ASSETS AND LIABILITIES.

The assets of the State, according to the Auditor's report September 30, 1906, page 16, were 1,814,453.37 in the treasury, and liabilities, or regular appropriations, against same of $1,481,343.47, leaving $333,108.90 balance in cash in the treasury after all demands paid. As per the Auditor's report on December 1, 1906, there were $1,085,725.17 against which there were an unpaid balance of $50,000 for capitol improvement, an unpaid balance to the common school fund of $894,977.53, the 2 and 3 per cent. fund of $3,264.39 and the Polytechnic Institute balance of $10,293.75, making $968,475.54. In other words, if the State's debts at that time had been paid, there would have been a balance in the treasury December 1, 1906, of only $117,249.63. In the event the State had appropriated last year $1,085,725.17 more than it did, there would not have been anything in the treasury to pay the charges against the State. Referring again to page 16 of the Auditor's report, showing the net surplus of $337,000, it would seem that this is a safe amount, subject to any cumulative appropriations that you might make, and by the Auditor's report December 1, 1906, of $1-,085,725.17 in the treasury, if you were to make individual and cumulative appropriations to that amount, you would consume all the money in the treasury and it would not be safe to go beyond that amount.

This condition of the State's funds does not evidence millions in the treasury. It is true that at some seasons of the year when the taxes are practically all in and the appropriations not due and not paid, the amount in the treasury looks large, but at other times of the year when more of the State's indebtedness is paid, the amount in the treasury is very much smaller, and it would be very dangerous for you to make appropriations based on the maximum amount in the treasury. You can safely base your appropriations only on the minimum amount in the treasury; it does the State's credit no good to be compelled to go out and borrow money to meet an expense account. To make safe annual in

creased appropriations up to $1,000,000, I have discounted that you will establish a method to equalize the assessed valuation of property for taxation and consequent increased tax returns of the State that I think will give the State an increased assessment of $75,000,000 a year, and tax returns from that amount.

I would suggest, therefore, that you appropriate first for the care of our most urgent requirements those which are absolutely necessary, and bring the most lasting benefits, and which should not under any circumstances be put aside or compromised. The treasury of the State cannot be likened to the fruit in an orchard that is distant from the watchful care of its owner, apparently li censing any passer to step in and help himself; it must be under the most watchful care and guard of the protectors and lawmakers of the State, and not necessarily subject to the promotion of the various schemes which will be presented to you. We must all remember that these monies come from taxes, levied on the properties of the State and should be used, not as liberalities, but for those just and economical demands which build up the properties and interests of the State. The establishing of new offices and new expense is easy, the maintenance of them will be an additional charge on the properties of the State, and should be entered into only after the most prudent investigation and deliberation.

SUB-TREASURIES.

The State's method of keeping its monies out of use, hid away in vaults, is akin to the old system of putting money in your stocking or hiding it away in a stump, behind a jamb, or under the bricks of the fireplace. Aside from the danger of this method, it is quite a loss to the business interest that this money should be locked away from the channels of trade. And I would suggest the enactment of a statute authorizing the State Treasurer, with whatever adjuncts of co-operation or advice. you may deem best, to deposit this money with the banks of the State under clear conditions of security by depositing with the treasury State bonds; and also some

plan of competition as to the amount of interest to be paid on said deposits, and the method of distributing through the State according to the requirements and best interests of the treasury.

CONVICTS.

The present arrangement governing our convicts seems to be giving reasonably humane treatment to the convict and large revenue to the State, meaning by humane treatment that consideration commensurate with the nature and condition of their employment, the State having changed its policy from attempting to give the convicts the hygienic conditions of a farm and outdoor exercise to the condition of more secure keep and larger earning capacity. "The way of the transgressor is hard;" it would be difficult to devise a system securing the deserved punishment, at the same time carrying out the full hygienic conditions and humanity of treatment. I would suggest that this arrangement lately instituted should be fully tested, making from time to time such improvements as may be necessary.

The methods of hiring and working and treatment of county convicts have been criticised. I would suggest your investigation, and remedial legislation.

JAILS.

The jails of Alabama for the keep and care of the prisoners are in a great many instances in a very crowded state and require your investigation and remedial legislation.

The practice of hiring the board and keep of a man in chains to anyone who expects to make money from the economy of it, or the saving of it, is wrong in principle and is obliged in a great many instances to bring about serious abuses. Besides being the object of cupidity in the making of money, it also excites the disposi tion to keep the jails full for the purpose of making more money. The State very wisely took the care of the convicts in its own hands when hiring them out be

cause it was found by experience that serious abuses by not giving the proper food and good care were the result.

The report of the convict inspectors, Dr. Bragg chairman, shows this to be the case, and why should the State continue to practice out of date methods of farming out the care of prisoners of the State at so much per diem, when every history shows that this method has almost without exception been abused. A man in jail is in the custody of the State and humanity demands that he should have reasonable care.. I suggest laws making it a part of the State's duty to feed its own prisoners, and also suggest a law to have a State inspector of the jails of the State. I think this would be in the interest of both humanity and economy.

THE YOUTHFUL OFFENDER.

The State has rightfully proposed to divide the two, that is, the adult and youthful convict. The first step in this line being the incipient home and school at East Lake. The work accomplished by the ladies with what subscriptions they could get from the public and the meager help from the counties and State has been wonderful; and the success of this work, bounded in as it has been by its meagerness of funds, is best attested by inspection of same. I strongly recommend that a sufficiency of the general fund be diverted to the upbuilding and enlarging of facilities for the care, not only of those there, but whatever of other numbers there may be necessary to be sent, to keep them separate and keep the best influences around these boys at the beginning of their life, giving them every opportunity that the State can furnish for reformation. As long as we recognize the principle that bad company is destructive even in our home life, how much more so must it be in the chained or convict life; and if we in our homes recognize the importance of securing good influences, how much higher is the duty of the State to separate these boys and give them the best influence rather than the worst?

I strongly recommend sufficient appropriation to secure dormitories and facilities for the keep of all the youthful criminals, and it will in the end, if there be anything in the axioms of life, be much more economic and upbuilding to the State, speaking on surface grounds alone, than to let them go on with the associa tions of adult and hardened convicts of the State.

MANUFACTURES.

It is evident that the tariff as a policy of the United States government is here to stay. It is also evident that Alabama being largely agricultural has not shared in this species of patronage and benefit given by the gov ernment. As a matter of State policy, we should give our people the opportunities for versatile employment, and should give our State a chance to share in that great wealth made by other States in the manufacturing of goods of every description, particularly that of cotton.

At 10 cents a pound our farmers make money and get a fair return on their lands and labor, and this wealth stays within the State. The average amount per pound which the manufacturer makes is 12 to 15 cents per pound; we could more than double the value of the pounds of cotton raised in the State by manufacturing it in the State. If the State could manufacture every pound of cotton that it grows, giving that much additional employment to the citizens of the State, and that much additional wealth and value to the economics of the State, it would be a great point achieved. Also the State is now one of the largest owners of timber lands and iron and coal lands. If we could but get an equitable adjustment of the freight rates within the State so as to encourage the building of industries, which use crude materials, it would tend more than anything else to increase the wealth of the State, and to increase the citizenship of the State, securing the diversification of interests that the United States government encourages by its tariff system, and the State in following the policy of the government perforce would best secure it by adopting the same lines.