BIENNIAL MESSAGE

JANUARY 11, 1898

From the Journal of the House of Representatives

To the Senate and House of Representatives:

I esteem it a high privilege to congratulate you as the chosen representatives of the people of this great commonwealth.

Great interests of the state-educational, agricultural, financial, commercial, and otherwise-have been intrusted to your care and consideration, in the belief that they will be well guarded and judiciously provided for; that while you will closely adhere in practice to the principle of economy, and aim to be diligent in lightening the burdens of taxation, you will not fail to make suitable and liberal provision for the state institutions and the advancement of their interests, to the end that Iowa may never be found lagging behind in the forward movement of Christian civilization and the onward march of progress.

I congratulate you also on the improved condition of our state and the country at large. Not for years has there been such evidence of prosperity, such glowing promise for the future. Everywhere the industrial world is alive with new activity, and agriculture rejoices with commerce over enlarged compensation for labor and more generous returns for investment. For the bestowal of these blessings let us not fail to express our gratitude to the Great Ruler of the universe.

I have had the pleasure of forming a personal acquaintance with those members of your body who were also members of the Twenty-sixth General Assembly, and to know and recognize their ability and loyalty to the interests of the state. Their experience will be valuable not only to themselves but to their new associates, many of whom I have also the honor to know. On the Twenty-sixth General Assembly devolved great responsibilities, equal to those imposed upon any previous legislature. Besides the usual legislation there was required a revision of all the laws of the state and the formation, adoption, and publication of the new code, which, put into a magnificent volume, is now in the hands of the people for their information and convenience. This of itself required much time and labor, but its great benefit to the state amply compensates therefor.

THE FINANCES

Finding from the state auditor's report, made about the 1st of January, 1897, that a deficit existed in the state's finances, in my message to the Twenty-sixth General Assembly at its extra session I called attention to the fact, and recommended such legislation as would reduce expenses and provide for the early extinguishment of the state's indebtedness. In pursuance of such policy, of such policy, investigations into expenditures were made and measures taken resulting in quite a saving, and in cutting down the expenses of the state. Steps were also taken toward increasing the revenue, of which I will speak presently.

The events of the past two years clothe the subject of finance with an unusual interest. The reports of the finan

cial officers of the state go into elaborate detail with comparisons made for several years. Such elaboration leaves little more to be said as to the facts, but these are of such a nature as to require the thoughtful consideration of all branches of the government.

The receipts into the general revenue of the state amounted during the term to $4,101,376.84, and the expenditures as represented by warrants drawn to $4,731,764.33. The expenses were, therefore, $630,387.49 in excess of the receipts. There were warrants outstanding at the beginning of the term amounting to $73,950.25, making the total amount of expenditures to be met $4,805,714.58. The cash on hand at the beginning of the term was $312,857.41, which, added to the amount of receipts above stated, made the resources of the treasury $4,414, 234.25. Out of this sum warrants were redeemed to the extent of $4,358,213.85, and interest was paid on warrants to the extent of $19,347.44, making the aggregate disbursement $4,377,561.29. The cash in the treasury at the close of the term, therefore, amounted to $36,672.96, and the aggregate of the outstanding warrants to $447,500.73, making the net floating debt $410,827.77.

This amount of indebtedness is largely the effect of excessive appropriations made by the Twenty-sixth General Assembly, yet not altogether so. This fact is well brought out in the report of the auditor of state. But for the destruction of the main building at the Institution for Feeble Minded Children, an expenditure amounting to $60,200 during the term, and more subsequently, would have been avoided. The extra session of the general assembly,

the labors of which in my opinion, abundantly justify its cost, entailed an expense, including the publication of the new code, of $170,497.53. The advance of one quarter's support for the hospitals for the insane, a measure in the interest of saving expense, took $107,821 more. These three items make the floating debt greater by $338,518.53 than it would have been had no such expenditures been incurred. Without these expenditures the debt would have been only $72,309.24.

The Twenty-sixth General Assembly made provision for meeting much of the extraordinary expenses incurred by additional levies and levying certain indirect taxes not heretofore known in this state. One of these was that on capital stock of corporations; another was that on collateral inheritances. Provision was also made for taxing express companies. Moreover, the fees for notarial commissions and those to be paid by commissioners of deeds in other states were made much larger. An increase in the amount of taxes to be collected from insurance companies is also made by the new code. Mainly because of the tax on corporations and the increase of the fee to be paid by notaries public, the moneys turned into the treasury by the secretary of state during the fiscal term amounted to $28,216.70, an increase over the preceding term of more than $10,000. The auditor estimates that the receipts from that source during the current term will amount to $55,000, a gain of nearly 100 per cent. Other additional taxes brought in nearly $5,000. As the most of these additional receipts came in during the latter part of the fiscal term under review and some of the laws providing for such increased

payments into the treasury did not become operative until after that term had expired, the additions to the revenue from these sources may be expected to be much larger in the future.

I am not disposed to look upon the large appropriations made by the Twenty-sixth General Assembly as unwarranted, although some of them, or perhaps the manner thereof, may have been injudicious at the time they were made. The needs of the institutions were great, needs that would have to be met in the early future if not by that body. In justification of the action taken, it may be said that the time was a favorable one for making public improvements. In no year, for several past, has it been possible to build so advantageously as in the year 1896. The contract for the edifice at Cherokee was let at figures which, I am advised, are far below anything that can be obtained to-day. Similar reports are heard concerning other of the improvements that were authorized by the general assembly. I am indeed persuaded that the difference between the prices at which contracts were let during the past two years and those likely to prevail for some time to come, and such as in fact did prevail a few years ago, is nearly if not quite sufficient, taking all the contracts together, to more than reimburse the state for all the interest it will pay on the warrants issued since the regular session of the last general assembly.

I still adhere to the opinion expressed by me in a former message that the manner of evidencing interest-bearing indebtedness through the indorsement of warrants with the date of presentation, from which date they draw interest, is