Governor Mark O. Hatfield's Administration

Legislative Message, 1961



Mr. President, Mr. Speaker, Members of the Fifty-First Legislative Assembly:

Two years ago I presented to the Legislative Assembly and the people of Oregon, a program designed to meet the needs of our state. This program was set forth in harmony with the pioneering attitude which has dominated our state’s history. Today I have a second opportunity to lay before the Legislature and the citizens of Oregon a program directed toward an even greater growth and progress.

During the Legislative Session of 1959 an air of pessimism existed in many quarters. There were those who predicted that it was not likely that Oregon would prosper during the 1959-61 biennium. This sentiment evaporated as it became apparent that the economic climate was changing.

The excess of the state revenues over state expenditures, reported in my budget message, is symbolic of the change in business climate and is the result of two developments. First, a healthy increase in economic activity. And, second, a concentrated effort on the part of the executive branch to hold in check the cost of government while maintaining the level of services authorized by the Legislature.

Our budget for the coming biennium reflects specific examples of the savings effected in the executive branch. Also, I am sure that you can observe the long-term confidence which exists as a result of the economic growth of the past two years.

My budget seeks maximum benefit from the financial resources we expect in 1961-63. The principles underlying these budget recommendations should be restated on this occasion.

Our primary budgetary consideration is that of holding the tax line. Economic productivity results primarily from individual enterprise and individual expenditure. Government stimulates and, in significant measure, guides economic endeavor. By holding the tax line we will be doing our part in promoting a balanced and growing economy.

A second commitment is that of affording tax relief, where possible. I do not advocate tax relief at any cost. Rather, adjustment of the tax burden must increase the equity of its distribution and come after careful consideration of the needs of our citizens for state services.

Our third aim in presenting a fiscal program is that of maintaining the adequate standards of service our state not provides for its citizens.

A fourth goal of our financial recommendations is to expand or intensify those programs for which we need is clear and compelling.

Finally, we offer essential new programs designed to enhance the well being of our citizens and assist in the development of Oregon.

It is with firm faith in the future of our state that I present these recommendations for action.


Repeatedly I have said that the number one job facing us is the building of a diversified economy. We have unique advantages to foster this development --- a high level of education, abundant recreation opportunities, excellent transportation facilities, land, water, power, markets and a skilled labor supple. These assets must be increasingly utilized to achieve new jobs and greater job opportunities.

In the matter of new jobs and greater job opportunities, there are certain statistics which are encouraging. Recent personal income figures show that Oregon’s percentage gain was above the national average for the first time since 1953. Another sign is that Oregon had a percentage gain in new corporations which exceeded California and Washington and was above the national average. Our Planning and Development Department reports that during the past year 93 new or expanded corporations added 5,700 new jobs. These and other figures indicate that our attempts to diversify Oregon’s economy are producing results. The seasonal nature of our three main economic activities --- timber, agriculture and tourism --- still present a challenge we must meet. The effects of seasonality can be reduced only as we continue to attract industries which will bring us year around payrolls.

In addition to capitalizing on our natural advantages, state government must assume its rightful role. This does not mean offering financial “gimmicks” or enticing industries to pick up a tax tab. Our goal must be that of an equitable and competitive tax structure and the maintenance of a strong fiscal position.

We must be aware that virtually every activity of state government will affect our economic progress. Public activity in education, recreation, mental health and natural resource development realties directly to the economic expansion. If we demonstrate, both through legislation and administration, that we are forward-looking and ready to assume our responsibilities, we will have contributed positively to the future development of our economy.


Net Receipts Tax

The voters of Oregon have repeatedly indicated their support of the personal income tax as the base of our tax system. An need for widening the tax base is recognized, however, Dr. Sly emphasized this position in his report submitted to the 1959 Legislature. At that time I recommended the adoption of the net receipts tax. The need for greater equity which such a tax would provide is as real today as it was then. Once again I urge you adoption of this proposal.

Inventory and personal Property Tax

Our inventory and personal property taxes have long been criticized as being inequitable and discriminatory.

The disadvantage of these taxes has been emphasized to us during the past two years in our efforts to attract new industry to the State of Oregon. A net business income tax would be far more equitable in its application. It should be adopted in lieu of the inventory and personal property taxes.

