Governor Mark O. Hatfield's Administration

Biennial Report, 1965


To Members of the Fifty-third Legislative Assembly:

On two previous occasions, as part of the Legislative Message document, I have made available a brief report of Executive Branch agency accomplishments. The following is in no sense a detailed accounting, and additional information may be found in biennial reports of the agencies concerned.

Because of printing deadlines most of the following was prepared prior to the Christmas, 1964, flood disaster.



With recently announced appointments, I have during the past six years named 100 individuals to judiciary and district attorney positions, including 26 Circuit Court judges, one Supreme Court Justice, two Tax Court judges, 14 district judges, six county judges, 34 justices of the peace and 17 district attorneys. Twenty-three such appointments have occurred during the past two years.

Additionally, during 1963 and 1964, more than 300 individuals were appointed to other positions of trust in state government.

Coordination and Reorganization

Creation of the Department of Commerce by the 1963 Legislature was a forward step toward a more manageable and responsible state government. The efficacy of this new arrangement is seen in the relative ease with which the public can now conduct its business with a group of inter-related entities. Plans for centralization of necessary nit services, common utilization of specialized office equipment, plus establishment of a Consumer Counsel division within the Department will further public convenience and provide for the greatest possible return on expenditures.

The broad blueprint for reorganization of the Executive Branch which I submitted to the 1961 Legislature retains its validity today. Pending resolution of the myriad problems inherent in our present structure, I have continued the practice of monthly meetings with the heads of state executive departments.

Capitol Construction

The Capitol Construction document outlines projects of this biennium. Further comment is in order. Higher education facilities completed include the William Jasper Kerr Library and Radiation Center at Oregon State University and the Oceanography Building on the same campus; Prince Lucien Campbell Hall, housing the departments of English, History and Sociology at the university of Oregon; a classroom building at Oregon College of Education, to replace a part of Campbell Hall destroyed by the October 12, 1962 windstorm; and a new campus for Oregon Technical Institute.

New Board of Control facilities have provided improved services for those in state care. These include: Steel Cottage at Oregon Fairview Home; May Building at Columbia Park State Home; the new Women’s Prison unit at Oregon State Penitentiary; two additional cottages at MacLaren School for Boys; cell and dormitory units at the Correctional Institution; and multi-purpose buildings at the School for the Deaf and Dammasch State Hospital.

The second of four new armories in the Portland metropolitan are was placed under contract. Completion in 1966 will allow the National Guard to create a number of temporary buildings at Portland International Airport, with a reduction in departmental operating costs.

Contacts were recently awarded for construction of the first unit of a natural resource complex on the Capitol Mall, this to house the Department of Agriculture.

Total capital construction completed, contracted or planned during the 1963-65 biennium involved expenditures of approximately $46 million in state and other funds, including some $12 million in self-liquidating Higher Education bonds.



During fiscal 1963 and 1964, the State Highway Department awarded a record number of contracts, totaling over $142 million. Oregon’s interstate freeway program is on schedule, and General-aid apportionments are being used as rapidly as they become available. We presently lead the nation in miles of interstate highway completed and adequate for present traffic.

Four hundred twenty-five miles of the Interstate highways have been completed at the end of 1964. Additionally, much work has been performed on no interstate highways. During 1963 and 1964, the Department grade d 217 miles and paved 350 miles and completed 83 structures on these highways.

The Highways Department is also engaged in a program of general improvement of highway conditions, the main objective being increased safety. One such program includes an exhaustive study of all highway section in the state to determine the most accident prone areas.

AN extensive betterment program designed to improve the condition of the State’s older highways has been carried our, including widening 675 miles of highway shoulders, paving 250 miles of highway shoulders, construction of 1,025 mailbox and other turnouts, improvement of 290 hazardous road approaches, improvement of 260 sharp curves, and the cutting of brush on 300 miles o highway to improve sight distance. The Department has widened and modernized 61 obsolete and narrow highway bridges.

Oregon’s economy continued to benefit greatly from tourism. New income records were set in each of the past two years in the amount of revenue provided by out-of state visitors. This income in 1963 was estimated at $220 million. IN 1964, it increased to $244 million.

Motor Vehicles

Streamlining of manual production systems through of work simplification and management improvement programs has enabled the Motor Vehicle Department to cope with an increasing volume of activity. 1963 figures show an increase of 6.1 per cent in motor vehicle registrations and a 12.3 per cent increase in the number of new driver licenses issued. Fuels tax collections have increased by 8.7 per cent.

Improved procedures have brought an estimated saving in excess of $60,000. IN accident prevention, emphasis has been directed toward greater assistance to community officials and citizens in establishing and improving traffic safety programs.

Major accomplishments have also included: reassurance of new passenger car license plates to extend over a five-year period at a saving of $200,000 compared with a one-year reissue; establishment of community traffic safety improvement schools; and adoption of brake fluid and eat belt standards.

Oregon’s driver licensing program again received an award as one of the three top-ranked programs in the nation. The Department also was recognized for outstanding management improvement program for state agencies.

National Guard

Management improvement continues to be a principle objective of the Military Department, and a savings of $7,000 has been realized during the current biennium. As a means of promoting further savings, three studies are currently under way involving administrative procedures in facilities utilization. Due to Federal participation in these programs, results are no expected to materialize until late 1966 or early 1967.

