Governor Julius L. Meier's Administration

Governor's Message, 1935

Source: State of Oregon MESSAGE Of JULIUS L. MEIER, GOVERNOR To the Thirty-eighth Legislative Assembly 1935

Ladies and Gentlemen of the Thirty-eighth Legislative Assembly:

Four years ago I outlined my platform the major objectives which I hoped to accomplish during my term of office as Governor. Today I am here to give you an account of my stewardship.

Detailed reports covering the activities of the various state departments and institutions will be placed in your hands. I shall not take up your time with a repetition of the financial and statistical data presented therein, although I commend these data to your thorough study since they form an indispensable background for your labors.

In the preparation of this, my farewell address, to the legislative assembly of Oregon, I have had before my my inaugural message. I find what I believe is justifiable gratification in the fact that every major objective touched upon therein has been achieved or is well on the way to achievement.

This has been accomplished despite the fact that Oregon has, along with the rest of the nation and the world, experienced a period of economic and social stress and strain which none of us dreamed of four years ago. This has been accomplished despite the fact that we have had to turn aside from the orderly routine of state business to meet emergency problems unequaled in number and gravity at any time in the history of our state.

Economy and Tax Reduction

I promised the people of Oregon an economical and businesslike administration of state affairs.

During the four years of my administration state appropriations have been reduced $5,450,136, and an inherited deficit which at one time reached $4,500,000 has been wiped out.

The approved requirements in the state budget submitted to you for the 1935-36 biennium are $2954,127 less than the revenues which will be available according to present estimates.

These available revenues may or may not be expended by your honorable body.

If they are not expended, the state property tax levy for the year 1936 may be reduced accordingly; in fact, it may be virtually eliminated.

It is my earnest hope that you will hold appropriations down to a minimum and thereby give the heavily burdened taxpayers the benefit of this reduced levy. The elimination of the property tax for state purposes is an objective greatly to be desired, and it now lies within the reach of the members of this legislative assembly to achieve it.

Local Tax Levies

Substantial as have been the reductions in state expenditures, no material relief will be experienced by the taxpayers until local taxes are reduced proportionately.

The truth of this statement becomes apparent when attention is called to the fact that Oregon’s tax bill for 1934 was approximately $41,385,000, and of this amount only $3,139,423 represents taxes for general state purposes.

The remaining $38,245,000—more than 92 per cent of the entire tax load—represents local tax levies.

With the view of reducing local levies, I organized, early in my administration, the Oregon Taxpayers Equalization and Conservation League, and a state-wide drive was inaugurated by this league with beneficial results.

To achieve effective and permanent reductions, however, a state agency vested with jurisdiction over local levies and bond issues is necessary, and I recommend that you give consideration to legislation along this line.

Water Power

In accordance with my pledge to carry out the water policies espoused by my friend, the late Senator George W. Joseph, there has been written into the statute books of the state a comprehensive and constructive water power code preserving our remaining valuable water power resources for the benefit of the people, granting municipalities a preference in their development, and safeguarding private development from frenzied finance methods.

In furtherance of these same water power policies, I appeared before the board of army engineers in Washington in the early part of my administration to plead for the development of the power potentialities of the great Columbia river with the result that President Hoover sent a special message to Congress urging their development on the same basis as the Boulder dam project.

Subsequently, authorization was secured from President Roosevelt for the construction of the Bonneville damn, the first unites of which are now in process of construction.

As at present authorized, the Bonneville project will produced less than 100,000 horsepower, which is inadequate for the industrialization of our state in competition with such projects as Muscle Shoals and Boulder dam.

Consequently, I recommend that you memorialize Congress for the construction of the Bonneville project to its full capacity of approximately 500,000 horsepower and also that you urge Congress to construct the necessary transmission lines to bring about the distribution of the electrical energy for industrial and domestic use.

In my judgment, the government’s power undertaking at Bonneville obviates any necessity of the state assuming a heavy load of bonded indebtedness for power development.

