including the year 1920 this department, in collecting fire marshal tax, collected from each fire insurance company two-fifths of one per cent on the total gross premiums of such company regardless of whether or not the gross premium was derived from a fire risk or from other lines of coverage extended by such company. Under date of December 20, 1921, the AttorneyGeneral's office, in a written opinion advised this department that where premiums collected by insurance companies for protection against fire losses are segregated from the premiums collected for protection against other causes of damage, the fire marshal tax should only be levied upon the amount of fire insurance premium. Consequently, while the fire marshal tax for the year 1921 was $40,310.59 for the year 1922 it is only $30,783.81.

Table II, hereto attached, shows expenditure from which you will observe that the expenditure of the department for 1921 is less than it was for 1920; while for the period covered during the year 1922 there is still a decrease.

The total income of the department for the period covered by this report is $2,552,221.20. Expenditure for the same period is $85,359.20. Net profit to the State, $2,466,862.00.

Since all the expense of the department is paid out of the funds collected by the department from the insurance companies, and since the premiums charged the citizens of the State are lower with the Insurance Department functioning than they would be without such department, and since all funds collected by the department in excess of operating expenses go into the general fund of the State, it is evident that the department has, without one penny of cost to the taxpayers of the State either directly or indirectly, yielded to the taxpayers of the State a total net profit of $2,466,862.00.

REAL USEFULNESS OF DEPARTMENT

It is impossible for the real usefulness of the department, or the actual value of the department to the citizens of the State, to find expression in any financial exhibit, or in a statement of income and disbursement. As illustrating in some way the wider field of usefulness of this department, I am calling attention to the fact that during the period of deflation following the year 1920, and which was so disastrous to many lines of business, as noted elsewhere in this statement, the withdrawal from the State of eighteen insurance concerns, not one policy holder of the State, so far as this department is advised, sustained the loss of a single dollar by reason of the crash in the business of insurance.

It is unfortunate that so many people seem to regard the Insurance Department as a mere collecting agency, or revenue producer. It is true that the department is one of the very best net revenue producers which the State has. It is equally true, however, that the savings to the citizens of the State, effected under the supervision of the insurance business in the State by the department, is many times greater than the amount of profit reflected in the financial statement, and no department of State so vitally touches the financial interest of every citizen in the State as does the Insurance Department, and in its work of supervision it is called upon to adjust thousands of matters involving the interests of the citizens of the State that find no expression in financial reports and no publicity through the press."

ALABAMA NATIONAL GUARD

The history of the organization and operations of the new Alabama National Guard is contained in a report recently submitted by the Adjutant General, Colonel Hartley A. Moon, who has shown marked ability as an organizer.

I call particular attention to the record of field services performed by the Guard for the protection of the lives, property and rights of citizens of the State and for the relief of citizens in distress. The value of these services is incalculable and they deserve the highest commendation.

The following memorandum from headquarters of the Fourth Corps Area, United States Army, shows the progress of organization of the National Guard in the states comprising the Fourth Corps area and affords cause of congratulation and just pride in our State military establishment:

The report of the Adjutant General follows: "1. Because of lack of proper national laws and the adoption by the states of such specific measures, the entire National Guard of the United States, on being mustered out of the Federal service after the war with the Central European powers, reverted to a civilian status including both officers and enlisted men. This left the states with absolutely no National Guard. The State of Alabama did not have one National Guardsman with Federal recognition at the beginning of the year 1919.

No effort was made early in the year 1919 to reorganize the National Guard of Alabama under the provisions of the National Defense Act of 1916, because of a letter from the War Department bearing date of January 22, 1919, informing the governors of the states that the military policies of the War Department had not been definitely settled and that until policies and plans had been worked out, authority would not be granted states to organize National Guard units with Federal recognition. Some states proceeded with the organization of a purely State Guard, but this was impossible in Alabama because of the fact that no State-owned arms, equipment, and uniforms were available for issue for such troops and no State appropriations were available for the purchase of such.

Pending instructions from the War Department, concerning the date on which to begin reorganization, the State Legislature, which was in session in February, 1919, took steps to comply with section 110, National Defense Act, so that when authority was given there would be no obstacles to the Federal government's co-operating with the State in the reorganization work, furnishing arms and equipments and paying the National Guard armory drill and field pay.

There being considerable delay in progress concerning the policies and plans of the War Department, on March 7, 1919, a special request was made by the Governor of Alabama that the War Department authorize this State to organize the State Staff Corps and departments and one infantry regiment. After considerable delay and correspondence, authority was given by the War Department on June 11th for the organization of the Adjutant General's Department and the Quartermaster Corps of the State Staff Corps and departments, and one infantry regiment. Work was immediately started on these units. In July, 1919, authority was granted for the organization of other divisional units of the Alabama National Guard.

Progress during the year 1919 was very slow as the military man power of the State had just been mustered out of the service of the United States and had had no opportunity to readjust themselves to their civil vocations. This was especially true of the officer material, who were, as a rule, mature men and, in many instances, men with families and in such businesses as required practically all of their attention and time in obtaining their readjust

ment.

2. Organization.

The first units mustered into the State service with Federal recognition were the Adjutant General's Department and the Quartermaster Corps of the State Staff Corps and Departments, on July 1, 1919. This was followed by the organization of Company "L," 167th Infantry, Birmingham, July 2nd; Company "A," 167th Infantry, Montgomery, July 12th; Company "D," 167th Infantry, Selma, August 6th; Third Battalion Headquarters Company, Birmingham, August 20th, 1919. By December, 1919, there were seven units of the 167th Infantry recruited and mustered into the National Guard of Alabama with Federal recognition.

In the year 1920, there were added three infantry companies and one troop of cavalry with Federal recognition. Organization work during this year was carefully and deliberately carried on, as the experiences of the previous year were used to advantage in organizing units on a more substantial basis with assurance of community support in military man power and of local appropriations and moral backing of the business interests.

In the year 1921, there were added six infantry companies, a tank company, three cavalry troops and two batteries of field artillery with Federal recognition.

In the year 1922, up to and including the 30th of September, there were added three companies of infantry, completing the 167th Regiment; two troops of cavalry, completing the 55th Machine Gun Squadron and completing our entire cavalry allotment; four batteries of field artillery, completing the artillery battalion and the entire allotment of field artillery. Other units organized during this year were the 114th Veterinary Company; the 153rd Motor Transport Company; the 135th Observation Squadron (Air Service); the 140th Ambulance Company; the 127th Wagon Company; Company "D," 133rd Engineers; the Headquarters Company, 77th Infantry Brigade; the 114th Ammunition Train and the Headquarters Company, 39th Infantry Division. With the organization of the Brigade Headquarters Company, the entire infantry allotment of this State was completed.

This gives the State of Alabama forty-two (42) organizations with Federal recognition at the end of the fiscal year, September 30, 1922, with a strength of one hundred and sixty (160) officers and two thousand six hundred ninety-six (2,696) enlisted men, a total of two thousand eight hundred fifty-six (2,856) active citizen soldiers.

The units of the infantry regiment are grouped in three battalion areas. The first in the black belt; the second in the northeast section of the State; and the third in Jefferson county; the separate infantry units being the Headquarters Company, 77th Infantry Brigade, stationed at Tuscaloosa, and