Inaugural address of  Mortimer R. Proctor   As it appears in the  Journal  of the  JOINT ASSEMBLY  BIENNIAL SESSION  1945  Thursday, January 4, 1945. Inaugural Address  Members of the General Assembly:  This  is  the  130th Legislature  to meet  in  history  of Vermont. The  first met  in Windsor, March  3,  1778. Our Legislative  history  provides  a  notable  record  of  honest,  thorough  constructive  effort.  It  is  a  challenge  to  us gathered here today as well as to those who will meet in this h through the years to come. It  is  a  distinct  pleasure  for  me  to  find  that  I  have  served  in  previous  legislatures  with  at  least  118  of  the members of this Joint Assembly. I hope I may soon become acquainted with the rest of you. You will always be welcome in the governor’s office. The  two-year  period  for  which  we  are  to  legislate  will  witness  the  decisive  fighting  of World War  II.  The greater  part  of  the  administration  therefore, may  be  subject  to  continued war-time  conditions  affecting  income, taxation and government controls. Yet  one  of  these  days  the  final  shot  will  be  fired  and  our  boys  will  begin  to  come  home.    That  will  be  a critical  hour  in  the  life  of  this  nation  –  one  in  which  we  must  not  let  the  sudden  transition  from  war  to  peace make  us  forgetful  of  the  horrors  of  the  battlefronts.    Civilization  must  not  be  asked  to  undertake  the  risk  of another conflict.  Public opinion must insist on an international arrangement which will insure a just and durable peace. It  is my  hope  and  purpose  that we may  further  strengthen  and  vitalize Vermont  during  this  administration.  Our legislation should improve our economic situation, provide high standards in education, modernize our care of  the  unfortunate,  broaden  the  scope  of  our  health  program,  and  provide  greater  opportunity  and  security.   By so doing, we can bring vigor to our people and progress to the State.  These are highly competitive days both for the  individual  and  for  State  Government.   We must  enable  Vermont  and  Vermonters  to  play  their  part  well  in the forward march of civilization. VETERANS Any  legislative  program  for  the  next  two  years  should  first  of  all  make  provision  for  our  men  and  women returning  from  war  service.  The  Federal  Government  has  a  generous  and  comprehensive  program  for  their welfare—a program in which Vermont must cooperate to the fullest extent. In addition to its previous provision for  compensation,  the  State  has  initiated  other  efforts  in  their  behalf  as  listed  in  a  booklet  just  issued  by  the Department of Veterans’ Affairs. I  recommend  that  the  Legislature  give  legal  status  to  this  department,  recently  created  by  Governor Wills, and make  an  appropriation  therefor.   More  than 30,000 Vermonters are now  in  the  service. Already discharged veterans  are  finding  it  bewildering  to  obtain  information  concerning  the  many  benefits  available.  One  of  the duties  of  the  Department  of  Veterans’  Affairs  will  be  to  act  as  a  clearing  house  for  this  program,  which  will include the establishment of local committees to assist veterans in all their problems. The  preservation  of  the  records  of  our  servicemen  is  important  both  to  the  State  and  to  the  serviceman himself.  Therefore,  I  urge  the  Legislature  to  consider  legislation  authorizing  some  authority  in  the  State  to receive and record s certificates of discharge and to issue certified copies free of charge or for a nominal fee. In the  designation  of  such  an  authority,  consideration  should  be  given  to  the  matters  of  convenience  to  the veterans,  fireproof  protect  of  the  records  and  the  facility  for  issuing  the  certified  copies.    This  protects  the servicemen  and  women  in  case  of  the  loss  of  the  original  certificate  and  provides  a  convenient  method  for having certified copies issued. INCREASING INCOME During  the  past  40  years  the  cost  of  government  has  increased  to  an  astounding  degree  in  the  light  of  our comparatively static population and yet despite this increase only a small fraction of the State’s outlay has been devoted to the development of its natural resources, to which we must look for much of the revenue we need for our  manifold  endeavors.  In  shaping  our  budget  we  give  slight  thought  to  strengthening  our  productive enterprises. At present less than 3% of our expenditures are for this purpose. Our  per  capita  income  at  present  is  low  in with  other  commonwealths.  If Vermonters  are  to  have  a  greater share of  the enjoyments of  life and  if  the State  is  to have  taxable wealth  sufficient  to provide  this  services now being  asked  of  government  we  must  increase  our  income  and  resources.  I  believe  the  hope  of  such accomplishment  lies  in  carefully  planned  at  energetically  sustained  program  of  development  of  agriculture industry, forestry and recreation as well as of our mineral wealth, much of which is still untouched. AGRICULTURE It would be difficult  to  imagine a prosperous Vermont without a prosperous agriculture.    If we can  increase the rewards that come from its pursuit and thereby add to the enrichment of rural living, we shall have erected a bulwark against the tendency to expect from government what we should earn ourselves. We should strive for disease-free and high quality livestock of whatever kind it may be. We should continue our present system of testing for TB in order to keep our herds clean. In  the  case  of  Bang’s  disease,  we  should  continue  the  present  method  of  testing  and  calf  vaccination.  For mastitis,  no  specific  cure  or  treatment  seems  to  be  effective,  and  for  the  time  being  our  efforts  must  be  along educational  lines.  The  State  should  have  a  pathologist  for  the  study  and  prevention  of  disease  in  all  kinds  of livestock. The State should do its share in encouraging dairy herd improvement. Artificial insemination has become an accepted  method  in  improving  the  quality  of  cattle.    It  has  developed  rapidly  and  to  a  point  where  we  should take stock of the results in order to plan carefully for future progress. Marketing Commission Marketing  is  a  vital  factor  in  any  productive  enterprise.  Our  agriculture  should  have  the  advantage  of modern  marketing  methods.  I  urge  this  Legislature  to  provide  for  an  agricultural  marketing  commission  to develop  ways  and  means  of  enabling  a  greater  diversity  of  agricultural  products  to  reach  the  most  profitable markets. Reference to the development of the College of Agriculture will be found under the heading of University of Vermont. FORESTS Our  forest  land  comprises  one  of  our  chief  natural  resources.  About  three-fifths  of  the  area  of  the  State  is better  adapted  to  the  growing  of  timber  than  for  any  other  purpose.  We  are  not  sufficiently  conscious  of  the significance  of  our  forests.  If  three-fifths  of  the  area  of  every  farm  in  the  State  were  better  adapted  for  the growing of one certain crop  than  for any other purpose, we would provide  for  it very carefully. That  is  just  the situation with our forest land, viewing the State as a whole. This  great  natural  resource  furnishes  raw  materials  for  the  main  industry  in  many  Vermont  communities.  We have over 400  industries which depend upon wood; give  employment  in whole or  in part  to  approximately 30,000  people;  and  have  an  annual  payroll  amounting  to  nearly  $14,500,000.    Nearly  20%  of  our  gainfully occupied people owe their employment to our forests.  