fdESSAGE OF
Governor Clifford Walker

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DELIVERED TO
GENERAL ASSENIBLY OF GEORGIA
JULY 7, 1925.

Mr. President, Mr. Speaker, Ladies and Gentlemen of the General Assembly:
In behalf of the State, permit me to express the thanks of the people to your honored President of the Senate and Speaker of the House for their strong appeals for serious concentration of mind and close application to the duties so vital to the future of Georgia which are now to engage your attention. In thorough accord with this spirit, I shall address myself directly to the problems to be solved.
The Constitution r.cquires the Governor to advise with tbc Legislature. I come with no desire to dictate: my only ;:;urpose is to aid you, if I may, in laying the foundation for tb~ building of a great State. I conceive that the hour has come for plain speaking and courageous acting: I shall not hesitate to bear my own part today: I have every confidence that you, on your part. will act courageously tomorrow. In the eco:10m 'y of time and that I may not be misunderstood or erroneously quoted, I shall speak largely from notes and I beg of you your careful and sympathetic hearing. First, let us consider briefly the
HISTORY OF TAXATION IN GEORGIA.
The present tax laws, which levy one uniform rate ad valorem on all classes of properties, were enacted many years ago; they were fairly satisfactory at that time because practically all property was tangible. It consisted mainly of farm lands, live stock and farm implements. Cities were few, towns were small. There were no railroads, no banks, no factories. There were a few stores: the store-houses and the stocks of merchandise were visible and could be fairly valued and assessed for taxation. It is true that in rare instances there would be found in the rear of the store a little iron safe and that safe contained a few notes and mortgages which were invisible and probably were not fairly returned for taxation. But these intangibles were so small in proportion to tangible property that the ad

valorem system was accepted as reasonably satisfactory. However, from that day to this the proportion of these invisibles and intangibles has grown to an amazing degree; indeed they have grown to be from one-half to two-thirds of all the property of the State. The little iron safe in the back corner of an occasional store grew to a big safe in every store and then to a bank vault and now to great safety-deposit storage vaults covering basement floors of great office-buildings. In the meantime the people have required more and more of the State; the functions of government have been rapidly and steadily enlarged; the people have demanded that it enter almost every sociological field till there has arisen a cry against paternalism and not without reason. Millions and more millions have been exacted of the people for war, for pensions, for crime, for jails. for penitentiaries, for the insane, for the feeble-mindedso many millions that only a miserly fraction has been left for education, for highways, and for other uplifting and inspiring agencies of the State. And yet as the years have gone by and functions of government have increased, the necessary additional taxes to meet these mounting millions have been levied upon real estate and other tangible property while tax-receivers and sheriffs have failed to find the intangibles. So they have added and continued to add to the burden of the tangible property owner till the end has come; the limit has been reached. If you add another dollar to the taxes on real estate you will confiscate that real estate; you will sell the homes of law abiding citizens who have been paying practically all of the taxes in the past while the owners of notes, mortgages and other intangibles flourish with their hidden wealth exempted from taxation by our worn-out tax laws.
Having studied together the history of taxation and, I trust, fairly demonstrated that our present laws have utterly broken down, let us next consider the history of the efforts to relieve the over-burdened owners of real estate and other tangibles.
THE HISTORY OF EFFORTS FOR TAX REFORMS
For twenty years, as conditions have grown more and more unbearable, conscientious governors and patriotic legislators
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have persisted in efforts to right these wrongs; for these twenty years every angle of the question has been studied. We have had available the experiences of other states. Legislatures have given it extended consideration in sessions both regular and extraordinary. We have had our budget and investigating commissions, our tax commissions. our state survey commissions. They were made up from our brainiest minds, our safest and sanest business men and our successful farmers. Not once has the charge of playing politics been lodged against a member of these commissions. They have traveled over the State on their own expense; they have had first-hand conferences with the people of all classes. They have personally inspected and surveyed the needs of every state institution. Their conclusiom are recorded in reports :filed and preserved in the archives of the State available to any citizen.
