Inaugural address of  Fletcher Proctor  As it appears in the  Journal  of the  JOINT ASSEMBLY  BIENNIAL SESSION  1906  Thursday, October 4, 1906. Inaugural Address  Gentlemen  of the Senate and House of Representatives: The privilege  and  the duty of  legislation  is yours but  in  accordance with  the  constitutional provision  and  in conformity  to  the  usual  custom  I  submit  to  your  judgment  some  considerations  which  appear  to  me  of importance in connection with your work the present session. Vermont  is  making  excellent  progress  in  both  agriculture  and  manufacturing,  and  our  state  is  rapidly becoming  known  as  a  beautiful  and  desirable  place  for  temporary  sojourn  or  permanent  residence  and  home making.  The  report  of  the  United  States  Census  Bureau  shows  that  in  the  five  years  from  1900  to  1905  the capital invested in manufacturing enterprises in the state increased from $42,499,640 to $62,658,741 or 47.4 per cent;  the  annual  value  of  our  manufactured  products  increased  from  $51,515,228  to  $63,083,611  or  22.5  per cent our annual wages to industrial employees increased from $11,426,548 to $15,221,059 or 33.2 per cent; and the annual product of our creameries and cheese factories  increased  from $5,500,545  to $6,416,434 or 16.7 per cent. During  the  same  five years our  savings bank deposits  increased  from $38,290,394  to $49,371,907 or 28.9 per cent. It is especially important that you should recognize this progress and prosperity and so legislate as to further advance it and establish it upon a permanent basis. To be sure we cannot create prosperity simply by legislation true  prosperity  must  come  from  a  deeper  source.  It  must  come  through  the  efforts  of  the  people,—through taking  advantage  of  natural  conditions  and  opportunities.  We  shall  prosper  agriculturally  only  so  far  as  the farmer  employs  the  opportunities  and  natural  conditions  at  his  command.  Manufacturing  will  develop  in Vermont only so far as brain, capital and energy utilize the splendid opportunities in our hills and water powers and  our  reasonable  proximity  to markets.  But  your  duty  to  the  state  and  her  people  is  none  the  less  important, for  it  rests  with  you  to  so  legislate  as  to  foster  and  not  to  discourage  industry,  to  promote  and  not  to  retard prosperity,  and  to  give  to  all  our  people  the  enjoyment  of  as  many  common  public  blessings  as  is  consistent with the economical administration of their public affairs. STATE INSTITUTIONS During  the  past  biennial  term  we  have  had  an  able,  thorough  and  impartial  investigation  of  our  state institutions,  the  honesty  and  economy  with  which  these  institutions  have  been  conducted  is  gratifying.  We should  at  all  times  insist  upon  absolute  honesty  and  every  reasonable  economy  in  the  administration  of  all  the institutions  of  the  state.  Our  duty  and  responsibility,  however,  does  not  cease  here.  The  strictest  discipline should at all times be maintained. Sanitary and other conditions pertaining to the health of the inmates should be of  the  best.  Modem  civilization  demands  that  the  broadest  and  most  scientific  treatment  should  be  given  our unfortunate  insane;  and  that  our  penal  and  reformatory  institutions  should  be  such  as  to  improve  if  possible rather  than  further degrade  their  inmates. With  this  end  in view  I  commend  to your  favorable  consideration  the reports  of  the  Investigating Commission  and  such  parts  of  the  report  of  the Attorney-General  and  the message of my predecessor as relate to these institutions. COURTS Some  re-organization  of  our  system  of  courts  and  judicial  proceedings  is  doubtless  necessary,  the Vermont Bar Association has given this matter much attention and is drafting a bill to be submitted to you providing for a general re-organization of the present system. Recommendations coming from such a source are worthy of your careful consideration, the recommendations of the Attorney-General contained in his report to you, covering the arrest,  trial  and  commitment  of  persons  charged with misdemeanors  in  our  lower  courts  should  also  have  your careful and favorable attention. His recommendations  if enacted would result  in greater economy and  the better administration of justice  FEE SYSTEM In  this  connection  I  remind  you  of  the  desirability  of  eliminating  the  fee  system  as  much  as  possible, especially  in  the  administration  of  the  penal  laws  in  our  minor  courts.  It  cannot  be  abolished  entirely  without making an unnecessary and disproportionate expense for salaries. But we should remember that in principle the payment of public officials by fees any further than the conditions absolutely require is undesirable, PUBLIC SCHOOLS. An  important  matter  to  receive  your  attention  is  that  of  the  public  schools. While  we  have  made  progress during  the past  fifteen years  in  educational matters,  this progress has not been  so great  as  in many of our  sister states  nor  what  it  should  have  been  in  Vermont.  Sixty  years  ago  in  freedom  from  illiteracy  Vermont  was  the second  state  in  the  Union;  today  she  is  the  twenty  seventh.  While  this  is  to  some  extent  due  to  the  increased number of  foreign born children within  the state, yet whatever  the cause  it  is an unpleasant  fact  to which  I urge that you give your prompt, earnest and best attention. In  the  larger  towns  and  cities  the  schools  have  decidedly  improved,  but  in  the  rural  communities  the progress  has  not  been  so marked  and  rapid  as  it  should  have  been. Our  educational  system  is  not  right  it  is  not producing  the  results  it  should,  and  it  cannot  produce  satisfactory  results  until  it  gives  all  the  children  of  the state the very best opportunities possible for securing a good common school education. Such an education is all many  Vermont  parents  can  give  or  leave  their  children.  The  state  will  not  have  performed  its  full  duty  until  it has provided every parent within the commonwealth the opportunity for doing this. Education in the highest sense for the common good. On account of the general movement from the smaller communities  to  the  larger  towns  and  cities,  these  larger  communities  are  the  recipients  of  the  education  of  the smaller  places. They  reap  the  benefits  of  good  educational  facilities  in  the  smal1  communities  and must  suffer the  penalties  of  their  poor  facilities.  