The economy of Vermont in part depends upon an ample supply of high-quality timber and a good thrifty sugar orchard on each farm. Forest Policy Although  it must be  started on a moderate basis and prefaced by a campaign of education  to make  its  long-range  advantages  understood  by  private  land  owners,  Vermont  must  have  a  forest  policy  that  will  eventually provide  for  handling  our  timber  as  a  crop—not  as  the  output  of  an  inexhaustible  mine.  Experience  of  other countries proves beyond doubt that regulation of forest practices brings lasting benefits to the people as a whole as  well  as  to  individual  owners.  Our  forest  policy  should  recognize  national  state,  municipal  and  private woodlands,  provide  for  proper  cutting  and  planting,  establish  equitable  methods  of  taxation  and  insure protection against fire and disease. I recommend the initiation of such a policy. In  this  connection  I  believe  the  State  should  take  the  lead  in  preserving  certain  primitive  wilderness  areas free  from mechanized  civilization  with  its  noise,  congestion  and  restlessness.    There  are many  today  who  will appreciate the peace, inspiration and health to be found in roadless areas. We should attempt to satisfy the tastes of all  types of, people.  In Vermont We still have some fairly sizeable  roadless  tracts. Once  lost,  they will never be regained. INDUSTRY Industry  is a  far  larger  factor  in  the  economic welfare of Vermont  than  is generally  realized. About 87% of our  towns  have  industrial  payrolls.  Before  the  war  there  were  some  28,000  wage  earners,  who  with  their families accounted for about one-third of our population. Over 50% of our industries have less than 25 employees.  Our industrial laws should be sufficiently flexible to protect such small businesses. Our greatest opportunity to expend industrial activity probably lies in the field of industrial utilization of our natural products from farm, forest, mine and quarry. This frequently requires research, which today spells life or death  for  many  industries.  The  Bureau  of  Industrial  Research  at  Norwich  University,  established,  to  aid  small industries  unable  to  carry  on  research  programs  of  their  own  should  be  strengthened.  The  same  is  true  of  the Vermont Industrial-Agricultural Products Commission which is carrying on experimental work with our natural products. Industrial Agent The Office of Industrial Agent was established by the Legislature of 1941, but its work has, been suspended due  to  the war.  I propose  to  reestablish  it at  the earliest moment and  recommend  that an appropriation be made to carry out its purposes. RECREATION Percentagewise,  recreation  probably  offers  opportunity  for  the  largest measure of  actual  state development.  Nature endowed Vermont with the requisites for a vacation paradise. Its hills, valleys, lakes, streams and forests contain unlimited possibilities. It is or us to make use of them, but in so doing we must preserve and perpetuate Vermont’s natural atmosphere, her traditions and her way of life. If we do, the profits from the recreational field can be shared by thousands of Vermonters either on a full-time or part-time basis. Recreation  embraces  a  wide  variety  of  activities.  Its  development  should  include  further  use  of  our  state forests, parks and  scenic drives; expansion of  facilities  for enjoyment of our  lakes and mountains,  including air expansion;  encouragement  of  the  further  purchase  of  summer  homes  and  the  sale  of  Vermont-made  products. Roadside beautification is an important factor in this program. The State Board of Conservation is responsible for a large part of these activities and recommend it develop a program based on the intelligent utilization of all of them. Publicity Publicity  is  an  essential  factor  in  recreational  development,  and  I  believe  our  publicity  policy  should  be modernized.  I  have  recommended  an  increase  in  the  appropriation.  Study  should  be  given  to  the  establishment of a  state promotional office  in New York City with a view  to determining  its value  to agriculture and  industry as well as to recreation. Stream Pollution One  of  the  chief  factors  in  our  recreational  program  is  the  problem  of  stream  pollution.  Even  though  the Government  is  exercising  increasing  control  in  this  direction,  that  is  no  reason  why  the  state  should  not  take apart in it. I  recommend  that  this Legislature, with  the aid of  the State Planning Board, make a start  in  the  formulation of  policy  to  preserve  the  streams which  are  now  clear  and  also  for  the  gradual  clearing  of  some  of  the  streams now polluted. It might be well to select some stream or watershed and study ways and means of clearing it, this to serve as a model for future work. I know  that  such a program cannot be undertaken without  financial hardships. Federal  funds might  share  in such work as post-war projects. FISH AND GAME Over  the  years  Vermont’s  fish  and  game  have  provided  business  for  the  merchant  the  farmer,  the  resort-owner,  the  hotel  man  and  many  others,  in  addition  to  the  enjoyment  given  the  fishermen  and  hunters themselves.  We  might  as  well  face  the  fact,  however,  that  changing  conditions  have  made  it  impossible  for Nature to renew the supply unaided. If we are to retain this source of pleasure and profit, we shall have to place larger  reliance  on  a  program  of  replenishment,  into  which  enter  a  variety  of  factors  such  as  stocking,  stream pollution  and  reforestation.  At  best  we  can  only  expect  that  any  plan  we  devise  will  require  increased expenditures. Long – Range Plan If the sportsman of the State could be convinced that a long-range plan for restocking our streams, lakes and covers  would  be  undertaken  and  maintained,  there  is  little  doubt  that  they  would  be  willing  to  increase  their contributions  to  our  self-supporting  Fish  and  Game  service,  and  this  also  would  be  the  best  approach  for obtaining an appropriation from the State. I  recommend  a  realistic  approach  to  our  fish  and  game  problem,  based  on  finding  the  facts  in  advance  of proposing a  remedy.   A  fundamental  feature of any such study should  include  recognition of  the vital necessity for a long-range program for the propagation and conservation of wildlife. GEOLOGY Vermont  normally  produces  more  mineral  wealth  than  all  of  the  remaining  New  England  states.    There  is every  probability  that we  have many  deposits  still  unknown.   Heretofore  private  capital  has  searched  them  out and  developed  them.    We  cannot  hope  this  will  always  be  so,  and  we  should  not  neglect  their  economic importance  any  longer.    If  Vermont  is  to  maintain  her  standing  among  the  states,  an  up-to-date,  systematic geological  survey  of  her  unexplored  regions  should  be  begun.    Mineral  deposits  yet  undiscovered  might  add considerably to our employment and to our income. For  this  reason  I have  recommended  an  increase  in  the  appropriation  for  the State Geologist  for  the  second year of this biennium in the hope that men may be obtained to start such a survey. LAND USE In  connection with  the  strengthening  of  our  productive  resources, we  are  undergoing  one  severe  loss  to  the State toward which we have become somewhat calloused, and the extent of which we do not appreciate.  I refer to  our  failure  to  make  the  best  use  of  our  so-called  submarginal  land.    Vermont’s  future  is  dependent  very largely upon the use which is made of its land. Demonstration Areas I urge  the State Board of Conservation  to  assemble and  coordinate  the  information various groups  studying this  problem  and  then  make  plans  for  the  selection  of  one  or  more  towns  as  demonstration  areas.  A  detailed survey  should  be  made  to  reveal  the  potentials  of  each  area.  