Governor Mark O. Hatfield's Administration

Biennial Report, 1961


To Members of the Fifty-First Legislative Assembly:

It is the custom for you chief executive to come before the Legislature with an address of recommendations. In anticipations of this legislative session, several message have been prepared. One is the budget which was made available on December 1, 1960 and another is the series of recommendations for reorganization of the executive ranch issued on December 15. Yet neither provides a coordinated report of executive department action in the past two years.

You have available a wealth of information in the biennial reports of the departments but nowhere is there what might be termed “Some Notes on Stewardship” to which I believe you are entitled.

Such a report must necessarily be brief and can cover only highlights of the period from January 12, 1959 to January 9, 1961. Additional detailed may be found in the departmental reports. It is my hope you will find this compilation useful.



In my Inaugural Address to the Fiftieth Legislative Assembly, I said: “. . . . I would publicly recognize that choosing the right individual for the right job at the right time constitutes one of the most important functions of you Governor . . .” Even as these words were spoken, the first of more than 550 appointees was taking office. This number includes full-time state* or county public officers as well as members of boards and commissions who as laymen, contribute their time and wisdom to the making of public policy.

Among the appointments were those of Secretary of State Howell Appling, Jr. as my successor in that office; State Treasurer Howard Belton, who succeeded Sigfrid Unander when he was named to the Federal maritime Board; U. S. Senator Hall S. Lusk, who filled the unexpired term of the late Senator Richard L. Neuberger; associate Justice A. T. Goodwin of the State Supreme Court, who took the Lusk position on the high court. As the two-year period closed, you Governor had under consideration a successor to Superintendent of Public Instruction Rex Putnam, who resigned because of health.

In addition to state boards and commissions, there are county officers, district attorneys, judicial offices, the Port of Portland and many other appointments and governor is required to make many of which are usually though of a coming under this authority.

Coordinating the executive branch

One need only glance at the cart of state government organization as it now exists to realize that departments have been created through the years without a realistic appreciation of the need for coordination. A governor is literally swamped with demands for appointments --- an average of one for every work day of the biennium --- yet once the appointment is made the board, commission or department is most instance the stand aloof from a governor’s inquiry. Without statutory authority coordination has been achieved through informal meetings of set frequency. Sessions are held with one-fourth of the department heads each week until, in rotation, the Governor and each department executive have met in a month’s time.

These meetings make for a better understanding by the Governor of the department’s activity and to the department head is given an over-all view o sate government and its inter-relations.

Moreover, the full capacity of one member of the Governor's staff has been devoted to providing liaison with boards and commissions.

At the direction of the Fiftieth Legislative Assembly --- and because administrative necessity requires it --- a plan of executive branch reorganization was prepared. Although not suggested by the Legislature, it appeared prudent to seek the counsel of individuals with the widest possible base of experience in government and other executive responsibilities. Each of the 17 members of the advisory committee brought with him particular background qualifications which are readily apparent. They deserve you gratitude as well as mine for this high public service. their recommendations appear as an appendix to the report I have submitted to you.

I am grateful for the indications of support which have been given thus far to some of the general aspects of the reorganization proposals. The have been kept from taint of partisanship and I am sure you will wish to maintain an atmosphere of objectivity as you approach the subject in earnest.


Just as government functions best in relation to the caliber of people in government, so budgeting follows as crucial corollary of efficiency. The budget proposals before this assembly were made available 38 days prior to you convening. While you may find agency requests which exceed that which is budgeted you may be assured the best possible measuring sticks were used to determine the figures presented to you. In essence, I hope you choose to live within our income rather than launching expansions beyond our means which would re quire a new sources of revenue.

For the first time, a “Budget in Brief” is available to assist you in interpreting the budget to you constituents who would not require the extensive document you have under study.

Also this year, for the first time you have before you a six-year capital construction budget that lays out realistically the building needs of the next biennium and the four years beyond that. The making of this budget revealed many inadequacies in our planning processes. These are being corrected. It can be expected that the six-year program to be presented to the 1963 Legislature will be even more useful.

Capital construction has proceeded on schedule during these tow years except for a steel strike which halted work on the Labor and Industries building for nearly six months. The Correctional Institution began operations, Dammasch State Hospital construction will permit that institution to open this spring, conversion of Eastern Oregon State Tuberculosis Hospital, new facilities at institutions under the Board of Control dormitories, classrooms and other facilities for our institutions of higher education have been among the results of action during the past two years.

Administrative improvements.

