dividual bookkeeping systems in the various capitol depart

ments.

The constructive accounting work so ably begun by the Board of Public Affairs has required careful preparation, and the installation and development of the systems in the various departments and institutions will extend over a considerable period of time. It is highly desirable that suitable provision be made for carrying on this work. When it is completed Wisconsin will have a business organization comparable to that of the best private corporations and will have established a system of cost accounts that will furnish the data for a scientific budget to be submitted at the opening of each session of the legislature. Beyond question these changes will result in economies and increased efficiency greatly in excess of the cost of installation and development. It is interesting to note that other states are already looking to Wisconsin for advice and direction in this matter.

Budget.

For the first time in the history of the state the legislature has before it at the beginning of its session a complete budget of all state departments showing in classified detail the expenditures for three preceding years, an estimate for the current fiscal year, and requested appropriations for the next two

years.

There is submitted in addition a digest of the appropriation laws affecting the various departments and institutions.

The budget is also accompanied by schedules for each department showing the number of employees, their salaries, and the changes recommended.

This exhibit has been made possible by the provision in the law creating the Board of Public Affairs and requiring departments to submit their estimates to this Board a month before the legislature convenes. This budget is not, of course, as complete or as accurate as will be possible in the future for the reason that there has been in the past no uniform system of accounting and no uniformity in classification of accounts.

Finance.

During the fiscal year 1912 general property taxes amounting to $32,610,000 were raised within the state. Of this amount $28,871,000, or 89% were levied by county and local units, and $3,739,000, or 11%, by the state. Of the latter amount only. $1,151,000, or 3%, were levied for state purposes. The remainder was levied and collected by the state, but was immediately returned to the school districts, towns and counties. Not one penny collected from the people in the form of general property. taxes was used for general governmental purposes. It was all either returned to the local subdivisions or was spent for education and highways.

The total per capita general property tax levied within the state for 1912 was $13.64. Of this amount $12.08 was levied by the counties and local units, and $1.56 by the state. Of this latter sum only 48 cents were for purely state purposes. The remainder was levied by the state but was immediately returned to the local subdivisions.

The state government therefore is not supported to any considerable extent by general taxation. Its revenues come from other sources. For 1912, the corporation taxes amounted to $4,546,000, or 41% of the total revenue receipts of the state. Of this amount the railroads contributed $3,594,000, the Insurance Companies $715,000, and other corporations $237,000. The inheritance tax yielded $783,000, or 7% of the total state. revenue; departmental earnings and fees, $1,147,000, or 10%; licenses, $528,000, or 5%; charges for charitable and penal institutions $252,000, or 2%; and all other sources $135,000 or 1%, making a total of $11,130,000.

The total net state disbursements for the fiscal year ending June 30th, 1912, were $10,580,000. This was for both state and local purposes. The chief items, other than the general governmental disbursements were as follows: for the support of public schools $2,306,000; for the University, $2,190,000; for the maintenance of penal and charitable institutions, $1,697,000; and for the construction of the state capitol, $790,000.

The condition of the public treasury during the past two years has been highly satisfactory. The balance in the general fund, on June 30, 1912, was $2,032,143.19. Two years before,

this fund showed a balance of only $798,067.91. This accumulation of public money accrued moreover notwithstanding the fact that the board charged with the duty remitted state taxes for the fiscal year 1912 amounting to $940,235.00. Consequently on October 26, 1912, there was a further remission of state taxes amounting to $1,989,216 for the fiscal year 1913. The first of these remissions included $450,000 for the construction of the new state capitol, and $490,235 for the support of normal schools; the second, $450,000 for the construction of the new capitol, $473,605 for the support of the normal schools and $1,065,611 for the maintenance of the university. No state tax therefore will be levied for any of these purposes during the current year; instead all appropriations will be met out of revenues derived from other sources.

These remissions though suggested by the large balances on hand in the state treasury at the times they were made, have been welcome relief to tax payers. They should therefore be followed by a policy of rigid economy in the matter of legislative appropriations.

State Board of Public Affairs.

