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SUPPLEMENT. The Laurens Advertiser. ' _._ LAUREN'S, S. Cv JANUARY .3, (904, FIRST ANNUAL MESSAGE OF Gov. D. C. HEYWARD. To the Honorable, the Gentlemen of the General Assembly. You are again assembled in annual session for the promotion of (he best interests of the people whom we serve, and I welcome you, ttiy co-workers, gladly and sincerely, to the thoughtful consideration of the work that lies before us. I am indeed grateful that you come together today, undisturbed by any factional feeling, but animated with the sole purpose of acting for the best interests of all the people of South Carolina. You arc the chosen representatives of the sovereign people of our State, and, as such, grave responsibilities devolve upon you. To meet these responsibilities you come directly from the homes and associations of those whom you have the honor to serve, and are thus enabled to fully know and comprehend their needs. To ren der faithful service is a sacred obligation, and its true and honest performance will be to you, I feel sure, not only a pleasure, but a privilege. 1 cannot here go into details in reference to the general progress of our State during the past year. It is only necessary for me to say that our development in all departments?agricultural, indus trial and commercial, and also including those higher interests which must ever have their place in the welfare of a pcopUv-has been most encouraging and gratifying. Much of the continued pros perity of the State depends upon you, and in discharging your du ties you will, 1 am sure, bear in mind this fact. The providing for every necessity of the people should be the chief province of gov ernment. This should be done with proper regard for necessary economy, hut the unwise expedient of seeking to be parsimonious should be avoided, for the reason that the best laws may thus be rendered inoperative, and the honest effort to execute them powerless. In this, the first Annual Message which I have the honor of send ing to your l>ody, I have discussed those subjects which I conceived important, and have made such recommendations as I deemed neces sary. In transmitting it to you I wish to say that you will have my earnest cooperation. THE FINANCIAL CONDITION OF THE STATE. Wishing to present for your consideration an accurate statement of the present financial condition of the State, I requested the Comp troller-General to secure the necessary comparative figures for this purpose. These figures cover the revenue and disbursements made on account of the current receipts and disbursements, commencing with the fiscal year, beginning January ist. 1897, and show the actual revenue and disbursements for each fiscal year down to and including 1902, with an estimate for 1903. This statement clearly shows that while the State's revenue has increased, the expenditures have increased at a greater rate. It appears that the total current expenditures in 1897 were $879,502.65; total current expenditures in 1902 were $1,223.971.28, showing an increase of expenditure in 1902 over 1897 of $344.468.63. In this connection the following figures are also interesting: In 1897 the revenue exceeded the expenditures by. . . .$101,099 84 In 1898 the revenue exceeded the expenditures by. . . . 10,019 53 In 1899 the revenue exceeded the expenditures by. . . . 50,048 90 In 1900 the expenditures exceeded the revenue by. . . . 10.045 42 In 1901 the expenditures exceeded the revenue by. . . . 13,924 29 In 1902 the expenditures exceeded the revenue by. . . . 208,795 23 In 1903 the revenue exceeded the expenditures by. . . . 56,304 29 If we take the surplus as above shown for 1897, 1898, 1899 and 1903, amounting to $217,472.56, from the excess expenditures over revenue of 1900, 1901 and 1902, amounting to $232,767.94 we have a net deficiency of $15,295.38. In other words, the total revenue received and applicable to each fiscal year from 1897 to, and in cluding, 1903, amounts to $6,934.725.33. The total expenditures for this same period amount to $6,950,020.71, showing a deficit of $15,295.38, as revealed above. The revenue for 1903, as above stated, includes $89.137.86, received in settlement of claims against the United States Government, as will he explained further on in this message. Had not this amount been placed to the credit of the general fund the deficiency would have been greater. It is thus seen that the finances of the State are not in such a deplorable con dition, but the fact that the Comptroller-General estimates that the State must borrow during the year 1904. $425,000.00 to promptly meet current obligations until the tax levy of 1904 becomes avail able, shows the finances to he in an unhealthy condition, to say the least. This situation should certainly be remedied and a sufficient revenue should he provided to place the State upon a cash basis. At your last session you appointed a committee "to consider how best to put the State upon a cash basis, what additional sources of revenue for the State arc available, and what