The  difficulty  with  our  state  school  tax  is  not  that  the  larger  communities are  bearing  some  of  the  educational  burden  of  the  smaller  communities,  but  because  this  money  is  not  being expended in a business-like way and in such a manner as to reap the best possible benefits from it. . Far  too many  children  in Vermont do not attend  school  at  all, many others  are very  irregular  in  attendance. The child labor law and the truancy law are both excellent and are helping in this important matter, If faithfully enforced  they  will  eventually  cure  this  evil.  The  weak  point,  however,  in  our  school  system  is  lack  of  skilled supervision. Experience  in  other  states  has  fully  demonstrated  the  fact  that  the  only  way  to  carry  out  any  definite educational policy in the state and to materially improve the country schools is to provide for them some kind of professional  supervision.    Local  supervision  never  has  and  never  will  bring  about  the  desired  results. Equalization  of  all  school  advantages  is  what  Vermont  should  strive  for,  and  the  first  requisite  for  this  is  to provide more  and  better  supervision  for  the  rural  schools.  Skilled  supervision  is  the  only method  by which we can  secure  anything  like  uniformity  of  work,  improve  our  teachers,  accomplish  better  results,  and  assure  full returns for money expended. It is only through this method that drawing, music, industrial arts and sciences, and other  subjects  essential  to  the  broad  education  of  our  children  can  be  introduced.  Unless  some  system  of professional supervision is established over small schools our children will be unable to go out into the world as well equipped as those of our sister states. In  our  larger  towns  and  cities  the  work  of  the  schools  is  directed  by  professional  superintendents.  If  the urban  schools  with  their  better  buildings  and  equipments,  graded  systems  and  trained  teachers,  require  skilled supervision,  certainly  the  rural  schools,  isolated  as  they  are  from  other  conditions  that  stimulate  educational interest,  need  expert  oversight.  In  some  towns  it  is  of  course  impossible  to  find  persons  competent  to  give  this supervision.  In  consequence  the  state  has  no means  for  carrying  out  any  definite  educational  policy.  The  state superintendent  has  no  means  of  reaching  the  rural  schools  with  any  definite  policy  or  program  which  he  may desire  to  inaugurate.  As  a  result  poor  teachers  are  employed  and  retained,  pupils  remain  ungraded,  the equipment  is  limited,  and  there  is  nothing  to  stimulate  or  arouse  the  interest  of  parent,  teacher  or  pupil.  The proceeds  of  the  present  8  cents  state  school  tax,  amounting  to  about  $150,000  annually, would  do  the  cause  of education  immeasurably  more  good  if  its  expenditure  were  directed  by  those  trained  and  skilled  In  this particular line of work. County  supervision was  tried  in Vermont  from 1889  to 1901  and was not  satisfactory. The  county unit was as much  too  large as  the  town  is  too small, and  in consequence  the work of  the county superintendent was  little more than that of a county examiner. For a good supervision unit in Vermont the group or district system would be much, more satisfactory. The principle of group units for school superintendency and of  the part payment of the  expense  thereof  by  the  state  is  contained  in  sections  622  to  629  of  our  statutes.    It  does  not  contemplate skilled  supervision,  however,  and  in  fact  is  so  limited  as  not  to  permit  it.  The  group  system  is  in  operation  in Massachusetts  and  has  recently  been  introduced  in  other  New  England  states.  Under  this  system  two  or  more towns may form a supervision district, such district nor to exceed a maximum or fall below a minimum number of schools. The school directors from the several towns forming such a district elect a superintendent, each town paying  its  proportion  of  the  expense  according  to  its  grand  list.  If  this  method  of  supervision  were  introduced town  superintendency  in  those  towns  would  be  done  away  with  and  considerable  expense  saved.  The  present cost  of  town  superintendency  is  nearly  $20,000.  Also  much  could  be  saved  in  the  line  of  director’s  services, examination  expenses  and  purchase  of  books  and  supplies.  In  fact  a  considerable  part  of  the  cost  of  such supervision could be saved. To  establish  and  give  this  system  a  trial  in  Vermont,  I  recommend  the  passage  of  a  law  making  such  a system  permissory  in  the  state,  and  providing  that  in  case  towns  unite  by  vote  of  their  school  directors  for  the purpose of professional supervision of a required standard and employ a competent superintendent, a portion of the  expense  should  be  paid  from  the  general  treasury  of  the  state.  As  the  state  is  and  should  be  a  partner  in educational work  and  as many  towns  night  hesitate  to  adopt  the method  recommended  if  they  had  to  carry  the entire expense, it is only right and just that the state assume a part of it. TRUSTEE PROCESS. Section  1364  of  the  Vermont  Statutes  relating  to  trustee  process  provides  that  if  the  goods,  effects  and credits  in  the  hands  of  the  trustee  do  not  exceed  ten  dollars  in  value  the  trustee  shall  be  discharged.  This provision  is  simply  one  of  convenience  and  to  prevent  the  trusteeing  of  trivial  sums  of money.  It  is  not  in  any sense an exemption since if the credit in the hands of the trustee exceeds ten dollars it is all subject to the trustee process. Section  1313  exempts  from  the  operation  of  the  trustee  process  the  proceeds  of  property  exempt  from attachment or execution. The  long  list of articles so exempt  in Section 1805 consists  in part of  things necessary for  the  living  and  comfort  of  the  owner  and  in  part  of  things  necessary  only  to  his  work.    