Timber Taxation

All of us are conscious of the importance of our forest resources. By our action today we must assure future generations that they too may inherit this resource in abundance. Intensive sustained yield management of Oregon forests, both public and private, is of fundamental importance to our economy both now and in the future. The method by which we tax our timber will play either a positive of negative role in our conservation program.

One of the major tax problems which you will consider is that of timber taxation. Legislation relating to it should seek to encourage sound forest management and extended cutting practices while at the same time providing that forests share their fair proportion of the tax burden.


In the field of social legislation there are an number of matters to which you will devote your energy and attention.


Good labor-management relations are necessary for economic stability and growth. Oregon has an unbelievable record, but legislative action is needed to fill the void where the Federal Labor-Management Relations Act does not apply.

Foremost is the need for an effective and practical procedure for secret elections conducted under state administration --- a procedure that will permit employees to choose whether they desire to get represented by a collective bargaining organization, and, if so, which one. Jurisdictional disputes between unions and coercive perceives by either union or management thus can be minimized.

With good laws, enlightened management, alert union members and responsible union leadership, Oregon labor-management relations can advance our industrial and social climate.

Workmen’s Compensation

Oregon has one of the nation’s best workmen’s compensation laws. There are a number of revisions which would strengthen the law and prove beneficial to both employer and employee groups.

Employers subject to the Workmen’s Compensation Law now pay at rates based on the accident experience of their industry. Employers who can demonstrate financial ability to pay their actual claim costs should be permitted to self insure through the Industrial Accident Commission. All claim against these employers would be administered by the Commission but the employer would pay only the actual cost. Such a program would provide strong incentives for improvement in accident prevention while providing proper protection to both employers and employees.

The hiring of persons with prior disabilities is limited because of the fear of employers that their costs for insurant against injuries to these people will be excessive. The Workmen’s compensation Law should be amended to eliminate this barrier to the hiring of the handicapped. If handicapped persons are denied employment a great resource is lost.

The Workmen’s Compensation Act originally was directed at hazardous occupations. Serious injuries occur in all occupations. The problem of the injured workman is not related to whether the law has labeled his job as hazardous. With minor exceptions the law should require coverage for all occupations.

Migratory Labor

Migratory workers play a significant role in the harvesting of Oregon’s farm produce. We have made real improvement in state regulation and private provision for sanitation, housing, working conditions and education. There is now available a study by the Department of Education which points toward needed further improvement in our services to these workers. Funds for this program were not included in the budget since the study had not been completed prior to the budgetary deadlines. This should not preclude passage of the appropriation requested by the department of Education for the training of migrant children.

Children and Youth

In my message of two years ago the need for remodification and rewriting of the laws relating to children and youth was pointed our. These laws are often conflicting and are scattered throughout the many chapters of the statutes. Each passing year accentuates the need for action of this vial matter.

Our public health program is another area of concern that relates to children and youth. IN the past decade maternal and infant deaths and venereal disease rates have actually shown and increase. One reason for this is the lack of clear definition in law of the authority and necessity for local health departments. You should consider establishing legal status for local heath departments.

Senior Citizens

There is a growing concern throughout the nation for the welfare of the aging. The high percentage of senior citizens in our state reflects tow encouraging facts. First, people are living longer, second, many Oregonians who retire are remaining within our borders and others are coming to us from throughout the country.

It is up to us to institute state programs which will aid them in preserving their independence and the fruits of their labor. I urge you to consider three basic programs.

First, the Legislature should promptly take advantage of the “Medicare” program established by the Congress. The state budgeted for 1961-63 includes funds for the participation in this program. There are those who expect that the social security laws will be amended to private care. If this be the case, the money budgeted should revert to the general fund.

The second program is one I commend to you once again. Homestead retention is fundamental to the preservation of personal independence. We would do well to encourage such retention by granting a reasonable exemption from taxes on the homes of our older citizens. I would stress that the encouragement should be by exemption and not merely by deferral. A deferral would create significant administrative and fiscal problems and would reduce materially the psychological goals of the program. I would suggest that the relief take the form of a percentage reduction of the tax and afford the broadest possible coverage.

The third recommendation is that recreation facilities be designed with specific attention to the needs and interest of older citizens. Such facilities would contribute to more vital interests and to more vigorous health.

