Annual message of Governor James M. Smith to the General Assembly of Georgia, January 13, 1875

ANNUAL MESSAGE
OF
GOV. JAMES M. SMITH
TO THE
GENERAL ASSE1\1BLY
JANUARY 13TH, 1875.
SAVANNAH, GEORGIA;
J. H. ESTILL, PUBLIC PRINTER.
1875.

1fESSAGE.
} EXECUTIVE DEPARTMENT OF GEORGIA, ATLANTA, GA., January 13, 1875.
To tlze General Assembly: In the discharge of the duty imposed upon me by the
Constitution, I have the honor to lay before the General Assembly the information deemed proper in reference to the condition of the Commonwealth, and to recommend to their consideration such measures as are deemed necessary and expedient.
Most prominent among the subjects claiming the attention of the General Assembly, is the financial condition of the State.
The balance in the Treasury on the 1st day of January, 1874, was $922,556.25, and the amount received during last fiscal year, was $1,895,116.86; making the aggregate amount charged against the Treasurer last year, $:2, 817,723.11. The disbursements for the same period amounted to $1,814,594.23, which, deducted from the amount received, leaves a balance of $1,003,128.88 on hand, January 1, 1875. The particular sources from which the receipts were derived, and the various purposes for which the disbursements were made, are stated in the Comptroller General's report, and need not be specially set forth in this communication.
The Legislature, at the session of 1873, made an appropriation to pay the claim of Russell Scige. This claim amounted to $423,125, and no means having been specially provided for its payment, it was satisfied out of the ordinary rcven~es which came into the Treasury during that year. This created a deficiency last year, which could not be supplied otherwise than by resorting to the very doubtful expedient of short temporary loans. As an evidence of the

4

Govemor' s Message.

improved condition of the public credit, it may here be stated, however, that no difficulty was found in raising the required amount, at a reasonable rate of interest.
The steady growth in the wealth of the State, as shown by the Comptroller General's report, cannot fail to be very gratifying to the people. The reported increase in the value of taxable property, for the year 1874, is more than $30,000,000 over and above the value reported for the previous year. This increase was produced, in part, by the repeal of the law exempting a certain amount of property from taxation. But, after making full allowance for the repeal of this exemption, it appears that the net increase in the value of taxable property returned, was $13,709, 376. I may here be allowed to note, for commendation, the thoroughness and accuracy exhibited by the Comptroller General in preparing the different tables contained in this report.
I unite with the Comptroller General in recommending that his office be relieved of the duty of consolidating and taking care of the agricultural returns. The reports of Tax Receivers to his office, in my judgment, furnish the most economical and reliable channels for the collection of agricultural statistics. Tht law should be so amended, however, as to secure, with reasonable certainty, all the information desired, and to this end, Tax Receivers should be obliged, as a part of their official duty, to collect and return the required statistics.
Other amendments of the tax laws are recommended by the Comptroller General, which are respectfully referred to the General Assembly for consideration.
According to the statement presented by the Treasurer, the funded debt of the State, not yet matured, amounted, on the first day of January, 1875, to $8,105,500. The principal and interest due thereon the present year, amounts to $670,385. Included in this is the first installment of $100,000 of the eight per cent. bonds issued under the authority of the act approved February 19, 1873. The Treasurer states that, in addition to the foregoing, there is

Governo1' s Jlfessage.

5

also outstanding, $269,500, past due bonds, which, together with the unpaid interest thereon, amounts to $323,400. The report contains a full and particular descriptive list of these last mentioned bonds. It is suggested by the Treasurer that a large amount of the same was paid by a former agent of the State, and not returned to the Treasury for cancellation. It should here be stated, that the failure upon the part of this agent to make such return has produced seririous inconvenience, and probably loss, to the Treasury.
Having reason to believe that Messrs. Henry Clews & Co., the agent just referred to, were converting to their own use paid up bonds of the State, and desiring to relieve the Treasury from all complications growing out of their transactions as agent, I directed the Attorney General to proceed to New York and obtain, if possible, a settlement of their account with the State. Upon his return, this officer reported that he found it impossible to effect a satisfactory settlement of the account; that Mr. Clews positively refused to permit any examination of his books and vouchers, unless the account which he had heretofore rendered against the State were first paid. It hardly need be stated that such an unreasonable condition could not be complied with. The chief objection to the account rendered was, that many of its items were not supported by proper vouchers. The examination of these vouchers, if produced, would necessarily have involved an inspection of the books and papers of the agent. A settlement having been thus refused, the Attorney General requested to be furnished with information in reference to the bonds which had gone into the possession of Messrs. Clews & Co., and which had not been returned by them to the Treasury. This request was also rdused. It is rumored that this firm has recently been adjudged bankrupt, and it is now hoped that satisfactory information in reference to the State securities in its possession may be obtained at no dist:mt day.
By reference to the report of the Bond Committee, made to the Legislature at the summer session of 18i2, it will be seen that, in addition to the bonds declared void by the

6

Governor's Message.