The new proposal concerning military support for civil authorities in the event of a nuclear attack on this country would place all military forces committed to this mission under the command of the adjutant General of the State of Oregon. This plan would give need command channels for a recovery mission utilizing military forces. Army National Guard troops were again utilized in the support of the Oregon State Police during the Labor Day week-end disturbances at Seaside, Oregon, and performed valiantly during the December floods.

Emergency Command Post

To protect life and property and provide for emergency public safety and health measures, I established an emergency command post in the basement of the Capitol early in the biennium. This center provides facilities for state government in times of natural or man-caused disaster, and was operated on a 24-hour basis during the six-day 1964 Christmas flood. Prior to that time it was utilized on several occasions for training purposes following practice emergency alerts.

The command post includes operational communications with two-way radio facilities for the State Police, Highway Department, Forestry Department, State Fire Marshal, Military Department and the Board of Aeronautics. Also included are radios on carious amateur frequencies for use of Civil Defense.

Teletype and telephone services, complete with a full state emergency switchboard, are also available.

Three rooms are provided with auxiliary power.

In the absence of this center with its trained personnel furnished by the several operation departments, it would have been virtually impossible to cope with the needs for state action which arose during the flood.

Civil Defense

With a staff reduced to three by the last Legislature, the Civil Defense Agency performed well during the biennium and the flood crisis. In the absence of the central command post, however, it would have been relatively impotent. The command center should not be viewed as a substitute for Civil Defense.

That Agency must be properly funded and staffed to permit the carrying out of its assigned role.

During the biennium further progress has been made in marking and stocking of public fallout shelters. Shelter spaces have been located for approximately 1,154,000 people.

Oregon Nuclear Emergency Organization

The Christmas floods also made more familiar the relief role of the federal office of Emergency Planning. OEP has another and more sobering responsibility, that of coordinating federal-state activities in the event of nuclear attack.

In response to a federal request, I took action in august of 1963 to create inn Oregon a state organization which would mobilize all resources following an atomic explosion, including those relating to health, food, water, construction, hosing, transportation, communications, fuels, refugee control, manpower and over-all production. Under the direction of the Public Utility Commissioner, the plans of 11 work groups of the Oregon Nuclear Emergency Organization are nearing completion.

ONEO was not activated during the floods, but many of its people were of assistance, I pray that their services will never be needed n war, but as long as America is a leader of nations, we must live with the possibility that some day an attack any come. Oregon will be prepared.

Fire Marshal

A program to standardize hose couplings used by public fire protection agencies is nearly completed. An improved plan-examining service to promote uniformity and coordination of state and local regulations governing construction, use and occupancy of buildings has been initiated.

A streamlining of inspection procedures has provided economies of operation; and more detailed investigation, reporting and classification of fire causes and contributing factors has been initiated to provide a better basis for fire prevention and protection programs.

Tax Commission

Wit the massive state-wide property reappraisal program virtually completed, the State Tax Commission is encouraging a vigorous maintenance program and additional assessment improvements. Area offices have been established to better assist local assessors. Local budget practices are being modernized and standardized through provisions of the new Local Budget Law.

In carrying out requirements of the 1963 monthly withholding law, the Commission is maintaining separate collection records. In a few years, when an adequate historical base is build up, these receipts will produce a quickly available measure of Oregon’s economic activity.

Numerous comparative tax cost studies made at the request of industrial prospects showed the Oregon tax structure to be highly competitive when compared to the t ax systems of neighboring states.

In terms of both unit costs and production, the Tax Commission is achieving favorable results from using part-time student help in off-hours at the height of the return filing period. This work is also beneficial to students incurred as it gives them experience and an opportunity to accumulate funds for helping pay for their educational expenses. By acquiring mechanical file equipment, the agency is handling an increasing volume of correspondence with fewer employees. Despite operating on a reduced budget for a part of the year, the Commission’s audit program was able to generate an additional $4.5 millions of revenue in 1963.

Liquor Control

Sales to minors continue to be the primary problem of enforcement, been though the identification card has been useful. Local enforcement agencies are giving good cooperation to combat this problem.

Management improvements have resulted in considerable savings and more efficient business practices. Stores and agencies have been relocated to meet shifts in population and during the past year two outlets have been discontinued.

Veterans’ Affairs

The Department of Veterans’ Affairs took over administration of the Board-man Space Age Industrial Park, under terms of a 77 year lease signed with the Boeing Company of Seattle on December 13, 1963. AS directed by the 1963 Legislature, the Department transferred $5.5 million of its farm and home loan earnings to the General Fund. This in effect discharged an obligation of veterans to the State for tax funds provided in the late 1940’s to establish the farm and home loan program.

In the past two years, more than 7,300 veterans borrowed in excess of $80 million to acquire their own homes and farms. Since the loan program stated in 1945, veterans have borrowed $416 million and have repaid $254 million. The record of veterans’ delinquent accounts continues at the low rate of less than 100 out of more than 29,000 loans outstanding. Of 48,700 loans to Oregon veterans, only 330 have been foreclosed. This is less than one foreclosure for ever 1,000 loans.


Pari-mutuel wagering at Oregon race meets has continued to increase. IN dollars the increase during 1963-1964 amounted to $8 million. State revenues from racing rose from $2.9 million to over $3.4 million for this two-year period.

Security controls and other safeguards in effect at the various rave tracks have encouraged greater public confidence.