And what have been the results of all these studies? All of these commissions have unanimously reached the following conclusions:
l. That the present ad valorem tax system, placing practically all the burdens of taxation on tangible property, has absolutely broken down in Georgia as in every other state.
2. That intangible property has grown to be one-half or more of all property and is now practically escaping taxation.
3. That the unequal and unjust proportion of expense of government borne by tangible property has reached the limit and any additional levies must be placed upon intangible properties.
4. That the people seem unable to understand that the real burden is not state tax. but county, city and special taxes, the former averaging only one-seventh of the whole.
5. That, in spite of wild and wanton charges of waste even assuming that certain economies may yet be practiced, the State government is still economically administered, being only onehalf that of Virginia, and less than any state in the South save two.
6. That Georgia spends less on education per inhabitant
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than any of the southern states.
7. That Georgia invests less in public school property and college plants and appropriates less for maintenance of her colleges than any other southern state.
8. That, as the survey commission reports the plant of the State University, the oldest in the Union, is "out of date," with a "lack of even the most ordinary living conveniences, not to mention average comfort." Over 1,000 acres of campus and almost all of the plant was donated to the State. Not one penny has been appropriated by the State for buildings in the last twenty years.
9. That every other educational and eleemosynary institution is suffering from growing pains, showing vital need of enlarged plants and increased maintenance funds.
10. That the only means of supplying the necessary new funds is bringing to the taxbooks invisible and intangible properties now escaping taxation.
11. That the one controversial problem to be solved by the Legislature is that of the best method of reaching these intangibles.
That job you have now tackled and that job I confidently believe you will finish like brave men. If I may aid you in that task, in compliance with my obligation under the Constitution to assist and advise with you in your deliberations, I now say to yqu that my studies have satisfied me that the best if not the only plan to reach intangibles for taxation is a combination of ( 1) The Classification System and (2) The Income Tax System.
PLAN TO REACH INTANGIBLE PROPERTY.
Tax experts agree that a combination of two systems is most satisfactory. The Tax Commission of 1918 appointed by Governor Dorsey made up of non-partisan. non-political, highly intelligent and patriotic citizens reported as best suited to the peculiar needs of Georgia a combination of the Classification and Income System. I have been unable to find any better suggestion.
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1. The Classification Tax System. This is no new thing. It was in effect in England when America was founded and was brought over by our Colonial Fathers. As its name implies, it recognizes that as properties differ in income producing character they should be class~fied and different rates fixed accordingly. So a hundred years ago our fathers fixed a much lower rate of taxes per acre on forest lands which bear a crop, say, every twenty years, than on cultivated lands which bear from one to three crops a year. So wild lands and pasture lands should bear a smaller rate than improved lands. An illustration of greater present interest, since we are dealing with intangibles, is its application in that field. As already indicated, over onehalf of the property in the State is intangible. Practically none of it is taxed. The explanation is simple. The income from intangibles, notes, mortgages, stocks, bonds, will average not
more than 7 % per annum. Under our present system they
are taxable at full value for State, County, City, School and
Special Taxes averaging not less than 3 : %, or a tax of 50%
of the income. This is so manifestly unfair, being in effect confiscatory, that by common consent we simply do not return intangibles for taxation. If the present laws should be enforced own~rs of intangibles would either sell them or move out of the State. The common sense course is to place a fair rate, say
of 1% on intangibles and then place such machinery in
motion as would invalidate these intangibles if taxes are not paid, or otherwise force them upon the tax books. This system will repeal the present uniform tax laws and well it may for the only real uniformity about our present system is the uniformity with which all men owning invisible property succeed in escaping taxation. It is true that this system will furnish a fine field for the demagogue as he can quite forcefully engender prejudice by pointing out a higher rate on one class of property and a lower on another. The complete answer is that we are now getting no taxes on intangibles and any sum we may raise in the future at whatever rate will be just that much of relief off the shoulders of the tax payers. The effect of the Classification Tax, as successfully tested in Maryland, Kentucky and other states, would be to raise around one-half million dollars from citizens and property heretofore escapmg
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taxation entirely. This in turn means that the owners of real estate and tangible property will be relieved of burdens of whatever sum may be raised from intangibles. This General Assembly will be asked only to submit a Constitutional Amendment permitting the people to say whether they will approve the new system. Since the people in the overwhelming endorsement of this administration have decreed that the antiquated uniform system must be reformed, it is difficult to see how any member can object to allowing the people a vote on the question.