Public Utilities Commissioner

Pursuant to my recommendation, the 1931 legislature abolished the old Public Service Commission with its membership of three commissioners and created in its stead a public utilities department with a single commissioner with enlarged power and charged with the specific duty of representing the public in all public utility controversies.

Public Schools

Believing that the public schools constitute one of our most important public enterprises, not only from the standpoint of the progress and general welfare of the state but also with respect to the amount of money spent and the number of individual lives involved, I promised to foster education and advocated the provision of free textbooks for our public schools. This latter recommendation has been carried out.

While the financial condition of the public schools has improved somewhat, along with economic conditions generally, my study of the problem of public school administration and finance convinces me that there are several important matters of school legislation which should receive you attention during this session.

In my messages to previous sessions, I have urged a plan for a more equitable financing of schools to the end that economy and efficiency in the expenditure of funds for public education may be accomplished.

The 1933 legislative assembly authorized the appointment of an educational commission which has given earnest study to the problems of school district reorganization and school finance in Oregon. The recommendations of this commission follow three general classifications, namely:

1. The establishment of a state school fund of $1,500,000 from sources other than property taxes, such fund to be distributed on an equalized basis to the school districts for the purpose of reducing local school district taxes now levied on property.

2. Legislation designed to equalize taxes for elementary and high school purposes within each of the counties.

3. A modified county school district system of school administration which will place a desirable measure of centralized responsibility in a county school board, but which will still retain local school boards and the identity and function of individual school districts.

I concur in the conclusions reached by this commission and commend the legislation submitted by it to the earnest study of the legislative assembly.

Higher Education

After a period of turmoil and dissension, which threatened the welfare of the entire system of higher education, harmony has been attained which leaves the way open for constructive achievement by the State Board of Higher Education.

The institutions of higher learning in Oregon have carried out a program of retrenchment during the past four years which has saved $5,700,000 to the people of the state. This was accomplished only by means of the unified control and rigid elimination of duplication made possible by the administration of the consolidated Board.

I believe that the next four years should show great progress in developing a well-rounded system of higher education in which each institution will serve efficiently in its own particular field without expensive duplication and demoralizing competition.

We must bear in mind the fact that Oregon with a population of fewer than a million people and an assessed valuation of approximately $900,000,000 cannot compete in the scope and magnitude of its educational institutions with more populous and wealthy states, but must aim at excellence in a system of higher education adapted to the financial capacity of the taxpayers of the state.

State Liberty

The State Library is a vital factor in the educational and cultural life of our people. Thousands remote from other educational and recreational facilities have received from it not only that knowledge which enriches life or increases skills but also the inspiration and courage to face the problems of daily life.

The library early sensed the possibilities of increased leisure which changing economic conditions brought to the State, and has done notable work these past few years in providing reading guidance, particularly to unemployed youth in rural areas. It has also given good service in this field in our state penitentiary.

Depleted budgets in both school and public libraries have created unprecedented demands for the services of the State Library. It will be years before the book stocks in schools and public libraries can recover from the drastic economy which conditions have forced upon them

In such circumstances state leadership in library activities is essential. I bespeak for the needs of the Oregon State Library your careful consideration and support.

State Police

In my inaugural message I recommended the enactment of legislation consolidating multiple state agencies into single departments in the interests of economy and efficiency.

With this end in view and with the further announced objective of protecting the state of Oregon from the inroads of organized crime and racketeering which have taken such a terrific toll in our nation, I urged upon the 1931 session of the legislature the organization of a state police force.

As a result of the organizing ability and untiring labor of the superintendent and the high morale and thorough training of the staff and officers of this department, Oregon today has a state police system that is outstanding in the nation.

This department consolidated the law enforcement functions formerly performed by the Traffic Department, the Game Commission, the Fish Commission, the Fire Marshal, and the Prohibition Department. In addition, the members of the State Police force are charged with the enforcement of all criminal laws.

