GENTLEMEN OF THE LEGISLATURE OF THE STATE OF CALIFORNIA:
I have been much impressed by the ceremonies just closed. Through them, and in a most solemn and impressive manner, it has been announced that I have been chosen by the people of this great State to preside over its destinies for four years, to guard its interests, to conscientiously and to the best of my ability administer upon its affairs and to execute its laws.
With the great honor which the high office of Governor brings, there also come grave responsibilities, and appreciating this, I enter upon the discharge of my duties with a full realization of the difficulties which will confront me in passing upon the important questions which will arise, affecting the interests of our people. In meeting them, I trust I shall not falter in my duty, and that I may have the wisdom to decide them on the side of right.
We are pleased to notice that our State is steadily growing in wealth, population, and importance. For a number of years we have enjoyed a wonderful prosperity, which still remains with us, and our future seems exceedingly bright and hopeful. And why should it not be so, with our wonderful resources and great advantages? Our broad and fertile valleys; our mountains, rich in mineral wealth; our magnificent forests; our unsurpassed opportunities for manufacturing and commerce, and our salubrious climate, are attracting to-day the attention of the world, and many are seeking our shores for homes and to engage in business.
CONSTRUCTION OF TRANSCONTINENTAL LINES
Because of our rapid increase in population and the possibilities of a wonderful development in the products of our soil, mines, and forests, transcontinental railways are building, or contemplating building, to our coast and connecting us by rail with the populous states of the Mississippi Valley and the Atlantic Coast.
The completion of these roads will prove a great advantage to our State; they will add to our wealth and importance; they will cheapen both freight and passenger rates to the large markets of the East; they will develop our valleys and our coast; they will bring to us a large population, and we should offer them every encouragement, so as to hasten their completion, and put no unreasonable obstacles in their way. Railroads form a most important part in the commercial and business life of a State. They operate under franchises granted by its sovereign power, and do business as do public servants. They ought not to make excessive charges or grant rebates to favored shippers or discriminate against persons or places, and for doing so the State has the right to complain. They also ought to be treated fairly and not as a common enemy, and should be protected in all their rights, and every just encouragement offered to induce them to extend their lines and improve to and increase their service.
Since the prosperity of our State depends so largely upon the facilities we have for quick, cheap, and convenient transportation, it is very important that every effort should be put forth to keep our navigable streams open and free to navigation, and to improve them to the best possible advantage. This work primarily belongs to the General Government, but much can be done by our State, and should be done. We should urge upon our representatives in Congress and upon our Senators to press before the River and Harbor Committees of the House and Senate the importance of improving the Sacramento and San Joaquin rivers, in accordance with some plan to be adopted by competent engineers, and whenever it is possible for the State to render aid, it should do so. We can not be too careful in protecting these streams from causes which may tend to shoal the water, create bars, or in any other manner cause obstructions to form which hinder, delay, or impede their free navigation.
These two streams are public highways, free from corporate control, open to all alike, and if safeguarded and improved will play a most important part in the future development of two of the greatest valleys in the world—not greatest in extent, but greatest in the variety and abundance of crops which, under proper irrigation, they are capable of producing.
CAPITAL AND LABOR
Our laws should be just and reasonable and should not alone protect the individual in his property and personal rights, but should equally protect all corporate interests. This is the day of organization and consolidation. Capital and labor are both organized, and when kept within reasonable limits, and prevented from intrenching upon the rights of others, can accomplish great good, and are to be encouraged. But neither should be permitted to do those acts which are detrimental to the general welfare of all, and both should respect the right of every citizen to invest his money in any enterprise, or sell his labor in the field or factory. The right to labor, to accumulate property and to conduct business are most sacred rights, vouchsafed to all by our Constitution, and no man or corporation in the enjoyment of any of these rights should be unlawfully or wrongfully interfered with by either organized capital or organized labor. These rights of the citizen should at all times be jealously guarded by our laws and those invading them punished, and no law should be enacted which would give to organized capital or organized labor any rights superior to or infringing upon the rights enjoyed by all the people in common.
PURE FOOD BILL
The pure food bill enacted by the last session of Congress has made it necessary that there should be some changes in our laws. This bill applies to interstate commerce only, and does not affect articles of food prepared and drugs and medicines compounded in the states and intended to be sold and used therein. The pure food bill was very much needed to stop the wholesale adulteration of foods in the United States, and to stop the preparation of medicines containing drugs that were injurious to the people who purchased the same in ignorance of what they were buying. The law provides that there shall be a printed label on each bottle or package, showing the ingredients of the medicine or compound offered for sale. The State Board of Health, in its Nineteenth Biennial Report, says:
“Most of our long list of deaths from enteric troubles are the result of impure foods, and to stop the deaths the cause must be removed.”
