have thought that a plan whereby such children would be made the lawful issue of the father for the purpose of inheritance and the father prohibited from cutting them off by will or from property of which he shall have become seized during their minority, would not be out of harmony with the principles of justice. Of course, such a plan should also contain very effective safeguards against blackmail. That is a detail. The important thing is that something practical be done to protect the innocent in illegiti

macy.

CIVIL SERVICE REFORM.

Efficiency experts have been inquiring into the conditions and regulations surrounding State and municipal employees under the direction of a new Civil Service Commission established with a view to making progress in this important detail of the State's business. A report will be submitted to you dealing with the standardization of salaries, qualifications, hours of employment and rules for promotion in the service, and I urge that legislation be enacted conscientiously following the recommendations thus made in the interest of a merit system that will sturdily withstand all corrupting influences. The legislation should be broad enough to encourage efficiency in State service by providing an equal opportunity for all. As a means of meeting a very positive condition, the necessity for higher wages and salaries in order to meet the unusual cost of living must enter into this question, not as a part of our fixed relations between the State and its employees, but as a temporary expedient. I believe the solution lies in a percentage bonus, granted in the budget from year to year until the living crisis is over. In the meantime employees should be properly classified through the contemplated standardization plan.

FUNDAMENTAL CHANGE IN FINANCIAL POLICY.

Financial methods in the State business require the same constant attention that they receive in the sound private business. It is important that they be made to conform to those standards

which the lessons of experience teach. You know of the present prosperous condition of the Treasury. Despite large sums of money advanced to the Federal Government and also the continually increasing cost of operating all business establishments, private or public, the State Treasury showed a clear, net balance at the end of the fiscal year in October last of $2,458,591.28, which was $602,287.41 in excess of the balance over and above all obligations of $1,856,303.87 the year previous, and six hundred and fifty per cent. more than the public purse at the end of the next previous administration of 1913. Our income in November and December last, the first two months of the current year, shows an increase of one hundred per cent. over the same two months of 1916. We can boast of a larger free balance in the Treasury to-day than at any time within the history of the State. Many precautions are being taken, nevertheless, to conserve the public funds and to make the State's business a profitable business. Departmental heads and commissions, sitting frequently as a board of directors, exchange with the Executive helpful views looking to efficiency and good of the service. The State House Commission, meeting frequently, has already set in motion plans for strict economy in stationery, postage, telephone and telegraph charges and other common sources of neglect and waste in the State offices. Much progress has been made. Yet there must be no tempering of the vigilance. I feel very strongly the necessity for legislation providing that all revenue-earning departments, boards, commissions and institutions of the State, instead of applying this revenue to maintenance or other expenses, as now provided, shall turn the money into the State Treasury, where it will be checked out when and for such purposes only as appropriations authorized in the usual way may provide. My view is that this will be found a more economical, as, of course, it is a more businesslike, method.

TAXATION.

The question of taxation or rather its inequalities is becoming, as governmental costs ascend, more and more serious.

Money, of course, must be raised for these purposes, but careful research and inquiry should be made to equalize the burden. It is my conviction that every department of the State government should give careful thought to the possibility of making consistent and proper charges for services rendered to the public, that those especially benfited by State activities should pay for such service, and thus a State government would distribute the tax burden where it more properly belongs, instead of the hit-ormiss plan of too much general and property tax. This is the natural outcome of a business government, and is a subject I have already opened with various departments and is already well developed in the Department of Labor. I shall have more to suggest on this subject later.

CHANGING THE FISCAL YEAR.

As a proposition to bring about more intelligent State financing, I invite your attention to the suggestion that our fiscal year for the State be changed so that it will begin on July first rather than November first, as now. There are several reasons which strongly commend such a change. First the Executive and legislators could provide for a budget with better knowledge of conditions as they will exist during the time that the funds are needed, and therefore with far greater intelligence, if the money were to be expended at a period beginning within a short time. after the close of the average legislative session, rather than practically six months or a year hence. Secondly, some of the appropriations which the Administration is called upon to authorize are for the purpose of constructing new buildings in connection with State institutions, and manifestly it is almost impossible to judge a year in advance, not only of what the needs of institutions will be with reference to additional facilities, but also to judge the amount of money which will be required for building constructions; and consideration must be given to the fact that considerable time is necessary in order to prepare specifications and plans and arrange for actual building even after an appro

2 Sen Jour

priation is authorized. Again, with a fiscal year beginning July Ist, the anomaly of the legislators providing for the expenses of the State government during a period when they are not in charge of the government is, to a large extent, avoided. Such a fiscal year would run concurrently with the present school fiscal year and also with the Federal fiscal year. I respectfully recommend legislation to this end, and am discussing this and other financial changes in more detail in my message accompanying the budget.

EXTENDED HOME RULE AND LOCAL OPTION.

Last year the Legislature greatly extended the power of home rule in the municipalities of our State and thus relieved future legislatures of much detail labor. At the same time, as a result of providing this broader jurisdiction in law-making to municipalities, a mass of statutes thereby rendered useless were repealed. There should be further legislation along these identical lines this year. New Jersey municipalities are capable

of the fullest measure of home rule, and it is sheer waste of time and energy to oblige municipalities, which term includes counties as well, to apply to the Legislature every time it is desired to take action which the municipalities are entirely capable of taking on their own initiative and which is in harmony with constitutional principles. In addition, the home rule principle must be extended to the excise question in order that municipalities which are entrusted with self-government in other matters may also be entrusted with self-government in the matter of liquor licenses; and, following the Republican party's pledge to the people, I urge the passage of a four-square local option bill. It will be wise in this connection to give careful consideration to regulation in the matter of excise privileges as well. In this way, where a municipality votes under the home rule principle for excise, some further control could likewise be secured.

MUNICIPAL GOVERNMENT-CITY MANAGER PLAN.

Closely associated with home rule legislation is the subject of municipal government generally. New Jersey has a commission government act, and this has been adopted by a number of cities which have found the new form of government a vast improvement over the old councilmanic, or representative form. The only criticism I hear does not counsel going back to the old form, but rather extending the commission principle. For instance, it is contended, first, that the very small commission made necessary by the fact that individual members of the governing body act as heads of departments, gives the city often a smaller board than is necessary to secure representation of all of the elements of the city; and, secondly, that the commission plan providing no adequate executive, because of the fact that every commissioner is supreme in his own department, inter-departmental conflicts are likely to arise, especially over appropriations, the interests of the city as a whole often suffering because each department is pulling for itself. The remedy suggested in connection with this criticism is the so-called City Manager plan, whereby the commission itself, which in that case need not be limited to three or five members, instead of distributing its power among its own members for administrative purposes, acts only in a legislative capacity and controls administration through a single appointive executive-City Manager-who in turn controls the various departments of the city government. Of course, no such State-wide legislation would be necessary if home rule legislation were sufficiently flexible to permit cities to have the City Manager plan by special home rule charters, as in the case of California, Colorado and Arizona. However, I am here referring to the subject, not with any special recommendation, but merely with the idea that it may be found desirable for this matter to have our mutual attention. Laws permitting the adoption of the City Manager form are in operation now in Massachusetts, Virginia, Ohio, Kansas, Idaho, Montana, South Dakota and North Carolina. It is not a mere experiment in theory, and I am