Property  owners  should  then  be  encouraged  to apply  this  information  toward  improvement  of  their  land  by  reforestation,  recreational  efforts,  or  the  raising  of some sort of livestock, etc. I recommend that the Legislature initiate action toward this end. Vermonters  are  too  thrifty  and  resourceful  to  permit  the  present  great  loss  to  the  State  to  continue.    Our motto should be, “Not An Idle Acre In Vermont”  EDUCATION Maintenance of high educational  standards  is one of  the chief duties of government Perhaps  the problem of greatest interest in this held pertains to increased State Aid to the towns. The  purpose  of  the  so-called  minimum  program  is  to  equalize  at  some  level  the  cost  of  education  to  the towns. Since 1935 the level has increased from $15 to $20 per equated pupil, and the amount of State Aid from $550,000 to $838,000. State Aid We should strive for a higher and a more uniform standard of education, and to accomplish this I believe the State  should  bear  the  brunt  of  the  burden.  To  this  end,  I  recommend  that  the  Legislature  appropriate  sufficient money  to  equalize  the  cost  of  education  at  a  level  higher  than  $20.  To  do  so  at  $25  would  require  about $1,090,000, or an, increase of about $250,000 a year. I recommend that this be appropriated to the towns on the existing basis. Minimum Salary I  also  recommend  that  this Legislature  establish  a minimum  salary of $1000 per year  for  any  teacher  in  the State. At present we have 238  teachers  in  two-room rural schools with an average salary of $903. We have 685 teachers  in  one-room  rural  schools  with  an  average  salary  of  $967.  These  salaries  reflect  the  increase  in  State Aid  provided  by  the  Special  Session  in  1944.   We  still  have  689  teachers  in  grade  and  rural  schools  receiving less than $1000 per year. The total deficiency of such salaries below the $1000 minimum is about $56,613.94. Consolidation Consolidation  of  rural  schools  in  some  cases  is  desirable,  but  this  should  be  undertaken  only  after  careful consideration by the Department of Education, the municipality involved, and those living in the area affected. Standardization I  recommend  encouragement  of  the  standardization  program  which  has  done  much  to  improve  the environment of rural schools. Vocational Program The  State  should  enlarge  as  rapidly  as  possible  its  vocational  program  to  further  student  training  in  the important matter of earning a living. High School Enabling Act I recommend that this Legislature pass an enabling act to permit adjacent towns, if they so vote, to combine into one high school district in order to provide more adequate high school facilities.  The, matter of a more extensive health and hygiene program in the schools is important. Transportation The problem of transportation in elementary and high schools has been troublesome, I see no reason why we should  not  amend  the  law which  provides  that  transportation  for  high  school  students must  be  voted  at  a  town district  meeting,  to  the  end  that  such  transportation  may  be  provided  by  the  school  directors  with  the  use  of State Aid funds. It  is  highly  important  that  we  enlighten  our  youth  on  the  true  meaning  of  Democracy  and  arouse  their enthusiasm  for  our  form  of  government.  We  should  likewise  give  them  a  better  understanding  of  Vermont’s resources and opportunities. PUBLIC WELFARE During  many  administrations  the  Public Welfare  Department,  especially  the  institutional  work,  has  been  a perplexing problem.  For this Legislature it is second to no other in importance. Work  of  the  department  has  been  growing  rapidly,  and  in  the  past  fiscal  year  expenditures were  the  largest of any department of State government.   Before  the war  they were exceeded only by  the Highway Department.  Funds used by the department in 1934 totaled $887,000 compared with $1,500,000 in 1944. Administrative Changes I  believe  certain  administrative  changes  should  be  made.  The  Supervisors  of  the  Insane  could  be consolidated  with  the  Advisory  Board  for  Problems  Relating  to  Mentally  Defective  Persons  and  become  an advisory,  board  of  the  department. This  advisory  board would  continue  to  have  the  duties  of  these  two  boards. This would simplify and unify various phases of work in this department. An advisory board for the, department would  be  of  great  assistance  to  the  commissioner  in  improving  and  strengthening  the  administration  of  the entire department. Work  of  the  department  has  grown  to  such  an  extent  that  it  should  be  divided  more  definitely  into subdivisions with a director over each. The new director most needed is one for the institutions. I  believe  that Old Age Assistance  could  to  advantage  become  a  subdivision  of  Public Welfare.  This would help  unify  welfare  services  and  permit  field  workers  to  be  used  more  economically  and  efficiently.  The  Old Age, Assistance Department has been operated very successfully and  its operations should he disturbed as  little as possible in changing over its administration to Public Welfare. Brandon Parole System I  also  recommend  a  parole  system  for  Brandon  State  School.  By  returning  to  their  homes  those  who  no longer need the full supervision of the school, many now on the waiting list could ember the institution. Aid to Blind In  connection with Aid  to  the Blind,  I  recommend  that  a  shorter  residence  in  the State  be  required  than  the present term of five years. Settlement Laws The  problem  of  settlement  laws  respecting  aid  to  indigent  persons  is  now  very  much  to  the  front.  The legislature  of  1943  took  a  forward  step  when  it  provided  that  towns  upon  whom  the  burden  of  support  of  a transient pauper falls should be reimbursed by the state for one half the amount spent in the care of such person.  However, no appropriation was provided by that Legislature and this should be done. I believe the Legislature should consider a change in the law to provide that when a dependent or delinquent child  is  committed  to  the Department of Public Welfare,  such department  after  sufficient  study  could place  the child  in  a  foster  home  if  such  seemed  suited  to  his  needs,  or  if  institutional  care  was  more  advisable,  could commit the child without further order of the court. MENTAL DEFECTIVES The problem of our feeble minded  is one phase of our welfare work which deserves more attention  than we have  given  it  thus  far.    The  Legislature  of  1941  set  up  an  Advisory  Board  for  Problems  Relating  to  Mentally Defective Persons but provided no funds for it. We should make an appropriation for this purpose and the work of  the  Board  should  then  be  energetically  pursued.  The  feeble  minded  are  greatly  increasing  the  population  at Waterbury and Brandon School. It results in great suffering as well as in rapidly growing expense. STATE INSTITUTIONS The population  and  cost of our  state  institutions  are  increasing. At  the  same  time  the  institutions  have  been rather consistently short of funds for the proper type of administration. The  Perkins  committee,  which  has  recently  completed  an  investigation  at  the  Weeks  School,  has  done  an excellent  job  and  its  efforts,  I  feel  sure,  will  bring  about  more  satisfactory  administration  of  that  school.  The McCormack  study  of  the  state  prison  at Windsor  in  1944  gave  the  prison  a  clean  bill  of  health,  but  found  that entirely new buildings would provide much more modern treatment of the inmates. Building Program Recommendations  for  a  building  program  are  contained  in  a  report  you  will  receive  from  the  State Institutional  Committee  which  has  just  completed  its  study.  