Inaugural address of  George D. Aiken   As it appears in the  Journal  of the  JOINT ASSEMBLY  BIENNIAL SESSION  1937         Thursday, January 7, 1937 Inaugural Message  Member of the General Assembly:-- On  the  second  of  July  in  the  year  1777  a  group  of men  from  the  settlements  of  the New Hampshire Grants were  gathered  in  the  town  of Windsor.  None  of  them  were  trained  in  law;  it  is  assumed  that  all  of  them  were poor;  if  the word  “radical”  had  been  a  common  political  term  at  that  time,  it might  have  been  applied  to  them, for on  that sultry July day—even while  the hired soldiers of King George  the Third and  their Indian allies were descending  upon  the  scattering  settlements  west  of  the  Green  Mountains—this  intrepid  group  wrote  the  most progressive political document  the New World had yet seen—the Constitution of Vermont. For  the first  time  in America  a  state  government  prohibited  human  slavery  and  extended  the  right  of  suffrage  to  all  freemen.  This group  of  undoubted  “rugged  individualists”  recognized  that  private  property  should  be  subservient  to  public need, the right to religious freedom, the right to freedom of speech and of the press and of trial by jury. And  although  the  founders  of  our  state  also  recognized  the  right  of  the  people  to  alter  their  form  of government  in  any manner  “conducive  to  the public weal”, yet  they wrought  so well  that  to  this day Chapter 1 of the 1777 Constitution known as the “Bill of Rights”, exists as part of the framework of our state government in an almost unchanged form. As we meet here at the beginning of this General Assembly I recommend to all of you that you read carefully this document of the 18th century, which is printed in your legislative directory, and which should represent the spirit of Vermont today, as it did 160 years ago. It  is  expected  of  an  incoming  governor  that  he  will,  in  an  address  to  the  General  Assembly,  express  his views on various problems of state, and recommend what he believes to be desirable legislation. Believing  that  the  prosperity  and  security  of  a  community  or  a  state  is  in  fact  a  reflection  of  the  prosperity and  security  of  the  people  living  therein,  it  seems  fitting  that  the  first  problem  to  which  I  should  call  your attention  is  that which has  to do with guarding  the health,  strengthening  the mind and character, and correcting the  wayward  tendencies  of  those  of  our  people  who  are  less  fortunate  than  most  of  us.  These  activities  are grouped under the heading of Public Welfare. The Department of Public Welfare  is charged with  the  supervision of  the hospital  for  the  insane,  the  state’s prison,  industrial  school,  school  for  feeble  minded,  woman’s  reformatory  and  sanatoriums  for  the  care  of tuberculous persons. It is also in charge of paroles and probations. The  point  has  been  reached  when  certain  of  our  institutions  have  become  over-crowded  and  requests  have been made  for  appropriations  totaling  over  a million  dollars  for  additional  buildings,  equipment  and  operating expenses.  It  is  my  opinion  that  appropriations  for  this  purpose  should  not  be  made  until  there  has  been  a  real study of our entire system of public welfare and state institutions. We have 1200 people in the state on parole and probation. At present probationary work is handled by part- time officials and is in a generally unsatisfactory condition, several hundred persons failing to meet the terms of their  probation.  It  is  very  probable  that  a  few  full-time  probation  officers  would  be  so much more  effective  in their supervision of these cases that the cost to the state for their services would be negligible. The  Woman’s  Reformatory  at  Rutland  is  a  fine  institution  used  to  only  a  third  its  capacity.  The  Brandon Home  for Feeble minded  is overcrowded, without even a place  to  isolate  the victims of contagious diseases. At Vergennes  we  are  spending  between  five  and  six  hundred  dollars  a  year  apiece  to  care  for  children,  some  of whom  doubtless  should  never  have  been  sent  there.  At  the  State  Hospital  in  Waterbury  1100  persons  are confined  in  an  institution  built  to  accommodate  800. At  the  State  Prison  in Windsor  half  the  prisoners  are  idle because there is no work for them to do. It has been  recommended  that we should employ a  full-time psychiatrist  to work at our  institutions and  that if this were done the saving made by releasing inmates would amount to more than his cost to the state. I  confess  I  do  not  feel  competent  to make  detailed  recommendations  at  this  time.  I  believe  it  is  our  duty  to see  how  many  people  we  can  keep  out  of  state  institutions  rather  than  how  many  we  can  put  in.  