Notwithstanding its additional duties, the department received for its maintenance during the first 18 months of its existence only the amounts theretofore allocated to the separate groups in the consolidation. The appropriation for the current biennium was considerably less pro rata.

In every field of activity the State Police Department has nearly doubled the number of arrests made by the separate agencies.

In addition, the department has established and equipped a central bureau for criminal identification, including in the equipment thereof many of the important technical devices necessary for highly skill crime detection and criminal identification.

Despite the fact that the department has operated in a field much wider than the pattern of its appropriation, $43,500 remained unexpended at the end of the last biennium and it is estimated that $40,000 will be returned out of the appropriation for this biennium.

In the field of general law enforcement, the State Police Department has established an outstanding record for highly skilled, courageous and devoted service. It is my earnest hope that this department may be left free to continue and strengthen its activities unhampered by political fear or favor.

State Department of Agriculture

Another important consolidation effected during the past four years was the creation of the Department of Agriculture, merging the activities of 17 separate boards under one head.

This consolidation has resulted in economical operation and the elimination of duplication. Constructive accomplishments have been achieved in standardization and grading of products, in fostering fair dealing between growers and buyers of produced, in the promotion of new markets and in many kindred activities for agricultural betterment.

The department has, without additional appropriation, carried out the provisions of the Oregon Agricultural Adjustment Act, with the result that growers generally feel that the provisions of this act, which expires on June 16, 1935, should, with certain amendments, be continued for another two years.

Under the administration of the Department of Agriculture, the State Fair has wiped out an $8,000 deficit, paid all installments due on its bonded indebtedness, invested $16,800 in improvements, taking advantage in this connection of available SERA labor, and as of November 1, 1934, reported a $24,500 cash balance in the bank.

Consolidation of Boards and Departments

The success of these two consolidations convinces me that the state can gain much in economy and efficiency through further consolidation of boards and departments. In fact, I feel that we have made only a beginning along this line.

Although the Chief Executive is nominally responsible for the conduct of state government, he lacks both the authority and the facilities for exercising control over its multiplicity of departments, boards and institutions. Consequently the Executive can neither render the service nor achieve the economies that the people have a right to expect and demand.

In this connection, I wish to reiterate the recommendation that I made four years ago, namely, that the funds collected by all so-called self-sustaining activities be paid in to the general fund and that these departments be placed under the budgeted appropriations such as govern all other departments.

It is a thoroughly unsound practice to have a multitude of agencies, some large and some small in scope, collecting fees and spending their receipts without supervision or control. The natural tendency is to regard those revenues, which are collected only by virtue of the power and authority of the state, as their own and to expend them as they choose. Repeatedly during my term of office I have found that efforts to control or check the expenditure of such funds have been met with resentment and sometimes with complete defiance.

Salary Standardization

The result of this financial inequality between departments is nowhere more evident than in the salary schedules which prevail in different offices of the capitol. Glaring inequalities exist in the compensation paid for similar services.

With the hope of assisting your honorable body in your deliberations on salary schedules, several months ago I named a group to make a study of this subject. Their findings will be available to your ways and means committee.

Unemployment Relief

Foremost among the emergency problems which have arisen during the apst four years has been that of providing food and clothing and shelter for nearly one hundred thousand of our citizens, who, in the majority of cases through no fault of their own, have been unable to find the employment necessary to sustain life for themselves and their families.

On my recommendation, the legislative assembly of 1933 enacted the present State Unemployment Relief Act, providing for the appointment of state relief and county relief committees.

These committees, in addition to assuming regular relief responsibilities, also accepted, at the request of the Federal Emergency Relief Administration, the duty of directing the Civil Works program in Oregon.

In November, 1933, the demand for financial cooperation with the federal government in meeting relief needs became so urgent that it was necessary to call a special session of the legislature to provide funds. These funds were provided from the state-controlled sale of liquor under the Knox law, and up to January 14, 1935, the sum of $1,003,000 has been contributed from state liquor revenues for unemployment relief.