The  same  humane consideration which  has  led  to  the  exemption  from  attachment  and  execution  of  such  apparel  and  furniture  “as may be necessary for sustaining life”, a certain amount of food and fuel, as well as cows, swine, poultry horses, wagons,  etc.,  and  has  exempted  from  the  trustee  process  their  proceeds,  if  sold,  ought  to  exempt  a  certain amount of the wares of a workman which is often his on means of securing the necessaries of life. Our  exemption  laws  were  originally  drawn  with  reference  to  a  farming  community  and  have  no  proper reference  to  the  case  of  employees,  industrial  or  otherwise.  The  latter  seldom  have  cattle,  horses,  sheep,  oxen, wagons  and  other  such  property  now  exempt  by  law.    In  their  case  that  which  needs  protection  for  the necessaries  and  comforts  of  themselves  and  families  is  a  certain  amount  of  their  wages.  I  recommend  that  the law  be  so  amended  that wages  or  compensation  due  the  principal  debtor  for work  and  labor  performed  by  him in person should be exempt to the amount of ten dollars, and that wages only in excess of that amount should be liable to the trustee process. CAUCUS LAW. The present  caucus  law  enacted by  the  last Legislature  in  response  to  a  strong  demand  for  some  legislation in this direction. There had been gross abuses in caucuses in some parts of the state and where these abuses had existed,  they  were  liable  to  occur  again  unless  prevented  by  some  effective  caucus  legislation.  Caucus  abuses may consist in the voting in caucus of men who are not legal voters, or the voting in a party caucus of men who really do not belong  to  that party and have no honest purpose of acting with  it, or  the  influencing of voters  in a caucus by corrupt and improper means.  There should be some way to prevent all of these abuses. The most advanced method for that purpose is a primary election law, and such a law is being introduced in many  states.  I  do  not  believe  a  primary  election  law  is  necessary  in Vermont  or  that  it would  be  acceptable  to the people at  this  time. Some  simpler method  is all  that is  required, but  to effectively prevent persons voting  in caucuses  where  they  do  not  belong  there  must  be  a  registration  for  caucus  purposes  at  some  time  before  the caucus,  and  a  sufficiently  long  time  before  so  that  the  registration  will  not  be  made  in  the  heat  of  a  political contest. The present  law has met with considerable  criticism but  that  is  apt  to be  the  case with  the  introduction of any radical innovation. Only a small per cent, of our towns have made use of the caucus check list and where it was  actually used  it worked  satisfactorily. Much  fault was  found with  the Australian ballot  law  soon  after  its passage.  It  was  said  that  it  was  unnecessary  and  cumbersome,  and  many  desired  to  repeal  it.    Now  we  are  all substantially  agreed  that  it  is  an  excellent  law  and  it  has  the  practically  unanimous  support  of  our  people.  I believe  that criticisms of  the caucus  law will  rapidly disappear as we become more accustomed  to  its operation and that in principle it is as simple as any law of its kind could be and be effective, The most unsatisfactory feature connected with it is the manner in which a voter may announce his political preference.  I would  suggest  such change  in  the  language of  the  registration as will clearly not extend  it beyond its  necessary  scope, which  simply  is  that  a  person  registering with  any  political  party  has  an  honest  purpose  to act with  it as a  loyal member  there of would ordinarily do.    It should be considered also whether  the method of taking  the  registration can be  in any way  simplified,  and made more  acceptable.  It  is only  in a  small portion of Vermont  where  caucus  abuses  have  occurred  or  are  likely  to  occur.  The  caucus  check  list,  therefore,  should continue to be optional in its operation and should be used when desired by a reasonable number of the voters in a town. With  such  slight  modifications  as  may  be  made  to  simplify  and  make  more  acceptable  its  registration provisions,  I  think  the  caucus  law  should  certainly  be  retained. The whole  tendency  in  all  the  states  is  towards some  form  of  legal  control  of  the  caucus.  The  step which we  took  two  years  ago was  a  long  one  for  us,  but  it falls far short of the measures which have been taken in sonic states and which have already been found to work satisfactorily. The repeal of the present law or the removal of its effective provisions without the substitution of some thing equally simple and effective would be a decidedly backward step.  THE STATE AUDITOR’S OFFICE The state should exercise  the strictest scrutiny over  its disbursements  from a  two-fold point of view  first,  to see  that no money  is paid out not  strictly within  the provisions of  the  law  and  secondly,  to verify,  the  accuracy of  all  accounts  kept,  and  to  so  systematize,  and  combine  them  that  exact  information  shall  always  be  available to  the  public.  This  two-fold  supervision  was  originally  introduced  by  Alexander  Hamilton  into  the  Treasury Department  of  the  National  Government,  and  still  prevails,  there  being  one  officer—the  Comptroller—who must  pass  upon  the  legal  sufficiency  of  all  bills,  and  another  officer—an  Auditor—  who must  pass  upon  their clerical accuracy. In  this state both duties  fall upon  the State Auditor, The practice has grown up of electing a  lawyer as State Auditor, and that course is practically necessary as a man not of the legal profession could hardly pass upon the legal  sufficiency  of  particular  items  of  expense.  While  the  legal  side  of  the  Auditor’s  office  has  been  well administered, such is the extent and detail of the state’s business and so meagre have been the appropriations for the  Auditor’s  office  that  it  has  been  difficult  to  keep  the  book  keeping  or  clerical  side  up  to  the  same  high standard. This  is not  the  fault of  the  several  incumbents of  that office  it  is due  to  the  fact  that both  sides of  the work in all its detail is more than one man with the assistance now provided by law can possibly do. The  auditing  work  proper  as  distinguished  from  its  legal  aspect  is  important,  not  only  as  a  check  upon wrong-doing  and  the  prevention  of mistakes,  but  in  the  interest  of  an  intelligent  understanding  of  the  affairs  of the  state  by  all  our  people.  