Rather  than spend  five  hundred  dollars  a  year  in  keeping  a  boy  in  Vergennes  I  would  prefer  to  spend  half  that  amount  in keeping  him  out.  I  do  not  like  to  hear  of  an  old  person  being  sent  to  an  insane  asylum  simply  because  he  has reached the age where his mind fails to function and he is not self-supporting. And  so  I  would  request  that  this  legislature  authorize  a  committee  of  not  over  five  and  preferably  three persons,  which  may  be  a  sub-committee  of  a  regular  legislative  committee,  or  a  special  committee  to  be appointed  by  the  governor,  and  with  an  appropriation  to  enable  it  to  make  a  real  study,  not  only  of  our  state institutions  but  of  our  entire welfare  system. Although  it might  take  some  time  for  this  committee  to  complete its studies, yet it could report before the end of this session its recommendations on matters requiring immediate attention, so that legislative action might be taken by this assembly. Old Age Assistance.—During  the recent business depression  there was sharply brought  to our attention  the sad  plight  of  those  people  who,  facing  the  sunset,  saw  the  savings  of  a  lifetime,  which might  have made  their declining years more  comfortable, wiped  away while  they were helpless  to prevent  it. Avenues of employment were closed to them, and to some thousands living within our state the only recourse was dependence on public charity with its accompanying humiliation. In 1933 Vermont adopted a policy of old age assistance. The act providing funds to carry out this policy was based  on  insufficient  information. Where  it  was  estimated  that  only  two  thousand  people  were  in  need  of  this assistance,  actual  experience  showed  that  about  six  thousand  are  equally  in  need  and  equally  deserving.  Small monthly payments are now being made  to about  four  thousand of our citizens,  these payments proving  to be of great assistance, not only to the recipients but to the towns and cities in which they live. Although  it  is  true  that  the old age assistance undertaking  is still  in  the experimental stage and care must be taken lest the burden placed on those providing the benefits outweigh the benefits themselves, yet it is only just that  some  means  be  found  whereby  we  can  extend  this  assistance  to  the  two  thousand  deserving  citizens  who are as much entitled to it as the four thousand who are now aided. If  no  more  feasible  plan  is  presented  I  would  suggest  that  a  head  tax  of  $2.75  would  prove  sufficient  to extend  the  present  rate  of  assistance  to  the  six  thousand  who  qualify,  and  in  view  of  the  fact  that  towns  and cities  are  permitted  by  law  to  drop  questionable  polls  from  their  list,  I  recommend  that  the  municipalities  be permitted to retain ten per cent of the tax to cover the cost of collection, instead of twenty per cent as at present. Education.—Our  law  relating  to  education  was  carefully  revised  two  years  ago  and  I  believe  has  given general satisfaction.  I think it should be continued without serious changes. Although we cannot afford to do as much  for our  schools  as we would  like  to, yet we must be  sure  that  there  shall be no  let-down  to our  standards and should strive to improve them at every opportunity. Agriculture.—The  problems  of  agriculture  are  innumerable  and  must  in  the  long  run  be  solved  more  by cooperation than by legislation. We may be thankful that our state has at last been declared practically free from bovine tuberculosis, yet we must  take  no  chances  on  a  return  of  this  disease,  and  a  comparatively  small  annual  appropriation  to  guard against it is wholly warranted. Unless  present  requirements  are  changed  by  congressional  action  this winter,  it will  be  necessary  for  us  to create  a  commission  or  agency  for  administering  the  federal  soil  conservation  program  if  the  farmers  of  this state are to enjoy it benefits. Liquor Law Enforcement.—Although Vermont’s liquor law is considered one of the most workable, yet it is  apparent  to  everyone  that  there  is  much  to  be  desired  as  regards  its  enforcement.  