"The Federal Aid System which comprises the main arterial Highways of the State, comprises 3958 miles. With the work completed and now under construction, there will be approximately 1200 miles of gaps in the Federal Aid System. The Commission wishes to stresss the importance of completing this System by filling in all gaps that remain in the highways now and will remain after the completion of the highways now under construction, as rapidly as moneys can be made available for this purpose, in order that the citizens of the State may have the benefits of the completed Highway System that will enable them to get to all large centers of the population by good, usable, all year around highways. In order to accomplish this as quickly as possible, we would stress the advisability of continuing to construct in accordance with the State Construction Plan, which is to build highways and surface with such type of surfacing as will give the needed service at the present time and for some years to come, only putting the high type expensive pavement on those roads where present traffic, or traffic soon to be anticipated may justify such pavement, using the valuable gravel, sand, clay, chert and stone deposits of the State in making temporary surfaces on those roads where the traffic justifies such surfacing.

"This plan of course, contemplates the ultimate paving of all the main arterial roads in the State as traffic conditions demand and as financial conditions permit. The object of our recommendation being to first build a foundation, and drainage structures, which are the same for all types of roads and which when finished with some so called temporary surface, will as stated above, enable the people to get the use of the general' system of roads at an earlier date than would be possible by paving all roads as thy are constructed.

"In constructing pavements, it has been the policy of the Highway Commission, concurred in by Federal Bureau of Public Roads, to ask for bids on several types of pavement which are recognized all over the Country as standard types, the purpose being to secure competition, which we feel could not be had should the Commission ask for tenders on only one type of surfacing. We believe that this policy has saved the State vast sums of money in the paving that has been done, and that if this policy is adhered to, the State will profit immensely thereby."

I submit the above extracts from the Commissions' report for your earnest consideration.

The motor bus traffic of the State has developed and is developing very rapidly and these vehicles being very heavy and operated at high rates of speed, are damaging the highways very much more than a similar number of ordinary privately owned vehicles do. In concurrence with the Highway Department's recommendation, I recommend that some action be had looking

to the regulation of this service, and that some system of licensing or taxing them be adopted that will cause them to reimburse the State in some measure for the damage done to the highways and that they be regulated as Common Carriers.

Within the last few years a great many small towns and communities traversed by the State Highways have installed very restrictive speed limits for those using the State constructed highways and these regulations have been enforced in such man-ner as to cause the people at large to call them "speed traps," and have been a great source of annoyance to the traveling public who are using the State Highways.

I would recommend that some action be taken to put the fixing of speed limits on State constructed highways under the jurisdiction of the Highway Department, or some other State Agency, so that uniform and properly thought out regulations may be provided for the use of the State Highways, rather than haphazard regulations that are now being enforced. We also concur in the recommendation being made by the Alabama Association of Mayors and ask your earnest consideration of same.

Any mention of Alabama's road building would be incomplete without the mention of that great engineer, the late lamented W. S. Keller. To him perhaps, is due as much praise as any other man. As Chief Engineer from the inception of Highway Development in Alabama he gave of his thought, his energy and his time, and to him is largely due the progress made in Highway development. He has left his monument in roads and bridges all over Alabama, and his services are remembered by our people.. He died in the service of his State as Chief Highway Engineer and has left to history a name that will endure. Peace to his ashes.

STATE BOARD OF ADMINISTRATION

The State Board of Control and Economy was abolished by the Legislature of 1923.

The State Board of Convict Supervisors was established in its place, retaining the best features of the old act and abolishing the other features which were found to be undesirable and impracticable. Later in the Session of 1923, the name was changed to the State Board of Administration because it not only supervises the operation of the Convict Department, but has charge of all State property, unless otherwise provided, and is the general business agency of the administration.

The Board is composed of two members, a president and associate member, and these members have direct charge of the two departments of the Board; the President is in charge of the Executive Department and looks after the general business inter-

est of the State; the Associate Member being in charge of all matters pertaining to the operation of all the State prisons and the activities connected with them. The Governor is ex-officio member of the Board.

EXECUTIVE DEPARTMENT

This department is under the supervision of the president, Hon. L. A. Boyd, and is charged with making all contracts, sale or purchase, of State owned property, unless otherwise provided, purchase of supplies for all departments, the keeping of accounts. covering the activities of the Board and administration of the State Insurance Fund.

Contracts made for leasing coal mines in which convicts are employed are referred to more specifically in the comment on the convict department.

Contracts for the sale of products manufactured by convict labor are handled through this department also.

Sale and purchase of farm lands in connection with the convict farms will also be referred to again under that department.