There  should  be  a  well  considered,  simple  and  uniform  plan  of  keeping  all  of  the accounts  of  the  state  and  such  work  should  be  so  kept  up  that  at  all  times  exact  and  concise  information  will always  be  available  with  respect  to  the  public  business.  It  is  desirable  that  the  people  of  the  state  should  be accustomed to the consideration of these exact figures. The business of the state does not require that we should have both a comptroller and an auditor, but both  lines of work  can properly be done under one official.  If  such official be  a  lawyer,  as has been  the  custom, he  is  able  to pass upon  the  legal questions  involved but he  should have  a  deputy  at  a  sufficient  salary  to  secure  the  services  of  a  skilled  accountant  who,  under  the  general direction  of  the  auditor,  could  give  his  attention  to  the  purely  auditing  side.  He  should  also  have  such  clerical assistance as is necessary to keep the whole of such clerical work in first-class shape. I  recommend  that  in  conjunction  with  the  efficient  present  State  Auditor  this  matter  be  given  a  through investigation during  the present session,  that  the system, prevailing  in other states about our size be considered, that,  if  necessary,  expert  accountants  be  employed  to  advise with  respect  to  a  uniform  system  of  book-keeping and  returns  for  the  state, and  that  the whole clerical side of  the Auditor’s office be put upon  the best up-to-date business  principles.  Some  uniform  system  of  municipal  accounting  should  also  be  worked  out  in  the  same connection.  I would go no  farther nor make any greater expense  than any private business concern would  incur doing  as  large  a  business  as  the  State  of  Vermont,  scattered  over  so  much  territory  and  transacted  through  so many  individuals  and  institutions;  but  I  do  not  believe  that  the  state  can  afford  to  do  less.  The  money  which business corporations spend for this purpose is not spent for the sake of spending but for the sake of saving. The small increase in expense to the state would be more than saved by the results. The recommendations of the State Auditor to my predecessor regarding the details of his department and the administration of justice deserve your careful attention. SPECIAL LEGISLATION. There is always a tendency on the part of many people to seek special legislation to enable them to do some special thing or to protect them from some real or fancied wrong when in reality such relief, if needed, could be obtained  under  the  general  law.  This  kind  of  legislation  is  wrong  in  principle  and  always  dangerous.  It unnecessarily  takes  the  time  of  the  Legislature,  encumbers  our  statutes,  and  is  more  likely  to  do  real  injustice than to be of any actual benefit. You should, therefore, scrutinize most carefully all special legislation. In almost every case relief, if really needed, can be obtained under the general law. There  is  also  a  tendency  to  seek  legislation  general  in  its  character  but  special  in  purpose  to  fit  some particular  case  which  has  arisen  or  is  anticipated.  This  is  even  more  dangerous,  for  though  it  may  cover  the particular case  in mind, which may be entirely worthy and meritorious,  it  is often wholly unsuitable for general application. All  new  legislation  should  be  given  very  careful  consideration,  and  when  a  law  has  been  passed,  unless there is marked reason for its repeal, it should be given a reasonable and thorough trial. The objectionable points are at once apparent and repeal is sought before it has had sufficient opportunity to bring out its real merits. You should, therefore, be conservative with reference to repealing legislation until it has been thoroughly tried. SPECIAL CORPORATION LEGISLATION. Corporations  are  the  largest  subject  of  special  legislation.  Acts  granting  special  charters  or  amending existing  charters of  public  or  private  corporations occupy  292  pages  of  the  printed  laws of  the Session of 1904 while  the  entire  public  acts  of  that Session  only  occupy  241  pages. Such  legislation  arises  some what  from  the tendency  to  seek  special  privileges  but  it  is  due  more  to  the  fact  that  our  general  laws  with  respect  to  the organization of corporations, both public and private, are not sufficient and complete.  We  have  now  a  general  law  (V.  S.  Chapter  165)  far  the  incorporation  of  private  corporations  by  voluntary association, but for some reason there is a constant application to the Legislature for special charters for private corporations,  which  ought  to  be  granted  under  some  well  considered  general  law.  Special  charters  are  a  good means  for  securing  special  privileges  but  they  area  very  poor means  for  protection  from  corporate  abuses.  In  a legislature  constituted  as  ours  is,  consisting  each  session  largely  of  new  members  and  convened  in  a  short session,  special  corporation  legislation  except  in  extraordinary  cases  is  not  likely  to  produce  satisfactory  and certainly  not  uniform  results.  It  ordinarily  happens  that  privileges  which  one  legislature  readily  grants  another will  refuse  and  conditions  regarded  by  one  legislature  as  of  importance  are  entirely  disregarded  by  the  next. Corporations  as  a  means  of  doing  business  have  existed  for  centuries.  They  are  necessities.  The  right  to  form them,  under  proper  restrictions  should  be  equally  free  to  all,  but  they  should  be  equally  subject  to  uniform provisions. The most useful corporations have no desire for special privileges not common to all corporations of their  class  and  do  not  object  being  subjected  to  all  reasonable  limitations  provided  other  like  corporations  are subjected  to  the  same.  The  greatest  danger  arises  from  special  legislation,  for  it  is  ordinarily  in  this  way  that special privileges are obtained and exemption from proper restriction acquired. I recommend such a revision of our general corporation laws as will bring them up-to-date. Their terms and conditions  should  be  liberal  but  just  and  reasonable.  It  is  right  and  proper  that  the  state  should  receive,  as  it does, a reasonable fee for charters, but no laxity in the corporation laws should he permitted, as is done in some states,  for  the  sake  solely  of  revenue.  