act approved August 23, 1872, Henry Clews & Co. also hold $800,000 of currency bonds issued under the act of August, 1870. There is reason to believe that, notwithstanding the action of the Legislatme declaring these bonds invalid, this agent has transferred, or in some other way converted the same to his own use. To prevent the injury to the public interest likely to 'result from any unauthorized or unlawful negotiation of our securities, I would suggest that all the bonds recognized to be legal and binding on the State, issued during the late administration, be withdrawn from circulation, and that other bonds of similar amount and of proper tenor and effect be bsued in lieu thereof. This action would, in my judgment, be beneficial to the public credit, ;md would effectually protect the Treasury from imposition and fraud.
There being no reason to believe that the railway companies, whose property has been taken possession of by the State for non-payment of interest, will be able to make any arrangement to resume possession of their property, I respectfully suggest the propriety of authoring the issue of an amount of State bonds sufficient to redeem tb.e bonds of the companies upon which the State is liable. These companies are insolvent, and the holders of their indorsed bonds will have to look to the State alone for payment. It is not probable, therefore, that the bondholders would hesitate to exchange, on reasonable terms, the securities held by them for State bonds. In settling the details of such an arrangement, a material benefit might be secured for the State without doing any injustice whatever to the holders of the bonds. Believing that the interest of the Commonwealth would be subserved thereby, I rcspectf4lly recommend the adoption of a measure giving effect to the foregoing suggestions.
The following estimate of the Treasurer, showing the probable receipts and disbursements at the Treasury, for the fiscal year ending December 31, 187.5, with such alterations as, in my judgment, the public interest demands, is respectfully submitted :

Governor's Message.

7

RECEIPTS.

Cash balance in Treasury Dec. 31, 1874.... . From general tax of 1875 . . . ............ . From general tax of 1874................. . Rental W. & A. R. R. .................... . Insurance tax 1875. . . . . . . . . . . . . . . . . . ..... Railroad tax 1875.... , .................... Express Company tax 1875....... , ....... . Dividends .............................. . Taxes for former years unpaid ............. . Hire of convicts ......................... . From all other sources ....................
DISBURSEMENTS.

$1,003,128 88 900,000 00 300,000 00 300,000 00 20,000 00 10,000 00 500 00 2,000 00 10,000 00 10,000 00 30,000 00
$2,.'i85,628 88

Civil Establishment........................ $100,000 00 Legislative pay-roll. ............. , ......... 100,000 00 Lunatic Asylum ........................... 115,000 00 Pay of Chaplain and Trustees.............. 2,000 00 Deaf and Dumb Asylum............ . . . . . . 13,500 00 Academy for the Blind.. . . . . . . . . . . . . . . . . . . . 11,000 00 University of Georgia...................... 8,000 00 Printing fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000 00 Contingent fund........................... 20,000 00 Public buildings. . . .. . . . . . . . . . . . . . . .. . . . . . . 20,000 00 Executive Department . . . . . . . . . . . . . . . . . . . . 10,000 00 Superintendent Public Works.............. 2,000 00 Clerk Wild Land Office. . . . . . . . . . . . . . . . . . 1,200 00 Vaccine Agent............................ 300 00 Educational Fund. . . . . . . . . . . . . . . . . . . . . . . . . 150,000 00 School Commissioner and Clerk........ . . . . . 3,700 00 Supreme Comt Reports...... . . . . . . . . . . . . . . . . 3,500 00 t-iolicitor General costs in Supreme Court... . 2,000 CO Old debts W. & A. R. R.. . . . . . . . . . . . . . . . . . . 25,000 00 Public debt and interest due iu 1875 ....... 670,383 00 Principal Keeper Penitentiary....... ,...... 2,000 00 Agricultural Department.... . . . . . . . . . . . . . . 10,000 00 Geological Survey......................... 10,000 00 All special appropriations .................. 200,000 00-$1,4!J9,583 00

Balance in Treasury Jan 1, 1875 ..... .

$1,086,045 88

In the foregoing table I have made no estimate for the Atlanta University. For reasons briefly given in another part of this communication, no appropriation ought, in my iudgmcnt, to be made for that institution,

8

Governors Message,

MACON AND BRUNSWICK RAILROAD.
Accompanying this coinmunication is a statement made up from the monthly reports of the Receiver of the Macon and Brunswick Railroad, showing the receipts and disbursements on account of the property in his hands, since the same was taken possession of in behalf of the State. For reasons set forth in my last annual message to the General Assembly, it was found necessary, on taking possession of the road, to continue to receive as money the change-bills heretofore issued by the company for convenience in its business. All the net earnings of the road, since its seizure, have been applied in the redemption of these bills. As fast as redeemed, the bills have been deposited in the State Treasury, where they remain subject to examination by the General Assembly. Some time before the road passed into the hands of the State, the company executed a deed conveying considerable property to certain trustees, to be used in redeeming the bills, and this property is now in the possesion of the Receiver, and, when sold, the proceeds thereof should be used to reimburse the State for the amount paid out in their redemption. The amount of these bills still in cireulation, according to the best information of the Receiver, is $16,749.50.
Having been led to believe that an arrangement might be made, whereby the company would be enabled to pay the accrued interest on its bonds indorsed by the State, and resume possession of the road, and entertaining doubts whether the property could be disposed of for its value, I deferred any action looking to a sale of the same, until the month of September last. Having then become satisfied that the company would not pay this past due interest, and believing that it would probably be for the interest of the State to divest the company of its title to the property, an order was issued directing the Receiver to advertise a sale of the road and its equipment on the first

Governor's Message.