But beyond this we need to take a special care to assure that we do not discard or segregate from the mainstream of our economic, social and political life this precious reservoir of experience and wisdom.


Developments in the public welfare field during this biennium deserve special mention. The work program for general assistance recipients has demonstrated anew that idle hands can be used in productive enterprises which are of immeasurable benefit to both the recipient and the community. We can take greater satisfaction in what a work program does for the self-respect of the individual than in the visible results of the project. Administration of the work relief projects has indicated that added legislation will permit wider utilization of the benefits to be realized through this program. Legislation should be adopted which will make it possible for recipients of general assistance to engage in work relief projects in the municipalities as well as in the counties.

The budget includes funds for a graduate school of social work. The establishment of this school is viewed with great expectation, for though it we will meet the ever-increasing demands for trained personnel in our social welfare programs. This new school can be expected to alleviate our present loss of personnel, while providing the stimulus to creative approaches to our public welfare problems.

Mental Health Clinics

We should strengthen mental health services in accord with the recommendations of my Mental Health Advisory Committee. There should be established in connection with the over-all reorganization proposals an statewide pattern of community mental health clinics and programs. This advance is essential services would be jointly undertaken by the state and the counties as local interest and resources and forthcoming.


The original --- and still major --- function of government is the protection of persons and property. It is the performance of this function that determines whether a government will expand or contract the limits of our individual freedoms. In many instances the very continuation of freedom is dependent upon government’s preservation of the balance among the competing forces in a society such as ours.

Consumer Protection

For many years the national and state governments have carried on programs designed to protect the consumer from deceptive and harmful practices and products. The consumer is no longer the victim of the practices of fraud and adulteration that were widespread at the turn of the century. Yet, there is a further need to insure that the consumer is able to make the most of his dollar on credit purchases, that he has a reliable source of data regarding items which affect his economic well-being, that he is not victimized by false advertising, and that he has a central point to which he can make complaints known.

It is for these reasons that I urge you to authorize the proposed Department of Commerce to develop a program for more adequate consumer protection.

I should also like to direct you attention to the Commercial Code which will come before you. If adopted it will provide further protection for the consumer.

Traffic Safety

There is no more tragic commentary on our civilization than the horrible self-destruction and property damage which occurs on our streets and highways through automobile accidents. I refer to Oregon’s nearly 1,000 deaths, more than 40,000 injuries and an economic loss of nearly $150,000,000 in the past two years. Unless strong, firm, forward-looking measures are taken by this Legislative Assembly, we will see the continuance of his carnage which can only become bloodier as we experience increases in population, motor vehicle registration and annual motor vehicle mileage.

Measures which would give Oregon a maximum speed limit, implied consent for chemical tests for intoxication, and police authority to arrest on probable cause at the scene of accidents must be passed.

To do less though inaction is an invitation to human slaughter.


Few measures in recent years have stimulated the expense and the intensity of feeling, as did the billboard control proposal in the November election.

It as heartening that the billboard industry has been meeting with the committee which supported the proposal in an attempt to develop acceptable legislation. My desire is that legislation be adopted which meets the federal standards. By so doing we become eligible for significant additional federal funds for highway construction. More important, we will provide the means of assuring preservation of Oregon’s scenic vistas and roadside beauty.

Liquor Regulation

Liquor control and regulation require our continuing attention.

One problem is still pending in the courts. The constitutional amendment permitting sale of liquor-by-the-drink requires that such beverages be sold only in connection with a food service. This requirement has been permitted to deteriorate to the point that some establishments serve practically no food and we find ourselves returning to the days of the saloon. This administration was the first to order through liquor commission regulation that these establishments derive a specific minimum of their gross income from the sale for food. Unfortunately, while recognizing the principle the courts ruled that the Commission did not have the necessary statutory authority. I urge you to provide the Commission with such authority.

It is recommended that you adopt legislation requiring a tamper-proof identification card for persons between 21 and 25 years of age. Such an identification card would serve to eliminate many of the illegal liquor purchases by minors and would protect the seller.

In my budget recommendations, I have suggested that the cities share in the revenues of liquor administration by an increase from ten to fifteen percent. Our counties have suggested that they too should receive a percentage of these revenues as an offset for their costs in the enforcement of liquor laws. You will wish to give this requires you careful consideration.