When  our  corporation  laws  have  been  thus  amended  applicants  for charters, except  in extraordinary cases, should be  left  to  the use of  its provisions and  the  time now occupied by legislatures in the consideration of private corporation measures can and should be given to public business. SAVINGS BANK AND TRUST COMPANY CHARTERS. There  are  forty-five  savings  banks  and  trust  companies  in  active  operation  in  the  state  and  every  one  has  a special  charter  varying  in  some  respect  from  the  charters  of  every  other.  If  it  is  desired  to  organize  a  savings bank  or  trust  company  a  special  charter must  be  sought,  because  there  is  no  general  law  for  their  organization. Chapter  173  of  the  Vermont  Statutes  provides  for  the  voluntary  organization  of  state  banks  of  circulation, discount  and  deposit,  but  that  chapter  is  obsolete  because  such  banks  are  not  desired  nor  desirable  while  we have  the  present  excellent  national  banking  system.  The  whole  chapter  might  just  as  well  be  repealed.  There should  be  a  general  law  for  the  organization  of  savings  banks  and  trust  companies  permitting  their  voluntary organization  in  proper  cases  upon  compliance with  the  provisions  of  the  law  and  the  payment  of  the  necessary capital.  So  far  as  possible,  the  charters  of  existing  savings  banks  and  trust  companies  should  be  brought  into conformity to such a general law so that the rights and privileges of all savings banks and trust companies in the state would  be  uniform. Although  it  is  better  to  allow  too much  competition  rather  than  too  little,  the  presence of  too  many  banks  in  a  vicinity  of  restricted  population  and  business  activities  might  really  be  harmful  to  the general  interests.  There  should  be  some  general  restriction,  therefore,  or  some  discretion  in  the  Inspector  of Finance  with  respect  to  the  granting  of  new  charters,  but  such  a  limitation  can  always  be  best  accomplished under a general rule or in the discretion of some selected officer rather than by the action of the legislature upon each case. VILLAGE CHARTERS. There  are  forty-eight  incorporated  villages  in  the  state.  There  is  a  general  provision  (Chap.  142)  for  the voluntary  corporation of villages but  its provisions  are  so  incomplete  that  all, or  substantially  all, of  them have in  fact been  incorporated by  special  charters.  It may be  said of  them,  as of  the  savings bank  and  trust  company charters,  that no one  is  in all respects like any other. In  the case of municipal corporations  this diversity  is even more  inconvenient  than  in  the  case  of  private  corporations.  The  powers  and  privileges  of  villages  should  be uniform. If they were thus uniform there would become through the decisions of the courts and otherwise some general  understanding  of  what  those  powers  and  privileges  are.  The  law  of  villages  being  now  largely  special for each village is practically private law. It should be public and uniform. I recommend that Chapter 142 be so amended,  enlarged  and  improved  that  it  will  answer  the  purposes  for  the  voluntary  incorporation  of  villages, and  I also  recommend  that consideration be given as  to  the extent steps may be  taken  to bring existing charters within such general provision. CORPORATION TAX LAW. In 1882 Vermont began taxing corporations under what was termed the corporation tax law, which provided for  a  tax  upon  various  corporations  based  upon  their  earnings  but made  no  provision  for  any  appraisal  of  their properties. This  law was  declared  by  the Supreme Court  unconstitutional  so  far  as  it  attempted  to  tax  interstate business,  to  overcome  this  difficulty,  in  1890  the  Legislature  passed  a  law  providing  for  an  optional  basis  of taxation: that is, in the case of railroads, it provided that they should be appraised and taxed at the rate of seven-tenths of one per cent, on such an appraisal, but  that  they might  in  lieu of this tax pay a tax of  two and one-half per cent, on  their entire gross earnings  if such  railroads are situated wholly within  the state, or  if situated partly within  and  partly  without  the  state  then  of  two  and  one-half  per  cent,  on  such  proportion  of  the  entire  gross earnings  of  such  railroads,  as  the mileage  of  trains  run  in  this  state  bears  to  the mileage  of  all  trains  run  on  the entire main  line  of  such  roads  for  a  given  period.  Since  this  optional  provision  was  incorporated  in  the  law  of the steam railroads of the state, with two or three minor exceptions, have paid upon their gross earnings. It is difficult to ascertain for the purposes of taxation the true value of a railroad. Many things must be taken into account in making an appraisal: The value of the railroad’s franchise, its bonded and other indebtedness, its capital  stock,  the  general  condition  of  its  property,  terminals,  connections,  expense  of  operating,  its opportunities  for  business,  both  through  and  local,  and  many  other  things  naturally  entering  into  such  an appraisal, which make  it very difficult  to  reach  a  result  entirely  satisfactory  either  to  the  state or  to  the  railroad corporations.  A  state  tax  levied  solely  upon  such  an  appraisal  is  not  likely  to  be  as  just  or  satisfactory  as  the present optional method. A  tax,  therefore, based upon  the earning power of a  railroad  in operation  is  the  fairest basis  and  has  met  with  general  favor.  Nor  is  it  a  satisfactory  method  to  permit  each  town  to  appraise  and  tax railroad  property  locally.  A  railroad  receives  its  franchise  from  the  state,  it  is  to  quite  an  extent  a  public corporation  and  even  its  local  property  is  not  used  locally  in  the  ordinary  sense  but  for  its  general  business extending  beyond  the  limits  of  any  or  any  few  towns.  