License  holders  have  the right  to  protection  from  illicit  traffickers  and  bootleggers;  those  using  our  highways  are  endangered  by automobile  operators  who  have  indulged  too  freely;  children  of  school  age  are  too  frequently  seen  in  varying stages of  intoxication. This  state of affairs  is deplorable  in  the extreme and must be corrected  to  the best of our ability. The trials of local enforcement officers and the difficulty they have in securing evidence and convictions is common knowledge. At present the attorney general has an appropriation of $5,000 a year to spend on liquor law  enforcement  but  it  appears  to  me  that  enforcement  should  more  properly  be  committed  to  the  Liquor Control  Board,  who  by  the  nature  of  their  duties  are  more  conversant  with  circumstances  indicating  probable violation,  and  I  recommend  that  enforcement  be  transferred  to  the  Board  and  that  said  Board  be  authorized  to employ, with  the consent of  the governor, such officers as  they deem necessary  to properly enforce  the  law and that the expense of such enforcement be paid out of the funds of this board. And I further recommend that the Liquor Board should cooperate with the Department of Education or other agencies  in dispensing  information  tending  to  reduce  the excessive use of  intoxicants and encourage our young people to live more temperate and useful lives. Motor Vehicle Department.—With the increased highway traffic which is here and that which promises to develop  in  the  near  future,  it  is  apparent  that  more  adequate  policing  of  the  highway  is  necessary  to  insure maximum safety to the public, and I recommend that the commissioner be authorized to increase to a reasonable extent  the number of enforcement officers.  If not carried  too  far,  it appears  that additions  to  the  force would be self-sustaining, in the same manner as those now employed. Highways.—In 1931 a state-owned highway system of 1037.12 miles was established and in 1935 additions to this system brought the total up to 1765.59 miles. Although notable strides have been made in hard-surfacing this  system  there  still  remain over  750 miles without  a  surface  superior  to gravel.  In view of  this  fact,  it would seem inadvisable to make further additions to the state system until we have a higher percentage of hard surface over that which we now have. Highway  funds  are  now  fairly  divided  between  town,  state  aid  and  state  owned  roads.  I  believe  that  we should continue  this division of  funds  in about  the  same proportion as now exists. Funds  received  from  the gas tax  and  motor  vehicle  registrations  should  not  be  diverted  to  purposes  other  than  highway  building  and maintenance except in case of extreme necessity. Looking into the near future it is not difficult to foresee the time when our present system of main highways will  prove  inadequate  to  bear  the  traffic  required  of  it. Already  routes  5  and  7  are  heavily  congested  at  certain seasons of the year. This congestion of traffic is due to increased industrial activity and to a decided increase in recreational  travel.  For  this  state  of  affairs  we  should  be  very  thankful.    However,  it  is  clearly  apparent  that additional  routes,  which  are  mostly  already  state-owned,  must  be  improved  to  handle  this  increase  in  traffic. Particularly  a  midstate  route  from  the  Massachusetts  border  to  Lake  Memphremagog  by  way  of  Wilmington, Ludlow, Rochester and Morrisville and two or three cross-state routes, would seem to provide almost unlimited possibilities  for  the  development  and  settlement  of  our  mountain  towns  by  tourists,  summer  and  permanent residents. These  people  are  attracted  to  Vermont  because  of  the  natural  beauty  and  charm  of  our  state.  Conditions existing  along  the  roadsides  are  likely  to  decide  visitors  from  other  states  as  to  the  advisability  of  purchasing homes  in Vermont. Therefore  it  seems  vitally  necessary  that  the  state  should  control  the  roadsides  of  our most scenic highways if desecration and despoilation are to be guarded against. So  I  recommend  that  the  Highway  Board  be  empowered  to  secure  along  existing  or  prospective  rights  of way  by  gift,  purchase  or  lease  such  areas  as  may  be  necessary  to  preserve  the  natural  beauty  along  our highways.  And  I  further  recommend  that  the  board  be  empowered  to  regulate  industrial  traffic  on  obviously scenic or light travel highways in order that the purpose in developing these routes may not be defeated. Recreation.—Progress  in  developing  the  recreational  resources  of  Vermont  during  the  past  few  years  has been  truly  remarkable,  due  to  the  efforts  of  the  National  Forest  Service,  the  National  Park  Service  and  the C.C.C.,  our  State  Forest  Service,  the  State  Publicity  Department  and  the  cooperation  of  our  citizens  who  are engaged in the business of operating hotels, summer camps and tourists’ homes. We may  also  look with  satisfaction upon  the  sale of hundreds of our  small hill  farms  and village properties to  those  who  have  bought  them  for  homes,  either  summer  or  permanent.  