Mental Retardation

Oregon had pioneered in the detection of phenylketonuria and thus has helped point the way toward elimination of mental retardation due to this condition. A colored movie was produced by the Board of Healthy which has won acclaim throughout the worked as the finest educational movie yet produced on this subject.

Mental Health

Since establishment of the Mental Health Division in the Board of Control, significant strides have been taken toward development of community-oriented psychiatric programs and in the reduction of mental hospital populations.

State institutions have achieved improved coordination. For the first time, long-term chronic patients in such institutions are being exposed to effective rehabilitation programs. The decline of inpatient mental hospital populations has resulted in an 18 per cent reduction, in contrast to a national average reduction in this area of only 2.1 per cent. Oregon’s present bed occupancy rate in mental hospitals is 1.64 per 100,000, one of the lowest in the nation.

Similar advancements are evident at Oregon Fairview Home, where a new outpatient department and pre-commitment screening have been established.

Chronic Diseases

THE Lane County “Stroke Rehabilitation” project completed its 3-year demonstration phases and has now been set up as an expanded community program to assist with all kinds of rehabilitation activates in the Eugene area. The project was a good example of state and local cooperation.

A program for training lay volunteers to work in care facilities and homes for the aged and handicapped was initiated, and groups were organized in a number of committees. These volunteers do not replace staff members but supplement their work and bring to the handicapped residents contacts with the outside community.

Migrant Labor

A migrant health project for intensive services in sanitation and health services in three counties produced these results:

Project sanitariums made 1,245 camp inspections; corrected 1,266 defects in 146 labor camps with a population of 8,000 workers.

Public Health Nurses screened 6,000 workers and their families. Eight hundred of these were referred for medical care.

Driver Safety

In a continuing effort to promote safety on our highways by eliminating drivers whose driving ability may be impaired by physical or mental conditions, the medical reports of 3,381 drivers have been screened and evaluated at the request of the Department of Motor Vehicles. About 10 per cent of those cases reviewed have been restricted to some degree by the Department of Motor Vehicles.


Since January 1, 1963, Tuberculosis Control activities have continued in high gear. 782 new active cases of tuberculosis have been registered. Although 90 persons dies of tuberculosis in Oregon during the same period, this was less than half the number dying in the corresponding 23 month period in 1953-1954.

Hospital Planning and Construction

A new federal law was passed to replace the Hill-Burton at which expired on June 30, 1964. During 1963-64, hospital projects in seven communities have received grants totaling $3,376,915 to assist in an estimated $10,160,249 worth of hospital and other health care facilities construction. In addition to services, modernization and remodeling, 312 hospital beds are being added.

Nursing home grants totaled $548,000, to be applied to $1,729,329 worth of construction, including 150 additional beds. Projects are under way in four different communities. A diagnostic and treatment center project received an $80,000 grant toward a $240,000 addition to a large general hospital. Altogether, the Hill-Burton program has provided $4,270,817 to assist in projects approximating $12,927,284.

Medical Investigation

The office of the Chief Medical Investigator conducted extensive training programs for those involved in medical investigation. A state-wide Medical-Legal Workshop held May 2, 1964 at the University of Oregon Medical School was attended by some 120 doctors, lawyers, and police officers.


Public Welfare

The program of job training for able-bodied but unskilled recipients has more than paid for itself as families return to self-support. The work program has been broadened to include on-the-job training in a variety of public agencies for men and women.

Case classification is now the practice in the 11 counties that account for nearly three-fourths of the state’s welfare caseload. In all counties, Oregon now qualifies for extra federal funds on the basis of rehabilitative services provided for those who need them.

Two new units are helping assure that public assistance goes only to those who are genuinely in need and eligible under law. The Case Review Unit carries on a continuous “quality Control” sampling of cases to make sure eligibility has been correctly determined. A unit of experienced investigators looks into cases where fraud is suspected.

Medical Assistance for the Aged, expanded to include chronic nursing home care and with simplified administration, now aids a growing number of the state’s elderly citizens.

Management improvements have resulted in significant savings of state funds.

Parole and Probation

During 1963-64, the number of Oregon cases under parole supervision increased from 2,848 to 3,251. Correspondingly, services to the courts increased tremendously. Approximately 52 per cent of the persons originally convicted of felonies were granted probation.

The Board of Parole has continued weekly meeting and has granted paroles to individuals who would profit by parole supervision. Crime has been increasing over the country at a rate that has brought continuing pressure on the department and its staff to meet the increasing needs. However, the quality of the board’s work is reflected in the fact the revocations of parole have been held at a reasonable level.

Penal and Correctional Institutions

As of November 30, 1964, inmate population at Oregon State Penitentiary and the Correctional Institution totaled 2,050. The completion of two new units at the latter now under way will add 181 beds. However, the growth rate indicates a substantial number of additional cells will be needed during 1965-67. The women’s Prison Unity opened in December provides modern facilities for housing 76 female inmates.

Treatment staff personnel have worked closely with the Portland Council of Churches in establishing a privately endowed Halfway House. The ultimate goal is a similar facility in major cities throughout the state.

Through the cooperation of the Division of Continuing Education, nearly one-half the inmates at Oregon State Penitentiary are engaged in academic studies. During the past two years, 77 received elementary education certificates, 161 were certified as high school graduates, and 330 completed college courses.

The Oregon State Correctional Institution, with capacity of 279, has had a population continuously in excess of 370, requiring that some inmates be housed in corridors. Despite crowded conditions, and effective program has been carried on, including that of education. During the past two years, 380 certificates of high school completion have been issued.