9

Tuesday in December last. Before the day of sale arrived, however, I felt it to be my duty, after an examination of the records of the company, to withdraw the property from the market, and to submit the question of the proper disposition to be made of the same to the General Assembly. In explanation of this action on my part, the following statement is respectfully submitted:
The Legislature, at the adjourned session of 1872, adopted a joint resolution declaring "that the State's guaranty placed on the bonds of the Macon and Brunswick Railroad Company is binding on the State." At the time of the adoption of this resolution, the Legislature had before it what appeared to be sufficient evidence of the validity and regularity of these indorsements, and especially of the indorsements made under the act approved December 3, 1866. These indorsements received further recognition by the Legislature in the annual appropriation act of 1874; and no doubt as to the validity of the last named indorsements arose in my own mind, until the recent examination of the company's records referred to above. A brief review of the history of the company, just here, may aid the General Assembly in solving the grave questions here presented.
In the President's report, submitted to a meeting of the stockholders of the company, held the first day of February, 1866, that officer used the following language:
"From the necessity of keeping the accounts for the last four years in the depreciated currency of the Confederate States, the balance sheets of the Treasurer presented an exaggerated statement of the cost of the road, through its various items of expenditure. Assuming that we are able to liquidate the bonds and outstanding liabilities during the coming year with the assets in hand, which I think can be done, or nearly so, having thus no debts, the amount of stock paid in should give the cost of the road. This will simplify the matter very much. The stock list gives not quite $800,000 in round numbers. \Ve have, then, for this sum of $800,000, a first-class road fifty miles long, equipped and running, together with seventy miles addi-

Govemor's 1/Jcssagc.
tional ready for the iron rails, clear of incumbrance or debt of any description. Deducting $200,000, as cost of the seventy miles of gr,1.ding, we hwe $12,000 per mile as the average cost of the fifty miles of running road-an extremely low figure for (this) description of road."
From the foregoing statement of the President of the company, it appears that, so early as February, 1866, as much as fifty miles of the road was fully completed and in running order, at a cost of $12,000 per mile, and that, in addition thereto, seventy miles had been graded at a cost of $200,000, and was ready for the superstructure, and that the property of the company was '' clear of incumbrance or debt of any description." So far, it appears that the road had been constructed by individual enterprise alone.
The act of 1866 already referred to, granted the aid of the State for the completion of the road on the following terms: that is to say, the Governor should place the indorsement of the State on the bonds of the company to be issued, to the amount of $10,000 per mile for the portion of the road then already completed, and the like amount per mile for every additional ten miles, as the same was completed and put in running order; upon condition, however, that before any such endorsements were made, the Governor should "be satisfied that as much of the road as the said indorsements shall be applied for" had been really finished and equipped, and that the road was free from every incumbrance that might endanger the security of the State.
On the day after the approval of the act just referred to, a series of resolutions explanatory of its provisions were adopted, by which, among other things, it was provided that the bonds of the company, to be indorsed by the State, should not exceed $1,000,000, until an amount of capital equal to the additional indorsement was "bona fide subscribed and paid into said company." In other words, after the indorsement of the bonds to the amount of $1, 00\ l, 000, there should not be any further indorsement

Governor's lrlcssage.

11

unless an equal amount of capital should be subscribed in good faith and p:.iid into the comprny.
After the grant of the aid of the State it does not appear that any action was taken by the company extending the road until the 25th day of June, 18G8. On that day an agreement, a copy of which is herewith transmitted, was ostensibly entered into by George G. Hull and Sidney G. Miller, of New York, with the company, whereby they agreed to furnish material and construct the unfinished portion of the road to the city of Brunswick. In consideration thereof, the company agreed to pay the said Hull & Miller as follows: $1,500,000 of the first !T'ortgage bonds of the c:Jmpany, indorsed by the State, $1,000,000 of 7 per cent. second mortgage bonds of the comp.1ny, and $1,500, 000 of preferred capital stock of the company, which should be entitled to receive dividends at the rate of 8 per cent. per annum, before any dividend whatever should be paid to the common stock. It was further agreed that all of the said securities should at once be issued by the company, and placed in the hands of Dabney, l\Iorgan & Co., bankers, of New York, as trestees, who should, upon the completion of each section of ten miles of road, obtain the indorsement of the State upon the first mortgage bonds of the company, and should deliver the securites placed in their hands as aforesaid to such persons as Messrs. Hull & Mil. ler should direct, upon the estimate of the chief engineer of the company. The company also agreed to obtain the indorsement of the State upon the first mortgage bonds as aforesaid, upon the requisition of said trustees, and "to provide that a majority of the board of directors should each be a holder of two hundred shares of the preferred stock." It would thus seem that it was the intention of the parties to this agreement to transfer, in effect, the entir(:! property of the company and the control thereof to the contractors, and practically to deny to the common stockholders all voice in the management of the affairs of the company. It is proper here to add, that there is reason to believe that Messrs. Hull & Miller were only nomina

12

Governor's Jl,fcssage.

parties, and that the real contractors were persons known only in the records of the company as "the New York Associates." These " Associates," it seems, employed Messrs. Hull & Miller to construct the road according to the conditions of said contract, and paid them therefor at the rate of $12,250 per mile, this being the actual cost of that portion of the road which was built after the grant of the aid of the State.
It nowhere appears, so far as I have been able to ascer. tain, that any amount whatever was subscribed and paid into the capital stock of the company after the passage of the act authorizing the State's indorsement of its bonds. The fundamental condition upon which the additional indorsements were to be made, after the State's guaranty was placed upon the first $1,000,000 of bonds, was therefore disregarded, and these indorsements were given, so far as I can learn, without authority, and in direct violation of the law. It also appears that "the New York Associates" virtually acted the double part of contracting with themselves, and that in effect they occupied the positions of both employees and contractors at the same time. In view of these facts, the question naturally arises, whether the agreement between the company and the contractors was not itself illegal and void.
I transmit herewith copies of a letter and estimate of the President of the company, showing that the actual cost of completing the road and putting it in running order was $12,250 per mile. This estimate embraces the entire cost of the road, including graduation, trestling, bridges, piling, station-houses, side-tracts, superstructure, iron, and all that was necessary to the completion of the work. The letter of the President shows not only the' cost of the road as above stated, but also that " the New York Associates " were the real contractors, and that Messrs. Hull & Miller were in fact employed by them.
The Legislature, at its session in 18il, raised a committee, commonly known as the "Bond Committee," whose duty it was made to investigate and report upon all the

Governor's Message.