In my message two years ago I recommended the creation of the present Board of Public Affairs. It is an entirely new departure in state government. Composed of four ex officio and three appointive members, one each to represent agriculture, labor and manufacturing, it combines departments of government and economic interests never before brought so closely together. The legislature specifically referred to it for solution several of the most important and urgent problems confronting the people of Wisconsin. In addition, it was given far-reaching powers of inquiry into the affairs of many of the administrative departments with a view to their reorganization so as to secure greater economy and efficiency and of research and investigation into problems of general economic and social betterment.

From my references in this message to what it has been doing you have undoubtedly gathered some idea of the scope of its work. It has investigated the public school system, agricultural coöperation in all its forms, the efficiency of the several departments of state government, the question of immigration and set

tlement, state finances, prison labor, and public printing. Comprehensive audits are being made of the principal state departments and institutions, a state budget has been prepared and a modern accrual system of accounting has been devised. The results of some of the work done under its direction have already been published in pamphlet form. Other reports are now being printed and will soon be ready for distribution. Some of the investigations were exhaustive and complete, while others were of a tentative and preliminary nature. Though the members serve without pay they have given the work of the board a great deal of time and attention.

In recent years it has been the practice to refer important questions to committees of the legislature for investigation between sessions. This was better than to leave all the work to be done after the legislature met; but the frequent changes in membership here made this an unsatisfactory and expensive device. By the creation of the Board of Public Affairs the legislature of 1911 adopted a new policy. Instead of half a dozen separate committees for as many legislative problems this board now considers them all. The new arrangement gives a better sense of proportion and permits each question to be considered in proper relation to all the others, thus saying both time and money.

The work of the Board has only fairly begun; but it is already apparent to every member of it as it must be to all who have kept track of its work that if our state is to remain a leader in the movement for constructive reform legislation and its proper enforcement, some such organization as this must be continued as a permanent body. We cannot afford to ignore the political experience of others or the necessity of basing our laws upon fundamentally correct principles. This means close, exhaustive investigation and research. The members of the legislature and the executive ordinarily have not the time to spend in this way. Too many other matters distract their attention. As a result there is constant danger of mistakes, legislative temporizing, and administrative failure. To avoid these consequences there should be a permanent organization provided with sufficient funds to make preliminary surveys of new conditions and to gather the necessary data upon which wise legislation should proceed. The present Board of Public Affairs meets this requirement perfectly. It has interfered with no existing officer or department of government but instead brings all officers and de

partments into helpful coöperation for the improvement of administration and for thoughtful inquiry concerning the economic and social betterment of the people. As an institution of government it is original and unique. Impressed as I am with the high value of the service it has already rendered and fully convinced that still better results are possible in the future, I respectfully recommend that it be made permanent.

Conclusion.

Wisconsin is prosperous. Never before in all our history were living conditions easier. This conclusion is established by the balances in our banks, the output of our factories, the abundant crops of our farms, the increased wages of labor and the contentment in the hearts of all our people. Nature has been wonderfully kind to us in geographical location, climate, soil, beauty of scenery and richness of natural resources. Our people are the peers of any on earth. All the conditions are present for unexampled future growth, prosperity and high achievement. What are we in whose hands the people of Wisconsin have temporarily placed almost unlimited political power going to do with it? What response shall we make to this expression of public confidence? Not what we say but what we do here will determine our fitness for this high responsibility.

Among the sisterhood of states Wisconsin now holds an enviable place. For years she has led in the great humanitarian movement at present sweeping forward toward the goal of political freedom and social justice. In an era of partisan machines and bosses she has attained real representative government. She has settled the question of corporate control. She is now engaged in establishing genuine democracy in industry and trade. Day by day she moves steadily onward and upward. She has already achieved a veritable political emancipation, yet no one was injured or outlawed. There is now in progress a program of social reorganization upon broad and enduring foundations, yet no one has been harmed. Merely the feelings of some men have been hurt and the preconceived notions of others have been jarred or upset. At this slight cost our state finds herself in the vanguard of a movement to uplift and dignify the com