The  changes  recommended  would  considerably improve conditions at the institutions, and should be carried out. I recommend  that  the Legislature provide for a committee  to manage and supervise  this building program. I shall refer to the funds for carrying out this program under State Finances. Over-All Survey In  recent  years  various  deficiencies  in  our  State  institutions  have  been  corrected.  The  time  has  come, however,  when  a  complete  over-all  survey  should  be  made  of  our  Public  Welfare  Department.  This  should include building; adequate classification of patients,  the matter of foster-home placement and colony plans, and the  general  modernization  not  only  of  our  facilities  but  also  of  our  methods  and  laws.    I  recommend  that  the Legislature authorize such a survey this year. OLD AGE ASSISTANCE Old Age Assistance grants in 10 years have increased from $250,000 to $675,000 annually. The department is  requesting  a  further  increase  of  $285,000  a  year.  I  am  recommending  part  of  this  increase  in  my  budget message. This  is  one  of  the most worthy  purposes  of  state  aid,  and  a  cause  to which we want  to  give  as much  as we can afford. In determining the amount, we must view it realistically as well as idealistically. This appropriation, as with others, must be kept in line with our ability to pay. It has been expected by many  that  the needs of Old Age Assistance would  tend  to decrease with  the growth of Old Age and Survivors Insurance, and especially with the bulge in war-time pay rolls.   A  study  of  this  problem  makes  us  aware  of  the  present  philosophy  of  many  that  it  is  right  to  spend  all  of one’s  earnings  believing  the  government will  provide  for  old  age.  I  do  not  believe  this  is  a  realistic  doctrine.  I doubt very much if our State or Federal treasury could support the people of this country to that extent. If we are  to  retain  the principles  long believed  in  this country and which have made  this country strong and prosperous, we as  individuals must  still  save  for  the  rainy day  and  for old  age;  friends  and  relatives must  share in this responsibility. At the same time, it is just and right that the government, subject to conditions now in our law,  provide  for  all  those  who  have  met  with  misfortune  beyond  their  own  control.  This  is  a  vital  part  of  the system of free enterprise and democracy. HEALTH We  are  face  to  face with  the  need of  improving physical  and mental  health  in Vermont. Evidence  of  this  is found in the physical examinations for World War I in which Vermont had the second highest rejection rate for both  mental  and  physical  defects  of  any  state  in  the  Union.    I  understand  results  of  examinations  for  this  war indicate about the same results. Our Department  of Health  is  doing  a  better  job  in  health matters  than many  of  us  realize. We  simply  need more of it.  Our  efforts  should  be  directed  first  of  all  to  the  schools;  where  we  should  emphasize  such  matters  as physical examinations, preventive measures, and health education.  Physical fitness is surely just as important as any  course  in  the  curriculum.  A  nurse-teacher  established  in  every  school  district  would  be  of  invaluable assistance  in  bringing  parents  and  teachers  to  a  better  understanding  of  the  health  needs  of  the  pupils,  and  in aiding the local public in developing a proper mental attitude toward adult health problems. In  examinations  for  the  last  war  it  was  proven  that  Vermont  had  the  highest  rate  of  any  state  for  dental defects. This indicates the real reed for dental clinics. We  have  now  in  the  State  nine  nursing  units  or  districts  comprising  seventy  towns,  directed  by  the Department of Health. These are financed by federal, state and local funds. They should be increased to include the entire State. The  American  Health  Association  is  promoting  a  plan  to  divide  the  State  into  health  districts  for  the administration  and  supervision  of  better  health  practices.    All  phases  of  health  work  would  be  headed  up  in these  districts.  I  believe  this  may  be  an  answer  to  the  proper  organization  in  the  State  for  the  improvement  of health. The Vermont  State Medical  Society  proposes with  the  aid  of  other  organizations  to  establish  a  union  of  all medical  facilities  in  the  State  to  be  called  the  Vermont  Medical  Council.  This  might  well  in  time  become  the official advisory council of the governor in medical matters.  It is a most encouraging and constructive proposal. We  should  look  forward  to  group  health  insurance  in Vermont  for  all who  desire  it.  I  believe we  can  have this without endangering patient and doctor relationships. LABOR Labor  is  a  vital  member  of  our  industrial  family  in  Vermont.  Before  the  war  there  were  over  30,000 employed in industry. If we are to have the sensible, balanced labor relations we want and must have if the American System is to survive, there must be recognition by labor and management alike of mutual interest and of both individual and group responsibilities. The  chief  function  of  government  in  dealing  with  employee-employer  relationships  should  be  to  promote good will, to encourage cooperation and, where resort is made to invention, to be impartial and just, demanding obedience to all law by both parties concerned. We  must  be  alert  to  the  changing  needs  of  unemployment  and  workmen’s  compensation  laws,  old  age assistance, general health and safety standards and liberalize them as conditions require. Though we legislate to the end of time, there will never be industrial peace and harmony without good faith, integrity, a high degree of responsibility, and a real desire to cooperate on the part of all parties concerned. INDUSTRIAL RELATIONS Vermont management  and  labor  have  done  an  outstanding  job  in  the  production  of  hundreds  of millions  of dollars worth  of  articles  needed  in  the  prosecution  of  the war.   Due  to  their  patriotism  and  public  spiritedness, not  a  single  hour  of  production  for  war  has  been  lost  by  strikes  or  walkouts,  with  but  one  slight  exception.  Harmonious  industrial  relations  have  made  this  a  truly  remarkable  accomplishment,  and  every  Vermonter  can be justly proud that this is another product of our way of life. Improvements  in  the  Workmen’s  Compensation  Law  and  the  laws  relating  to  the  employment  of  women and children have been important factors in our industrial life.   I recommend the following:  Elimination of the waiting period in Workmen’s Compensation when disability continues  three weeks or more;  increase  in  the maximum  limit of weekly compensation payments; a  study of a minimum  wage  law  for  women  and  children  in  intra-state  industries;  giving  legal  status  to  the  Vermont Apprenticeship Council. UNEMPLOYMENT COMPENSATION Increase  in manufacturing  in  Vermont  in  recent  years  has  intensified  the  importance  of  the  unemployment compensation program.   The dislocations  in  industry caused by business cycles are more strongly felt now  than in the days when our economy was essentially agricultural. Business  has  not  yet  devised  measures  for  providing  full  employment  at  all  times.    Therefore,  ways  and means must be made available whereby individuals out of work through no fault of their own, and who are able and  willing  to  work,  shall  receive  reasonable  assistance  during  these  periods.    This  can  best  be  accomplished through our present system of unemployment compensation. Subject to the provision of the Federal Unemployment Compensation Law and the regulations thereunder, it seems  desirable  that  the  present  scale  of weekly  benefits  be  adjusted  upward  and  consideration  be  given  to  the extension  of  the  duration  of  benefits,  at  least  for  the  period  of  reconversion  from  wartime  to  peacetime.    