Due to variations in seasonal employment opportunities, the relief load in Oregon has fluctuated in the past two years from a minimum of 12,700 families and 4,900 single persons in October, 1933, to a maximum of 51,260 families and 7,800 single persons in May, 1934. During the winter and early spring months of 1935, it is estimated that over forty thousand families will be on the relief rolls.

The Civil Works program placed at work on public projects in Oregon during the winter of 1933-34 approximately 27,000 men and women. It resulted in the expenditure of $6,450,000 of federal funds and $862,300 of state and local funds for wages and materials.

In 1933, exclusive of the Civil Works program, $4,900,000 was expended from public funds for unemployment relief in Oregon of which $4,500,000 was contributed by the federal government. During the first 11 months of 1934, there was expended for unemployment relief from public funds, exclusive of CWA expenditures, $8,600,000, of which the Federal Emergency Relief Administration contributed $7,531,000. Unemployment relief in Oregon during this winter season is costing approximately $1,250,000 per month.

The State Relief Administration, through special grants of federal funds, has carried out a drought relief program in the eastern section of our state which has served the double purpose of giving relief to needy farmers and also developing and conserving the water supply. It has developed a transient relief service and a camp work program for both federal transient and state resident homeless men.

In cooperation with the State Department of Education it has developed, through federal appropriations, an emergency educational program which is giving work to several hundred unemployed teachers, and providing educational and recreational facilities for thousands of adult unemployed.

The State Relief Administration is acting as agent for the Federal Emergency Relief Administration in the supervision of work relief for needy college students through which 12 per cent of the enrollment of Oregon colleges and universities are receiving cash wages on work projects.

The Federal Surplus Relief Corporation has called on the State Relief Administration to distribute large quantities of surplus commodities—beef, pork, butter, cheese, eggs and apples—to the destitute unemployed, at the same time aiding Oregon farmers to dispose of their surplus products.

The State has followed the lead of the federal government in holding to the premise that work is preferable to direct relief, and has provided aid through cash wages on public projects where such projects have been available, or through direct relief, where work has not been available.

I wish to express my appreciation, in which I feel the whole state should join me, for the unselfish, efficient and devoted manner in which the state and county relief committees have carried out their difficult and distressing task, without experience to guide or precedent to aid them. Some mistakes have been inevitable, but my contact with federal supervisory officials leads me to believe that the work in Oregon has been discharged with exceptional integrity and efficiency.

The expressions of the Federal Emergency Relief Administration and the public utterances of the President lead me to believe that an increasing measure of financial cooperation is to be demanded of the state, and that the problem of caring for the unemployable indigent is to be rigidly returned to the local communities. I, therefore, urge you to have these two points in mind in framing your unemployment relief legislation.

Liquor Control

When it became apparent that repeal of the eighteenth amendment would occur prior to January 1, 1934, I appointed a committee of representative citizens to make a study of liquor control and to submit recommendations for legislation which would protect the state against the evils of the old saloon regime.

The Oregon Liquor Control Act followed very closely the recommendations of that committee, placing the sale of all liquor containing more than 14 per cent by volume of alcohol in a system of state dispensaries conducted under the supervision of an appointive, non-salaried commission of three members.

As of November 30, 1934, the Commission was operating 22 stores and 117 agencies. The stores have operated at an expense of 6.5 per cent of sales and the agencies 8.3 per cent. During the latter months of operation, this ratio of expense to sales ahs been considerably lowered, and it appears reasonable to expect that operating expenses can be brought down to 5 per cent of sales.

Gross receipts from sales during the ten and one-half months the stores have been in operation have exceeded three million dollars. As of December 15, permits had brought in $71,000; licenses $103,750, and privilege taxes $220,500. Out of profits and fees the Liquor Control Commission has contributed to unemployment relief more than one million dollars.