changes should be made in existing laws for the assessment and collection of taxes." This committee has completed its report, which will be transmitted to you. This report is a most important one. It has been prepared with great care by legislators experienced in the fiscal affairs of the State, who have given much time and study to the preparation of their report, and I commend it to your most earnest consideration. The report came into my hands so recently that I have not had time?on account of other pressing duties?to give it the careful thought and consideration its importance demands, and for this reason I am unable just at this time to make recommendations con cerning it. However, in this connection, I will say that some change, with a view to raising more revenue, is imperative. The complaint of inequality in taxation is an old one, as well as a just one, and if your honorable body could devise some law by which this evil could be remedied, and corporations, as well as individuals, be compelled to return all property for taxation at its real value? as is required by the Constitution'- the present tax levy would greatly exceed the necessities of the government. I invite your specirl attention to this phase of the Subject, with the earnest hope that you, in your wisdom, may be able Jo enact some law that will compel honest returns of property and provide for such penalties as will deter those who seek, under oath, to evade the law. This is the most important function df the State, so far as its business affairs are concerned, and it is not only an unwise, but a suicidal policy, to continue expending more money than the revenues of the State amount to. The question resolves itself into this, that ex penditures must be curtailed, or more revenue raised. The former, I fear, is impracticable, and the latter can only be done in one of three ways: First, by requiring the county authorities, upon whom devolves the duty of ascertaining and placing upon the tax books all property, to exercise a rigid supervision of tax returns, and forc ing them to require a proper listing of property heretofore escap ing taxation. Second, by a license tax as suggested by your com mittee ; or third, by increasing the tax levy, which is undesirable, as it will only place additional burdens upon the honest taxpayer, while the "tax dodger" still escapes. In connection with this part pf my message 1 wish to ac knowledge my obligation to the departments of the Comptroller General and Treasurer for the information which has enabled mc to furnish you with accurate figures as to the financial condition of the State. INSURANCE LICENSES. The Comptroller-General's report concerning this department is a strong and businesslike presentation of the subject. This report shows the number of insurance companies doing business in this State, their financial condition, the amount paid to them in pre miums and the amount paid for losses incurred, these aggregating very large totals. This report embraces the workings of one of the most important business departments of our State government. It condemns the present insurance laws as being defective and inadequate, and offers suggestions providing for the better examination of compa nies organized in this State, with a view to protecting our citizens against irresponsible companies. The report recommends also many changes in our present license laws, including a schedule of fees to be paid, and regulating how and to whom they shall be paid. These changes arc many and far-reaching. They are fully de tailed in the rei>ort, and for this reason I shall not attempt to enu merate them here. It is estimated that under the proposed changes the Slate will receive a total revenue of $127,600 from this source, and 1 quote only the following extract relating to this portion of the report: "This would give a net revenue of $108,600, April I, 1904, avail able for the general expenses of the State government. In addi tion to this, the State would receive quarterly an estimated revenue on the gross premiums received in 1904. of $93,000, making the total revenue received during the year 1904, $201,600. Of course, the revenue for 1905 will drop back, say to $135,000. This law would be better for the State and the companies, as it would relieve this office and the companies of a great deal of expense and trouble." This is a strong business presentation of a business subject and in arranging for our State finances it is well worthy of your most careful attention. The estimated figures given are decidedly interest ing, and if, as is stated, the proposed law would be beneficial to both the State and the insurance companies, this in itself would justly en title it to your utmost consideration. Such a license law as out lined has been adopted by many States. It is now in force tri North Carolina, and from what I can understand, is giving general sat isfaction. DECREASE OF PUBLIC BONDED DEBT DURING THE YEAR 1903. The principal fundable of the public bonded debt of South Caro lina has been decreased during the year 1903 by $125,000.00 of State Capitol Bonds surrendered by the United States Government in settlement of claims of the State of South Carolina against the United States Government, and decreased on books of State Treas urer by $37,000.00 Blue Ridge Railroad Bonds, written off the books by direction of the Act of the General Assembly. (See Acts of 1903, pages 266 and 267.) The following figures show the bonded debt of the State: January 1, 1904. Principal funded.