Nearly 1,000 boys are not under the supervision of MacLaren School, with over 450 in the campus and camps program, the remainder either under parole supervision or in supervised foster homes. In addition to work camps at necarney and Tillamook, a new facility has been established near Florence. The vocational program at Hillcrest School for girls has been strengthened through establishment of a Beauty School, in cooperation with the State Board of Cosmetology.

Oregon became one of the first states in the nation to establish an industrial Accident Insurance program for penal inmates, financing this worker benefit plan through earnings from prison industries.


With the growth of education at all levels, it is increasingly important that effective coordination be vigorously pursued. The Education Coordinating Council, comprising representatives of the public, higher education, community colleges, independent colleges and the business community, has been given the responsibility for seeking coordination and planning for the future.

Higher Education

In 1964, Oregon’s higher education system became the first in the nation to undertake an analysis of its total management information requirements. The first phase of the study, now almost complete, will identify areas where use of data processing equipment will be most effective, ad provide guidelines for immediate and long-range development of educational data processing systems. An early area of interest will be class scheduling and space utilization.

A system of curricular allocations has been developed to decrease or prevent expenditures resulting from unnecessary and undesirable duplication of major institutional function; to improve the quality of specialized programs of study; and to prevent unnecessary and undesirable proliferation of courses, services, and programs.

Master campus plans were completed and adopted for Southern Oregon College, University of Oregon, Portland State College, Oregon Technical Institute, and Oregon State University.

THE Chancellor’s Office has been reorganized to augment its ability to provide modern management resourced and services, on a centralized basis, for institutions of the Higher Education System. The Teaching Research Division was made a part of this office.

Gifts and grants to higher education during the biennium will total more than $32,720,000. This money contributes both to the instructional programs of the institutions and the economic welfare of the state.

The past several months have seen two significant dedications: the Oregon State University Marine Science Laboratory and research vessel Yaquina, and the new Oregon Mechanical Institute campus at Klamath Falls.

Construction has begun on a $2,000,000 U. S. Public Health Service Pacific Northwest Water Laboratory on the Oregon State University campus. The laboratory will have a staff of 150 scientists and will further amplify Oregon’s reputation as one of the nation’s leading water resources research centers.

A five-year grant of $2,500,000 to the University of Oregon, the largest single grant in the institution’s history will establish a Center for the Advanced Study of Educational Administration on the Eugene campus.

Astounding new techniques in reaming out arteries to save limbs that otherwise would have to be amputated and successful multiple heart valve implantations are among the milestones achieved by the University of Oregon Medical School in the clinical care of patients. A new $500,000 Cardiovascular Research Laboratory, made possible by grant from the U. S. Public Health Service, provides added testament of the national stature of the Medical School.

Student enrollment in State System of Higher Education institutions has of November 12, 1964, was 36,350.

Department of Education

Major activities of the biennium included improved teacher education programs through examination by interdepartmental committees, reorganization of liberal arts and professional phases, and the acceptance by many school districts of responsibility for such teacher preparation. Teach intern programs were established in nine colleges. Citizen assistance was intensified with the appointment of committees to advise on financial procedures and in the operation of small schools. Minimum school standards were revised.

Two community college districts were formed, in Douglas and Lane counties, and new campuses opened at Central Oregon College, Bend, and Southwestern Oregon College, North Bend. Enrollment increases of 43 per cent in the community college system encouraged passage of a $5 million bond issue to help provide capital facilities.

Classes for mentally retarded children at Dammasch in Eastern Oregon State Hospitals were established. The department organized and participated in conferences and workshops involving more than 3,000 teachers and administrators throughout the state.

School for the Blind

A special federal grant was received to augment activities of the State School for the Blind in providing special emphasis on the return of handicapped children to regular classrooms. A move in the direction of year-around programming has been undertaken in cooperation with the Oregon State Elks Association, the Lions Auxiliary, Western Michigan University and other public and private groups.

School for the Deaf

Action has been taken to add grades 11 and 12 at the School for the Deaf, and the class graduating this Spring will be the first to receive full high school instruction at this institution. IN cooperation with Oregon College of Education, a training program for counselors has been established.

The vocational training program has been substantially strengthened by additional supervisors.

The number of students has increased at a significant rate, and means are being explored whereby additional student population may be accommodated, either through expansion of c campus facilities or the development of additional services.

State Library

Federal assistance to public libraries was substantially increased during 1964. As a result, a three year Eastern Oregon Library demonstration was completed with the establishment of new county library systems in Baker and Wallowa counties.

The State Library will administer grants for library construction, and the first such project in the United States was started in Corvallis last September.



THE Oregon economy is operating at a high level. Two of the very best measures of economic activity and strength are employment and income.

Oregon personal income totaled $4,935 million in 1964 (preliminary McGraw-Hill estimates), up 8.1 per cent from 1963, compared to a 5.5 per cent for the U. S. Oregon ranked fifth highest among the states in the year-to-year percentage gain in personal income. Employment is running at a record level.

Employment in Oregon has been higher every month in 1964 than for the corresponding months of the past. In November, employment totaled 723,700, up 16,900 from November, 1963.

The seasonally-adjusted non-agricultural wage and salary workers index reached 119.0 in November 1964 --- an all-time high. This represents a gain of nearly 92,000 non-manufacturing jobs over the employment level of the 1957-1959 base period.