Out of the appropriation of $400,000 allocated to the Commission to set up its operations, only $107,800 has been used, and the balance will be returned to the general fund. The sum used in launching the operations of the Commission will be repaid to the state with 5 per cent interest as soon as the demands on liquor revenues for unemployment relief are terminated.

In the design of its stores and the conduct of its employees, the Commission has strictly adhered to the spirit and intent of the law which provides that “This act shall be deemed an exercise of the police powers of the state for the protection of the safety, welfare, health, peace and morals of the state * * * and to promote temperance in the use and consumption of alcoholic beverages.”

The Commission has cooperated with city councils and county courts in the granting of licenses, and has frequently consulted with church organizations and parent-teacher associations in the location of its stores and agencies. It has likewise cooperated with federal and local authorities in a vigorous campaign against illicit manufacture and sale of liquor.

This new branch of the government has been handled with fidelity and efficiency, and the experience of the last 10 months has strengthened my belief that the Oregon Liquor Control Act, with only minor changes, offers the people of the state the most satisfactory method of handling the difficult problem of alcoholic beverage control.

The Liquor Control Commission will submit to your honorable body certain recommendations for amendments to the law. In the majority of these, I concur; with others I am not in entire agreement.

I particularly refer to the recommendation by the Commission that it takes over the handling of all wines and beers above a certain alcoholic content.

Several thousand merchants have procured licenses from the Liquor Commission and established themselves as retail and wholesale dealers in the distribution of wines and beers in packages for consumption away from the premises where sold. So far as I know, there has been no abuse of these package licenses. I feel that the rights of these merchants should be considered in connection with the distribution of malt and vinous liquors.

At the time the Knox bill was adopted, an effort was made to include among its provisions authority for dispensing certain alcoholic liquors by hotels and restaurants. This is a subject difficult of solution. It is undoubtedly true that there is some demand on the part of the traveling public to purchase and have liquors served with their meals. It is my hope that this legislature may find some sound solution for this problem in line with temperance which will not permit the abuses of the old saloon days, and at the same time permit the traveling public who happen to sojourn within our borders to be reasonably served with alcoholic liquors.

State Highway Commission

I am pleased to report that the departments coming under Executive supervision have functioned efficiently during the past four years despite the fact that each of them was faced with serious problems as a result of the economic depression.

The State Highway Commission has conducted its affairs in a firm and impartial manner, exercising good business judgment in the expenditure of th estate and federal funds at its disposal. Bonded indebtedness has been reduced $5,600,000 despite the issuance of 2.5 million dollars in bonds for an unemployment relief program.

Through the changes in motor vehicle fees and gasoline tax and the abolition of the state market road tax the motorists and the taxpayers of the state have been saved $4,000,000 per year. Maintenance costs have been reduced 28 per cent. Federal funds in the sum of $13,350,000 have been disbursed with a view to securing the maximum of efficiency and at the same time affording unemployment relief. Bridges are now under way over the five major stream crossings on the Oregon Coast highway as a result of a federal grant of $1,400,000 and a loan of $4,200,000.

Corporation Commissioner

At the beginning of my administration, the Corporation Commissioner faced a deplorable condition in which fraud, racketeering and financial piracy were rampant—all in direct violation of the Blue Sky law and of the Building and Loan Association statutes. In these operations there was exhibited extraordinary and astounding effrontery, a disdain of concealment and an open defiance of law, which made it apparent that the wrongdoers had little fear of prosecution or punishment.

A vigorous campaign was instituted against these abuses with good results. Active financial racketeering in Oregon has been stopped and few persons now even attempt to secure permits under which rackets can be operated. Racketeers have been indicted and convicted, and remaining ones are now under investigation by the department with a view to indictment. Building and Loan Associations in which racketeering has been practiced are now in the hands of the Corporation Commissioner as statutory receiver either for operation or liquidation.

As to corporations in general, the department reports a slight falling off in revenues from filing fees and licenses. However, operating expenses have been rigidly reduced so that since March 1, 1933, net earnings have actually increased.