These  people,  who  are  of  the  finest type of  citizen, have not only brought millions of dollars worth of new  capital  to Vermont, but have materially added  to  our  permanent  population  until,  according  to  the  United  States  Census  Bureau,  we  have  gained  as much during the last six years as we did during the previous sixty. Although we were  told a few years ago  that  this  influx was a  temporary depression movement of folks who would  leave  Vermont  as  times  got  better,  yet  it  is  a  satisfaction  to  note  that,  as  business  conditions  improve, instead of leaving us they are coming in increased numbers. Although we  should  not  go  to  extremes  in  publicizing Vermont  as  a  recreational  state  but  try  to maintain  a sound balance with our agriculture and industry, yet we should continue to consistently develop our recreational resources in such a manner that people from other states may find Vermont most attractive, either for a summer vacation or a home. Our present appropriation for publicity, which is used largely in advertising our recreational advantages, should be continued. We should continue to acquire such areas of land as will give public access to our  larger  lakes  and  mountains.  In  my  budget  message  you  will  notice  that  I  am  recommending  only  a  small amount  for  the  acquisition  of  more  land  by  the  state,  but  it  occurs  to  me  that  the  large  annual  expenditures which we  are  incurring  in  purchasing  reservoir  sites might  better  be  spent  in  acquiring  and  protecting  areas  of recreational value. I  call  your  attention  to  an  act  of  Congress  known  as  the  Fulmer  Act  authorizing  the  United  States  Forest Service  to  cooperate  with  the  states  in  purchasing  areas  of  land  for  public  use.  This  act  provides  that  areas  of this  nature  may  be  purchased  with  federal  funds  but  will  be  operated  by  the  state.  One  half  the  income  from such  land  is  to  be  returned  to  the  federal  government  until  the  purchase  price, without  interest  added,  has  been repaid, at which time the state becomes sole owner of the property. It is the opinion of many that a national park or  monument  of  considerable  size  in  northern  Vermont  would  prove  to  be  of  great  value  to  the  recreational industry.  I  believe  that  the  National  Park  Service  would  look  with  favor  upon  such  a  project  if  they  are convinced that the people of Vermont desire it. In other states where national monuments have been established the funds with which  the  land has been provided have mostly come from private sources. I submit  to you  that a project  of  this  nature  is  deserving  of  careful  study  on  your  part  to  determine  whether  it  could  be  properly financed and carried out. The  increase  in  tourist  traffic  has  led  to  the  construction  of  a  great many  tourist  camps  about  the  state. We may  congratulate  ourselves  that  most  of  these  camps  are  clean  and  comfortable.  For  the  protection  of  the traveling  public  as  well  as  the  operators  of  clean  overnight  camps,  it  seems  that  an  official  inspection  and licensing  of  these  places would  be  advisable. Our  present  law  provides  for  inspection  only  at  the  option  of  the owner. Natural  Resources.—The  Legislature  of  1935  established  two  boards,  whose  duties  had  to  do  with  the management  and  conservation  of  our  natural  resources,  the  Board  of  Conservation  and  Development  and  the State  Planning  Board.  The  members  of  these  boards  have  been  loyal  citizens  who  have  performed  their  work conscientiously. The  State  Planning  Board,  whose  activities  have  been  largely  financed  by  federal  funds,  has  engaged  in research work having  to do with different phases of Vermont’s welfare,  including study of our water resources. Being  financed  largely with  federal  funds,  the  Planning Board  has  perhaps  felt  obliged  to  follow  courses  other than  it might  have  pursued  as  a  strictly  state  planning  board.  If  this  board  is  continued  I  am  recommending  an appropriation sufficient to enable it to be a state planning board in fact as well as name. The Board of Conservation and Development has been in charge of the activities of fish and game, publicity and  forestry.  However,  there  is  a  widespread  feeling  throughout  the  state  that  the  activities  of  the  Fish  and Game Department  are of  sufficient  importance  to warrant  its being made  a  separate department,  as  it was prior to  being  placed  under  the  Conservation  and  Development  Board  two  years  ago.  The  fish  and  game  clubs  of Vermont are practically unanimous in requesting this change and it appears that they are justified in so doing. As  is  done  in  nearly  all  states,  the  Publicity Department might  be  restored  to  the  office  of  the  Secretary  of State.  