Manufacturing employment has averaged 2.9 per cent higher during the first 11 months of 1964 than in the corresponding period of 1963. Lumber and wood products , with particular strength showing in plywood, had the largest absolute employment gain, 2,500 or 3.6 per cent. THE combined metal-working group, composed of primary and fabricated metals, machinery and transportation equipment, which employed 22,500 in November, 1964, had the largest percentage gain --- 9.3 per cent.

Most of the additional jobs developed in the nonmanufactuing industries. Continuing on a monthly average basis, employment in services increased 3,700, government 3,400 (mostly in state and local education), and retail trade 2,000 for the first 11 months of 1964 compared to 1963.

Cash farm receipts for Oregon are up 4.7 per cent for the first nine months of 1964 compared to the same period of 1963.

On a seasonally-adjusted basis Oregon’s unemployment rates have consistently been below those of the U. S. In 1964.

Many feel Oregon could stand a bigger share of federal defense and aerospace spending. Indeed, such expenditures have been responsible for a major growth in some other parts of the U. S. However, Oregon has been outperforming the national economy without benefit of significant federal spending in these areas.

A long-time goal in Oregon’s economic development, greater diversification of industry, has been achieved, even within the state’s job-producing giant --- forest products.

An accelerated rate of industrial expansion has contributed substantially to the high level of economic activity in Oregon during the past two years. In this period, a total of 240 new plants and plant expansions, in building an investment of some $225 million, has been reported. This growth has included facilities for serious industries, food products, primary metals and metalworking, electronics, chemicals, and a wide range of investments in new woods products and agricultural produces processing.

Trade Mission to Japan

In November of 1964 I led a trade mission to Japan, Taiwan and Hong Kong. The party of 35 included various industrial, business and financial leaders of the state. The importance of trade with Japan is emphasized when we recognize that our exports to that nation in 1963 amounted to $125 million. The mission unquestionably strengthened ties with various Japanese organizations and can be expected to enhance our trade and governmental relations.

Department of Employment

Twice during the biennium the rate of unemployment tax was reduced for a great majority of employers covered by the Department of Employment law. The first reduction was on January 1, 1964, when the minimum was reduced to 1.8 per cent from 2.7 per cent; the second occurred January 1, 1965, when the minimum rating was further reduced to 1.2 per cent.

The Department of Employment continued to take on added responsibilities in the field of training and referral to opportunities under both the Manpower Development and Training Act of 1962 and the Economic Opportunities Act of 1964. Its responsibilities under the former in the selection of trainees to date totaled some 690 persons trained; 414 employed upon completion of training with the continued program for 1964-65 referring 2,726 persons for training in 28 training courses about the state. The State Department of Education is responsible for training the persons selected by the Department of Employment.

The Department’s new responsibilities under the EOA of 1964, are especially spelled out in the field of disadvantaged youth. A new Youth Opportunity Center in Portland has been established to offer services to all youth, but particularly disadvantaged youth. The new center will refer youths to jobs, to training centers, to the Job Corps compass and Neighborhood Service Corps jobs depending upon need and abilities.


Oregon experienced a 13.6 per cent increase in the rate of new in-corporations over the previous year. This rate of increase exceeded that of Washington, California and the United Stated as a whole. Presently there are 27,539 active corporations of record.

Assets of state-chartered savings and loan associations increased $75,000,000; mortgage loans increased $70,000,000; and savings, $65,000,000.

The Assumed Business Name section, established by the 1963 Legislature, has processed 29,300 assumed business names since July 1, 1964. Over 2,000 conflicts have been noted and corrected because of this central register over the old system of separate remigration by county.


Three new state banks and seven new branches were chartered over the state, with the majority located east of the Cascade Range. Also 19 new consumer finance offices were licensed; two industrial loan offices; and six new pawnbrokers.

Total assets of state-chartered banks are up by $75,363,000, or 18.3 per cent, between December 31, 1962 and October 1, 1964.


There has been an over-all increase of nine insurance companies licensed to engage in business in Oregon. Of these nine, four were domestic companies.

Legislation has been drafted to bring further protection to the insurance-buying public by upgrading licensing requirements for insurance agents.

Planning and Development

An expanded program of developmental planning, research and promotion was conducted during the last biennium, which included completion of a series of ten reports as a part of a state-wide development study and completion of regional development studies for the Northeast Oregon and Mid-Columbia areas. A major Willamette Basin study, involving some forty state and federal agencies, was started.

Promotional activities included distribution of some 25,000 pieces of literature and an increase in the circulation of the monthly publication, “Grow”, to 7,500, all by request; emphasis on out-of-state showings of the motion picture, “Oregon Today”, a promotional folder on community development corporations; and a number of specialized presentations, promotional meetings and conferences, both within and out of the state.

Real Estate

Under provisions of the Subdivision Control Law, over 765 subdivisions have filed, including out-of-state subdivisions in California, New Mexico, Arizona and Texas.

A Television series on Public Education in Real Estate was programmed through KOAC-TV and programs were presented on several radio stations.

Industrial Accident Commission

The State Industrial Accident Commission continued a trend of increased service to the public, with greater efficiency within the agency. Payrolls, employer contributions and workmen’s contributions are increasing , while the Commission’s claim costs in all categories continue substantially lower.

A new planning and research division program resulted in a total savings of approximately $260,000.