If the Classification Tax is incorporated in our laws its friends concede that it will realize probably one-half million, certainly not more than one million dollars, even if carefully enforced. The history of new tax laws in Georgia is a suc-
cession of litigation, delay, default and d(1fiance. In my judg-
ment, new monies actually collected would no more than provide funds to cover projects to which the state is already committed with no provision for an educational equalization or building program or a constructive highway program. Thoroughly convinced that patriotic citizens in large majority not only wish but demand constructive educational and hig~way progress, I know of no better method of raising additional necessary funds than the
2. Net Income Tax. Little argument has been adduced against the justice of this system. Many even of those who will pay the largest additional taxes openly assert that it is the fairest tax on earth, placing the burden upon those most able to pay it, viz.: those who for the current year are blessed with large net profits while relieving those not so fortunate. Against the tax are urged, by a small minority, four points worthy of notice:
( 1) The danger of constantly increasing rates or surtaxes.
I favor a limitation in the Constitution to a maximum of 5 %
and any other safeguard against undue increases or other unsound or unfair provisions.
(2) The inquisitorial method of enforcement by the Federal Government. The Legislature in prescribing necessary regulations can be trusted to see that our own people are fairly and courteously treated.
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(3) Cost of Administration. If the Assembly sees fit it can provide that the tax payer shall simply swear to an exact copy of his return to the Federal Government and provide that he shall pay to the State a certain proportion of the amount fixed for Federal taxes. The State would thus get the benefit of the inspection, the checking and every other method of enforcement by the Federal authorities with minimum expense to the State. South Carolina has found this plan satisfactory.
( 4) Keeping Out New Industries. Much will be heard on this score. Let it be remembered that the greatest manufacturing state in the Union, Massachusetts, has had an income tax for over a hundred years. Such industries as have left the North to come South have largely located in North Carolina, a state which also has had an income tax. The Federal Government made a material reduction in its income tax this year
and wifl make another next year. If the State should fix its
rate at a figure equal only to these reductions, it would raise funds amply sufficient to meet our needs. What industry demands is not so much low taxes as stabilized taxes; it prefers a settled unfavorable system to an unsettled favorable system. Certainly those most interested in the betterment of industrial conditions as well as those who appreciate the need of an increased income for the State should be most active m securing early and final settlement of the tax questions.
Having discussed the history of taxation, the history of efforts to reform the tax laws, and having given you my plan to obtain relief. let us see if there is any real
NECESSITY FOR TAX REFORMS
If we do not need any new money we should still pass these reform laws to equalize the burdens by distributing them among all classes: we should still take measures to tax the in tangibles and reduce the ad valorem tax on the tangibles since equality is the basis of fair taxation. But must we raise additional monies 7 What is the real condition of affairs in Georgia today?
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I discussed at great length in my inaugural address our obligations to the under-privileged boys and girls who live outside the incorporated towns and cities. Public conscience has at last been aroused to the fact that it is unmoral and unfair to penalize a child by depriving it of practically every educational advantage because it happens to be born in a remote section. Enlightened thought now demands that we equalize the advantages or lack of advantages heretofore offered such remote sections by supplementing on a fifty-fifty basis such local taxes as the limited taxable values will stand through a part of the common school fund to be known as the Equalization Fund and I propose that a minimum of One Million Dollars annually of new monies be levied upon intangibles for this purpose.