13

bonds and indorsements of the St;:i.te, during the adminis_ tration of Gov. Bullock. The committee, in pursuance of its duty, made an examination of the indorsements placed upon the bonds of the Macon and Brunswick Railroad Company after the adoption of our present Constitution. Upon reference to the report of that committee, touching said last mentioned bonds, it appears that the only witnesses who were examined as to the cost of the road were l'resident Hazlehurst and Messrs. J. P. Giraud Fostor, Morris K. Jessup, and D. Willis James, understood to be three of ''the New York Associates." These witnesses testified that,
"The Macon and Brunswick Railroad cost, for building and equipment, twenty thousand dollars per mile, fully ten thousand dollars per mile of which were paid in and nivested in good faith by the stockholders independent of and outside of (the) State's indorsement. The company received one million nine hundred and fifty thousand dollars of bonds under the act of 18GG, and six hundred thousand dollars of bonds under the act of 1870. The amount of money paid in, and invested in good faith by the stockholders, will cover the first indorsement fully, but not the second."
The Legislature acting upon this testimony, as reported by the Bond Committee, adopted the resolution to which reference has already been made, recognizing the validity of said indorsements. It cannot reasonably be supposed that either the committee or the Legislature were advised of the cost of the road, as set forth in the letter of the President accompanying this communication. The cost of the equipment of the road cannot account for the discrepancy between the amount of the cost of the road, as stated in the President's letter and estimate, and the cost of the same as set forth in the testimony of himself and the three "New York Associates" before the Bond Committee. And as to the amount claimed to have been paid in by the stockholders, it is not to be supposed that the committee had examined the stock book and minutes of the company. These books, now in the hands of the Receiver, have been

14

Governor's 11/lessage.

searched in vain for evidence that any stock whatever was actually subscribed and paid in by individuals, after the grant of aid by the State.
It will not be expected that I should pause to comment upon these and other facts of equal significance disclosed by the examination made into the affairs of the company. I fed it to be my duty, however, to recommend that a thorough investigation be made, to the end that it may be ascertained whether the law, under which the company procur(d the State's indorsement, bas been complied with or not. The public interest requires that this shall be done. If it should appear that the company has complied wilh the law, and has thus entitled itself to the State's indorsement, justice to the holders of its indorsed bonds demands that the oblig;ttion should be acknowledged at once. If, on the other hand, it should be shown that the company has not placed itself in a position to claim said indorsement, and that the same has been illegally obtained, a;-id that the present holders of the bonds are properly chargeable with notice of the wrong-doing, then the duty to the people, already overburdened by debt and taxation, requires that this should be so declared with equal promptitude.
At the last session of the General Assembly, I suggested that doubt existed as to the validity of the State's indorsement upon the $GOO, 000 of bonds of the company issued under the act of 1870. I now respectfully advise that the investigation be extended to all the indorsements granted said company by the State, since the adoption of the present Constitution. Attention is also called to the appro_ priation act of the last Legislature, in regard to the interest upon bonds of the company, which it may become necessary to repeal. It may also become necessary for the State to continue to hold the road for a longer period than two years, to which time it is now limited by law. In that event, it is hoped that the act imposing this limitation will be modified, and that the Governor will be authorized to keep possession of the road until the same can be dis-

Governor's Message.

15

posed of to the best advantage, both of the State and the company.
NORTH AND SOUTH RAILROAD.

The North and South Railroad Company having failed to pay the interest on its bonds indorsed by the State, I ordered all the property of the same to be ceized and taken possession of on the 23d day of April, 1874, and appointed Edward A. Flewellen Superintendent of Public vVorks, as agent of the State, to manage and control the same. The law under which the seizure was made requires the Governor to hold the property at least six months before offering it for sale, and the seizure having been made the latter part of April, no sale could therefore have been made earlier than November. The road has not been sold for the reason that it was not believed that anything approaching its value could be obtained in the present condition of the money market. It is hoped, however, that this state of things will not continue long, and that some arrangement may be made by which the property can be disposed of without great loss to the public treasury. The road sustained serious damage the past year from freshets, and the repairs rendered necessary in consequence thereof made it impracticable for the agent to apply any part of the earnings to the payment of the interest on the indorsed bonds. It is not probable that the future earnings of the road will be snfficient to meet this interest. It will be necessary, therefore, for the Legislature, at the present session, to make provision for its payment.

ME11PHIS BRANCH RAILROAD.

The Memphis Branch Railroad Company having completed and equipped the first section of five miles of its road, as required by the act entitling the company to the aid of the State, applied for the indorsement of its bonds in May last. After causing a thorough examination of the affairs of the company to be made, I placed the State's

16

Governors Message.

guaranty on its bonds to the amount of $34,000, this being one-half the value and cost of the section completed and equipped. The section of the road was finished, and the application for the State's indorsement was made, before the passage of the act approved February 25, 1874, repealing the provisions of the several railroad charters theretofore granted, which gave State aid to such enterprises. In my judgment, the application came within the saving operation of that clause of said last named act, ,vhich provides that any company which had already acquired a vested right to the aid of the State, should not be affected by the act. It may be added that the commissioners who examined the road reported that more than $100,000 had been in good faith invested in said company by private individuals, and that satisfactory evidence was exhibited, showing that there was no lien or incumbrance upon the property oi the company which could endanger the prior lien of the State.