$6,514,674 14 Principal fundable. 170,208 64 $6,684,882 78 As an offset to these figures, there is an outstanding credit of $493,277.26, as shown below. SINKING FUNDS. The assets of the Cumulative Sinking Fund, for the reduction and payment of the South Carolina Brown 4 1-2 per cent. >nds and stocks, having been increased during the last fiscal j :r by $33?59243f now aggregate $493,277.26; all of which is so invested and loaned as to yield from four to five per cent, annual interest. The assets of the Ordinary Sinking Fund having increased $3,780.02 during the last fiscal year, on December 3r, 1903, amounted to $61,387.39, of which $2,764.18 belong to escheats; $53,228.28 of the Ordinary Sinking Fund is loaned out at five per cent, annual interest. INSURANCE SINKING FUND. Under the law providing for "State Insurance of Public Build ings" 75 Sinking Fund policies are now running, carrying $583,891.76 of insurance on public buildings at an aggregate premium of $5,068.11. The assets of this fund at the close of year 1903 amount to $11,651.25, of which $6,000.00 is loaned at five per cent, annual interest. A FINANCIAL SETTLEMENT WIT! I THE UNITED STATES GOVERNMENT. I am glad to announce to you that, through the efforts of Senator Tillman, an important settlement has been effected with our Na tional Government. This transaction involved the payment of claims aggregating $337,887.96, which amount included a cash pay ment of $89,137.86 into our State Treasury. This is a matter of the greatest importance and we can well congratulate ourselves upon so satisfactory a settlement and one which came at so opportune a time. 1 shall have the pleasure of transmitting for your informa tion in a special message, by request of Senator Tillman, his de tailed communication upon this subject, together with his speech in the Senate. I deem it appropriate just here, however, to submit j the following brief extract from this communication, which has specific information upon the settlement which was so satisfactorily made: "It affords me great gratification to hand you herewith warrants Nos. 5746 and 5747 on the United States Treasurer for $89,137.86, together with receipt from the Southern Express Company for $125,000 coupon bonds of the State of South Carolina, with coupons attached aggregating principal and interest, $248,750, making a total in cash and bonds of $337,887.86. This warrant and these bonds have l>een obtained by my receipting the United States in full for the claim of the State of South Carolina which grew out of ex penditures by the State on behalf of the United States Government during the War of 1812-1815." Further on in this communication Senator Tillman makes special acknowledgment of the valuable assistance rendered him in this matter by Mr. James M. Baker of Lowndesvdle, S. C, assistant librarian of the Senate. In reference to these efficient services Sen ator Tillman makes the following request in his letter to me: "In conclusion, I desire to suggest that it will be an act of grace ful recognition and of simple justice to Mr. Baker that the Legisla ture should recognize his invaluable services by appropriating a small amount of money, say $1,000, out of that which has been ob tained. His work was not done with this idea, however, but he is poor and has a growing family, and the State can well afford to pay him handsomely." In view of the great service rendered our State by Senator Till man in this matter, I think any request he makes here should find a ready response. 1 therefore ask your "consideration of this and concur in the request made by Senator Tillman. The warrants? Nos. 5746 and 5747?on the Treasurer of the United States for $89,137.86, were duly received and at my request this amount was deposited by the State Treasurer to the credit of the general fund. As the State was under the necessity of borrowing money I thought this was the most judicious disposition to make of these funds. EDUCATION. There is nothing of greater importance to a State than is the education of its people. Never was this need more all-embracing and comprehensive than it is today. This is an age of progress and enlightenment, and history and statistics alike reveal the fact that the most prosperous countries are those with an educated citizen ship. Under a democratic form of government, in a republic like ours, where each individual has a direct and equal share in the responsibilities of citizenship, it is absolutely necessary that the people should be educated. Only in this way can there be a proper recognition of our relation and duty to the State. To those