Public Convenience and Necessity

The legislature should provide statutory protection against future duplication of utility facilities. Such duplication has become common, particularly in the electric industry, and about 100,000 rate payers are in areas of present or prospective duplication. This means they pay for more investment in facilities that is needed to give adequate service. Most states have statutes authorizing the issuance of certificates of public convenience and necessity to preclude wasteful duplication.

The Legislature also should provide for the issuance of certificates of public convenience and necessity to log truckers. Such a certification procedure is essential in order to assure the adequacy of truck service and to avoid cut-throat competition that can be harmful to loggers, truckers and general public.

Atomic Energy

The Committee on Federal-State Relations appointed by President Eisenhower recognized that the states have a vital interest in the control and regulation of peaceful uses of atomic energy. Congress has enacted agreement with states whereby the Commission may discontinue and the state may assume regulatory authority over by-product materials, source materials and special nuclear materials in quantities not sufficient to constitute a “critical mass.”

Regulation by the state will greatly enhance research and use of nuclear materials. Our Public Utilities Commissioner and State Health Officer have devised a program for state regulation and legislation permitting state participation. The adoption of such legislation is vital to our continued growth in the field of atomic energy.


For some time it has been recognized that our Military code needed revising. A revision will be submitted for you consideration. This proposal is based upon a comprehensible study, and I urge its adoption.

Civil Defense

A number of communities have done an excellent job in planning for civil defense and are worthy of your approbation. I am concerned that so-called target areas have emphasized planning for evacuation to the virtual exclusion of a program of protection against fallout. Building codes in some communities do not encourage the construction of fallout shelters. I recommend that tax allowances be made for civil defense construction by individual citizens and by those who construct residence and office dwelling. This may encourage greater civil preparedness in these days when the alternative to annihilation may lie in our own efforts for self-preservation.


By administrative order I have directed that members of the Racing Commission and its employees shall not have a financial interest in racing horses or dogs in Oregon nor shall they be permitted to wager on races under their jurisdiction. These safeguards would be made a part of the racing law.


Our state has an enviable record in the field of civil rights. There is a continuing need to keep our civil rights statutes progressive, strong and adequate. Of particular concern is that of extending the Public Accommodations Act to cover those areas commonly called “personal services.” I know tat you will want to give this you most serious consideration. We cannot rest easy in the enjoyment of our freedoms until we have eliminated all vestiges of second-class citizenship.


Basic School support

We have every right to be proud of our outstanding school system. In virtually every national ranking that attempts to measure quality, Oregon is listed in the top five. The preservation of this quality in terms of the expanding school population is becoming increasingly difficult for our local school districts. Many citizens are feeling the press of a burdensome property tax. To afford an opportunity for local tax relief I have recommended in my budget an increase in state basic school support.

This increase will permit some communities to be in the position of lowering property taxes, while others will find themselves in the position of not having to raise property taxes to meet existing needs.


In 1955 as a State Senator, I authored a proposal for establishment of an enlarged program of state scholarships on a new basis.

The last Legislature provided a State Scholarship Commission but no appropriation was granted .I hope you will appropriate funds to administer these responsibilities, underwrite some of the costs of those who, on the basis of need and competitive examination merit help, and authorize use of such stipends at either public or private higher education campuses within Oregon.

This program is offered in the certain knowledge that we cannot afford the erosion of our brain power now taking place for lack of individual financial resources.NATURAL RESOURCES

In my message on government reorganization specific proposals were made, which will assure more adequate conservation of our great natural resources. Beyond the context of reorganization there are several items you should consider.

Proper management and orderly development of recreational and scenic resources should receive high priority. An inventory of existing facilities and planning for the accommodation of present and future citizens in the field of outdoor recreating is imperative, not only to maintain the general health and well-being, but as an important adjunct to industrial and economic development.

Modern construction demands huge quantities of sand and gravel, but we must assure that the dredging of these materials is done in a manner compatible with the conservation and use of other resources.

We must strengthen the means of combating air and water pollution be providing simplified methods for the financing of municipal sewage treatment plants.

During the past year we have noted an appalling increase in the numbers of man-caused forest and range fires. I recommend enactment of laws which will provide more stringent punitive measures as a deterrent to those who thoughtlessly endanger our lands.