IN the state Tax Commission some marvels of administration were achieved. A new tax reporting from was introduces which in itself resulted in savings of $200,000 and much greater convenience for the public. Better personnel utilization enabled the Commission to reduce its assigned positions by 90. Convenience to the taxpayer, simplification of effort, closer cooperation with county officials, continuance of the reappraisal program --- these are achievements of the Commission.

Considerable reorganization of the military Department was undertaken by the new adjutant general. The Portland armory office of the adjutant General was closed, 11 positions were eliminated in the Department office, $17,500 in budgeted general funds will be returned through a tighter policy in transportation control, 40 separate funds at the local armory level were eliminated and through tighter fiscal controls and amount exceeding $325,000 will be saved in this department alone.

Many improvement were realized in the Motor Vehicle Department, including a speedup of registration and licensing, initiation of renewal notices for automobile licenses, reduction of operation divisions from eight to six, integration of field offices with the Public Utilities Commissioner at considerable savings handling of a five per cent increase in business plus registration and titling of house trailers under new law with reduced personnel and saving of $9,000 annually were realized in mailing procedure change.

Traffic safety efforts embodied the three axions for improvement --- education, engineering and enforcement- but the results were hardly encouraging. You governor initiated some dramatic steps to call public attention to the human toll and perhaps some of these did result in fewer accidents that otherwise might have been experienced. Helicopter and observation patrols were put into service, extensive roadblocks were set up at certain holiday periods, and a stepped-up patrol car coverage with some unmarked vehicles filled out the program.

When the field of law enforcement, the phasing-in of the forty hour week in the State Police Department was accomplished with effectiveness thus putting these unclassified personnel on the same work schedule as the majority of other state employees. Improvements were made in the rigorous training program of the State Police, but inadequate pay remains as a deterrent to ideal recruitment.

In the Highway Department, a total of $62,800,000 worth of contracts was let in 1960, or $25.5 million more than the amount contracted in 1959. More that 11 million visitations were recorded in Oregon’s 175 state parks during 1960, and increase of six per cent over 1959. AN additional 614 acres were taken into the park system this past year. A survey by the Traffic Engineering Division indicates Oregon and its residents were hosts to more than Six million tourists during 1960, a gain of more than 400,000 over the previous year.

Our most recent State Fair was outstandingly successful from nearly every point of view. A greater number of our citizens participated in exhibiting and in other activities than in any previous Fair. Of particular note is the fact that participation by our youth significantly exceeded other years. A gratifying aspect was our financial success in 1960. A gain in assets of $1-7,432.69 exceeds any other year in the fair’s 95-year history. The cash profit of $64,143.78 is contrasted to a cash profit of $20,000 last year and a $53,000 loss experienced in 1958.

Historically, one of the reasons advanced for creating regulatory agencies was that cases were delayed too long when processing through the courts and that administrative agencies would be able to give prompt action. Few have done so. In the Public Utilities Commissioner’s office a major effort has been made in this direction. No longer do heads of operation division sit as examiners on cases while evidence is presented by their subordinates. Also, the number if employees at the Salem office has been decreased form 175 to 154 without decreasing services.

The activities of the Industrial Accident Commission have resulted in revitalized administration and have been characterized by greater service to employers and to employees. Two new commission members were appointed. The commissioners have carried their program to the local communities through a series of public meetings. Better relationship with employers, claimants, doctors and hospitals has been developed though the creation of area coordination programs. An administrative survey has been undertaken which promises even greater modernization of administration in the biennium ahead.

The 1959 Legislature abolished the Unemployment Compensation Commission and created a Department of Employment to be administered by a single Commissioner. The new agency became effective July 1, 1959. As anticipated, the reorganization has proved to be a substantial administrative improvement. The emphasis of the agency has been shifted from unemployment to employment, with concentration on job counseling and placement. The problems of farm placement have received particular attention with effort directed to avoiding the acute labor shortages during critical harvest periods that have occurred in the past. Mechanization of agriculture has been recognized through efforts to relocate workers. Areas requiring large numbers of seasonal workers have received special attention in improved utilization of local labor resources.

State licensing agencies affect the rights of many people. It is imperative that the procedures by which licenses are granted, denied, or revoked protect those rights. I have not hesitated to remind the licensing boards of their dual responsibility to safeguard both the rights of those they license and the general public.

Although progress has been made in the past two years in the area of personnel management there have been discouraging factors. On the positive side, we can point to more effective utilization of employees, and to improvements and strengthening of training programs designed to motivate individuals as well as to prepare them for greater responsibilities. On the negative side, our disadvantageous position on salaries has resulted in a number of costly losses of higher skilled personnel. It is difficult to evaluate the adverse effect these losses have on the competence of our state services. Certainly the circumstances demand action.