The development of the agricultural resources of the State is now. and will be in the future, of prime importance to progress. We must train our youth to lower the cost and increase the production through our Agricultural Institutions, while we train our boys at the Technological School to develop the other natural resources of the State to provide the funds necessary to maintain a greater State. I propose one half million dollars annually additional investment in this field.
If we establish the consolidated school system in the counties which I deliberately say is the hope of the State and which under God I believe we will establish, we will be wasting millions if we do not furnish these schools with trained competent and consecrated teachers. It is a crime to penalize helpless youth by placing them under a seventh or eighth grade teacher. I assert without fear of successful contradiction that there can be found in all he world no more economical, no more consecrated, no more worthy service than that now being rendered by the Normal Schools at Milledgeville, at Athens and at Valdosta. Let us, once for all, forever crystallize the thought that we are not spending money on these great institutions, we are investing money; investing money not only in the hearts and lives of these students but in the hearts and lives of the millions of boys and girls whom they are to reach later as teachers in the common schools of the State. And since this is a day for plain speaking. I want to say as Governor of this State that it is a
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shame, nay, is nothing less than a disgrace to the imperial State of Georgia, that men like Dr. Parks and Dr. Pound and Dr. Powell have to spend the summers climbing up this Capitol Hill, wearing out their physical strength already depleted by overconscientious effort in their college work, on salaries less than those paid deputy sheriffs or professional base-ball players in Atlanta, humiliating themselves begging for a miserly pittance on which to train teachers to teach your children and mine, and persuading legislators to realize the folly of spending millions on criminals and insane and thousands on education, rather than millions on education and thousands on decreased crime and insanity. One third of all the teachers resign each year; onethird of all the teachers are under the eleventh grade. To properly train competent teachers for our schools we need three times the buildings, three times the equipment and three times the maintenance now furnished our Normal Schools. Let us forever forget the thought of any expenditure for such purpose and talk only of how much money we can_ invest in the hearts and minds and souls of the children of Georgia. These Normal Schools should have a minimum maintenance fund of a half million dollars annually.
For a hundred years the State appropriated nothing to the maintenance of the University. While for twenty years our neighboring states have appropriated millions for building university plants equipped for modern needs, Georgia has appropriated not one cent! Every dollar appropriated by the State for 130 years for buildings, for equipment and for maintenance, for 130 years I say, totals less than is appropriated annually by each of the several of the new Western states for maintenance of their universities alone: The consequence is that the present physical condition of the University is disgraceful as is apparent to even the most casual observer whether measured by the equipment of other State Universities or by the actual needs to provide efficient service. Over three hundred girls now attend the University without a single dormitory, being scattered all over the city. The recent report of the Board of Visitors, selected from the State at large without any reference to personal interest in the Universiy, says:
"We desire to commend unreservedly the character of work
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that is being done by the various departments under present conditions. On every hand we find evidence of careful management and of thorough and competent instruction. We are glad to report that apparently every precaution is taken to safeguard the physical, moral and spiritual welfare of the university student. There is evident a marked improvement in the morale of the student body. We commend the recent Pastors' and Parents' day as worthy of being continued.
"However, we find that many departments are overcrowded with students, that the student body is constantly increasing, that the present teaching force is inadequate to give proper instruction to the large number of students enrolled, that the equipment is for the most part insufficient and that in a number of cases the quarters assigned to various departments are entirely too limited. It is quite possible, if not probable, that our state university will soon lose its standing as a class A college unless prompt relief is given . It is unthinkable that loyal Georgians should permit an institution which ought to be the pride of the state to meet with such a fate. In our opinion, a crisis has been reached. The time has come when Georgia can no longer .afford to starve its educational institutions.
The State Survey Committee of which Hon. C. Murphy Candler was Chairman, selected as a non-partisan, non-political committee to make a survey of the needs of the State's institutions, without reference to any personal interest in any of them, reported on the higher educational institutions as follows:
"Your Committee has given very careful consideration to , the needs of the higher ranking educational institutions of the State. that is: the University proper, at Athens; the College of Agriculture; the School of Technology; the State Normal School; the College for Women at Milledgeville; the Woman's College at Valdosta, and the Medical Department of the University at Augusta.