I suggest  that  you  give  serious  consideration  to  the  advisability  of  extending  this  law  to  cover more  individuals than are now protected from the hazards of unemployment. POST-WAR EMPLOYMENT Employment of  all  those who  are  able  to work  is one of  our  chief  concerns.   There  cannot  be  contentment, prosperity  or  progress  unless  unemployment  is  kept  at  an  absolute  minimum.    In  1940  the  total  employed  in Vermont was about 131,000.  In the first quarter of 1944 there were about 125,000. A  careful  survey  by  the  State  Planning  Board  indicates  that  about  27,000  will  be  seeking  employment  in Vermont  in  the  First  peace-time  year.    Aside  from  industry  there  will  be  employment  possibilities  for  about 22,500.   The  possibilities  of  employment  by  industry  in  the  post-war  period  depend  in  large measure  upon  the encouragement and favorable conditions provided by government for free enterprise. Depending  upon  such  conditions  in  industry,  the  survey  finds  that  unemployment  might  range  some between  zero  and  18,000.    In  anticipation  of  this  uncertainty,  the  State  should  lay  aside  surplus  funds  or appropriate new money to be used in needed public works and should direct agencies of the State government to prepare  necessary  working  plans  for  authorized  projects.    The  State  should  likewise  encourage  the  towns  and cities  to  adopt  a  similar  course  of  action.    The  construction  of  authorized  projects  and  those  recommended  in this message,  such  as  the  institutional  building  program,  the  additions  to  the State Library  and  the State Office Building, will contribute in part to the State’s program for post-war employment. Enabling Act With  the  State  and  towns  bending  every  effort  to  set  up  plans  for  public  works  to  provide  employment during  the  early  post-war  period,  I  believe  the  State  should  provide  enabling  legislation,  limited  in  duration, which  will  permit  municipalities  to  set  up  reserves  for  post-war  construction.    Such  an  act  has  already  been adopted as special emergency legislation in many states. UNIVERSITY OF VERMONT The crisis in the affairs of the University of Vermont and State Agricultural College became apparent to the Legislature  in  1941  and  resulted  in  a  direction  by  the  Legislature  to  the  governor  to make  a  complete  study  of both  the  financial  and  educational  situation  and  report  to  the  Legislature.  This  report  developed  such  a  serious condition  that  a  special  session  was  held  in  August,  1941,  and  a  comprehensive  rehabilitation  program  was approved.   The plan then adopted and continued by the legislative session of 1943 requires contributions by the State of approximately $150,000 annually in excess of previous contributions. At  the  time  of  the  adoption  of  this  rehabilitation  plan  the  State  necessarily  decided  as  a matter  of  principle that  there were  services  performed  by  the University  the  continuance  of which were  essential  in  the  interest  of the  people  of  the  State.  It  was  recognized  by  our  people  generally,  that,  the,  State  needs  the  functioning  of  a first-class college of medicine, that we need extensive scientific and educational work in the field of agriculture, with  trained  men  to  educate  our  farmers  in  the  most  advanced  methods  of  agriculture,  it  also  was  recognized that  a  useful  function  is  being  performed  by  the  University  in  training  teachers  for  our  schools.  Although  the Legislature  approved  the  general  plan  of  rehabilitation,  as  recommended  by  the  governor  and  by  the  special advisory  committee,  and  at  that  time  proved  certain  broad  principles,  nevertheless  the  State  has  neither  a  legal nor a moral obligation to continue the assistance to the University in the exact form then approved. I  believe  the  time  has  come  for  a  re-appraisal  of  both  the  administrative  and  financial  relationships  of  the State  to  the  University.  Whereas  four  years  ago  the  State  was  con-  fronted  by  a  financial  emergency  at  the University,  we  now  are  faced  with  a  situation  which  because  of  certain  emergency  features  as  requires immediate decision as to the future relationship of State and University,  Special Message This  matter  is  sufficiently  complicated  and  of  such  importance  that  I  propose  to  deliver  to  you  a  special message, covering in detail the proposal which I recommend for your consideration. SHARING COST OF GOVERNMENT The whole  problem  of  financial  relationships  between  the  State  and  the  towns  needs  careful  review,  These relationships  have  grown  up  over  a  long,  period  of  years  in  a  rather  haphazard  manner  and  with  little consideration of what a fair distribution of the burden of government should be. I urge this, Legislature to give the problem consideration. Following that, I shall request the Planning Board to  carry  on  your  findings  to  the  end  that  we  have  a  clearer  picture  of  the  extent  to  which  this  burden  is  now shared  between  town  and  state,  and  also  if  possible,  some  basis  for  indicating  how  further  burdens  should  be shared. It is especially important to us who believe in the town form of government. INDEX OF WEALTH We  need  in  Vermont  a  comparative  index  of  wealth  for  all  our  towns—a  yardstick  to  indicate  the  actual comparative wealth of each town. The  Grand  List  was  intended  to  provide  such  an  index  and  it  would  if  we  complied  strictly  with  the  laws. Sec.  634  of  Public  Laws  requires  real  property  to  be  appraised  at  its  “just  value  in  money.”    Actually,  it  is appraised in most cases at varying percentages less than full value, from 30 to 100% of full value. The  Grand  List  is  resorted  to  for  various  financial  purposes,  other  than  local  taxation.  It  is  the  basis  for computing the town’s share of State Aid funds. It is the basis of figuring the town’s share of a state tax. It is the basis for determining a town limit of indebtedness. And there are many others. Let me say  right here  that  in  the discussion of  this problem  there  is no desire  to alter  the present practice of appraisals,  so  far,  as  they  pertain  to  establishing  the  Grand  List  for  the  purpose  of  local  taxation.  The  towns should continue to handle their Grand List for local taxation just as they do now. The  present  discussion  concerns  only  instances where  there  is  financing  involving  several  or  all  the  towns. For this we need something in addition to the present Grand List. We need something which will indicate a true comparison of the wealth of all towns so that all towns may be treated alike. One  instance will  illustrate  the serious unfairness existing now. State Aid for education  is distributed on  the basis of wealth per equated pupil. Actually, two towns might have about equal wealth per pupil.  Yet if Town A bases  its  Grand  List  on  30%,  of  full  valuation  and  Town  B  on  90%,  Town  A  would  receive  three,  times  its rightful share of State Aid compared to B. There  are  at  least  17  Vermont  statutes  in  which  the  Grand  List  is  made  the  basis  for  a  tax,  distribution  of funds or other financing, and which, therefore, provide the basis for unfair use of funds insofar as the Grand List varies  from  a  uniform  appraisal  basis.  This  injustice  is  due  to  the  fact  that  we  have  no  accurate  comparative wealth index for all towns in the State. The method  employed  by New York  to  correct  this  situation  is  perhaps  the  soundest  and  produces  the  best results.  