The Department of Finance and Administration has broadened its services to the Governor as well as to the other agencies of state government. The Department’s role in the development of reorganization plans, the six-year building program, the shuttle-bus service between Portland and Salem that reduces the number of state vehicles on the freeway, and the fact that the budget document was released on schedule are evidences of the increasing usefulness of this 10 year old agency.

Two years ago, the state had barely begun to utilize the advantages of electronic data processing. We had before us the report of a survey by a consulting firm urging that further use of this equipment be considered on a statewide basis. This be have done. WE have also given full consideration to the recommendations in the report. There is now a central inventory of equipment, central review of control of acquisition and plans for acquisition and use of this equipment.

Within higher education, the approval of the constitutional amendment lifting the limit on self-liquidation bonds for construction was of immense significance and you governor served as honorary chairman of the citizens’ committee. Dr. O. Meredith Wilson, president of the University of Oregon, resigned to become head of the University of Minnesota and dr. A. L. Strand, president of Oregon State College, announced his retirement from that office effective next fall. The Board of Higher Education responded to the suggestion of the Governor that meetings be held in a more easily accessible location and agreed to hold session more regularly on the campuses around the state.


Oregon’s most urgent need a biennium ago appeared to be for a new business climate and a new confidence for our economic future.

In an all-out effort to attract new payrolls to Oregon and provide a sound basis for expansion of existing industry, emphasis and direction has been given the Department of Planning and Development. A transcontinental sales task force, headed by your Governor and including 19 leaders in industry, kindled an interest in Oregon among the investors of the East and Midwest. A similar personal contact was established with the electronic industry at its annual meeting in San Francisco. During 1960 alone, a total of 93 new manufacturing plants and plant expansions were recorded, creating a total of 5,700 new jobs.

One of the most complicated and far-reaching real estate transactions was achieved on the old Boardman bombing range site which has been redesignated as the Space Age Industrial Park. Through the cooperation of the Congressional delegation, local government officials, the national administration and private citizens, there is now available approximately 100,000 acres to meet the requirements of the missile age. Just when a tenant or tenants might be obtained is speculative. But the fact is Oregon now possesses one of the few remaining, available sites which offers ideal conditions for an investment of this nature.

An important key to our economic growth is the role of research. Oregon’s participation in research activities has grown rapidly. Two of the outstanding examples of our significant participation were the Science Seminar conducted by the Department of Planning and Development and the announcement of the establishment of a primate research center.

In the former, Oregon’s leading scientists and technicians met with the Director of the National Aeronautics and Space Administration, the Directors of Research for the Army and Navy, and Assistant Director of Research for the Air Force and numerous representatives of leading industries engaged in scientific work. The dissemination of information from this meeting significantly accelerated Oregon’s interest in research and scientific production.

In the latter, the United States Public Health Service approved two grants totaling nearly $2,000,000 for the construction of the initial sections of a Regional Subhuman Primate Center in Portland. The center is associated with the University of Oregon medical School in basic medical research with particular emphasis on cardiovascular study.

The month of August, 1960, saw an all-time high in employment with a record figure of 734,100. by this and several other measurements, Oregon’s economy experienced inspiring growth during the two-year period covered by this report. In January of 1959, for instance, there were 619,900 employed, 58,800 unemployed --- in January of 1960 there were 639,500 employed, 47,600 unemployed. Other measurements during the time from January of 1959 to January of 1961 --- personal income, bank debits, retail sales, corporation receipts --- are heartening. As an example, Oregon ranked above the national average in personal income for the first time since 1953.

An advisory committee to the Industrial Accident Commission worked with vigor during a period of significant transition in that department. These able individuals have given valuable public service and I urge you to invite them to discuss with you any aspect of their responsibilities.

On three occasions in which both management and labor indicated a willingness to sit down together and discuss possible strike solutions in the Governor’s office a settlement was attained. I refer to the strike which tied up construction in 1959 and subsequent strikes affecting the cheesemakers and the Willamette Valley milk producers. Some 40 hours of presiding at the conference table were involved with one session concluding at 4 a.m.


The social services of our state are usually of paramount concern and in the past two years the have been provided with wisdom and effectiveness.

In the administration of the public welfare program, two steps are of especial significance. I refer to the initiation of work projects whereby recipients who are able-bodied are employed in public works. Begun in adopted by others with encouraging results. Public acceptance --- by those so employed and by the general citizenry --- has been without serious objection.