STATE AID.

Reflection has satisfied me that additional legislation is required to check the evils likely to flow from the unwise policy of granting the aid of the State to works of internal improvement. Experience has shown that it is almost impossible to so guard the public interest as to prevent injury to the same under these grants. The larger portion of our financial troubles of late years may be traced directly to this mischievous policy. The act approved February 25, 1874, repealed all existing railway charters, ~o far as the same provided for State aid, except in cases where the right to the same had already become vested. What would amount, under the law, to a vested right, is a mooted question. It has already been claimed that the mere acceptance of the charter by the company, without more, would have the legal effect of vesting the right to the aid therein granted. If this claim should be allowed by the courts, the object sought to be accomplished by the

Governor's Message.

17

act would be entirely defeated. The Code, however, as will be seen by reference to section 1682, authorizes the withdrawal by the State of the franchises granted in certain cases. Indeed, the franchises granted to railway companies, since the enactment of this part of the Code, were granted and accepted subject to the right of withdrawal, unless otherwise expressly provided. I would, therefore, respectfully recommend that in all cases where the same can be done, the franchises to those railroad companies whose charters make provision for State aid, be withdrawn by legislative enactment, unless they shall, within a prescribed time, renounce respectively all right to claim or receive the aid granted in their several charters.

STATE UNIVERSITY.
The report of the Board of Trustees of the State Uni-. versity shows that the receipts from all sources, during the collegiate year ending July 28, I 874, amounted to $40,011.80.
The University is reported in a prosperous condition, and the devotion of the students to their studies, during the last collegiate year, is highly commended. The number of new students received the present year has exceeded anything in the experience of the past.
I invite attention to the report of the Board of Visitors, who attended the examination of the Senior Class, prior to the last commencement. This report is very full, and the thoroughness with which the board discharged its duties reflects great credit upon its members. Attention is called by the board to a defect in the law prescribing its duties. The law requires no more than that the board shall "attend the University examination preceding the annual commencement, and report to the Governor the character of such examination." The powers given to the board are not broad enough to give value to its reports. Authority should be given to extend its investigarions to every matter affecting the interest of the University. It
2

18

Govemols Message.

is thus only that the report of the Visitors can be made a clnnnel through which the General Assembly may receive trustworthy information touching the condition and wants of the University. I recommend that the law be amended as here indicated.
I further suggest that inquiry be made into the propriety of providing for a thorough reorganization of the U niver~ sity. As at present constituted, the Board of Trustees consists of thirty-five members-a larger number, as I am advised, than composes a similar organization in this or any other country. The body is too large for efficiency; besides, its members are appointed for life, and thus, in some measure, are left without that sense of responsibility which experience proves is necessary to secure diligence and faithfulness in places of trust. In my judgment, the offices of the present Trustees should be vacated, and provision should be made for the appointment of a new Board, to consist of not more than nine members. The appointment should be made in the manner which would most certainly secure men of enlarged views, and of general fitness for the position. The full term of office should not be longer than six years, and the first nine appointed should be divided into three classes of three each, to be appointed respecti\ely for two, four and six years. Thus, every two years there would be three vacancies in the Board. This provision would prevent the making of sudden radical changes in the management of the University, and, at the same time, would secure a sense of responsibility upon the part of the Trustees. The board ought to be held directly responsible to the General Assembly, and, to that end, they should be required to make out and submit full annual reports of their proceedings, and of the condition of the Univcrsity.
The changes just suggested would, in my opinion, greatly advance the cause of University education in the State. The institution would draw around it the sympathy and support of all the best men of the State, and the representatives of the people would not hesitate to make all need-

Governor's llfcssagc.

19

fol appropriations for its support and advancement. The people of the State desire to see their U nivcrsity grow and expand, and they fully assent to the truth of the maxim, that the greatness of a State depends upon, and is proportionate to, the higher education of its people.

ATLANTA UNIVERSITY.

By an act approved March 3, 1874, the sum of $8,000 was annually appropriated to the Atlanta University, upon condition that the institution shou:d admit for instruction as many colored pupils from each county in the State, free of charge, for tuition, as there are or may be members of the House of Representatives from each county, to be nominated by said members respectively, so long as said appropriation continues. The Governor is inhibited from drawing his warrant for the said sum, until the truskes of said institution shall have submitted a plan for the expenditure of the same to a Board of Commissioners, consisting of the Chancellor of the State University and two members of the Faculty of the same, and until such plan shall have been approved by them each year in writing, and filed in the Executive office. The condition upon which a warrant was to be given for the appropriation, having been complied with, the amount for the past year was paid over to the President of the University. The report of the committee, whose duty it was to visit this institution, will be found accompanying this communication.

COMMON SCHOOLS.
The report of the School Commissioner shows that there is a school organization in every county in the State, and that public schools have been in actual operation in one hundred and twenty-five counties the past year. A growing interest in the schools is manifested, and there has been a marked change in public opinion in favor of the present system. The Commissioner directs attention to the fact that there are $350,000 of school bonds now in the hands