State Industrial Accident Commission

The four years just past have been the most trying in the history of the State Industrial Accident Commission. Entering the period with no surplus to absorb the shock accompanying the downward trend of industry, the Commission has built up the accident fund until it again totals well over a million dollars, whereas at one time it was as low as $500,000. NO losses have been sustained on account of any investments of this fund during the past four years.

While the law permits 10 per cent of receipts to be expended for administration, the Commissions has during the past fiscal year been able to cut this figure down to 6.3 per cent. Insurance statistics indicate that the Commission is now carrying 95 per cent of all workmen’s compensation coverage, which is evidence of growing confidence in the fund and of increasing security to employers and labor.

A few amendments in line with changing social and economic conditions and national regulations will be submitted to you at this session to safeguard the solvency of the fund and afford greater protection to employers and workmen.

World War Veterans’ State Aid Commission

The World War Veterans’ State Aid Commission has weathered the depression in good condition.

Despite an extremely liberal policy on foreclosures which has enable many thousands of veterans to protect their investments during the depression, the Commission has acquired a considerable amount of property. Cooperating with the Federal Emergency Relief Administration, the State Aid Commission has furnished employment for hundreds of skilled and common laborers through a state-wide program of rehabilitation of state-owned properties.

Despite the fact that the Commission surrendered tax income of $1,100,000 during the past four years, thus affording temporary relief to the overburdened taxpayers, it has been able to make a net reduction of $150,000 in its bonded indebtedness.

Earnest effort has been directed to making the Commission self-sustaining, with the conclusion that had the original law been so drafted as to permit a nominal brokerage fee on all loans granted, a small service charge during the life of the loans, and an interest charge slightly in excess of that which the Commission is compelled to pay for its funds, the millage tax could have been discontinued permanently.

State Insurance Department

During the past four years the State Insurance Department has been conducted on an overhead of less than 5 per cent of its revenues, and after payment of all operating expenses will have turned into the general fund of the state more than $2,860,000.

The Fire Marshal’s Department has done outstanding work in fire prevention and has made a record that other states are now emulating.

During the past six months I have cooperated with officials in the Insurance Department in a campaign designed to cut down the terrific toll in property and human life from motor vehicle accidents.

State Board of Forestry

Great progress has been made in the field of forestry during the past four years. The Oregon State Board of Forestry has, through the cooperation of private timber owners and the federal government, developed a forest protection system that ranks among the highest in the United States. Plans and policies have been worked out to place the forest lands of the state on a sustained yield basis.

Activities have been greatly stimulated through the establishment of the Civilian Conservation Corps and endorsement of the lumber code by the industry. Twelve hundred CCC men are under the direct supervision of the board and are engaged wholly in protective and improvement work on state and private forest lands. Expenditures have totaled $550,000. The board has also acted as representative of the code authority in forest protection work.

Oregon National Guard

In its training activities and in the actual test of mobilization for emergency use, the Oregon National Guard has demonstrated its efficiency. During the past year a call to emergency service proved that the National Guard not only is able to summon an effective force in the speediest possible manner but is prepared with definite detailed plan s and ample reserves to meet any situation that might arise in support of civil government.

Gratifying results have been obtained in developing a state training area for the National Guard at Camp Clatsop, in Clatsop county. The state has secured government-paid installations amounting to $200,000 and a sufficient acreage to make Camp Clatsop a permanent, fully equipped training center for our citizen-soldiery.

Flax Industry

During the past biennium the flax industry has experienced the most successful operation since its inception.

On June 20, 1931, the industry had on hand in cash and accounts receivable $58,000, while in June, 1934, the industry had on hand $267,539. The audit prepared by the Honorable P.J. Stadelman, Secretary of State, as of June 30, 1934, gives the complete report of the operation of the state flax industry, and for the first time it shows a cash profit.