In carrying out the mandate of the 1959 Legislature, the Department of Agriculture is making numerous changes in its organizational structure of Agriculture is making numerous changes in its organizational structure which would promote its services to farmers and consumers. Greater emphasis has been placed upon promotion and marketing of crops and emphasis has been placed upon promotion and marketing of crops and livestock. There are other improvements to be made to enhance this reorganization. I cite you two examples: (1) The Milk Audit Law, which needs revamping to be of greatest service to producers, processors and consumers; and (2) the Grain Warehouse Act, which needs substantial change to assure that the farmer who stores his grain in a public warehouse is fully protected.

Soil conservation districts have done much to conserve natural resources. I strongly urge you favorable consideration of measures which will allow more adequate state participation in the Small Watershed program.

The proof of competence in the handling of firearms should be demanded as a prerequisite for the first-time licensees if the annual toll of hunting accidents, fatalities, and vandalism is to be reduced.

In view of recent ruling by the Attorney General, it is necessary for this Legislature to consider clarification of the laws relating to the authority of the Land Board and other public agencies to lease and sell public lands. The full development of the industrial and economic potential of state lands in coordination with the preservation of their scenic and recreational values is of primary importance.

Your support of these and other measures designed to augment the present activities of our natural resource agencies is vital.


IN local government there are signs of increasing strength. The appointment of home-rule committees in nine counties, the progress of school district reorganization, and continued efforts in intergovernmental cooperation are among the evidences of interest and action.

I hope that in the course of you deliberations you will review the laws governing annexation, which is the key to orderly city development.

In view of the increasing scope and complexity of metropolitan problems, this Legislature will help assure further progress by authorizing an executive assistant in the Governor’s office with special responsibility for matters of intergovernmental coordination.


One of the most critical problems in state government is the lack of adequate salaries for classified and unclassified personnel, including those in higher education and state police. There has long been concern expressed over our failure to gain and retain the most competent employees for various state agencies. Private employers, the federal government and some local governments are paying salaries in excess of those currently paid by the state. This gap must be narrowed if we are to provide the services our citizens expect from their government. No program, regardless of how sound it may be, can function without qualified people.

I suggest that the Legislature adopt the salary recommendations contained in the budget. I further advocate the replacement of the statutory method of setting salaries for key administrators and to permit their establishment in essentially the same manner as for the classified service.


Washington’s and Lincoln’s birthdays need no longer be considered as legal holidays but may be set aside as special days of commemoration. In lieu of these two legal holidays, it would be fitting to establish February 14, Oregon Statehood Day, as a legal holiday.

I also urge that primary and general election days be considered as regular working days for public employees. IN making this suggestion, it should be clearly established that public employees be permitted the time off to vote in instances where the need is demonstrated.


There is much that can be done, along the lines suggested by a bipartisan committee, to improve our election laws, particularly in the corrupt practices act and reporting procedures. Moreover, it is my hope that a procedure be established to permit prompt investigation and action when defamatory and inflammatory campaign materials threaten the proper conduct of elections. The procedure should be completely nonpartisan, and can only be effective if it is conducted in the white light of publicity. The state cannot afford to leave to the combatants the correction of blatant efforts to swing an election by smear and fear or by the alternate use of the whisper and the big lie.


Since you last met, two circuit judges were appointed and elected as required by ORS 3,160. The status of the docket in that jurisdiction did not justify the addition of two judges. Yet two positions were put on the ballot to comply with the requirements of law. I hope you will take corrective measures so that the automatic factor that ignores the question of need is eliminated.

I should like to pay tribute to the record of improvement which has been achieved by the Supreme Court in reducing its backlog of cases during the biennium. In my remarks before the Fiftieth legislative Assembly I urged a test for practicality of the pro tem system before considering further the proposal for two additional full-time justices. The wisdom of you decision to concur in that recommendation is borne out by the fact that nearly $55,000 was saved when salary, secretarial staff and other considerations are totaled. Moreover, the objectives were achieved earlier than predicted.


In all of you deliberations which involve programs not envisioned by the budget presented to you, it is my hope you will avoid sending to my desk legislation which requires expenditures for which no appropriations are provided.


Executive Succession

IN these days of modern communication and transportation, there is no more need for a temporary Governor than there is for a temporary President.