Strong legislation is required to stop the sale of impure food and drugs in this State, not only the sale of that manufactured or prepared here, but that which is shipped in; so that the purchaser may know what he is getting. The law enacted should be along the lines of the Act passed by Congress, so as to be as much in harmony with it as possible. It should be made a high misdemeanor for any person to manufacture within this State any article of food or drug which is adulterated or misbranded, or offer the same for sale, or to offer such food or drug for sale when shipped into the State from any other State or country.
There are patent medicines and nostrums for sale to-day in this State that are injurious to health and ought not to be sold. People who buy them are perfectly ignorant of the kind of drugs used in compounding them. The safety of the public health requires that the sale of such medicines should be suppressed, or at least that there should be plainly printed on a label to be affixed to the bottle or package, a statement giving the ingredients thereof, and the preparation when it contains morphine, opium, cocaine, heroin, chloroform, chloral hydrate or similar drugs, so that the purchaser may know what he is getting and what poison he is taking or giving to his children.
I know of no legislation more important than this, and trust that it may speedily be passed.
The Board of Health strongly recommends that such a law be enacted, and this, too, after a most careful investigation into the subject. It is to be hoped that the bill passed by Congress, together with the legislation enacted by the several states, will put an end to the evil practices of manufacturing and selling impure foods and drugs to the people of this nation.
California, because of its fruit interests and wine industries, should be the first to stand for a strong pure food law, not alone because of the protection it affords to the health of its citizens, but also because it will prove beneficial to us in a commercial sense. The branding of cottonseed oil as pure California olive oil injures our olive industry; the misbranding of our wines affects our wine producers, and the placing of labels upon inferior Eastern fruit and representing it to be California fruit is a gross injustice to those engaged in canning and preserving California fruits. Such practice is a fraud upon the community and should be stopped, and every effort should be put forth to stop it. The General Government will take active steps to do so, and it is our duty to assist when and wherever we can.
DIRECT PRIMARY LAW
The direct primary law is being discussed somewhat, and will no doubt be taken up and considered by you during this session. There is much that can be said in favor of a direct primary law, and there are many good arguments made against it. Of course, upon these you are to pass. A few weeks ago there appeared in the San Francisco “Call” a very clear and concise statement of what was intended by this law. It is as follows: “The direct primary law contemplates the nomination of partisan candidates for political office by direct vote of the members of political parties voting under the same full protection of the law that is thrown around general elections, and by employment of the Australian ballot. The voter makes his own nomination by ballot in the same manner that he votes for the candidates of his choice after nomination.”
It is urged in favor of a direct primary law that all political questions should be submitted directly to the people for their decision, and that it is just as important that the voter should say who the candidates should be as to decide which one should be elected.
The candidate for office receiving the majority of votes at a primary election has been before the people and they have had an opportunity to judge of his character, his worth, and his qualifications to fill the office he is seeking. If he is an unfit and unworthy man, that, too, will be known.
If you should decide in favor of a direct primary law, then the Constitution will have to be amended, because Section 2 1/2 of Article II provides for a primary election for the purpose of choosing delegates to attend a convention for the purpose of nominating candidates, and the section will have to be amended so as to provide for the holding of a primary election for the purpose of electing party candidates to be voted for at a general election.
Should you deem it inadvisable to adopt the direct primary law, then I advise that our present primary law be amended so as to apply to the entire State, and also amended in other particulars which are necessary, but which need not be stated now. The primary law as it exists to-day is too cumbersome, and should be simplified.
Commencing on June 1, 1909, and ending on October 15, of the same year, there will be held in Seattle, Washington, an exposition known as the Alaska-Yukon-Pacific Exposition. The intent of the exposition is to exploit the marvelous resources of Alaska and to increase the oriental trade on the Pacific Ocean. This exposition will be largely attended by people living east of the Rocky Mountains, many of whom will be seeking homes or opportunities to make investments. There is no doubt the Northwest will make a splendid exhibit of its wonderful resources, and that many will be attracted thereby. We should take advantage of the opportunity which this exposition offers us, to place on exhibition a splendid display of the products of our soil, mines, and forests. For this purpose a reasonable sum should be appropriated, similar to that appropriated for the Lewis and Clark Exposition.