"In our opinion the State has never adequately equipped or maintained one of these institutions. They have all had to pinch and economize and appeal for outside help in order to
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meet, even partially, the demands of a large portion of the youth of the State for higher educational opportunity in State institutions. Georgia has some outstanding non-State institutions, ranking with the best in the South; these are filled to their capacities, but they cannot meet the State's needs. The State has very properly relieved them of the burden of taxation on their school properties and Endowment Funds and this is about as far as it can constitutionally go, so that the large body of youth seeking college education in other than denominational or private institutions must look to the State or attend institutions outside the State."
The University at Athens 1s, i}S already stated, the oldest State University in the United States. One of its dormitories in use today was erected in 1806 and a second in 1823. The present chapel was erected in 1831. Any one who will go through them will be impressed with their lack of even the most ordinary living conveniences, not to mention average comfort. Other buildings upon the campus are only a little less antiquated and lacking in adaptability to their uses. Every modern structure on the campus, and they are few, has been financed and built and donated to the State by friends and Alurpni of the University. The original campus was donated to the State by Governor Milledge and every acre since added thereto has been purchased and donated by the Alumni until now it embraces over one thousands acres, not one of which was purchased by the State. The State has not appropriated a penny to the erection of any building for this institution in over twenty years. Less than ten per cent of the value of the present plant has been contributed by the State and yet this is the State's University. The buildings on the campus because of their age and lack of proper repairs and maintenance, are probably less suited for their present uses than are those of any of the branches of the University above mentioned. Those other institutions, however, are in pressing need of additional buildings.
"If the University proper, the College of Agriculture, the School of Technology, and the Normal School and the Colleges for Women are to continue to rank with like institutions in
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neighboring states; if they are to do work that will entitle their diplomas to recognition beyond the borders of the State, Georgia must provide adequate plants, equipment and maintenance, or else as our forefathers declared in 17 84, we will be forced "to humiliating acknowledgment of the ignorance or inferiority of our own.' "
I propose a bond issue of from ten to fifteen million dollars for buildings and equipment, as a foundation for a fifty-fifty equalization fund, for consolidated schools in the remote sections of the counties, and for buildings and equipment for our higher educational institutions which will place them on a par in physical plant and facilities to train our boys and girls with those of our sister states.
At the University is a plant which cost over a million dollars including over one thousand acres in and near the center of the city. The State has appropriated on that plant $180,000 while all the rest has been given to the State. The same is true at Georgia Tech and at the Milledgeville College. The Tech plant is valued at nearly two millions of dollars yet less than two hundred thousand has been appropriated by the State. The Milledgeville College plant is worth over a million with less than two hundred thousand from the State and yet the boys at Georgia Tech have had no religious services, no chapel exercises for years because no adequate chapel has been supplied. Their graduation exercises must be held out of doors and frequently are interrupted by rains. At Milledgeville the chapel holds only the students-not one of the parents of the graduates can see their daughters graduate because of a lack of chapel room. At Tech last year two hundred and fifty ambitious, Anglo-Saxon, Georgia boys, too poor to pay their way through college were turned away even from the Co-operative department which is equipped for such boys to work a month and study a month-because of lack of dormitory and laboratory and class room and equipment. Two-thirds of the sickness of the State, causing an economic loss of millions annually, could be prevented if ample provision could be made for the State Health Department. Out at the Training School for Delinquent Girls is the spectacle of a well-constructed build-

ing vacant for the want of a few thousand dollars for maintenance. The Courts and Special Agencies are begging for admission of such girls there and of wayward boys at the Training School for Delinquent Boys at Milledgeville which is in practically the same condition. At Gracewood School for the feeble-minded children I saw twenty girls sleeping in one small dormitory room with their little beds jammed so tight that one could not get in between them to make them up. There was not a particle of adornment on the walls of the rooms save a small fragment of glass improvised for the use as a mirror and no provision for their comfort save one old broken-down rocking chair with broken arms while the only piece of play-ground equipment for their amusement was one old, frazzled rope swing. I am told that only slightly better conditions exist in the dormitory for our unfortunate deaf children at Cave Springs.