SIAC provided employers with two workmen’s compensation insurance rate reductions --- a 7 per cent decrease July 1, 1964, and a 4.3 decrease January 1, 1965. Combined, the two reductions will mean an annual savings of $3,880,000 to employers in Oregon. The continuing downward trend of claim costs. Plus further increased yields from SIAC investments should allow consideration of further reductions effective July 1, 1965, or lower rates than otherwise required, if benefit increases are allowed for workmen.

Over-all effectiveness of the safety program is graphically illustrated by the reduction of fatal injuries. For the first time in the history of the Accident Prevention Department, the number of fatalities for the fiscal year was below 100, the figure of 97 representing 17 fewer deaths than the previous year.

The use of a new wide-area telephone service has speeded the authorization for surgery and the obtaining of claims information, resulting in the all-time record of 9.2 days for processing claims.


Parks and Recreation

During the past biennium, the State Parks and Recreation Division of the Highway Department continued to acquire and develop new areas and expand existing facilities to meet the needs of park visitors. Attendance at state parks in 1963 maintained the upward trend it has experienced in the past 10 years. Day visitors reached an all-time high of 13,014,668, nearly 1,500,000 over 1962, while 877,658 campers utilized the 43 parks which offer overnight camping facilities. In 1964, a total of 14,400,000 day-use visitors were recorded, and overnight campers totaled one million.

The Oregon Non-Urban Parks and Recreation Study, published in One, 1962, recommended the acquisition of 15 new areas and additions to 22 existing parks. Following these recommendations, 2,746 acres throughout the state, and six new area totaling 131 acres were added to the system. Oregon now has 190 state parks and waysides totaling 66,143 acres.

New parks opened to the public include Tugman, Boardman, Illinois River, valley of the Rogue, Fort Rock, Prineville Reservoir, Carl G. Washburne, Ellmaker, Bullards Beach, and Nehalem Bay. 280 campsites were added, making a total of 2,946 at 43 sate parks. In order to better serve Oregon’s growing number of recreational boaters, launching ramps with parking areas and sanitary facilities were constructed at eight parks throughout the state. In addition, a large number of improvements were made throughout the system, including increased parking space, hiking trails, water-ski traffic pattern signs, boat docks, picnic tables, etc.

In cooperation with the Travel Information Division, the Oregon Public Parks Guide was revised to show the major state, federal, and local recreation area throughout the state. Brochures and information handouts have also been developed for many of the major parks, providing information on facilities and activated available in and near the park.

A park information program was instituted at 14 parks during the 1964 summer season, and proved to be extremely popular with park visitors. Included in the program were evening slide shows and talks at outdoor theaters, placement of over 1,000 plant identification markers along nature trails, information booths, etc.

The State recreation Director continued to provide assistance to counties, communities, districts, and agencies on problems dealing with the development and use of local recreation facilities, activities, and programs.

A study of the role of city, county, and private organizations in Oregon’s recreational picture was initiated. This report will also update the 1962 Oregon Non-Urban Parks and Recreation Study.

Additional research was initiated by the Planning Section in the form of a Visitor Use Survey. This study will provide information on origin, length of park visitors, Results of the survey will enable the Parks Division to better provide the facilities and activities most desired by park users.

In cooperation with local county government units, the Parks and Recreation Division continued its practice of holding statewide County Park Conferences and workshops. The Oregon County Parks Association, established in 1960 at my invitation, now includes 26 of Oregon’s 36 counties. Oregon has pioneered in the county park movement, and our efforts are being emulated in other states.


During the past two years, boat registration in Oregon increased from 58,000 to over 70,000. it is anticipated that the registration will exceed 80,000 by July of 1966. A program known as the Oregon Junior Boatman’s Safety Course was initiated by the Marine Board to educate young boaters in safety on the waters. This course is sponsored by an umber of schools, boating clubs and civic organizations.

A new Marine Law Enforcement manual was published and distributed to all Sheriffs and State Police interested in the enforcement of the boating laws. Through the cooperation of several federal agencies and County Courts over two hundred Uniform Waterway Markers have been established on state waters. Plans and specifications for the markers were prepared by the board.

On January 1, 1964, the Marine Board commenced a simplified boat registration system. The system combined the Certificate of Number, which was issued on a three-year basis previously, and the Annual Boat License into one annual requirement. The new system has not only eliminated some confusion among the boat owners, but is expected to result in considerable savings in the cost of administration in the future.

Pollution Control

Thirty-two new sewage treatment plants were completed, and 15 existing plants were enlarged. At the end of the biennium an estimated 1,000,000 persons (96.5 per cent of the total severed population of the state) were being served by 218 public and semi-public sewage treatment plants.

To restore and maintain an acceptable degree of purity in the waters of the Willamette River system, a policy was adopted requiring as a minimum, (a) Primary sedimentation year round for al pulp and paper mill wastes, (b) 85 per cent BOD removal during the period of critical stream flow in the summer and fall months for all sulfite put and paper will wastes, and (c) secondary treatment (85 per cent BOD and suspended solids removal) for all sewage and other waste effluents discharged into the main river or any of its tributaries, with the deadline for meeting such requirements being December 1966.

A comprehensive study and report was made by the Sanitary Authority staff of the air pollution problems in the Portland metropolitan area, and adoption of new air pollution control ordinances by the cities of Medford and Portland and inauguration by the latter of an active air pollution control program followed suggestion of this study.