The migrant labor pilot education program conducted through the Department of Education, a, long with the interim committee report of two years ago, brings forcefully into focus one of the foremost social problems in our state. In other phases of the migratory labor program, the Executive Department effected the coordination of the three agencies --- Labor, Health and Agriculture --- through the agreement on goals and areas of responsibility to implement the action of the 1959 Legislature.

The Governor’s Committee on Children and Youth and the State Council on the Aging have been active since 1959. The Children and Youth Committee was represented at the Golden Anniversary White House Conference on Children and Youth held in Washington, March 22 to April 2, 1960. In addition, a Statewide Conference was held in Salem, November 4 and 5, 1960 which provided an opportunity for citizens to discuss protective and treatment services to children and youth.

Our Council on Aging also will be represented at a White House Conference early this year. Similarly, this group in the spring of 1960 sponsored a meeting where citizens from throughout our state met to discuss problems of senior citizens. The Council has been of real value in focusing public attention on pressing needs and in providing research data which point up those needs.

One of the most depressing statistics in 1959 was the waiting list for admission to Fairview Home. In January of 1959 the active waiting list was 378. Today this active waiting list has been reduced to 203. With the opening of Magruder Cottage this month and by filling 25 vacancies which have been created by transfers to other institutions this active waiting list will be only 78. Between now and July 1, 1961, this waiting list will increase by approximately 93 people. The last Legislature appropriated funds for one additional 115 bed unit which is now under construction. With the filling of this unit the waiting list will be reduced to approximately 56 individuals for immediate admission.

A Fairview Home Committee of Visitors was appointed and functioned during the biennium with effectiveness and was particularly helpful in the transition between the administrations of the late Dr. Irvin B. Hill. And Dr. James A. Pomeroy.


The forests, soils, wildlife and water we have inherited and will pass on to succeeding generations demand continued wise use and development.

The biennial report of the Committee on Natural Resources and the reports of the separate departments in this field admirable tell the story of progress and action during the past two years. In establishing the committee, the Legislature placed the Governor as chairman. This responsibility I have welcomed and I can report we have spent many hours in frank, detailed discussions, the minutes of which are available to you. The manner in which these representatives of a variety of agencies were able to place the over-all good of the State of Oregon at the forefront indicates to me we would be strengthened by combined action such as through a Department of Natural Resources.

The Committee did not dodge responsibilities. It has taken stands. One of these was a drafting of revisions for the Oregon Dunes National seashores Recreation Area bill before Congress. It is a matter of record that the most prominent sponsor of that legislation, the late Senator Neuberger, was kept fully informed of our point of view and expressed his attitude in these words in a letter dated January 27, 1960: “. . . I have very confidence that we shall be able to work together successfully for a bill establishing a national Park on the coast which will be in the interests of our state and the nation”

In other major activities the Committee on Natural Resources:

Cooperated with the National Outdoor Recreation Resource Review Commission and supplied local and regional data to assist that body in completion of its assigned role.

Provided assistance and coordinated efforts in the long-range sand dunes stabilization and erosions control program on the Oregon coast.

Recognized the continuing necessity for provision of adequate public assistance for recreation purposes to public lands in Oregon, by forming an Access Advisory Committee to assist with the problem.

Encouraged a broadened program of public information in the general field of outdoor recreation through a conference on “Good Outdoor Manners.”

Coordinated activities in connection with carious annual conservation observances such as “Red Hat Days,” “Conservation Week,” and “Soil Stewardship Week.”

Submitted information on Oregon’s water resources problems to a Committee of the Congress investigation this phase of national resource management.

Recommended measures to increase federal assistance to local communities for construction of sewage treatment facilities to reduce water pollution.

Supported the “Control Use Act” for the national forests; and a bill to designate the Salmon River of Idaho as a fish sanctuary pending the solution of fish passage problems.

Called for a northwest Governors’ meeting on conservation of the Columbia River salmon resource.

On a number of occasions during the past year, the State Land Board has been presented with proposals which could ultimately mean much in terms of jobs, economic growth, year-round industry, and a sounder fiscal basis. Although a letter of advice from the Attorney General filed some seven years ago clearly counseled the Land Board it could proceed in several of these negotiations, it was determined that a more formal opinion should be sought. The net result is a stalemate until such time as you give further indication of legislative direction. The matter merits you full attention.

The brucellosis (Bang’s) disease control program achieved a modified certified status in July of 1959, costs are cut through blood testing chiefly on a market slaughter basis and an intensified calf convention program is underway. The meat inspection program is among the best such state services in the nation. The long-standing dissension within livestock and veterinary ranks has apparently been resolved. As authorized by the 1959 Legislature, the Department is reorganized with an aim to bring to Oregon consumers expanded protection by closer attention to food sanitation, truth in advertising, honest weights, deceptive packaging and harmful spray residues.