REVISION OF REVENUE LAWS
The time has arrived in this State when we should consider the advisability of changing or amending our revenue laws and substituting a system which is more modern and which will meet the conditions of to-day. The present system of taxation is old and antiquated, having been in existence for nearly fifty years, and has not proven to be elastic enough to meet or keep pace with our growth and development. To-day we are confronted with the fact that we have upon our assessment rolls but very little more personal property than we had thirty-four years ago, notwithstanding the population of the State has trebled, and there has been a corresponding increase in our wealth. Upon investigation, we learn that real property bears nearly all the burden of taxation, and the farmer, based on the value of his property and his income, pays a greater sum for taxes in proportion that the merchant, manufacturer or other man of business. All the farmer has is in plain sight, and consequently, is assessed, while money and credits to a large extent go free. Such conditions ought not to exist, as all property should bear its just proportion of taxes. The expense of the State is largely met by a direct tax levied upon property in the different counties. We have a Board of Equalization, whose duty it is to equalize the assessments made in the several counties of the State, so that each shall pay its just share of State taxes. It is a well-known fact that in almost every instance assessments are made as low as can be so as to escape the State tax as much as possible. And while the Board by equalizing assessments endeavors to put all counties on the same basis, still with all its care inequalities are sure to exist between different classes of property, between county and county and between city and city, which can not be prevented. The result is that one county will pay more than its just proportion, and another county will pay less. A system which makes such results possible, and can not be remedied, should be abolished. It is quite evident that some change should be made in our revenue laws, but just how far that change should go, is a question. Shall we continue the present system, with some amendments, supporting the State by a direct property tax, collected from the several counties, or shall we make radical changes in our revenue laws and separate county and State by providing that the State shall be supported from sources different than those which support the city and county?
If this question were a new one, I would advise that we approach it with great care and caution, but we find that several states have adopted the dual system, and that good results have been accomplished. It is evident that some of the evils existing to-day by reason of our present revenue laws, can best be remedied by adopting a system already in use in several of the states by separating State and local taxation.
This means that the State shall collect its revenues from sources other than a direct levy on real and personal property—of individuals, leaving to the counties and cities the exclusive right to tax such property for local purposes.
This plan will save the owners of real estate nearly $4,000,000 annually paid for State taxes, and abolishes at once the necessity for equalization between the counties. The assessment will then be local in each county and city, will be made with only local matters in view, without regard to values in other localities, and without a purpose of keeping down the State tax to a minimum by an undervaluation of property.
This system is not an untried one, as it is now in vogue in several of the states, where it has proved to be successful. It is the most modern method in use and the most just.
The State, under this system, could derive its revenues, in addition to those collected from present sources, by levying a tax upon the gross earnings of railroads; street railroads; express companies; car companies; light, heat and power companies; telegraph and telephone companies; on the shares of the capital stock of banks, and upon corporate franchises.
I can not in this brief address set out in full all the reasons why there should be separation of State and county taxes, but I respectfully call your attention to the very able and exhaustive report of the Commission on Revenue and Taxation. It is plainly demonstrated that such a separation, at least, is a vast improvement over our present system, and it is also shown that our present revenue laws are not only inadequate, but very unsatisfactory.
To bring about this separation it is necessary that the Constitution should be amended, and I advise that a resolution amending it as suggested by the Commission, be passed.
This will then refer the whole matter to the people for their consideration and the wisdom of the measure can then be fully discussed by the press. In the meantime, the Commission can continue to gather information in those states where the dual system is in use, and can also prepare amendments to our laws to meet the changed conditions if the constitutional amendment carries.
This question of revising our revenue laws seems to me to be one of great importance and I commend it to your most careful consideration, trusting that you will give it your best thought.
The question of harbor improvements in this State to-day is one of considerable importance, particularly as it affects San Francisco. Our commerce, both foreign and domestic, is rapidly increasing. We are extending our trade to the Orient and in Australia, and in a few years, when the Panama canal is finished, this trade will be greatly augmented by the commerce that will spring up between this coast and the Atlantic. Steps should be taken to put the water front of San Francisco, and also of other ports in California, in condition to accommodate the fast increasing trade and to care for the great commerce which will come to us when the canal shall have been completed. The rebuilding of San Francisco will, for a number of years, call for a vast amount of building material consisting of lumber, steel, cement, etc., and a great portion of this, particularly lumber, will come in ships and dockage and wharf room must be provided for it. There is no reason why improvements should not be commenced at once, and pushed to completion as rapidly as possible.
