were in the control of the Federal Government, no effort was made by the State itself to get the benefit of that great inland water-way. It remained practically idle while the railroads of the State were experiencing the worst congestion of freight known in our history. In order that the people may get some benefit from the canal there was appropriated this year $200,000 to be used as a revolving fund for the purposes of paying the charges for the towing of boats.

This account involves no expense to the State, as the money will be returned in the form of fees from the boat owners, but it is necessary for the State to supply the fund in the first instance, in order that the service may be rendered.

For years, no attempt has been made to add to the industries carried on in our prisons. One of the complaints that I made during the campaign, was that the prisoners were kept in idleness. Following out my suggestion, there was appropriated $75,000 for the purchase of the necessary machinery to manufacture in the prisons the number plates for automobiles. They have heretofore been purchased by the State from private manufacturers at an annual cost of $150,000. I am informed that the last lot was manufactured in the State of Illinois.

Early in my term, it was brought to my attention that a pest had come into the State known as "The European Corn-borer" and was working havoc with the corn fields in the Mohawk valley. For its suppression and elimination, there was immediately appropriated $75,000.

During the campaign, I spoke at great length upon the necessity for liberal appropriations to the Department of Education. Accordingly, I signed a bill increasing the State's allotment to the common schools for teachers' salaries, carrying an appropriation of $5,300,000.

Early this year, I conferred with the Regents of the University on the question of adult illiteracy in this State. Following our conference, they had a bill prepared carrying an appropriation of $100,000 for the instruction of illiterates which I approved.

I accepted a bill of $30,000 to provide for scholarships for soldiers and sailors who took part in the great war.

During the war, women found their way into new lines of industry at such a rapid rate that the creation of a Bureau of Women in Industry in the Industrial Commission was considered essential. I signed a bill for $10,900 for its continuance.

When Congress adjourned without acting upon the big financial bills, the Federal Labor Bureaus were threatened at the very time that we needed them most. Nothing was left for the State to do but come to their aid. For their continuance, I accepted bills aggregating $233,633.34.

During the campaign, I spoke about what I deemed to be the evil of the direct settlement clause in the Workmen's Compensation Act. I appointed a Commissioner under the so-called "Moreland Act" and his preliminary report showed abuses to so great an extent that the Legislature, by unanimous vote, agreed to a remedy, and it will cost $72,000 for additional help in the Commission to carry it out, and I believe it is worth it. The Workmen's Compensation Act means nothing for the millions that it costs industry in the State unless it is properly administered.

The sum of $50,000 was appropriated for the Excise Department for rebates on liquor tax certificates where the traffic was suspended on the request of the United States Government or under the provisions of the statutes because the premises were in the vicinity of camps or cantonments.

To the Attorney-General there was appropriated $50,000 for the purpose of upholding the 80 cent gas rate for New York City. To the Comptroller there was appropriated $300,000 for administering the new income tax law.

To the Secretary of State for the administration of the new motor vehicle laws, there was appropriated $126,040.

For a great many years, it was customary to pass the appropriation bill making provision for the support of the Government during the closing days of the Legislature. It, therefore, became what is known as a thirty day bill and was in the hands of the Governor for investigation and examination for a period of thirty days.

By a change in procedure to conform with the provisions of Chapter 130 of the Laws of 1916, the Legislature passed the appro

priation bill at a time during the session, which made it a ten day bill, or, in other words, the Governor would have only ten days to examine its provisions, but to compensate for the loss of time given to the Governor to consider it, there was created what is known as "The Governor's Budget Bureau," and department heads were required to make requests in the Fall of the year to that Bureau. This enabled attaches of that Bureau to be familiar with

every provision of the bill. It likewise gave the Governor some control over proposed items, in that his opinion as to the advisability of increasing salaries or adding new places could be obtained through medium of his Budget Bureau before the introduction of the bill.

When I came into office on the first of January, I found that the Budget Bureau was out of business; its chief having been transferred to the State Council of Defense for the purpose of auditing their accounts, and no examination was made of the estimates submitted. Because of this situation, I was allowed a period of ten days in which to pass upon a bill carrying upwards of $57,000,000. In the time given, and by working night and day, a careful study was made of the bill, and I struck from it all additional places that I believed to be unnecessary. I was unable to take them all out, because in spots the bill was so drawn that the new places were coupled up with a large number of existing positions, and I would have been forced, in order to reject the new one, to strike them all from the bill.

I was confronted by the same situation with regard to salary increases. Some of the salary increases I regarded as excessive, but as I have no power, under the Constitution, to reduce an item, I would have to strike it entirely from the bill. I conferred with the legislative leaders and asked that I be permitted to veto the items and requested them to resubmit them to me at what we could all agree would be a reasonable increase; this they refused to do, and I was forced into the position of either accepting the salary increase or crippling the department by separating the employee from it entirely, and in many cases, they were Chiefs of Bureaus, and men who were charged with a great deal of responsibility in the management of the department.

In the above statement I have accounted in detail for all of the appropriation bills that I signed this year, and I stand squarely upon the statement that among the bills totaling nearly $5,000,000 that I disapproved, not one single, activity of the State was interfered with or no necessary appropriation was allowed to go by the board; while on the other hand, every dollar of money represented in the total appropriation bills of 1919 accepted by me, is, in my opinion, absolutely necessary for the proper conduct of the business of the State.

I am entirely unwilling that I make a record in office of low appropriations at the expense of the efficiency of the Government of the State. If I understand aright the attitude of the public, they are not against increased appropriations for the purposes of Government, but they will not tolerate the waste of public funds. I will do what lies in my power to make every dollar appropriated bring a dollar's worth of return to the State.

(Signed) ALFRED E. SMITH

ESTIMATE OF REVENUES SUBMITTED BY THE COMPTROLLER The State Comptroller estimates the revenues of the State for the fiscal year ending June 30, 1920, will be $98,682,069, and that the cash balance that will be available on July 1, 1919, will be $2,827,873, or a total resource to meet the budget appropriations of $101,509,942. The Comptroller's estimate is made up of the following revenues: Direct tax $13,752,069, Income tax (State share) $20,000,000, Business corporation tax, $18,000,000, Other corporation taxes $12,000,000, Organization of corporations $1,000,000, Transfers (Inheritance tax) $15,000,000, Stock transfer (stamp tax) $6,200,000, Mortgage tax $1,000,000, Motor vehicle $4,200,000 and Miscellaneous receipts $7,530,000.