Such  tax,  therefore,  as  is  levied  upon  it  should  be  paid into the treasury of the state. The  rate of  seven-tenths of one per cent, upon  their appraisal was  increased  in 1904  to one per cent. As  the railroad companies have, with minor exceptions, continued to pay upon the basis of their gross earnings this has undoubtedly been less than one per cent, on an appraisal of their property. While railroads, therefore, are paying a  tax  of  less  than  one  per  cent,  on  the  appraisal  of  their  property  the  average  tax  rate  throughout  the  state  is about one  and  six-tenths per  cent, — a greater difference  than  the  facts  and  conditions warrant. Although  there is  a  great  difference  in  the  value  and  earning  power  of  railroads,  in  the  different  New  England  states  it  is significant that, according to the report of the Interstate Commerce Commission for the year ago the average tax per  mile  paid  by  railroads  for  the  year  ending  June  30,  1902,  was  in  Massachusetts  $1,401,  in  Connecticut, $1,005,  in Rhode  Island $888,  in New Hampshire $324,  in Maine $198, and  in Vermont only $146.  It has been and  should  be  the  policy  of Vermont  to  treat  our  railroad  corporations  fairly  and with  every  consideration. We should  take  into  account  the  natural  conditions  with  which  they  have  to  contend  in  this  state  and  the  fact  that they are contributing much to its welfare and upbuilding. However, they should bear their fair proportion of the burden of taxation and in equal justice to all interests in the state should pay an increased tax. SAVINGS DEPOSITS IN NATIONAL BANKS. Some  national  banks  in  the  state  run  in  effect  a  savings  bank  department  and  pay  interest  on  certain  time deposits.    To  the  extent  this  is  done  the  state  receives  no  revenue  thereon  and  it  is  doubtful  whether  such deposits generally get  into  the grand  list of  the  towns. Some means should be devised  to secure proper  taxation of such savings deposits, because they should bear taxation equally with other savings deposits and because also without  it  national  banks  are  enjoying  a  preference  in  a  business,  which  does  not  properly  appertain  to  them, over  institutions  which  are  especially  created  by  the  state  for  that  purpose.  If  such  deposits  in  national  banks cannot  be  taxed  directly  by  the  state,  and  probably  they  cannot  be,  I  recommend  that  provision  be  made  for requiring  national  banks  to  disclose  the  names  of  their  savings  depositors  and  the  amounts  of  such  deposits  in order  that  they may be properly  taxed  in  their respective  towns. There are decisions of  the courts sustaining  the right of a state to do this. DOUBLE TAXATION. Double  taxation  is  an  evil which  so  far  as  possible  should  be  corrected,  this  problem  has  been  studied  and discussed for years and different solutions suggested and urged, but as yet any remedy suggested has seemed to lead  into  difficulties  even  worse  than  the  present.  The  fact  is  that  the  matter  is  so  interwoven  with  the  whole question  of  taxation  that  no  single  provision  can  satisfactorily  solve  the  problem.  Any  single  provision  would create  all  or  some  of  the  following  difficulties  the  making  of  a  new  line  of  exemption,  which  is  always unfortunate,  the  serious  impairment  of  the  revenue,  of  the  towns  or  of  the  state,  the  raising  of  the  rate  upon which money  can be borrowed,  and  in  fact  in  towns where  the  tax  rate  is very high  rendering  the borrowing of money  practically  impossible.  The  attempt made  in  other  states  to  solve  the  double  taxation  problem  by  some single provision has never been successful. We  should  not,  however,  be  discouraged  by  our  own  want  of  success  thus  far  or  by  the  failure  of  other states,  but  should  take  up  the  problem  with  renewed  determination  to  satisfactorily  solve  it,  Much  inquiry, research  and  investigation  is  necessary  in  a  question  of  this  kind.  We  should  know  as  far  as  possible  to  what extent  in  fact  double  taxation  exists  in  Vermont,  study  carefully  any  proposed  change  in  its  relation  to  the individual, town and state, and to the whole question of taxation. If with such knowledge as is available you are able  to  find  a  solution  of  this  question  that  bids  fair  to  bring  the  desired  relief,  with  out  the  creation  of  other evils,  it  is most desirable  that you do  so. But you  find  that  sufficient data are not available upon which  to base, this  necessary  readjustment  then  I  recommend  that  you  provide  for  the  creation  of  a  strong  representative commission which  shall  take  up  not  only  the  question  of  double  taxation  but  the whole  question  of  taxation  in Vermont and give  it a  thorough  research and study. Such a commission should have  the power and authority  to collect  statistics,  examine  books  and  records,  and  should  study  the  system  of  taxation  in  other  states.  It  should be of  such  a  size  and  character  and  its  research  and  examination  so  broad  and  extended  that  its  findings would carry weight and give promise of a satisfactory solution by the next legislature.  DEPARTMENT OF HEALTH. I command to your favorable consideration the work of the Laboratory of Hygiene and of the State Board of Health. There  is no  interest of  the state more worthy of being fostered along sensible  lines  than  the work which has been begun in behalf of the public health. Besides the great saving of life and prevention of suffering, which is  the  important matter,  the  State Laboratory  is  already  saving  the  people  of  the  state  in money many  times  its cost.  All  efforts  to  control  the  public  health  by  quarantine,  inspection  of  water  supplies,  etc.,  are  liable  in  the beginning  to  create  some  friction.  That  is  to  be  avoided  as much  as  possible,  but  there  should  be  no  departure from the policy upon which we have entered of controlling matters relating to the general public health. HIGHWAYS. The aroused public sentiment in favor of improved permanent highways is an indication of a greater interest of  the  people  in  the  true  welfare  and  development  of  the  state.  It  is  a  most  important  subject  and  fully  merits your most careful attention. We have many natural conditions with which to contend making the construction of the  best  highways  difficult  and  expensive,  but  these  conditions  make  it  important  to  have  such  highways  if possible. Government  aid  for  highways  has  been  urged  by  some.  It  is,  however,  contrary  to  the  whole  spirit  of  our governmental system, nor  for Vermont  is  it a practical or desirable policy. Not only  is  it wrong  in principle but in  the end  it will be  less burdensome  for us  to work out our own highway problem and  leave other state  to  take care of theirs. Nor am I in favor of issuing state bonds for the purpose of building state highways. We are a rural community,  our  income  is  not  large,  and  to  load  upon  the  state  a  bonded  indebtedness  with  a  fixed  interest charge  is  poor  business  management.    