PURCHASING DEPARTMENT

All supplies and material for most of the departments are purchased through this Board. Purchases are made on basis of sealed bids and that this Department is functioning to the profit of the State is probably most clearly demonstrated by the increased volume of business handled by it. The total purchases made through this department during this administration have exceeded nine million dollars and is an increase of about three million dollars over the previous administration, although the purchasing for Educational and Eleemosynary Institutions have been discontinued since 1923.

The Accounting Department keeps a financial record of all activities of the Board.

The State Insurance Fund has been in operation for three. years. This law brings the insurance of all State owned property, except the University of Alabama and the Alabama Polytechnic Institute, including State owned rural school houses under the supervision of this Board. All State property has been inspected and values adjusted for insurance purposes. As a result of the operation of this Fund and this inspection the protection on all State owned property was increased 74.9% and the protection on rural school houses increased 138.61%.

With the exception of about five million of dollars of excess insurance, which is reinsured in a standard insurance company, all of this is carried in this fund.

The total valuation of property covered by this fund is twenty-one and a quarter million upon which there is about sixteen and three quarter millions of insurance, over eleven millions of which is written at a discount of 40% from the manual rate.

There was appropriated by the Act creating the Fund one hundred thousand dollars to be used only in the event the premiums collected would not pay the losses and to protect the fund against an unusual loss.

All losses have been promptly paid and not one penny of the contingent appropriation has been used.

The operation of this fund has saved the tax payers of Alabama during the three years of its operation nearly two hundred thousand dollars in discounts and there was a net cash balance on hand October 1, 1926, of approximately fifty thousand dollars. In addition to the above, thousands of dollars have been returned to the tax payers in payment of fire and tornado losses on property which would not have otherwise been protected.

The State of Alabama is nothing more or less than a gigantic business enterprise, you gentlemen of the Legislature are the Board of Directors and the tax payers, whom you represent, the stock holders. With the above showing made by the operation of this fund before you, I believe you will recognize it as a sound business policy and one which should be continued.

CONVICT DEPARTMENT

This department is under the direction of the Associate Member, Hon. Roy L. Nolen, who has had the direct responsibility of the administration of all State prisons and their allied activities.

Probably the most constructive achievement of this Board has been the change in the basis of employment of convicts. It was the desire of this administration that the State should be paid for the use of convicts employed in the mines on a free labor basis and at the same time improve the working conditions of the convicts.

To this end an investigation was made as to the amount per ton at which the coal could be produced. The operators were then approached on the proposition of leasing the mine premises and equipment and coming to an agreement on the price per ton.

On account of the fact that each mine was operated by different methods and under different conditions it was necessary to work each contract out singly.

The Belle Ellen Mine was the first to be taken over. In this contract the coal was mined and owned by the State until sold. This contract became effective on February 1st, 1924, and this year was the hardest one on coal sales of any time in the past decade. In spite of this fact the contract produced more revenue

than would have been reecived under the old plan, but was cancelled August 31, 1925.

The Flat Top Mine was the next to be taken over on July 1, 1924. Then Banner Mines on March 1st, 1925, and Aldrich Mines on August 1st, 1925.

All of the mines have been in operation on the new basis less than one half of the time and yet the increased revenue, or earnings, accruing under these new contracts has amounted to more than four hundred thousand dollars over and above the old basis of leasing the men to the company and the prisoners have been under the direct supervision of State employees at all times.

Under the provision of these contracts Alabama took another great forward step in providing compensation for prisoners injured while employed, or for their dependents. I am advised by prominent prison authorities that this is the only State in the Union, and probably the only place in the world, where such provision is made.

In order to further protect the interest of the State, its employees and prisoners, catastrophe insurance was taken out covering each operation and group insurance, in which the employees participate in the premium, has been provided.

Old Prison Farm Number Five, which was non-productive and practically abandoned, containing 692 acres was disposed of for $132,500.00 together with two other small tracts in Elmore County containing 136 acres for about $4,500.00.

On the other hand nearly nine hundred acres were added to the Kilby farm lands, conveniently located on railroads and improved highways for less than was realized on sale of the above mentioned tracts.

It is the opinion of the Board that there will be enough timber and gravel on the new tract to pay for it and it is recommended that these resources be preserved indifinitely.

This administration has made one hundred thousand dollars worth of improvement in the erection and equipment of a modern. dye house at Speigner.

This administration participated in the cost of Kilby Prison construction to the amount of more than one million of dollars and has made additional improvements in the physical equipment and improvements in the camp in the amount of about one quarter million of dollars.

Time forbids that this discussion be continued but a detailed report will be furnished each of you for your information and study.

I desire to commend in no uncertain manner the wise, careful and honest handling of this the most intricate and important department by Honorable L. A. Boyd and his Associate, Honorable Roy L. Nolen, who in purchasing and in administration