Govenzor s ll1essage.
of the Secretary of State, and claims that the interest on these bonds from October 13, 1870, to October 1, 1874, amounting to $84,000, is a debt due from the State to his department; and he asks that the Legislature take some action recognizing the validity of the claim.
The net amount of the school fund, collected from all sources, from the adoption of the present Constitution down to December 1, 187:3, was $489,722.42. The sums collected since the last mentioned date, amount to $186,183. 90, and the disbursements to $169,071.84.
The whole amount of poll tax assessed for the year 1874, and which by act of February 28, 187J., is retained in the counties, was $199,550. Of this amount, the Comptroller General estimates that the sum of $133,000 has been collected.
I concur in the opinion expressed by the Commissioner, that the act of the last Gcnerai Assembly, providing for the payment of the school debt of 1871, ought to be repealed. I also suggest that the law prescribing the mode in which the school fund shall be paid over to County School Commissioners be amended as is recommended in the report. Such payments are at present required to be made at the State Treasury. By the amendment recommended, the funds due to each county would be paid over directly by the Tax Collector to the County School Comm1ss10ner. By this arrangement, the collections by the County School Commissioners would be much simplified, and the cost of transmitting the money to and from the State Treasury would be saved.
I concur fully in the opinion expressed by the Commissioner to the effect that the act of the last General Assembly, giving an annual donation of $8,000 to the Atlanta University, should be repealed. The colored as well as the white people of the State should be educated, and to this end the tax payers are willing to contribute to the extent of their ability. It can not reasonable be expected, however, that the class upon which the burden of taxation chiefly falls will consent to support an institution

Govenzor's 3fcssage.

21

wherin the mischievous doctrine of social equality is prac. tically inculcated. The wishes and feelings of those upon whom rests the burthen of supporting the Government should be consulted in this as well as all other matters affecting the public interest.
By reference to the report of the Board of Visitors, who attended the annual examination at this institution, it will also be seen that some system of theology is taught therein. Adopting the very pertinent inquiry of the Board, Whose theology is it that is taught? without waiting for a reply to this question, it may safely be assumed that the teachings upon this subject are sectarian in their character. The Constitution of the State inhibits the granting of a donation or gratuity by the Legislature to any sectarian corporation or assoc1at10n. It is hardly necessary to add, that the spirit, if not the letter, of this constitutional provision would be violated by continuing the appropri:1tion under consideration to this institution. But, recognizing the duty resting upon the public to provide for the educa. tion of the colored people, I respectfully submit the views expressed by the State School Commissioner on this subject, with the recommendation that they be favorably considered by the General Assembly.

DEPARTMENT OF AGRICULTURE.

I transmit herewith the first annual report of the Commissioner of Agriculture. This Department was created by the act approved February 20, 1874, but the Commissioner was not appointed until the 2Gth day of Augusl last. As soon as appointed, however, he entered energetically upon the discharge of his duties, and has already succeeded in organizing his department and placing it in thorough working order. The materials necessary for the handbook required by the act, are being collected, and a specimen, showing the manner in which this valuable work is being prepared, will soon be ready for delivery. A labor_ atory has been fitted up at the Capitol, and furnished with

22

Governor's Message.

chemical apparatus suitable for conducting analyses of soils and minerals. The rules prescribed for conducting these analyses, it is confidently believed, will be effectual in securing results of great practical benefit to our agricultural interest. An accurate knowledge of its condition and wants must necessarily be the basis of all improvement in our agriculture. Recognizing this truth, the Commissioner has arranged a system for the collection of reliable statistic:il information. He has already gathered a mass of valuable facts, showing the present condition of our agricultural labor system, the amount of home supplies produced, and the general conduct and management of our husbandry.
The Legislature, in establishing this department, took a step in the right direction, and, in my judgment, the future material prosperity of the State will depend, in a large measure, upon the manner in which it may be fostered and sustained.
Judging from what has been already achieved, I think it may be safely predicted tbat, under the able management of the Commissioner, this department will soon entitle itself to the confidence and permanent support of the people.
GEOLOGICAL SURVEY.

The office of State Geologist, created by an act approved February 27, 187--1, has been conferred upon Dr. George Little, who held, at the time of his appointment, a professor.-;hip in the University of th~ State of Mississippi. This officer, after organizing his department, entered at once upon the discharge of his duties. Taking the field late in the fall, after a hurried preparation, he has traversed nearly the whole of northwestern Georgia beyond the Chatt?Lhoochee, and h;is already made a large collection of specimens, showing the geological and mineralogical character of a number of the counties embraced in that section. The inform;ition contained in his report, herewith transmhed, is very valuable, and the attention of the General

Govemor' s j}fessage.
Assembly is specially directed thereto. I think it is not too much to say, in behalf of this officer, that the benefits expected by the people of Georgia, from the operations of this department of the public service, will be fully realized under its present intelligent and energetic management. Believing that the work thus undertaken will, wben completed, be of incalculable value to the p:coplc of the S~ate, I earnestly recommend such appropriation be made therefor as may be deemed necessary for its energetic prosecution.
LU::-iATIC ASYLU~f.
The report of the Trustees of the Lunatic Asylum exhibits fully and particularly the condition and management of the institution during the past year. Its ofncial organization is reported good, and all its affairs have been conducted with a just and reasonable economy. For reasons stated in the report, the amount appropriated for the support of the institution the present year should be larger than that given for a similar purpose last year. The suggestion of the Trustees upon this subject m:1y, in my judgment, be safely adopted, and I respectfully recommend that the amount asked for be given. Duplicate vouchers for the expenditures of last year have been regularly forwarded, as the law requires, and arc ready for inspection by the proper committee of the General Assembly.
ACADE~IY FOR THE DLI:--:D.
The report of the Trustees of the Academy for the Blind sets forth the administration of the affairs of that Institution during the past year. For reasons stated by the Superintendent, a larger sum may be needed for the support of the Academy the present than was appropriated for that purpose last year. The necessity for such additional appropriation will, I presume, be inquired into, according to usage, through a visiting committee, appointed by the General Assembly. I respectfully recommend that what-

24

Governot's Message.

ever amount may be found necessary to secure the comfort of the pupils and to promote the efficiency of the Institution be supplied.