These eleemosynary institutions and secondary schools actually need one-half million dollars additional with annual maintenance.
And yet with a record of illiteracy that is humiliating, conditions all but disgraceful in practically every uplifting and inspiring institution of this imperial State-this State imperial in territory, this State imperial in natural resources, in the fertility of her soil and the variety of climatic conditions, this State imperial in the character and the ability of her citizenrywith all this, every year for twenty years when patriotic Georgians, have come here to plead that such disgraceful conditions be bettered, that humane treatment be accorded the wards of the State, that the one-half of the underprivileged boys and girls in the country be given a fair chance in fife, and suggesting that the necessary new funds be raised by forcing the owners of in tangible and invisible property to. pay a just share of the expenses of government; with all this, professional opponents of reform and misguided though honest men come here to say that conditions are well enough. They have been perfectly willing for Georgia to stand still or lag behind while Empires are being builded to the North of us and to the South of us.
I trust, therefore, that we may all agree that the tax question should be settled, right now, in this session. Heartened

by the sincere assurance of your presiding officers and the evident determination of the members to serve the people by buckling down to enact constructive legislation I feel that it is unnecessary to dwell further upon an appeal that tax reforms be no longer delayed. Industries prefer a stable unfavorable tax system to an unsettled favorable system. Our State will never prosper as it should so long as there is unrest and bitterness over this matter. The common people are not in a frame of mind and will not be to enter upon a great educational and highway program even if the means were available so long as they believe and have good ground to believe that practically all of the burdens are being borne by one-half of the people while the other half are practically escaping taxation. We have fifty days yet available in which to finish the job. So my first proposition is that we settle this question promptly at this session.
We have all the data, all the information we may need. We have available the experience of other states. At the last convention of Governors I found that practically every
state which had the income tax was pleased with it and prac-
tically every state which did not have it was endeavoring to
secure it. In Georgia we have studied the question for twenty
years; during my first administration we gave especial and almost exclusive study to it in both regular and extraordinary sessions, the latter called for that purpose only.
For the benefit of the large number of new members in the Assembly who are not so familiar with tax legislation, I feel that I should add that this history of taxation and efforts toward reform would not be complete without reference to specious arguments which have always been and doubtless will now be urged against any measure of relief. For these same twenty years, as inequalities in taxation have grown worse and worse, tax payers' leagues and representatives of special interests have appeared with arguments which have confused the minds of over-careful members into doing nothing while the people continued to suffer, absolutely blocking all reform legislation. In the meantime these expert blockers have never made a single constructive suggestion which would relieve the suffering, prop-
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erly distribute the burden, or make any contribution to the material development of the State.