A policy was adopted to promote research on air pollution caused by emissions from wigwam waste wood burners.

Agricultural Research

Oregon State University has broadened its research program on natural resources, and this activity has been matched by additional demands form the public for research findings, as well as request for technical assistance.

Research has continued on improvement of pasteurized fish pellets in cooperation with the Fish Commission. All former fish wastes for processors in the Astoria area are being used in this bin product. This pellet is reducing rearing costs substantially, as well as hatchery fish fatalities.

As a direct result of research activities at Oregon State University, increasing interest is being shown in the potential of a number of new agricultural crops. A “dry freezing” process developed though Agriculture Experiment Station activities has resulted in establishment of an industry which has extensive possibilities in the modern handling of perishables.

A significant event was the acquisition of a forestry nursery and the establishment of a forestry genetics enter.

Water resources research has been broadened in a number of areas, with coordination accomplished through the activities of the Water Resources Research Institute.

A number of departments are cooperating in studying the feasibility of irrigation on the more poorly drained soils of the Willamette Valley.

During the biennium a cooperative study on the economic importance of the salmon-steelhead sport fishery in Oregon was completed.

Mineral Resources

With a 19.4 per cent increase in the value of minerals produced compared to 1962, Oregon mineral production rocketed to an all-time high of $62,700,000 in 1963. Employment and payrolls in the state’s mineral industries showed impressive gains over last year. Payrolls were up 7.25 per cent over 1962, and employment increased 3.17 per cent for total of 10,592.

Douglas County, largely through the efforts of Hanna Nickel smelting at riddle, pushed into first place in mining production for the first time in 1963. The county had been in second place for the preceding seven years, with either Lane or Clackamas county in the top spot. Twenty-five of the state’s 36 counties reported increased mineral production over 1962.

The Department of Geology and Mineral Industries has been conducting intensive studies of volcanic features in central Oregon for a number of years, one often main objective being to acquire and publish information that might lead to the establishment of a lunar research center in the state. Both federal and private research groups have visited the Bend area on numerous occasions to conduct carious tests, and teams of astronauts and at geologists have experimented with equipment designed for actual moon reconnaissance.

During the biennium the Department has been engaged in a long-range geochemical study of stream sediments and soil samples in hopes that, by pinpointing certain areas where the possibility of finding economic mineral deposits is much greater than normal, industry can be encouraged to investigate them.

The search for oil offshore in Oregon has intensified every year since passage of the submerged Lands Act in may 1961. In June 1964, 13 major oil companies were engaged in the offshore studies. Several of the firms operated joint seismic and bottom sampling programs in order to hold costs down. An estimated $12 million was expended in exploration.

Soil Conservation

During the biennium the State Soil and Water Conservation Committee reviewed and approved two resource Conservation and Development Project Plan applications for submission to the Governor’s office and transmittal by the USDA Soil Conservation Service to Washington, D. C. The Upper Willamette RC&D Project Plan application sponsored by five Soil and Water Conservation districts was approved by Congress as one of the ten pilot undertakings in the United States.

SWCD’s are also active in sponsoring small watershed programs under Public Law 566. There have been 43 watershed projects sponsored under this program in Oregon. Of these, six have been authorized for installation and eight other s authorized for planning. Installation cost on these projects is $8,716,439, with $4,927,059 furnished by the federal government and $3,793,373 from local sources. To speed up this program additional funds are needed at the state level for watershed planning.


A headquarters building for the Department of Agriculture was placed under contract for construction in December as the first unit of a Natural Resources complex on the Capitol Mall.

Economies accruing from the reorganization of the Department of Agriculture permitted it to meet its responsibilities, with only minor restriction in some services, under a budget reduced by the tax referendum. The department, through it Agricultural Development Division, has lent important aid to the governor’s Import-Export Committee and ha helped to call attention of the American leaders of the international trade discussions to the needs of Oregon agriculture and allied industries.

Agreement was reached for the first joint action to gain lower freight rates on Midwest feed grains shipped to the Pacific Slope. This move is of utmost importance to expansion of our livestock industries. Our Oregon department has enjoyed excellent cooperation from affected livestock segments, who are carrying the state’s share of the cash outlays for this joint effort.

What is recognized as the first Consumer Advisory Committee in any state department of agriculture was created in the Oregon department last April.


Of special significance is the satisfactory progress achieved in decentralization. Additional responsibilities have been assigned to field representatives throughout the state for efficiency’s sake and public convenience. Noteworthy, too, is the extension and strengthening of communications lines between the agency and the public. Through local advisory boards scrutinizing for district operation and costs, the public has gained stronger voice in the management of district affairs.

Mutual-aid pacts were effected between various of the department’s 14 fire districts to provide a strong forcing times of heavy fire stress. Study of the entire fire protection system, along with its financing, was continued into this period. Still apparent is the need for greater public participation in financing forest fire protection.

The Department watched carefully during the past two years for indication of any start of a Douglas fir bark beetle epidemic. The potential still remains. Meanwhile, clean-up through log salvage operations was pushed as rapidly as the construction of new and excessive access roads would permit, not only for the benefit of insect control but to help meet the fire problem as well.

Fish and Wildlife

The 1961 Legislature appropriated to the Fish Commission $120,000 from the General Fund for rehabilitating and improving anadromous fish runs on the coastal streams south of the Columbia River, but only if 40 per cent of the cost of each project is provided from other funds. Although a variety of difficulties were encountered, practically all of the money was committed.