The  condition  of  our  highways  at  the  present  time  is  not  such,  nor  the advantages  to  be  derived  from more  perfect  highways  great  enough  to warrant  the  creation  of  a  state  debt. We are practically without debt at the present time and it should be our fixed policy to so continue. In  1892  the  state  first  began  to  assume  positive  responsibility with  reference  to  highways  by  the  enactment of a law providing for a 5 cents state highway tax, paid into the State Treasury and redistributed to the towns on the basis of their highway mileage. While in some towns this money was expended according to the spirit of the law,  it  resulted  in but  little permanent work  for want of proper  supervision.  In many  towns  it was not  in  reality spent for permanent work but used for ordinary repairs. The Legislature recognizing  this fact,  in 1898 provided for  the  appointment  of  a  state  highway  commissioner  and  the  creation  of  a  state  highway  department  which should  supervise, as  far as possible,  the expenditure of  this  state high way  fund. This was  a decided  step  in  the right direction and there has been a marked improvement since then in the method of expending this fund and in the  results  obtained.  There  are  many  sections  of  excellent,  well  constructed,  permanent  road.  Each  year  is showing  an  increase  in  amount  and  an  improvement  in  quality.  Soil  accessibility  of  good  road  material,  and other natural conditions enter  largely  into  the  results obtained but  the greatest  factor  is  the method  in which  the money  is  expended.  Towns  that  have  been  fortunate  and  careful  in  the  selection  of  a  road  commissioner,  and when securing a good one have retained him, have invariably had splendid results from the operation of the law. The  county  meetings  have  been  very  educational  and  have  created  a  genuine  interest  which  has  resulted  in much more efficient work, Notwithstanding  the  improvement  that  has  been  made  in  the  method  of  expending  the  state  highway  fund and  in  the  results  obtained  during  the  past  few  years,  some  towns  are  today  gaining  nothing  from  the expenditure of this money in the way of permanent road and others but little. The larger towns and cities which are making a  large contribution  to  this fund certainly have a right  to demand  that  it should be expended  in such a  manner  as  to  yield  the  best  possible  results.  The  state  has  not  fulfilled  its  duty  until  it  has  provided  for  the expenditure  of  this  large  fund  according  to  the  best  and most  up-to-date method.  I  firmly  believe  that  in  every way  much  better  and  more  satisfactory  results  can  be  obtained  from  the  expenditure  of  the  state’s  highway money under more complete and rigid supervision. It is utterly impossible for one man to properly supervise the expenditure  of  over  $100,000  distributed  in  small  and  varying  amounts,  in  every  town  in  the  state.  In  the expenditure  of  this  money  we  should  aim  at  two  important  results:    First,  to  procure  its  expenditure  in accordance with  the best  scientific methods,  and  secondly,  to have  these  sections of permanent  road  so  located that  in  the  end  they  will  form  continuous  lines  of  permanent  highways.  The  only  way  to  bring  about  these results  is  to  provide  more  supervision  for  the  work.  The  state  commissioner  should  give  his  entire  time  to outlining  the work and  to  its general supervision and should be a salaried officer with  reasonable allowance  for office and clerical expenses. There should also be a supervisor for each county appointed by the State Highway Commissioner,  with  the  approval  of  the  Governor.  The  state  highway  fund  should  be  expended  in  accordance with plans and specifications  laid out by  the state highway department and under  the supervision of  the County Supervisor, both as to its location and method of expenditure. To  further  encourage  the  construction of permanent highways  I  recommend  that  any  town or  city making  a special appropriation  for permanent highway work  should  receive an allowance  from  the  state  for  this purpose. The amount which the state should be called upon to contribute for this purpose in any one town during any one year should of course be limited. Such additional funds should be  located and expended under  the same general plan as  is provided for  in  the expenditure  of  the  regular  state  highway  fund.  The  state’s  contribution  to  such  optional  work  should  be  paid from  the general  treasury of  the state and not be  taken  from  the  regular state highway  fund accruing  from  the 5 cents state highway tax. AUTOMOBILES. Automobiles  have  come  to  stay  and  they  have  their  proper  and  rightful  use  in  the  pleasure  and  business  of many people. They  are  likely  to gradually  fill  a greater  rather  than  a  less place. For  those who  can  afford  them they are  the most advanced method of highway  travel. Besides  their use by our own people  they probably help to  bring  summer  residents  and  visitors  into  the  state. Where  they  have  been  used  longer  and  are most  used,  in and  about  cities,  they  are  practically  ceasing  to  be  a  menace  to  horses,  in  any  action  with  reference  to automobiles these facts should be taken into account. At the same time, during this transition period many of the men, women and children who are living up and down  our  hills  and  valleys  are  practically  banished  from  the  use  of  our  highways  both  for  the  purposes  of business  and  pleasure.  Business  in  many  of  our  communities  is  being  seriously  interfered  with  because  the people are kept off our highways by the fear of meeting automobiles. In time our horses, will probably be come so familiar with  these machines  that much of  the present difficulty may be  removed, but pending  that  time  I do not  think  it right  that so many of our people should be deprived,  to  the extent  they now are, of  their natural and rightful  use  of  the  roads. We  may  well  consider  whether  for  the  present  automobiles  should  not  be  prohibited the  use  of  certain  highways,  especially  some  of  our  narrow  hill  roads  where  the  passing  of  a  team  and automobile is impossible without great danger to the occupants of the team. The  present  law  provides  for  a  nominal  registration  fee  of  two  dollars  for  each  machine  and  an  annual license  fee  of  two  dollars  for  operators.  