DEAF AND DUM ASYLGM,
Herewith transmitted will be found the annual report of the Board of Commissioners of the Institution for the edntion of the Deaf and Dumb. It is suggested in the report that the same amount as that annually appropriated in previous years, 7Ji;;: $13,500, will not be sufficient to meet the wants of the Institution the present year, and an appropriation of $15,000 is asked for. The Board also asked that an additional sum of $1,000 be appropriated to pay for repairs of buildings, and $250 be given to purchase material needed for fitting up the printing office of the academy. The report shows that the Institution is in a prosperous condition, and I cheerfully recommend the appropriation of such sums as may be necessary for its support.

ATTORNEY GENERAL'S REPORT.
The report of the Attorney General contains a statement of the business of the State, in his charge, the past year Attention is especially invited to that part of his report which refers to the purchase of property at public sale, for the use of the State, and the disposition made thereof. The Attorney General suggests that the Governor, in conveying certain property thus purchased, be authorized to warrant, on the part of the State, the title to the purchaser. This suggestion is respectfully submitted to the General Assembly for such action as may be considered proper.

PENITENTIARY.
In pursuance of the Act approved March 3, 1874, the convicts in the Penitentiary have been farmed out to different parties, for terms ranging from one to five years. The lease of Messrs. Grant, Alexander & Co. expired on the

Governors Message.

25

first day of April last, less than one month after the passage of this act. In consequence of the short time allowed within which to dispose of them, the lateness of the season, and the general condition of the country, it was found impracticable to obtain full prices for the convicts. All of them were disposed of, however, on terms which relieves the State of every expense on account of the Penitentiary. In disposing of the convicts, I sought as far as practicable, to diversify their employment, with a view of ascertaining in what special industries such labor could be most beneficially engaged.
The terms for which the convicts have been leased, will soon begin to expire, and it will be necessary, therefore, for the Legislature to devise in advance a permanent and more satisfactory system for keeping and employing them. The present plan can be regarded only as a temporary expedient, rendered necessary by the condition of our finances and the inconvenience, if not impracticability, of securing a better system under the circumstances. In any permanent system adopted, care should be taken to preserve the punitive and reformatory character of a Penitentiary, and, at the same time, make it self-sustaining as far as possible.
It will appear, by referenee to the report of the Principal Keeper, herewith transmitted, that the number of escapes and deaths has been large since the last letting of the convicts. This results, probably, from the vices inherent in the system, rather than from negligence on the part of the lessees. The escapes have been at the rate of ten per cent. per annum of the whole number of convicts, and the deaths at the rate of six per cent. This, it must be confessed, is an unfavorable showing for the present system, and clearly demonstrates the necessity of abandoning it as soon as possible.
The number of convicts, at the present rate of increase, will soon reach one thousand. It has been ascertained that for a period of fifty years anterior to the late war, each convict confined in the State prison involved an actual expenditure from the public treasury, over and above the

26

Governor's Message.

proceeds of his labor, of $219.00 per annum. It cannot be expected that convicts can be kept under that system at this time for a less amount than this. Assuming this to be true, the number of convicts which may reasonably be expected at an early day, will require for their maintenance, if kept in prison, an annual appropriation of over $200,000. Such a burden as this should not be imposed upon the people of the State, for the support of violators of the law, if it can be avoided.
It will thus be seen that the disposition to be made of the convicts under our laws, is a matter of grave public coucern. The attention of the Legislature is earnestly invited to the subject. It can scarcely be hoped tlnt any system which may be adopted will be free from objection. While I have no plan to offer as entirely satisfactory to my own mind, I would suggest that in any system that may be devised, the convicts should be placed under some one responsible head, rather than divided among several, and that the State, in the event it should part with the labor of the convicts, ought, nevertheless, to retain the right of police, including the right of supervising their sanitary and moral condition, their treatment and safekeeping.
VOLUNTEER C0!.\1PANIES,

The number of volunteer companies organized in the State is two hundred and twenty-one. Of these, one artillery company, eleven cavalry and forty-three infantry companies have been armed. There have been issued to the infantry two thousand three hundred and thirty stand of arms, with accoutrements in full. Included in this amount, arc one hundred muskets furnished to the Agricultural College at Athens. Four hundred and sixty pistols, and an equal number of sabres, have been issued to the cavalry. Five 12-pounder Napoleon guns have been drawn by the State from the Ordnance Department at Washington, four of ,vhich have been given to an artillery company at Savannah.

Govcmo1's llfcssage.

27

Experience demonstrates that nothing tends so effectually to preserve the public peace as a consciousness on the part of the evil disposed and lawless, that government possesses the power to enforce the laws. Hence the militia should, to the extent practicable, be thoroughly organized and armed. The quota received annually from the Federal Government by the State, is wholly insufficient for this purpose. The quotas of fourteen years--from 18Gl to 1874, inclusive-were required to supply the fifty-five companies already armed, and to furnish the Agricultural College, as before stated. The companies organized, Dl,t now unarmed, must therefore be disb:rnded, unless an appropriation be made by the Legislature to supply them with arms. I recommend that a sufficient amount be voted to arm the companies already organized, The expcnditrn e of this appropriation should be guarded by limiting the cost of the arms to be purchased to the regulation prices prescribed by the Ordnance Department of the United States.
COXSTITUTION,\L A'\IENDMENT.