From available funds we have paid back to the general fund $125,787.03, covering the legislative appropriations of 1923 and 1927. It is interesting to note that form April 1, 1927, to October 1, 1930, a net loss of $214,033.64 was incurred, and that during the period of October 1, 1930, to June 1, 1931, a net loss of $91,739.42 was sustained. From July 1, 1933, to June 30, 1934, the net profit was $16,163.55, and it is now estimated that the flax industry is earning at the rate of from $2,500 to $3,000 a month. As of December 1, 1934, the industry had cash on hand and accounts receivable amounting to $188,000.

In addition to combing American markets heretofore untouched Mr. William Einzig, who has been in charge of the industry, has been able to sell our flax and tows to France, Italy, and Belgium.

We have made diligent efforts to bring industries related to the growing of flax to Oregon and I have been gratified, within the past week, to receive word that a large manufacturer of cigarette paper will have a planting of flax in Oregon this year. If the planting is successful it will be followed by extensive expansion in the manufacture of this type of paper in America.

I feel certain that, if this industry is carried on in accordance with sound business principles, the farmers of Oregon, as well as Oregon industry, will reap many benefits, and the taxpayers will not be called upon by the legislature to provide further appropriations.

State Institutions

During the past biennium the institutions for custodial care have been further modernized and they are in a good state of repair. A new hospital has been completed within this period at the Oregon Fairview Home and is rendering excellent service.

In the operation of the institutions we have been generally successful in remaining within the budgeted appropriations, even in view of special processing taxes and unforeseen contingencies, and at the same time rendering humane and efficient service in the care of our charges.

It is of interest to observe that in December, 1923, our population in comparable state institutions was 4,190 with an appropriation for that period of $3,309,788. In the past decade the population has been increase by 1,891, but the appropriation has been reduced by $476,678.22. The superintendents of the various institutions have given me their whole-hearted support and cooperation in establishing this excellent record and deserve commendation.


In closing, I wish to pay a well-deserved tribute to the late Thomas B. Kay, former State Treasurer, and the late Hal E. Hoss, former Secretary of State, whose unfortunate passing the whole state mourns. They were public servants of the highest type and Oregon should be ever grateful for their able and devoted service.

Likewise, I wish to express my appreciation of the fine cooperation and able assistance of the Honorable P.J. Stadelman during his term as Secretary of State.

The sound business judgment of these gentlemen has been invaluable on the State Board of Control, the State Land Board, the State Banking Board, the State Reclamation Commission, the State Printing Board ,and other state agencies where I have been associated with them.

I believe that the affairs of these boards are in good shape and that each has achieved real progress despite the serious problems of the last four years.

To those state officials and employees who, despite substantial pay cuts, have cheerfully and faithfully met the serious responsibilities and heavy duties of the past four years, I offer my heartfelt thanks. Even in those departments over which the Executive exercises no statutory control, the response to my appeals for economical and efficient operation has, almost without exception, been most gratifying. I am deeply grateful to those who, in state departments and institutions, have labored efficiently and loyally for the state of Oregon and for the success of my administration.

Economy in public expenditures is a goal often sought and seldom attained. To Henry M. Hanzen, State Budget Director, who has discharged his duties with the single purpose of saving money to the state, without regard to whether his actions would make him personally popular or otherwise, belongs a large part of the credit for economies accomplished during my administration. His advice and assistance have been invaluable to me.

Finally, I wish to express my appreciation for the able and loyal service of my own office force, and particularly that of my secretary, Mrs. Beatrice Walton Sackett. Her wide knowledge of state business, her sympathetic understanding of public affairs and her impartial and efficient discharge of the duties of her office have given me support and assistance which have made possible much of the success of my administration.

Despite the troubled times and the distressing problems which have accompanied them, I have considered it a privilege to serve as Governor of my native state during the past four years.

To my successor in office whose ability, integrity and record of distinguished public service promise the state of Oregon a higher quality of leadership, I tender my good wishes for the success of his administration and the unqualified assurance of my willingness to cooperate at all times “for Oregon, its people, their welfare and prosperity.”

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