I  would  then  recommend  that  a  Board  of  Natural  Resources  be  authorized,  which  would  combine  the State Planning Board with the remaining activities of the Board of Conservation and Development. This Natural Resources  Board  would  have  control  of  state  forests,  recreational  areas  and  investigational  study  of  our  water resources and other natural advantages, having a definite work to do while laying plans for future developments. I believe such action would coordinate recreational and other activities dependent on our natural resources. Banking  and  Insurance.—In  1933  the  banking  industry  found  itself  in  an  acutely  dangerous  situation  and the  Vermont  legislature  passed  much  emergency  legislation  tending  to  alleviate  the  situation.  Since  that  time there  has  been  some  improvement.  The  F.  D.  I.  C.  has  insured  deposits  until  nearly  all  of  the  savings  of  our people  are  now  protected.  The  R.  F.  C.  has  loaned  Vermont  banks  nearly  seventeen  million  dollars,  which provides  liquid  assets  with  which  to  do  business.  But  although  deposits  in  Vermont  banks  are  now  insured against loss, yet they have been steadily decreasing. The reason for this is not difficult to find.  All our banks are now limited to payment of two per cent interest on deposits and are subject to strong competition, including that of the federal government which offers the small depositor so-called baby bonds that yield nearly three per cent interest. With  the  legal  rate  of  interest  at  six  per  cent  there  is  now  permitted  a  spread  of  four  per  cent  between the  rate  of  interest  paid  depositors  and  that  charged  borrowers.    This  is  obviously  too  great  and  many  of  our progressive  bankers,  recognizing  this,  have  voluntarily  and  in  good-businesslike  manner  reduced  the  rate  of interest charged to five per cent or less on good security. Some  banks,  however,  persist  in maintaining  this  spread  of  four  per  cent  between  depositor  and  borrower. The  situation  thus  created  is  not  only  unsatisfactory  but  manifestly  unjust,  placing  many  Vermonters  at  a disadvantage  as  compared  with  citizens  of  other  nearby  states.  I  have  hoped  that  this  condition  might  be corrected  without  additional  legislation,  but  my  hopes  have  not  been  realized  as  yet  and  legislation  may  be necessary.  Perhaps the solution lies in reducing the number of banks in the state and consequently the overhead costs of the industry. The  latest  report  of  the  Commissioner  of  Banking  and  Insurance  calls  attention  to  a  serious  evil  now existing  in Vermont.  I  refer  to  the  practices  of  so-called  financing  companies, mostly  located  outside  the  state, who  make  small  loans  to  our  people  of  very  moderate  means.  Too  late,  the  borrower,  in  desperate  need  of  a loan, finds he has signed away a large part of his pay check for months or years to come, and has agreed to pay interest  charges  which  may  ultimately  amount  to  from  fifteen  to  forty  per  cent.  I  agree  with  the recommendations  of  the  commissioner  that  the  activities  of  these  concerns  be  drastically  regulated  or prohibited. We want no peonage system in Vermont. I  recommend  the  continuance  of  Vermont’s Worthy  Debtor  Law,  which  extends  to  the  farmer,  the  laborer and the small business man the same right to temporary receivership as is enjoyed by public utilities, banks and large corporations. Water  Resources  and  Storage  Reservoirs.—Following  the  flood  of  1927  a  commission  of  hydroelectric engineers  made  an  exhaustive  study  of  the  water  resources  and  possible  reservoir  sites  within  the  state.  Their report recommended the construction of eighty-five reservoirs within our borders with the recommendation that such  reservoirs  be  used  in  connection  with  the  development  of  hydroelectric  energy.  The  report  indicates  that there is some over half a million undeveloped horse power in Vermont. No  start  was  made  in  putting  these  recommendations  into  effect  until  after  the  legislative  session  of  1933. Since that time storage reservoirs have been constructed at Wrightsville and East Barre and a third is now being built in Waterbury. At  the  time  construction  of  the  East  Barre  and Wrightsville  dams  was  authorized  it  was  expected  that  the cost  to  the  state  in  acquiring  flowage  rights  and  dam  sites  and  other  expenses  incidental  to  the  construction  of these  dams  would  not  exceed  two  hundred  thousand  dollars.  An  act  of  the  legislature  authorized  the  Public Service Commission to levy assessments against the supposed beneficiaries to pay a substantial part of this cost. I  fear  few  people  realize  what  an  expense  the  construction  of  these  reservoirs  has  been  to  the  state.  