who are charged with directing the affairs of our State the work of educating the people should appeal most strongly, and we should manifest this by earnest labor in this truly great field. We should give the utmost consideration to every branch of this work, from the little log schoolhousc to the university; for in advancing our educational facilities we will not only make our State more prosperous, but we will make permanent and steadfast a high standard of citizenship. THE COMMON SCHOOLS. The proper education of a people must, of necessity, have its beginning in the common schools. These should he in every com munity in our Stale; they should be as well organized on a business basis as it is possible to have them ; they should be presided over by competent teachers, with full-length scholastic terms, and the school buildings should not only he neat and comfortable, but they should be attractive. The surroundings should he such as to make the children desire to go to school, and when this has been done a strong point will have been gained at the very beginning. Although it is very evident that there is an educational awaken ing in our State, it is equally evident that much remains to he done. In fact, the awakening but reveals the magnitude of the task before us and the great necessity with which we are confronted. While it is true that the graded schools and the high schools in our various towns show striking and marked improvement, the conditions sur rounding the schools in the country are not so satisfactory. We must remember that these country schools are not in thickly set- : tied communities, that they have no large school fund; but we must also remember that a-Jargc majority of the children of the State are, of necessity, absolutely dependent upon these schools for their preparatory education. The average white school in South Carolina is open only 112 days in the year and the average salary paid to the teachers in these schools amounts to only $203.04. Surely this is not a record upon which we can afford to rest and be content. The imperative need which confronts us demands that we should improve this situation. It is an absolute reproach to us that these schools are open only for 112 days, which statement means that many are open for a much shorter period. The same condition exists when we contemplate the small salary paid to the teachers, faith fid men and women who are devot ing themselves to this life work. It is most gratifying to know that these conditions arc being more realized by our people year by year, and that there is a determina tion to improve our common schools. In April last many of our leading educators held a conference in Columbia, and it was then determined to organize and conduct an educational campaign for improving school conditions. This plan was carried out by the appointment of a committee consisting of State Superintendent of Education O. B. Martin. President D. B. Johnson, of Winthrop College, and myself, to take active charge of this work. A number of meetings were held at various places throughout the State, many speakers interested in education spoke at these gatherings, and, by awakening decided interest among the people. I believe that much good has been accomplished. At these meetings great stress was laid upon the necessity for the improvement of school buildings and grounds, and several ladies were employed by the committee to prosecute this work. In ac cordance with this move, these ladies visited a number of counties, held meetings among the patrons and formed organizations among parents and children for further labors in this line. In conducting the educational campaign and in defraying its expenses the com mittee was financially assisted by the Southern Educational Board, to which Board I wish to render thanks for this valuable aid. RURAL SCHOOL LIBRARIES. There are entire counties in our State in which not a single county school library is to he found. '1 he proper training of a people is hindered by this lack, the school work is not as complete as it should be, and I concur in the recommendation of the State Superintendent of Education that a part?if this be only a small portion?of the State school fund shall be used to encourage the establishment of libraries in our county schools. CONSOLIDATION OF RURAL SCHOOLS. Other States in the Union that arc making marked progress in all educational lines arc attempting, through consolidation, to es tablish satisfactorily a strong system of county graded and high schools. This, In my judgment, is, for many reasons, eminently desirable, as in itself it will furnish means at home for the proper preparation for college. Experiment has proved that it is also more economical to transport the children at the public expense to a large central school than it is to conduct several smaller schools at remote and isolated sections. I herewith present a few figures from the report of the State Superintendent of Education : The total expenditures for our public schools during the past year amounted to $1,046,143.50. The