The protection and administration of approximately one-half of Oregon’s 30 million acres of forest lands is the responsibility of the State Forester and the Board. Holding burned acreages to a surprisingly low figure in view of extremely dry weather of past two seasons, addition of the Klamath Agency district, attainment of the half-way point in the rehabilitation of the 250,000 acres of state lands within the Tillamook burn, increased revenue from state timber sales ($5,582,146.15 up to December 12, 1960), and expansion of the tree nursery and farm forestry programs, are manifestations of departmental activity.


In our federal system, state government must maintain effective relations with national and local governments and in its own economic interest must develop international contacts as well.

The state’s centennial celebration is a subject of the report of the Centennial Commission. In addition to the central program on the grounds in Portland it is important that any evaluation recognize the significance of the individual community efforts throughout the state. Also, the International Trade Fair brought new stimulus to Oregon in many ways.

Oregon was visited by many people from other countries during the year as tourists, as students, as officials studying particular segments of our government. We participated in welcoming to Oregon the King and Queen of Nepal, the Crown Prince and Princess and Prime Minister of Japan, several ambassadors, and many other representatives of other nations. IN addition, a long list of officials of our own federal government, in all three of its branches, visited Oregon during the biennium.

IN liaison with federal departments and the Congress there has been much activity. Meetings with individual members of Oregon’s delegation in Congress have been productive. Testimony before regulatory agencies resulted in some decisions in which Oregon realized gains. A personal appeal to the President on funds for Green Peter dam, and Yaquina Bay project, port development, and a number of other matters were helpful in conjunction with support from many sources. There were disappointments such as the loss of the regional post office without justifying evidence. On the whole relations both with a delegation, a majority of which is of a party opposite to the Governor’s and with federal agencies have been harmonious.

During the past tow years there has been continued negotiation with the other six states in the Columbia River Basin Compact which represents the maximum degree of agreement possible at present. While am ore comprehensive program, such as that envisioned in the regional corporation concept, would be desirable, we have dept open the door of interstate cooperation.

The Port of Portland and the City of Portland’s Commission on Public Docks --- one appointed by the governor one by the Mayor of Portland --- operate in a jurisdiction essential to our economic p progress. As a first step toward brining about closer cooperation between the two agencies, all named to the Port of Portland the then Chairman of the Dock Commission. The opportunities for the development of the Columbia River require more than closer state-city action. Under study is a proposal for an Oregon-Washington compact along the lines of the New York Port Authority.

One of Oregon’s most tragic disasters occurred on the night of August 7, 1959, when a truck exploded in downtown Roseburg claiming 14 lives and causing approximately $12,000,000 property damage. The community demonstrated unusual courage and calm in facing this catastrophe. Order was maintained and property protected thorough the alert action of the State Police, and units of the Oregon National Guard as agencies, including such state organizations as the National Guard, the State Police, the Public Utilities Commissioner, Insurance Commissioner, Highway Commission, and Civil Defense Agency cooperated very effectively as they demonstrated the ability of the state and local agencies to meet the test of crisis.

Your Governor experienced the privilege of election to membership on the nine-man executive committee of the National Governors’ Conference in June. In addition, I have taken the chairmanship of the Western Governors’ Conference committee on economic development of the West.

As the two-year period covered by this report came to a close, it became possible for Mrs. Hatfield and me to accept the invitation of the governments of Brazil and Argentina to spend some two weeks in those countries. There can be no doubt that the people-to-people program President Eisenhower envisioned can do much to develop further good will among the formal functions and made our way independently to schools, hospitals, and homes of modest income it because increasingly apparent that such exchanges must go beyond the well planned itinerary and the scheduled tour. I have said previously we in this country must arrange for our guests to “get off the Manhattan-Hollywood axis and out to the crossroads of America for a true idea of what we are like.” And so it is in visiting other countries.

In the 20 months since you adjourned, three former Oregon chief executives and a United States Senator have died: Oswald West, A. W. Norblad, Douglas McKay and Richard L. Neuberger. I note the passing of these four statesmen as a solemn reminder of their careers and the purposes for which we are met in efforts to be worthy of our heritage.

Respectfully Submitted,

Mark O. Hatfield

State Archives • 800 Summer St. NE • Salem, OR 97310

Phone: 503-373-0701 • Fax: 503-378-4118 • reference.archives@state.or.us