Instead  of the  two hundred  thousand dollars, which was expected  to cover  the cost of  the  two completed  reservoirs,  I  find that  the state has spent $99,236 on  the East Barre project, $236,200 on  the Wrightsville project and $17,289 on the Clothes Pin Dam at Montpelier, making a total of $352,000 already spent. The  highway  between  the  village  of  Worcester  and  Montpelier  is  yet  below  the  flood  level,  thus necessitating an increase of several miles’ travel between these two points when there is high water. If this road is  raised  sufficiently  to  protect  it  from  floods  another  expense  of  over  $100,000  will  fall  upon  the  state.  The road  between  East  Barre  and  Orange  is  also  below  the  spillway  level  and  the  cost  of  raising  this  highway  is estimated  at  $141,000.  However,  this  last  expense  will  likely  be  unnecessary  as  there  is  an  available  detour between the towns of Washington and Orange. As  for  the Waterbury project,  the  state has paid out  to date $40,109 and  it  is estimated  that  if and when  the Little  River  Dam  is  complete  the  cost  will  be  approximately  $180,000  more.  Therefore,  it  is  apparent  that  the state will have a  total  investment  in  these  three reservoirs of approximately $600,000 besides  the obligations of yearly taxes and maintenance. It  is  reported  that  an  effort  is  to be made  to have  the  state bear  the  entire  cost of  these projects.    In view of this  turn  of  affairs  it  appears  to  me  that  we  cannot  afford  to  embark  upon  any  more  projects  of  this  nature without  an  irrevocable  guarantee  from  private  and  municipal  beneficiaries  that  they  will  assume  a  fair proportion of the cost. However much a problem  the construction of  reservoirs on  rivers wholly within  the  state may be,  there  is a larger one which confronts us in the Connecticut River basin. States to the south of us are rather insistent on the construction  of  huge  reservoirs  on  the  tributaries  of  the  Connecticut  in  Vermont,  and  Congress  has  already authorized construction of eight dams which our more southern neighbors desire to have built. The  fact  that  the  cost  of  a  development  of  this nature, with  the  expense of  reservoir  sites,  the  abandonment of farms, the loss of population, the sacrifice of recreational and industrial development, relocation of highways and other huge expenses, would run well up into the millions of dollars may be accepted without question. That Vermont would be absolutely unable to stand this expense and the sacrifice of our assets, even if partly borne by other  states,  is  also  unquestioned,  and  it  is  further  true  that  we  ourselves  would  derive  comparatively  little benefit  from  the  construction of  this  reservoir  system.  I  think we may  also  assume  that  the people of  the  lower Connecticut Valley have been given  to believe  that  this program would  afford  them  far greater protection  from the flood waters of the Connecticut than it really would. There is still another feature of this program which has not made a very prominent public appearance as yet. That  is  this:  if a series of storage reservoirs were constructed in Vermont to maintain  the summer flow of water in  the  Connecticut  River,  the  states  of Massachusetts  and  Connecticut  would  be  enabled  to  generate  electrical energy at a little more than half the cost of producing it here in our state. It may be readily seen that this would, give them a tremendous advantage as regards future industrial developments. At present  the State of Vermont and  the  towns  in Vermont have an annual  income of over a million dollars from  taxation  of  hydroelectric  energy  and  the  reservoirs,  power  houses  and  transmission  lines  by  which  it  is generated and transported. That we have other undeveloped locations within the state where electricity might be generated profitably and without serious damage to other lines of development is also acknowledged. If  these  sites  are  developed  with  public  funds  we  would  not  only  lose  a  huge  amount  of  taxable  property from our grand list, but under our present law incur an annual tax bill of large proportions. We  wish  to  remain  on  good  terms  with  our  neighboring  states,  but  the  water  power  of  Vermont  is  our heritage,  a  natural  resource  bestowed  upon  us  even  as  other  states  have  their  natural  advantages  and  I  believe this gift should be used primarily for  the benefit of our own state and we should not surrender any of  it without just  recompense.    I  hope  the  time  is  not  far  distant  when  every  Vermonter  will  be  enabled  to  enjoy  the  use  of electric power in his home or business at rates proportionate to our bounty. The  situation  is  being  ably  and  diplomatically  handled  by  a  committee  of  our  Planning  Board  with  Mr. Ralph Flanders as chairman, and this committee should continue in charge of the matter. State  Finances.