In  general,  the Tax Commission  of New York  satisfies  itself  as  to what  basis  of  appraisal  each  town  is using, whether it is 25% or 100%. From the appraisal based on such a percentage, the state can easily determine what the 100% valuation would be. Such  valuation  establishes  a  comparative  index  of  wealth  for  all  towns  and  provides  a  basis  for  treating them fairly whenever there is financing involving several or all, but is not used for local taxation purposes. I  recommend  that  the  Legislature  study  this  problem  and  adopt  some  method  which  will  establish  a comparative index of wealth for all towns.   RURAL ELECTRIFICATION The  State  should  give  its  support  to  plans  for  rural  electrification  which  is  making  a  sharp  up-swing  both through the public utilities and the cooperatives.  From a two-year survey by the Public Service Commission we learn  that 68.8% of our 21,772  farms are now electrified and another 6.3% are  so  located as  to be available  for electrification.    On  the  basis  of  its  study,  another  4,000  farms  in  the  State  should  be  electrified  soon  after  the man-power  and  material  restrictions  imposed  by  the  war  are  removed.    Ninety-three  percent  will  then  be electrified  or  electricity  available.    Rapid  building  of  rural  telephone  lines  after  the  war  is  planned  by  the telephone  companies  and  a  state-wide  survey  of  rural  lines will  be  undertaken  in  the  near  future  by  the  Public Service Commission. SALARIES Due  to  the  increase  in  the  cost  of  living  and  the  general  level  of  salaries  today,  I  believe  the  salaries  of  all State  officials  regulated  by  statute  should  be  reviewed. Vermont  has  been  fortunate  indeed  to  have  officials  of such  quality  and  general  ability  for  the  modest  salaries  paid.  State  government  today,  however,  demands  in many  departments  unusual  ability  and  personality. We  are  a  state  of moderate means  and  our  level  of  salaries must be  regulated accordingly. However, we must be  fair and should pay as generously as we can  for  the work required.   I  recommend  that  the  Legislature  provide  for  the  appointment  of  a  committee  to  study  these  salaries  and recommend to this Legislature such adjustments as it deems best. HIGHWAYS We may well  be  proud  of  our Vermont  highways. During  the  past  20  years  great  progress  has  been made. Our  highways  of  all  classes  compare  favorably with  those  of  other  states. There  is much  to  be  done,  however, on our total highway mileage of over 14,000 miles for all systems. The  improvements  to complete  the  state highway  system of 1800 miles will  require  about 19 years.   About 21 years will be needed to bring our 2700 miles of state aid roads up to standard.  Of 9700 miles of town roads, 3600 are now of gravel.  Of the remainder, only about 2800 directly serve any farms and, therefore, need gravel.  Sixty  percent  of  the  towns  in  the  State  can  complete  their  back  roads  in  10  years  on  the  basis  of  pre-war  State appropriations.  This program in itself is sufficient reason for making certain that use of funds from gasoline tax and automobile registrations are restricted at present. The  location  and  improvement  of  our  highway  system  in  Vermont  is  of  great  importance  to  the  State. Instead  of  large  cities  and  concentrated  populations,  our  people  are  scattered  throughout  the  hills  and  valleys, and all groups are constantly using the roads. Development of our State depends in large measure on the proper type of highways reaching the desired destinations. A  healthy  agriculture  requires  good  farm-to-market  roads  and  such  it  system  should  be  worked  out  as rapidly  as  our  resources  will  permit.  The  matter  of  the  improvement  of  our  so-called  back  roads,  serving productive  farming  areas,  should  be  given  careful  consideration  by  this  Legislature,  together  with  the  ever-recurring  problem  of  snow  removal,  which  excessively  burdens  many  of  our  small  towns.    As  soon  as conditions  will  permit,  the  maximum  appropriations  for  the  improvement  of  our  back  roads  reached  in  1941 should be restored. The ten year program which was interrupted by the war must be continued with all speed as soon as men and equipment are available. The pay-as-you-go policy has  proved  to be  a wise one. We must maintain  it,  as well  as  establish  a  forward and alert program of highway improvements in the years ahead. AVIATION That  there  will  be  a  tremendous  expansion  of  civil  aviation  as  soon  as  peace  has  been  attained  is  not questioned. There are now four Class 3 airports in the State.  In my opinion these are sufficient for the needs of the State at the present time. We also have several smaller Class 2 fields. I  do  not  believe  we  have  enough  of  the  smaller  fields,  Class  2  and  1,  either  to  meet  the  needs  of  our  own people  after  the war  or  to  permit  out  of  state  recreational  visitors  to  come  here  in  the  volume  expected.  I  urge the Legislature to continue an appropriation to permit the State to assist towns to acquire land for airports. Under our  law providing  for  a  tax on gasoline,  the  receipts  from  a  tax  on  aviation  gas  do  not  go  directly  to benefit  those  who  pay  the  tax.  This  is  a  cause  for  irritation  and  probably  results  in  some  loss  of  revenue.  I suggest  that  this  Legislature  consider  both  the  justice  and  advantage  that  may  accrue  from  appropriating  all receipts from taxes on aviation gas directly to the service of aviation. The  benefits  that  come  from  an  airport  are  not  confined  to  the  city  or  town  owning  it.  The  facilities  are available  to  all  and  yet  under  the  present  laws  the  municipality  owning  the  port  must  pay  all  the  cost  of maintaining  it  and  its  facilities.  The  largest  items  of  cost  are  the  removal  of  snow  from,  and  the  repair  of, runways.  The  highway  department  of  the  State  has  an  equipped  organization  well  trained  and  capable  of handling  both  of  these  problems.    I  recommend  that  the  Legislature  consider  the  advisability  of  providing authority  to  the  Highway  Department  to  take  care  of  one  or  both  of  these  needs  at  airports  where  there  are scheduled  stops  and  line  operations  or where  there  is  contract  flying  serving  a  sufficient  number  of  persons  to warrant  such  expenditure,  payment  of  costs  for  such  work  to  be  divided  between  the  State,  the  owner  of  the port, and adjacent towns as the Legislature deems proper. There has been no adequate method in law for dealing with, man-made obstacles built in the approach zones to runways after a port has been established. The Council of State Governments has drawn up an act for airport zoning. I recommend that the Legislature give careful thought to this suggested legislation and decide whether it or some modification of it should be enacted at this session. PUBLIC RECORDS COMMISSION Addition to State Library Study by the State Building Commission, its architect and the Public Records Commission led all of them to the  unanimous  opinion  that  the  archives  and  non-current  records  of  the  different  departments  of  the  State Government  should  be  provided  for  in  an  addition  to  the  State  Library  Building  and  not  in  the  proposed  State Office Building. Such  an  addition  would  also  meet  the  need  of  the  State  Library  for  additional  stack  room  for  the  proper shelving  of  its  book  collection.  