These  together  with  dealers  licenses  produced  last  year  $3,398.94.  Considering the use which automobiles have of our highways and their size, weight and speed, I think that they should pay an annual fee, adjusted upon some reasonable and fair basis sufficient to produce a more substantial revenue for state highway purposes. There should be some provision by which machines from without  the state using our highways should pay a like license fee. One of the greatest difficulties is the lack of consideration shown by some drivers of automobiles when they meet  horses  unaccustomed  to  them.  It  will  be  impossible  for  you  to  frame  any  law  which  will  make  people thoughtful  and  considerate,  but  you  should  consider  whether  the  rules  of  the  road  for  automobiles  can  in  any way be improved so that the conduct of the few thoughtless may be made to conform more closely to the action which the courtesy of most people naturally suggests. GRADE CROSSINGS. The  crossing  of  railroads  and  highways  at  grade  is  fraught  with  danger  under  the  most  favorable circumstances,  As  the  frequency  and  speed  of  train  service  has  increased  the  danger  both  to  those  using  the railroads and the highways has likewise increased. The reports of the Railroad Commissioners show that during the ten years from 1894 to 1904 there were one hundred accidents at grade crossings in the state of Vermont by which fifty persons were killed and fifty others more or less seriously injured. In  the early construction of  railroads  it would have been practically  impossible  to build  them without grade crossings  but  now  they  should  be  gradually  removed.  The  life  and  safety  of  our  highways  and  to  the  greater safety  of  our  people.  The  receiving  serious  attention  in  all  of  our  sister  states.  In Massachusetts  from  1890  to 1905  inclusive  there  was  expended  for  the  removal  of  grade  crossings  $24,310,377.67  of  which  the  railroads paid  $14,721,897.04,  the  state  $6,420,601.93,  and  the  cities  or  towns  $3,129,689.76.  Our  statutes  provide  that the Railroad Commissioners may  under  certain  conditions  order  the  removal  of  grade  crossings,  but  the  law  is only  permissory  in  character  and  but  little  progress  is  being  made  in  that  direction,  The  time  has  come  when Vermont  should  recognize  this  great  and  increasing  danger  to  her  people  and  provide  for  the  gradual compulsory abolishment of  these grade crossings. Connecticut has such a  law. We cannot expect  to make rapid progress  in  their  removal but must be  conservative  so  as not  to burden unduly  either our people or  the  railroad companies. There should continue to be, as at present, a provision for a fair division of the expense between the railroad company and the town or city in which the crossing is located. The state, as is so generally done elsewhere, may well  contribute  something,  to  be  carefully  limited  by  law,  to  this  improvement  of  our  highways  and  to  the greater safety of our people. The number of crossings  to be  removed  in any year should be specifically  limited. Instead  of  the  limitation  under  the  present  permit  system,  contained  in  V.S.  3842,  to  the  removal  of  not  more than  one  a  year  in  any  one  county  on  any  one  railroad.  I  suggest  that  a more  reasonable  basis  for  the  railroads themselves  and  for  all  concerned would  be  a  limitation  based  upon  the mileage  of  the  railroad.  The  law might require,  for  example,  that  there  should be one grade  crossing  removed  each year  for  every  specified number of miles which a railroad operates in the state. CONCLUSION I cannot urge upon you  too strongly  the  importance of  taking up your work promptly and actively. Many of you  are  strangers  to  each  other  and  new  to  the work  before  you.   These  reasons  and many  others  tend  to  delay the  progress  of  the  important  work  of  the  session.  Unnecessary  and  even  pernicious  laws  are  sometimes enacted,  worthy  and  needful  legislation  is  sometimes  defeated,  and  all  legislation  is  often  unduly  considered because  wasted  time  early  in  the  session  compels  haste  at  its  end.  All  important  legislation,  such  as  that pertaining  to  education,  highways,  taxation,  courts  and  state  institutions  should  be  introduced  and  considered early  in  the  session.  You  can  do  the  state  no  greater  service  than  to  actively  take  up  your  important  work  at once. You  should  examine  all  special  bills  and  special  appropriations  with  great  care.  None  should  meet  your approval until  they have been shown  to be worthy and necessary. The danger  is  far greater  from  too much  than from too little legislation. The people of the state expect you to keep your appropriations within the limits of the strictest  economy  consistent with  the  performance  of  the  full  duty  of  the  state  to  all  her  people.  For  four  years we have been without a direct tax for the support of the state government. This should be our fixed policy. With this  in  view  you  should  so  adjust  the  state’s  income  and  expenditures  as  to  make  a  return  to  a  direct  tax unnecessary. As you enter upon your duties as the chosen representatives of the freemen of Vermont. you may well recall the  worthy  record  of  those  who  have  preceded  you  in  these  halls,  and  the  patriotic  service  of  Vermonters  at home  and  abroad,  in  war  and  in  peace.  Vermonters  may  well  take  pride  in  this  past  and  in  the  unexcelled achievements  of  those  who  have  borne  our  name.  Let  not  this  thought,  however,  be  a  satisfying  one;  its  true purpose  and  effect  should  be  to  arouse  and  stimulate  you  to  so  serve  your  state,  to  so  legislate  at  this  session, that Vermont  in  all  respects may  take  and  hold  her  rightful  position  in  that  grand march  of  progress which  the twentieth century is today witnessing throughout our great country. FLETCHER D. PROCTOR. Montpelier. October 4, 1906.