During the biennium a major step was taken toward eventual solution to the long-standing problem of upstream fish passage over Willamette falls. The existing fishways at Willamette Falls on the Willamette River near Oregon City are inoperative or inefficient during parts of the year when spring Chinook, fall Chinook, and silver salmon and steelhead trout are present. New facilities will provide-year-round passage, and permit extensive enhancement of fall Chinook and silver salon runs which heretofore encountered extreme difficulty in migration. However, existing pollution in the lower Willamette is a very definite and serious threat to relaxing this potential.

In the past two years ORegon has maintained its position among the leaders in the nation in the variety of angling and hunting opportunities available to its citizens, and in the success which they and our visitors enjoy in these recreational pursuits. At no time in history have the opportunities been so diversified, and still others are soon to be relied with the successful establishment of such species as the mountain sheep and wild turkey.

A classic example in the sport fishing field is Diamond Lake. In the past two seasons the yield from this one lake alone has totaled in excess of one-half million fish. Those anglers who prefer warm-water species such as bass and perch can look forward to more opportunities with activation of the pond rearing facilities at St. Paul in 1964.

Our sport fish and wildlife resource provided a total of more than 20 million man-days of recreation in 1963 and 1964.

Oregon’s hunter safety training program received recognition as the top such program in the nation in 1963. Since inception of this program, more than 75,000 young people have received training in safe gun handling and sportsmanship.

Water resources

A major event of the biennium was the statewide water resources conference which I called in Salem December 10-11, 1964. The meeting was attended by more than 400 citizens and government officials interested in learning about Oregon's problems and seeking means of augmenting efforts to determine our ultimate waterneeds. Program presentations graphically portrayed the need for a vastly accelerated study in the face of suggested diversions to other areas.

During the past biennium the State Water Resources Board conducted basin investigations in the Lower Willamette, Sandy, Hood, and Mid Coast basins. The board staff provided the chairman and implemented coordination for the Columbia Basin Interagency Committee Task force in its important review report of the Willamette River basin. The coordinated agency team approach to basin planning developed in ORegon, is production noteworthy results.

Of particular interest has been the Data Availability and Status Catalog developed by the Task Force Data Storage and Retrieval Team under board chairmanship. The catalog lists date pertinent to water and agency storing the data, the availability of such data, the method of storage, the classification as to scope and whether the data is exiting, currently being gathered or proposed to be gathered.

Perhaps the best way we can protect our valuable water resources is to put these needed resources to beneficial use. To this task the Water Resources Board has stimulated and facilitated water development by working with local people in the Grande Ronde, Umatilla, Willamette, John Day, Hood (Fifteen mile creek), Dschutes, Rogue, umpqua, and coastal areas of ORegon. There never has been more local and federal activity in water development in Oregon. The sate, however, must soon appraise its role in water development in filling the gap between local and federal financing of water developments.

State Engineer

Probably the most significant accomplishment in the efficiency field was the reassignment of duties and expanded use of the watermasters following authorization for payment of expenses by the 1961 Legislature. SAvings estimated at $15,000 were obtained during the period July 1, 1963 to date through this method and partially reduced the effect of the tax Rejection cutback. Constituting 14 field offices, they have reduced travel from Salem and increased stream gaging and station maintenance during the off destruction season.

Two new hydroelectric projects licensed by the State Engineer have been placed on the line producing power for our growth and a boost to the economy in the construction jobs. The $25,000,000 Carmen-Smith project of the Eugene Water and Electric Board on the McKenzie-Smith River complex was dedicated in September, 1963, and adds 90,000 kw. to our installed generating capacity. It is and orderly step in providing for the development of the Eugene area without detracting from the recreation value of the scenic McKenzie River. THe project includes an annual license fee to the state of $12,840.

Portland General Electric's $60,000,000 Round Butte project on the Deschutes River placed its third unit on the line in November, 1964, adding 300,000 kw. installed capacity. The 440 feet high rock-fill dam is one of the largest in Oregon and provides a unique three-pronged lake with back water up the Crooked, Deschutes and Metolius Rivers. The reconstructed Cove Palisades State Park scheduled for completion next year lies between the Crooked and Deschutes River arms and will be a major addition to the recreation facilities of the Central Oregon area. Tax payments to county, state and federal governments include $74,190 annual license fee to the state.

Construction was started this summer on the $2,500,000 Middle Fork Irrigation District project to rehabilitate and improve their irrigation system. THe project includes a peaking reservoir and 130,000 feet of pipeline to provide gravity pressure for sprinkler systems. Prime function is to eliminate the destructive glacial silt that occurs in Coe and Elliot Creeks, the prime source of water during certain summer melt conditions. A $1,100,000 FHA loan finances the portion of the project to be repaid by the local district and is the largest to be made west of the mIssissippi for a project of this type. PLanning for the project, which is being constructed under the Watershed Protection and Flood Prevention Act (small watershed Act), was aided by state planning funds appropriated during the 1961-63 biennium.

BAsic data collected fro the state-wide well net of 750 wells is now being summarized and published in an annual series of Ground WAter Levels beginning in 1963. Data obtained from these observations provides the first and best index of general ground water conditions. Careful analysis will aid in pinpointing future ground water problems and critical water areas prior to their full development.

IN concluding this report I would take note of the death of Walter Norblad, a former member of the Oregon Legislature, who served the First Congressional District for nearly two decades.

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