These special interests always work in conjunction with good men who are confused or are misled into seeing dangers which do not exist or into advoctaing other measures-the effect of which, however pure the motive or patriotic the purpose, is to defeat all relief. I realize that while I speak there are those in this body and outside this body, good men and true, who on principle and in good faith, do not agree with some of the views here expressed. For their honest views I have of course, the highest respect. I come to appeal to all of these to approach the solution of these problems in a constructive spirit of "give and take," looking to the adjustment of differences of opinion so that we may not longer withhold relief from our suffering people. Permit me to warn again the newer members of this body who are not familiar with the operations of the professional outside tax reform blockers. Some of these engage in such work on a salary for a living. Some act from pride of authorship of other tax measures, some act because real reform will result in reaching some of their hidden wealth. Most of them are men who have enjoyed all the privileges and protection of government, whose wealth has been accumulated largely by enhancement of values through civic growth and improvements to which they have contributed little-men over-privileged and over-fortunate who have no feeling for the under-privileged child; men who have little idea how the other half, the under-privileged half, live; men who hold College diplomas and whose sons hold College diplomas but who have no sympathy for the poor boys who would find the doors of the Colleges barred for lack of room if they could knock for entrance. If such men come before you deploring agitation for additional state taxes remember that state taxes are just a small fraction averaging only one-seventh of all taxes. If they raise the "man of straw" of the income tax driving away industry, ask them what is the greatest industrial state in the Union? It is Massachusetts, and Massachusetts has had an income tax for over a hundred years. New York collects hundreds of millions annually in income taxes without complaint from business or industry. Ask them if an income tax will
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keep industry out, why those which have come South have not located in Georgia which has no income tax but haue located in North Carolina which has an income tax? If they say that the Constitutional Amendment in Florida prohibiting inheritance and income tax has brought millions of people to that stateand I understand that that argument has influenced some of your good members-ask them in all fairness if it is not a fact that this amendment was passed only a few months ago while the current of people going to Florida started long before that amendment was ever proposed. Ask them if, on the contrary, it is not true that people have gone to Florida to invest their money in real estate while the taxes on real estate in that state are over twice as high as in Georgia.
It may be true that a few owners of intangible property have established their citizenship in Florida to escape income or inheritance taxes. If so we have lost nothing as they have paid no such tax in Georgia. While I would welcome any man who might come here to escape a confiscatory tax, that man who seeks to escape a fair tax on his hidden wealth while he sends his children to state schools and enjoys the protection of state courts and other blessings of government which add to the burdens of tangible property owner, is not a good citizen and his coming will add little if anything to the civic character of the state-it will not contribute toward the ideals of good citizenship, upon which moral foundation the ultimate wealth . of any state must finally rest. The spiritual state towers about and above the physical state and the two must advance in proportionate ratio if the structure is to remain. We must take care, gentlemen of the Assembly, that we do not teach our sons and daughters to place a premium upon wealth and at the same time a discount upon the moral obligation of civic brotherhood at any price. "The majesty of the State must find and kindle a Spiritual majesty in the soul of every citizen, or the State itself will rest on the shifting sands of personal desires, personal profits and personal ends and when on such a house the rain descends and the floods come and the winds blow and beat upon it, that house will fall and great will be the fall thereof."
Two years ago we were stirred to envy by the industrial
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progress of North Carolina. Industry went there in spite of an income tax. People went there because of its progress as manifested in a great educational program and a great highway program. Today we are stirred to envy by the real estate progress of Florida. People are going there in spite of an 11 mill tax on real estate. The eyes of the world are centered on the South. People are coming through Georgia by the million. Wealth has gone to Florida and men have gone to Florida because Floridians have opened their natural playground to pleasure-seeking people through the inestimable service of good roads. I challenge you to open North Georgia's wonderful scenic beauty to the world by good roads and it will become the summer playground for all people to the South of us. Give us a fair tax on intangibles that will finance a great educational program and a great highway program which will arrest the attention of tourists as they pass until they awake to the superior advantages of our wonderful State. Enthusiasm will be aroused in our people and Georgia will prosper as North Carolina and Florida have done. I weigh my words when I say that in my judgment the 75 million dollars invested in a modern highway system in North Carolina has been worth 75 millions in advertising the state in the outside world, has increased values more than the cost and has been a fine investment if the highway system had not been worth a cent in intrinsic value to the people of the state. It will be worse than a calamity, it will be a crime if we even hesitate to go forward'-----Certainly if we allow petty politics or personal interests to defeat this progressive program and thus doom Georgia to a place as a second-rate State.
I trust that I have now fairly demonstrated that this state has urgent need of an increased income of not less than three million dollars annually; that this sum would be no undue burden upon the intangible property of the State. Tangibles are paying around nine millions in taxes. Can it be said that three millions levied upon an equal value in intangibles is confiscatory or unfair or unjust? Six millions would be its full share. If one half of the property of the state-tangible property-is paying nine millions of taxes can any one fairly say that the other half of the property-intangible property-
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should not pay at least three millions? Would it drive any patriotic citizen away from Georgia, would it keep any legitimately managed industry out of Georgia to ask one-half of the property now escaping taxation entirely-the notes, the mortgages, the bonds, the stocks, the property owned in large measure by people of wealth who are able to pay their full share of taxes, whose incomes justify and good morals demand the payment of that full share-to pay these three millions which would approximate only one-fourth of the expenses of the State?
