passengers, 59 employes, and 65 not connected with the operation of the roads. In the same time, 440 persons were injured-28 passengers, 354 employes, and 58 not connected with the operation of the roads.

RAILROAD LEGISLATION.

I propose to discuss in another paper, more fully than the limits prescribed to myself in this message will permit, the relation of railroad corporations to the State and the duty of the latter to protect its citizens against exorbitant rates, unjust discrimination, and unfair and inequitable dealings of all kinds at the hands of these corporations. At present I make the following recommendations in regard to that portion of railway traffic that comes within the control of State authority:

First. I recommend the passage of a law destroying the pass system root and branch. No one should be permitted to ride free except the officers and employes of railroads, and they only when traveling upon the legitimate business of their respective companies. Neither passes nor mileage tickets should be used in payment for services or work of any kind done for railroad companies. Such services and work should be paid for in cash.

Second. I recommend that maximum passenger fares on first class roads be fixed at two cents a mile. In my judgment increased travel, and receipts from those who formerly traveled on passes, will soon

make up to the railroad companies any loss they may suffer from this reduction in fares, and the change will prove beneficial both to them and to the people. A large percentage of the business is already done at this rate, but not enjoyed by those least able to pay.

Third. I recommend the passage of a law fixing reasonable maximum rates of freight on the principal commodities transported by rail; and also authorizing and requiring the Railroad Commissioners to reduce said rates at any time when, in their judgment, they are too high. If it shall be held that the legislature cannot delegate to the Commissioners the power to absolutely fix such rates, then they should be regarded as prima facie reasonable rates. Railroads should not be permitted to raise any freight rate at any time without the written approval of the Railroad Commissioners.

The companies should be required to furnish sufficient freight cars. There have been, during the present season, hardship and suffering in the midst of plenty, in the Northwestern part of the State, because of the failure of the railroads to provide sufficient rolling stock to move the products of that section.

Should the General Assembly decide to make the Railroad Commissioners elective by the people, or nominated by the Executive and confirmed by the Senate, such legislation will not meet with any opposition at my hands. The salaries of the Commissioners are now paid by the railroad companies. I recommend that the law be so amended that they shall hereafter be paid by the State.

Railroad corporations in the running of trains do not pay sufficient regard to the Sabbath. They not only deprive large numbers of their employes of the weekly rest which is essential to their physical and moral well-being, but they also set a bad example to the rest of the community. A large part of the present Sunday work of railroads could and should be discontinued. During the year nine persons were killed and one hundred and thirty-four injured in coupling cars. The companies should be required to adopt more modern appliances. I invite your attention to these subjects.

Railroad companies are public corporations, and the railways should be, by law, declared public highways, and their officers should be required to take an oath to obey the constitution and laws of this State and of the United States. The right of the State to control railroad companies has been confirmed by the highest judicial authority. While stringent means should be applied to strong corporations, the weak ones should be protected, and especially the new roads making

efforts to do business at lower rates. Penalties should be provided and more effective measures used to compel the companies to comply with the laws. Combination should be prevented and competition secured. The State should assume and maintain the full, thorough and complete regulation of railroads by law.

All property is protected by the law. All is undervalued, and much personal property is not listed for taxation, which is required by law to be listed. This imposes an undue proportion of taxes upon those who make full returns to the assessor. The plainest principles of good government are violated, when these inequalities which may be reached and obviated by legislation, are still permitted to exist year after year. Protection for all property is desired, and those who have charge of it, and the owners, should not shrink from bearing their just share of the burden. County treasurers should remit to the State Treasurer taxes collected each month. Counties should be held for full amount of levy and have the benefit of all interest collected. Much interesting information and many suggestions as to proper legislation upon this subject will be found in the current report of the Bureau of Labor Statistics, obtained from county officers, many of whom have had long experience in assessing property and in levying and collecting taxes. There is a very general feeling that additional legislation is needed, and I again commend the whole matter of assessment and taxation of property to your earnest consideration.

COUNTY AND CITY INDEBTEDNESS.

The report just mentioned also contains some interesting informa tion relating to county and city rates of taxation, expenditures and indebtedness. The reports are not complete, but enough is given to