—Vermont  has  reason  to  feel  proud  that  during  the  years  of  the  depression  we  have  been able  to  run  on  a  pay-as-you-go  basis.  It  is  true  that  we  have  done  without  some  things  which  might  be considered  necessities  and  for  which  there  will  be  a  stronger  demand  than  ever  now  that  economic  conditions are more favorable. Within  a  few  days  you  will  receive  my  budget  message.    My  recommendations  will  be  conservative  and total  well  within  the  amount  of  probable  income.  I  believe  that  the  entire  state  is  desirous  of  avoiding  any further  indebtedness.  It  is  possible  that  the  legislature will make  some  new  appropriations,  but  if  this  is  done  I expect  that  additional  revenue  will  be  found  to  meet  the  new  obligations.  It  should  be  borne  in  mind  that  in 1938  and  1939  payments  of  a  hundred  fifty  thousand  dollars  and  interest  each  year  on  our  temporary  bonds must  be  made.  In  addition  we  must  provide  $48,000  in  1938  and  $50,000  in  1939  for  the  retirement  of  war bonds. During  the  last  year  a  capable  commission  has  been  at  work  studying  different  phases  of  state  financing, including  possible  new  sources  of  revenue.  When  you  receive  this  report  I  suggest  a  thorough  study  of  it because  it may be necessary  to draw upon  these  sources. And  I  further  recommend  that  consideration be given those sources of income that are now exempt from taxation to determine if some of them should not at this time begin to bear their share of the public burden. During recent years we have suffered a great loss in revenue from the decline in railroad taxes and in the tax on bank deposits. The special legislative session of last winter made a flat reduction in the tax rate on railroads. It  is  true  that  some of  our  roads were  in desperate need of  relief, but  it  is  equally  true  that others were  in more favorable  condition,  yet  all  received  an  equal  reduction. We  have  a  commission  authorized  to  hear  appeals  by the  public  utilities  from  the  appraisals  made  by  the  tax  commissioner,  and  to  make  equitable  adjustments.  I believe  it  more  desirable  to  let  this  commission  use  its  authority  in  making  adjustments  in  appraisals  where advisable than by legislative action to reduce  the rate paid by any group  to a point which  is based on  the ability of the weaker ones to pay. The  falling  receipts  from  the  tax  on  bank  deposits  can  be  stayed  only  by  improving  generally  the  banking conditions  within  the  state  so  that  savings  deposits  will  again  be  encouraged  and  by  liquidating  as  rapidly  as possible  the  fifteen  million  dollars  worth  of  real  estate,  which  the  mutual  savings  banks  have  acquired  by foreclosure proceedings and which is permitted as an offset against the tax on deposits. And  I would  further  recommend  that serious  thought be given  to setting a  flat  rate  for  the  registration of all pleasure  automobiles.  The  tendency  of  manufacturers  toward  building  lighter  cars  has  resulted  in  a  drop  in registration  fees  until  the  average  is  now  $18.10  for  each  car.  If  the  tendency  toward  lighter  cars  should continue  so  that  any  one  of  the  three  popular  weight  groups  should  fall  to  the  next  lower  class,  we  would  be faced  with  a  loss  of  $250,000  annually  in  registration  fees.  Pegging  the  fee  at  $18.00  per  car  would  insure  a revenue of not less than that which we are now receiving. And now I have no more recommendations to make at this time. There are many things I might discuss, but I  have  presented  those  I  believe  to  be  of  major  importance.  I  have  spoken  plainly  lest  my  words  be misinterpreted  by  some. As Governor,  I  intend  to  transact  business  openly  so  that  the  people  of Vermont may know how their affairs are being handled. With some  things  I have said  today many of you will disagree. That  is  inevitable. But when we disagree on a subject and express our viewpoints openly, then we are in reality making progress. While  I  occupy  the  executive  office  it will  not  be  the  office  of  any  particular  group  or  sect,  and  I  selfishly hope  that  at  the  end  of my  term  it may  be  said  that my  administration was  a  successful  one. With  your  help  it will be.  Let us forget our political differences, forget that we may not attend the same church, or that we belong to  different  occupational  classes,  but  remember  we  are  all  Vermonters  working  to  promote  the  welfare  and increase  the  happiness  and  prosperity  of  the  people  of  our  state.  If we will  do  this,  then  I  know  that  under  the guidance of the Great Master of us all we shall succeed.