How will we raise the three millions from intangibles? I propose that we raise it by a combination of first-The Classification of Tax and second-The Income Tax. I apprehend that there will be little opposition to the Classification Tax. If from principle or from prejudice against the method of administration of the Federal System or for any other reason you are opposed to the income tax, then will you not admit that it is incumbent on you to suggest some other better substitute method to reach these intangibles in the amount of the three millions? So far as I am concerned with all the influence of the Executive I pledge you my aid in securing the adoption of any conservative substitute plan which any opponent of the Income Tax Plan will suggest if the Comptroller General and the State Auditor will certify that in their opinion the substitute plan will actually cover into the State Treasury Three Million Dollars annually of new taxes upon the invisible and intangible property.
In the face of such a proposition, do you not think it
equally fair that if no such substitute plan is suggested it is proof sufficient that no better or fairer plan is known? You should join me in a constructive spirit in framing the Classification Amendment and the Income Tax Amendment throwing about it in the Constitution itself such limitations and safeguards as will protect all the interests of all the people of the State.
I trust, indeed I sincerely believe, that after mature deliberations the vast majority of you will agree that my suggestions are reasonable and fair.
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Though it involve a number of personal pronouns, which I trust you will pardon, I feel that you are entitled to know that for three years, since the day I was nominated I have taken every possible opportunity to make every possible appeal to the business men of this State to aid me and the legislature in a constructive spirit to work out a sane and a safe and conservative tax system for Georgia. I have told them plainly that every hope of a great state was a challenge to enact a tax system which would reach the intangibles; that the best system I could suggest was a combination of the Classification and Income Taxes. I have implored them to co-operate with me in a constructive spirit to work out a better and safer plan if there were in fact any danger or any injustice in the plan I suggested. Now after three years of such persistent entreaty I earnestly submit that you should give very little if any heed to the critic of the other man's plan if that critic has no better plan of his own to submit.
There is yet time, if thoughtful business men care to make real constructive contributions to the solution of the problem. Again and finally I sound the call to patriotic Georgians to suggest and help us to adopt a better plan to reach intangibles than the Classilfication plan plus the Income Tax plan. If such a plan is suggested within a reasonable time and you believe it feasible, adopt it and I will take great pleasure in approving it. If no such plan is brought to your attention, in the name of the under-privileged boys and girls of Georgia, born and to be born, in the name of a greater state, I here call upon all of you, advocates and opponents of the plan here submitted, to compose your differences, agree upon proper limitations and safeguards, and then in the statesmanlike spirit of "give and take," enact such a law.
I commend as the highest type of statesmanship the spirit of the declaration of an honored member of your body, a new member whose family name has always stood for integrity of character and conservatism in thought, who after my inaugural address said to me "I am with you cordially in threefourths of your program and I will be with you in the other fourth unless some better suggestion is made."
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I could say more but I must not detain you longer. I have spoken in very plain language today. I have not hesitated to lay bare our weaknesses. One-half the battle against disease is a proper diagnosis of the case. If our loved one is ill we want the full truth and nothing but the truth so that we can prepare to combat the dangers. I have sought to tell you the full truth as to Georgia's needs today so that we may face this serious crisis in her history squarely and fight for her future as only Southern men can fight for their State. Having diagnosed the case it is now up to you to provide the remedy, it is up to you to place and preserve Georgia in that high position which she should now hold and forever maintain. Wisdom. justifies this effort; Justice demands it; and in, Moderation of expense, through equal distribution of burdens, it can be done.
CLIFFORD WALKER.
July 7, 1925.
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