These improvements should be substantial and permanent, following a carefully prepared plan, so that when completed we can boast of one of the finest ports in the world. Of course, to relieve present congested conditions, some temporary work must be done, and it should be attended to at once. The Board of State Harbor Commissioners, in their biennial report, published in 1905, speaking of the work contemplated to be done with the $2,000,000 voted by the people of the State for the purpose of completing the sea wall south from the Ferry Building to Channel street, and also for constructing new piers and docks that may be necessary, say: “The money will be used as follows: The construction of 4,400 feet of sea wall that will approximately cost $770,000, and building eleven modern cylindrical piers along the new sea wall, having a total length of 9,600 feet and a width of 120 feet, amounting to $1,105,000.” This money should be used immediately and these improvements completed as soon as possible.
When this money is exhausted if we have not sufficient docks and wharves to properly accommodate the commerce, then I advise that we submit again to the people the question of voting more money for this purpose, by issuing bonds secured by the receipts of the harbor. I am sure that the people of this State are willing to vote all the money necessary to improve this great harbor in the manner it should be improved, but they have the right to expect that the money shall be prudently expended and the best results obtained, and further, that the work shall progress rapidly, and not drag along from year to year. I sincerely trust that during the next four years the Harbor Commissioners will give to these matters their closest attention, and this administration will expect them to do so. While it is true that the cost of building material and wages have increased, yet the improvements to be made are necessary, and a rapidly growing and pressing commerce demands them; therefore, it is not good business policy to delay the work. With the limited wharves now existing, it is important that they should be used to the best advantage to accommodate all. Some care should be taken to see that freight is taken away in a reasonable time, and where it is not, a penalty should attach. Within the last few months the merchants and shippers of San Francisco have given considerable prominence to the conditions existing along the water front of that city, and have made many suggestions for their betterment. The State will soon be called upon to expend a large sum of money in extending the sea wall and in constructing docks and wharves to accommodate the rapidly increasing commerce coming to that port. Before this work commences, and while the Legislature is in session, I am of the opinion that some good would come from an investigation into the several harbors of the State under State control, and I would therefore recommend that a joint committee of the Senate and Assembly be appointed to make inquiries into the prevailing conditions at these several harbors, and also to ascertain pilot charges and other expenses attached to shipping; the amount of pilot fees collected and the rebates, if any, given, and to whom; the average expenses of vessels engaged in foreign trade in arriving and departing from the port of San Francisco; whether any shippers are favored over others; whether any of the wharves are being used for business other than receiving and discharging freight to the exclusion of others; what repairs and improvements are necessary, and such other matters affecting the public interests as may suggest themselves to the committee, and to make a full report thereof to the Assembly and Senate at its earliest convenience, so that proper legislation may be passed, if found necessary.
The effect that the recent conflagration in San Francisco has had upon insurance companies, the efforts made by some to evade the payment of their liabilities on technical grounds, and the loss, delay, and inconvenience suffered by the insured, have demonstrated that there should be some amendments made to our insurance laws affording a better protection to our citizens and making it more difficult for a foreign company to evade its just obligations. However, in making such amendments, we should act with calm deliberation, proceed cautiously and be only actuated by a desire to enact such laws as will amply protect the insured in his contract, which must be fair and just, and afford protection to the company as well. Insurance is a legitimate business and a very important one, and should be so considered. In legislating, care should be taken not to enact laws containing provisions that will be so onerous to the companies that they will be forced to withdraw from the State, or that will entail upon our people more expensive insurance than they pay to-day.
In matters of legislation affecting the insurance business, we have not progressed as rapidly as some of our sister states, notably New York and Massachusetts. Both of these states have given the question of insurance considerable study, and have a very good code of insurance laws which have proven quite successful.
We may with profit examine the laws of these two states, and adopt such as we may deem proper, or at any rate they can furnish us a safe guide in drafting those laws which we may consider to be necessary for the protection of this State under the conditions existing here. There should be a standard form of policy, providing against the loss by fire, explosion, collapse or earthquake. Under such a policy there would be no doubt as to the obligations of the insurer, no doubt as to the legal meaning and effect of the provisions of the policy, and no opportunity to insert clauses not noticed or misunderstood by the insured. The contract of insurance should be made clear and certain as to its terms, and this is of the most utmost importance.