This  need  has  been  urgent  for  several  years  and  cannot  be  delayed  any  longer without impairing the usefulness of the service. We  all  realize  today  both  in  governmental  agencies  and  in  private  business  that  efficient  service  depends  a great  deal  on  past  records,  and  these  should  not  only  be  adequately  protected  from  damage  by  fire,  water, insects, etc., but should also be made readily available for study and use by interested persons. This requires that they  be  collected  into  one  central  place.  I  recommend  the  construction  of  an  addition  to  the  State  Library Building which will accomplish  this purpose and at  the same  time meet  the needs of  the State Library.   Further reference is made to this in my budget message.   STATE GUARD Since  there  are  no  Federal  troops  stationed  in  our  State,  and  with  the National  Guard  fighting  valiantly  on the  various  battlefronts  overseas,  the  State  guard  as  an  organized  military  force  stands  ready  to  perform  its mission of internal security and to assist in time of disaster and emergency. For  over  three  years  the  personnel  of  the  State  Guard  has  been  making  a  voluntary  and  conspicuous contribution to our war effort. By  its  loyalty,  devotion  of  much  time  to  training,  and  performance  of  many  duties  assigned  to  it,  such  as guarding vital  installations  as was  the  case  at  a  critical  time  after Pearl Harbor  assisting  at  the  scene of  crashes of  airplanes  in  our State,  searching  for  lost  persons  and  fighting  forest  fires,  the State Guard  amply  justifies  its continued  existence,  within  the  limits  of  the  act  of  this  Assembly  creating  it,  until  the  return  of  the  National Guard to our State. FIRE PROTECTION AND PUBLIC SAFETY The  rapid  increase  in  loss  of  life  and  property  by  fire  in  Vermont  is  a  subject  to  which  I  am  sure  you  will want to give your careful consideration.  Over the five-year period in Vermont from 1939 to 1943 inclusive, fire took a toll of 54 lives and destroyed nearly  $8,000,000  in  property,  of  which  $1,350,000  was  not  covered  by  in  leaving  Vermont  with  a  per  capita loss three times that of the average for the United States. These  losses  have  a  direct  economic  effect  on  the  people  of Vermont  since  in many  cases  property  lost  by fire  is not  restored or  rebuilt, and  this value  is  removed  from  the Grand List of  towns and cities. This  results  in an increased tax rate to the residents of those towns and cities affected.  Some  of  the  fire  laws  of  Vermont  are  out-moded  and  inadequate,  and  do  not  cover  modern  hazards;  also, our  fire,  prevention  personnel  is  too  limited  in  number  to  properly  cope  with  this  situation,  and  I  am  sure  we want  to  do  all  possible  to  correct  these  conditions.  I  urge  this  Legislature  to  give  careful  consideration  to proposals furthering this objective. AUTOMOBILE ACCIDENT PREVENTION In 1944 injuries and fatalities from automobile accidents exceeded those in the armed forces of this country. This situation deserves our attention. After  careful  study  and  investigation  the  organization  of  motor  vehicle  administrators  in  this  country concludes  that education  in our high schools will accomplish more  to  improve  this condition  than any extent of punishment after  the accident has occurred. Several states have such a course  in  their schools.  I believe  that we should consider further instruction in automobile driver education. WATER RESOURCES At  the  present moment  this  broad  subject  is  very  acutely  in  the minds  of  our  people  in  two  distinct  phases which are entirely different in purpose and arise from quite different sources. First:    further power development of  the Connecticut River at Wilder, which  is under  the  jurisdiction of  the Federal Power Commission by  reason of Acts of Congress which have been  in  effect  for  some  time past. Only new or additional Acts of Congress can change this jurisdiction.   Second: flood control legislation affecting the Connecticut River basin, and particularly as to projects on the West River, has been in a formative stage during the last year or thereabouts. I wish to review briefly the matter of flood control. Vermont’s  traditional  policy  respecting  flood  control  of  the  Connecticut  River,  established  after  the  1936 flood  and  since maintained,  has  been  that we  as  an  up-river  state will  sacrifice  parts  of  our  area  to  be  used  for flood  control,  knowing  full  well  that  the  principal  benefits  from  such  sacrifice  go  to  down-river  states;  that sacrifice  of  lands  and  rights  for  purposes  other  than  flood  control  should  not  be  asked  of  us,  and  that  since  a majority  of  the  dams  are  to  be  in Vermont,  the  program  should  be  so worked  out  as  to  give  this State  the  least material damage and the maximum flood control benefit possible under the circumstances. The  difficulties which  have  beset Vermont  and  other  states  stem  directly  from  the Barkley Amendments  to the  flood  control  bill  of  1938  passed  when  Congress  was  on  the  eve  of  adjournment.  These  amendments, seriously  jeopardizing  the  interests and  the sovereignty of all but  two states  in  the Union, were never submitted to  hearing  before  a  committee  of  Congress.    The  timing  of  their  presentation  to  Congress  was  such  that  the states had no opportunity to protest their passage. The effect of the Barkley amendments and a decision of the Supreme Court in a case arising under the 1938 flood  control  law  of  which  they  are  now  a  part  was  to  nationalize  all  the  rivers  of  this  country  and  all  their tributaries  likewise;  to  take,  away  by  federal  law  from  every  state  government,  except  Texas  and  Oklahoma, any authority to have a voice in determining what developments were to be made in the watersheds within their borders. Vermont  has  consistently  protested  against  this  federal  policy. Other  states,  both  eastern  and western,  now understand  the  implication of  the Barkley Amendments. They  joined Vermont  in protest against  the  law and  in determination that the law must be changed to bring the states back into the picture. The so-called O’Mahoney – Millikin Amendment resulted from that determination. So after more  than  six years during which all our valleys have been under  threat of condemnation, we have come to an era of peace and cooperation. As  to  the future,  it  is my belief  that  interstate, compacts dealing with  interstate streams are  the proper mode of approach in our republican form of federal union.  However, with federal law as it is, we must recognize that the principles of  the O’Mahoney – Millikin     Amendment are probably about as far as we can hope  to go. With this  thought  in mind,  it  is hoped  that a similar principle be  included by Congress  in  legislation dealing with  the authority  and  jurisdiction  of  the  federal  power  commission.    If  this  were  done,  we  would  have  some  official standing in a matter such as redevelopment of the Wilder Dam. In  the  spirit  of  the  new  flood  control  law  I  pledge my  administration  to  cooperate wholeheartedly with  the Federal Government and  its agencies and with  the down-river  states  to work out a program of  flood control  for the Connecticut River  in which both  the national  interest and  the state  interest will be  respected and which will be beneficial  to both  the down-river and  to  the up-river states.  