In the last session, realistic steps were taken in the event of the Governor’s physical or mental incapacitation. We were thus one of the first in the nation to deal with that possibility. I urge that we take a similar forward step and refer to the people a constitutional amendment elimination from Article V, Section 8 the words, “absence from the state.”

Moreover, I recommend that another referendum amend the Constitution to provide that the Secretary of state succeed to the governorship upon death or incapacitation. This would give the people a chief executive they themselves had elected on a statewide basis. His service, should the absence provision not be eliminated, would be at no additional cost to the taxpayers. The proposed effective date should be January, 1965, beyond the present terms of the occupants of the offices involved.

23rd Amendment

Another matter of constitutional concern is that of prompt approval of the 23rd Amendment to the U. S. Constitution. IN the November election Oregonians supported the idea that people within out borders should not be disfranchised in presidential elations because they could not meet the residence requirements. It is only fitting that in this same spirit the franchise should be extended to residents of the District of Columbia.

Constitution Revision

During the 1951,1953m and 1955 sessions of the Legislature, it was my privilege to work with others in attempting to call a constitution convention. Unfortunately, those efforts were not successful. The need continues but the possibility of its occurring appears to be some years in the future.

Although you predecessors have been unwilling to approve the calling of a constitutional convention, the citizens of this state in the past general election did authorize the Legislature to submit extensive, coordinated revision of the document. I urge this session to begin the implementation for this mandate from the people.


The budget which has been submitted to you contains funds for a realistic building program for higher education and state institutions. There are an number of items which I suggest you consider in order that the long-range building needs of our state be adequately met.

A project which should be given high priority is the construction of a transportation building on the Capitol Mall. This administration inherited from the preceding administration a lease on the building in which the Motor Vehicle Department is presently housed. This lease expires in 1964. If we are to meet economically the space requirements of the Motor Vehicle Department, we need to begin immediate planning for transportation building.]

Another significant area in planning for future building requirements is that of enlarged facilities for the Supreme Court and the Department of Justice. The present building no longer meets their needs.

In order to facilitate legislative services to the people, we are requesting planning money to study the feasibility of the Capitol extension to provide the needed legislative offices and committee rooms.

IN conformity with the directive of the Fiftieth Legislature, the Department of Finance and Administration has bade an extensive study of the need for a state correctional facility for women and funds for its construction are included in the budget.


You have received, in a special report, my recommendations for the reorganization of the executive branch. The establishment of a manageable and responsive executive organization is certainly one of the most significant proposals that will be before you. If government administration is to be as efficient and effective as it ought to be, we require a cabinet system.

The Fiftieth Legislative Assembly directed the submission of reorganization recommendations. I do so in the firm conviction that the proposed changes are urgently needed.

These recommendations are not the product of any one mind. Any political party. They are an outgrowth of previous legislative study, departmental review and a citizens committee’s suggestions. This committee was headed by former Governors Chares Sprague and Robert Holmes and to it I also named four member of this Assembly, along with representatives for business, labor and agriculture..

I think perhaps the most eloquent testimony in behalf of the reorganization proposals is the nature of the objections so far heard. The voices of caution, the voices of resistance to change are always prompt and numerous. They appeal to instinctive rare of the unknown. They prefer the old, because it is familiar, to the new, because it is strange. Heed these objection and you shall have failed to take steps to meet the challenge of the sixties.

The Hoover Commission gave Congress a blueprint for betterment. James m. Landis has handed President-Elect Kennedy a chart for a new course of action as it applies to an umber of federal agencies. We in Oregon now have an outline to eradicate obsolescence. Should you choose to do nothing, then the buck-passing which now characterized some administrative procedures must rest at your door.


The length of the legislative session and the breadth of you endeavors have been of increasing concern in the light of the meager compensation accorded to you. There are factors in 1961 which could and should assure for the people of Oregon a session which will be remembered for its seriousness and for the dispatch with which business was conducted. You received the budget document 38 days ago; the reorganization plan was I you hands t here weeks ago; last month you conducts a preliminary legislative conference embracing some one-third of you membership; you have created a fiscal committee which provides added staff services; the number of experienced legislators portends familiarity with procedures and problems; election of majority leadership with prior gavel experience and a continuance of minority leadership in the Senate along the lines suggested in this message tow years go --- these are the factors which give you an unprecedented opportunity to get to the heart of the matter promptly and decisively.

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