The Secretary of State has been directed to send, properly authenticated, to the Senate, where it originated, the act of the last Legislature, approved l\farch 2, 187-!, entitled "An Act to amend the Constitution of the State." An examination of this act shows that it is applicable only to such indorsements of railway bonds made by the late Governor, as the Legislature had declared '' illegal, fraudulent or void." A large amount of the fraudulent indorsements and bonds, issued during the late admir.istra:ion, are not covered by the language of the act. It is doubtful, therefore, whether the public interest would be subserved by the final adoption of the act as an amendment to the Constitution. It is also questionable whether it would be competent for the Legislature so to amend the act as to include the ether bonds and indorsements to which attention has just been directed. The question is thus brought before us, whether, for this and other reasons, it is advisabl

28

Governor's llfessage.

at this time, and under existing circumstances, to call a convention for the purpose of revising and amending the Constitution of the State.
It is generally conceded that such a convcntior_ ought to assemble in the course of a few years. Indeed, there seems to be but little, if any, difference of opinion as to the propriety and necessity of revising the Constitution; the only doubt in the public mind being as to the time when this can best be done. There are certainly many reasons why a convention should be called without unnecessary delay; and yet, it must be confessed that there are other reasons, equally cogent, why, in a matter of such grave concern, the State should move with extreme caution. The peculiar condition of the State, its relations with the Federal Government, and the necessity of acting, as far as practicable, with due regard to other Southern States similarly situated with ourselves, impose upon us a grave responsibility. The people, however, have the right to decide this question for themselves, and to them the Legisbture can safely remit it. \Vhen this has been done, the entire question can be discussed and determined upon its merits. I can see no reason, therefore, why the Legislature, if it see proper, may not take action during the present session, for the purpose of referring the question of assembling a contion to a vote of the people.

FEDERAL RELATIONS-LOUISIANA.
The exhibit here made of the affairs of the State, though not all that could be desired, furnishes much ground for hope and encouragement in the future. Our financial condition is steadily improving, and our great agricultural interests begin to show signs of reviving life 2nd vigor. vVith the increased production of breadstuffs during the past year, the planting interest, with a better price for the great staple, would be on a more satisfactory footing at this time than it has been for some years. The interest in the State which seems to languish most is our railways.

Go,uemor' s J1fcssage.

29

The chief c1Jstacle in the way of our advancement has arisen frcom tL,c course pursued by the party in possession of the Federal Government towards the Southern States. One of the in,mcdiate results of this policy has been the disorganization of our labor, and the consequent large increase of idleness, vagrancy and crime. It has been erroneously assumed that the lately enfranchised class would not receive just or proper treatment from the white people, and to prevent this imaginary evil, the mischievous and uncrmstitutional measures known as the Enforcement Acts have been resorted to. vVe are now further threatened by still greater evils, in the pass;ige by Congress of what is commonly designated as the Civil Rights Bill. Should this great and unnecessary wrong be inflicted upon us, I hazard nothing in saying that it will be followed by the immediate overthrow of our public school system, by the complete demoralization of our labor, by great injury to our finances and to the holders of our securities, by confusion in every department of business, and by further alienation between the two classes of our population. The unwisdom of the measure, so far at least as the State of Georgia is concerned, is shown by the fact, that the laws of this State already guarantee precisely the same rights to all the people, of whatever class, condition or color. \Ve have one law for all-for the white man and the colored man-for the freeman and the freedman. It is admitted that there are distinctions among us, but they are such distinctions as obtain among all peoples, under all governments and in all societies, and such as no government has heretofore ever undertaken to regulate by legislative enactments. That such legislation is unnecessary and can be productive of mischief only, we very well know. Self-interest, to take no higher view of the subject, would dictate to the white people the policy of forbearance, conciliation and fair dealing towards the colored race. Even when a slave, the negro was sure of protec tion and kind treatment, and now, that he has become a free and independent laborer, and possesses every legal

30

Govemors Message.

right that the white man has, it is still to the interest of the latter that his rights should be carefully guarded, that his efficiency as a laborer should be increased, and that his general condition should be improved in all practicable ways.
But its inj1!rious effect upon the peace and material prosperity of the Southern people is not the only mischief justly chargeable to such legislation. The disregard of the right of local self-government, of which it is the expression, betrays the existence of an alarming disease in the Federal system. The experience of this people, during the last ten years, but confirms the uniform teachings of history, that power, in whatever hands, is ever struggling for its own enlargement. During that short period, the General Government has violated the liberty of the citizen, overturned and created State Governments at will, and committed other flagrant violations of the Constitution.
The crowning act in this course of usurpation aud wrong, is the attempt to stifle, by the strong arm of military power, the will of the people of Louisiana, expressed at the recent election. In popular governments, the untrammeled exercise of the elective franchise, and the purity of the ballot box, are at once the form and essence of public liberty. The recent attempt to pervert the popular will in Louisiana, may well excite the gravest apprehensions. There would, indeed, be little ground of hope for the per. petuity of our free institutions, if such usurpation were met with public apathy. Happily, however, it has produced the contrary effect, and patriotism finds encouragement in the almost universal sentiment of condemnation this grave wrong has evoked.
The change in public sentiment indicated by the recent elections, also leads us to look for an early reformation of the policy and practice of the Federal Government towards the Southern States. If the policy of irritation should be abandoned, and the people be left to themselves, the two races would soon establish such social and business relations with each other, as their own peace, happiness and

Governor's Message.

31

true interests require. In other words, our people only ask that they be secured in the great right of local selfgovernment, as it once existed in all the States of the Union, but which is now enjoyed alone by the people of the :Northern States. If the Government will but give us home rule, a revenue tariff, an honest and economical administration, and a sound circulating medium, we shall not have long to wait for the return of peace and prosperity to all parts of the country, and among all classes of the people.
JAMES M. SMITH,