I make  this pledge as freely and as sincerely as I would pledge myself to use the power of this State to resist the arbitrary taking of our valleys and our resources if the new policy of cooperation had not been established. In the light of this brief resume; it seems apparent that the State should have some official body empowered to represent our interest in all problems and plans involving water resources of the State. We  have  a  Water  Resources  Board  set  up  by  Governor  Wills  in  1944  to  take  care  of  specific  problems occurring under his administration, but it has no legal status. State Water Resources Board I  recommend  that  the  Legislature  either  extend  the  authority  of  some  state  department  or  establish  a  board with ample authority to handle these problems. COURTS We  are  fortunate  to  have  for  our  guidance  the  very  recent  report  of  a  special  committee  consisting  of  six outstanding lawyers in the State appointed by the Vermont Bar Association to make a study of the whole system of  administration  of  justice  in  Vermont.  With  some  slight  exceptions  the  membership  of  the  Bar  Association accepted and approved the report at its annual meeting after it had been considered and debated at length. The  report  represents  a  thorough  and  conscientious  study of  the problems  involved  and merits  the attention of  this  Legislature.  There  are  several  important  recommendations  which  would  require  for  adoption  action  by the Legislature. Among others is a recommendation for the establishment of a Judicial Council.   Such a council has worked extremely well in the great majority of states of the Union and its value is so well demonstrated that I  do  not  hesitate  to  recommend  that  the  Legislature  adopt  this  proposal.  There  are  other  more  far-reaching recommendations in the report which also should receive careful consideration by the Legislature. ELECTIONS There  is  one  special matter which  I  think  has  never  before  been  listed  among  our  State  problems. This  has developed with the increase of governmental responsibilities.  There  is  not  sufficient  time  between  our  State  election  date  and  the  meeting  of  the  Legislature  for  the incoming governor to properly attend to the various duties of that period. At this particular time he is confronted with  certain  duties  of  first  importance.  There  is  the  budget  which  requires  much  detailed  study—much  more than  can  now  be  given  it—in  Order  to  present  the  Legislature  with  the  carefully  prepared  document  it  should have.  The  inaugural  message  is  another  time-consuming  document  in  its  preparation.  More  and  more  state matters  have  to  be  accurately  presented  to  the  Legislature  for  its  consideration.   Again,  there  is  not  time  to  do this as it should be done. While  no  action  can  be  taken  by  this  Legislature,  I  recommend  that  the  next  commission  appointed  to prepare and present Proposals of Amendment to our Constitution give this problem its consideration, BANK TAX Based  upon  official  statements  of  Commissioners  of  Banking  and  Insurance,  and  upon  the  evidence contained  in  reports  of  the  Legislative  Tax  Study  Commissions  of  1929  and  1935,  the  Vermont  Bankers Association,  through  a banking  commission, has  conducted  an exhaustive  study of  the  inequities of  the present tax on banks which taxes bank deposits rather than bank income, and of its unfair application as between classes of  banks.  Also  included  in  the  study  were  the  methods  and  effects  of  taxation  on  banks  in  the  other  states, particularly those in the northeastern section of the country. As  result of  this  research,  the Commission suggests  that  the State substitute a  tax based upon bank earnings in  place  of  the  present  four mill  tax  on  deposits.  The  suggested method  of  assessment  and  collection  has  been designed  to  relieve  the  State  of  all  details  possible  and  place  a  tax  burden  on  the  banking  industry  of Vermont commensurate with its ability to pay and at a rate as high as that obtained from other types of industry. In  1943  the  bank  deposit  tax  represented  approximately  a  25%  tax  on  the  net  income  of  Vermont  banks. Comparative  studies  of  the  same  year  show  that  the  banking  industry  contributed  proportionately  2  ½  times more  revenue  to  the State Treasury  than  the  average  of  six  neighboring  states.  In  addition,  investigation  shows that we are now the only remaining state depending on the deposit tax as the primary method of taxing banks. The suggested  tax plan  is  to assess a 2%  tax rate on net earned  income as defined in  the corporate franchise tax and a 4% tax rate on interest paid to depositors. I believe this plan merits the serious consideration of this Legislature. FINANCES The State’s finances are in excellent condition. According  to  the  present  program  of  debt  reduction  our  bonded  debt  at  the  close  of  the  fiscal  year  ending June  30,  1949, will  have  been  reduced  to  $393,000  excluding  the  perpetual  debt which  consists  of Certificates of  Indebtedness,  held  by  the  Permanent  Schoo1  Fund,  and  the  Agricultural  College  Bonds,  which  total $568,031.90. On  July  1,  1944,  the  unappropriated  surplus  in  the  Treasury  was  $1,006,060.44  and  this  will  probably  be increased  by  the  end  of  the  present  fiscal  year,  June  30,  1945.  I  believe  that  such  surplus  should  be  used  for capital  improvements  and  not  for  recurring  expenditures. Therefore,  I  recommend  the  following  appropriations from our unappropriated treasury surplus: 1. $200,000 as additional appropriation for state pay for veterans of World War II. The Legislatures of 1941 and  1943  have  already  set  aside  $2,500,000  for  this  purpose  and  it  has  been  estimated  that  the  sum  of $2,700,000 will be necessary to discharge our obligations to our servicemen and women.  2.  $150,000  additional  appropriation  for  the  state  office  building. The Legislature  of  1941  appropriated  the sum  of  $600,000  for  such  a  building.    The  additional  appropriation  is  for  the  addition  of  another  story  and  to provide for increased building costs. 3.  $750,000  for  additional  buildings  at  our  state  institutions  in  accordance  with  the  recommendations  of  a special  committee  appointed  in  1944  by Governor Wills  to  study  our  state  institutions with  special  attention  to their  building  needs.  The  report  of  this  committee  will  be  in  your  hands  within  a  few  days  and  deserves  your careful study and attention. CONCLUSION Such  are  some  of  the  problems we  are  to  consider  together  during  this Legislature. While  the  enactment  of laws is your responsibility, I shall cooperate with you in every way possible. A session of the legislature is like a journey—an exploring trip through unknown country. It is an interesting trip  with  ever-changing  scenery  and  situations.  We  learn  much  about  Vermont  and  about  each  other.  I  am personally looking forward to our trip with sincere pleasure. Government  today  is  a  challenge—a  challenge  to  aid  our  fellow men,  especially  those  who  have met  with misfortune  beyond  their  control—a  challenge  to  steer  a  wise  and  just  course  between  security  and  self-reliance—a  challenge  to  increase  opportunity  for  earning  a  living  and  supporting  one’s  family—a  challenge  to strengthen moral fibre and character for these are what really count. We must  remember  that America  lives  in  simple  homes.  In Vermont  and  in America  it  is  the  rank  and  file, the great middle class, who comprise the substance of our people and the hope of a great tomorrow. We  must  remember,  too  that  government  is  for  the  welfare  of  all,  that  freedom  of  government  has  great responsibility  and  to  meet  our  challenge  successfully  we  must  have  faith  in  ourselves,  in  Vermont,  and  in  the Eternal Spirit. The strength of the hills is His also. * * * * * The Governor having concluded the reading of his message, was escorted to the Executive Chamber by the committee appointed by the Chair. The Supreme Court was escorted from the hall by the Sergeant at Arms. The Joint Assembly dissolved. RAWSON C. MYRICK, Secretary of State, Clerk