There should also be enacted a deposit law under which companies of foreign countries will not be permitted to do business in this State unless they have on deposit in this or some other state a minimum sum, and in addition thereto the full reserves required of domestic companies, as to all policies issued upon property situated in the United States where a reserve is required. This is the law in many of the states, and had it been the law in this State the Transatlantic and other companies which have retired to Germany without paying their losses, would not have escaped so easily, because their assets in this country might have been sufficient to have covered part of their losses, at least.
All insurance companies should be required to furnish to the insured, upon demand, the necessary blanks to make out his proof of loss, this demand to be made upon either the local or general agent representing the company in this State, and if none, then upon the Insurance Commissioner. The demand should be made within a stated time and the proof of loss submitted within a fixed period after the blanks have been furnished.
You will no doubt have many proposed changes in the law presented to you for your consideration. I know you will proceed carefully and thoughtfully in what you do, and I trust that when your labors are finished you will present a code of insurance laws equal to those existing anywhere, and which will be conservative, fair and just to all concerned. This question is a most important one, and very intricate in its details. It opens up a subject that the average person is not familiar with, and one that requires study to understand. But after all it resolves itself into what constitutes a fair agreement between the insurer and insured, and what is necessary to protect the interests of the contracting parties. When this has been solved, your work will have been finished.
There will be many important measures pending before you during this session, which I have not referred to and which will require your close attention. The most important will be in providing money to carry on the business of the State during the next two years.
Our expenses appear to be increasing out of proportion to our increase in population and wealth. We have many commissions to support, some of which seem to me to be needless. There is also a steady increase in the expenses of our various State institutions, caused by the growing number of inmates and the construction of quarters to receive them. There is no denying the fact that California is one of the most expensive states in the Union to care for, and while our attention for years has been called to the fact, we still continue along in the old way. Our burdens have been placed upon us and we are bearing them, and in all probability will continue to do so. But those burdens should be made no greater. Every effort should be made to prevent any unnecessary expenditure of money being made. When any matter comes before you asking for an appropriation, meet it with the question, “Is it necessary?” and make the parties advocating the measure show you the necessity before you grant it. We all feel a pride in our State institutions, and want to see them properly managed and cared for, and our people are willing to provide the necessary money to do this, but we don’t want any extravagances. Some repairs to our public buildings will have to be made and some new ones constructed to replace those destroyed by the earthquake, but before money is appropriated for either, the character and extent of the repairs should be carefully considered, and the class and expense of new buildings thoroughly investigated, particularly the buildings to be constructed at the Agnews Asylum. The care of the insane is a big problem in our State. The percentage is greater here than in almost any other state, while the number of our asylums is steadily increasing. The expense of maintaining them is great already, and every effort should be made to curtail it where possible, without doing any injury to or hindering the great work we are doing. This much the people of the State have the right to expect of us, and here our duty ends.
It is for the best interests of all that the Legislative and Executive departments should work in harmony. I sincerely trust that we may have the confidence of each other, and that upon all questions affecting the public welfare we may freely consult and exchange our views. A public office is a public trust, and a public trust is the highest trust known. Those vested with governmental power can by their acts destroy their State, or they can make it a strong, powerful, and influential nation. A State’s administration is what its public officials make it. If it is an honest and a just one, it will have the support of all the people. If it is not, it will meet with their condemnation. The people expect of us an economic administration, that only just laws shall be passed, and that the needs of the State shall be judiciously provided for.
Ours is a large State and a grand one. It is an empire within itself. It rests here upon the Pacific Ocean in regal splendor—a queen among the states of the nation. To-day it is inviting the best of our country to settle here and abide with us. It welcomes capital to invest in our mines, in our forests, in our valleys, and in our cities. It looks forward to a future full of hope and blest with all that makes a people great, contented and prosperous. We must be known as a progressive State, one where law and order are preserved, where capital is protected and where labor of the highest and best type is free to follow its own calling; a State dedicated to education and all that is noblest in life.
Such a State is ours, and such a State, with all its great responsibilities, with all that is dear to the hearts of its subjects, with its present and its future hopes, has been placed in our hands as a sacred trust to guard and to protect, and God giving us strength and wisdom, we will do so.
JAMES N. GILLETT,
Governor of the State of California.