Plenary Session Transcripts

Governors Attending:

Discussion Subjects:

Retrospectives and prospective on the Governors’ Conference; interstate oil compact; interstate trade barriers (control of interstate commerce, freight rates, taxation of insurance companies, sales and use taxes, liquor taxes); what role the federal government and state governments should play in the development of interstate regions; public works and relief; intergovernmental cooperation (federal governmental activities that stand to benefit, highway improvement, and federal taxation of state employees); and federal enforcement of administrative standards on state government

Points of Interest:

The meeting transcripts began with retrospectives and a prospective on the association. (See copies attached.) Council of State Governments Executive Director Frank Bane took over as Secretary of the association.

Attendance at the meeting was low because of a major hurricane that had just hit southern New England. [The hurricane, known as the Great New England Hurricane of 1938, came ashore September 21 on Long Island, causing severe flooding, as well as fires sparked by downed power lines.] (Information source: www.erh.noaa.gov)]

Governor George Aiken of Vermont, though not present at the meeting, asked that a resolution be adopted expressing dismay that the federal government had not approved the New England State Flood Control Compact, which he argued would help prevent the kind of devastation that the hurricane had caused. However, his colleagues in the association ultimately declined to act on his recommendation, some because of their opposition to the adoption of resolutions concerning the federal government and others because they felt that they needed to know more about why the federal government had not approved the compact.

Governor James Allred of Texas gave a presentation on the ways in which states in effect established interstate trade barriers. Among the examples he offered were that some states gave preference to in-state businesses, that truckers had difficulty dealing with differing laws and regulations in the states through which they passed, and that northern dairy states imposed high taxes on oleomargarine--which was made from cottonseed--in order to make the southern states less competitive with their own. Governor Carl Bailey of Arkansas questioned Governor Allred as to whether Texas itself had erected a trade barrier in the form of a requirement that insurance companies doing business in the state invest a certain percentage of their capital in Texas as security. Governor Allred responded that a substitute was under consideration for companies doing business in Texas to be charged something for exploiting the state's natural resources--which he did not consider to be a trade barrier.

Reference was made to the Interstate Oil Compact--written jointly by Governors of oil-producing states--which had been approved by Congress as well as by state legislatures with a view toward controlling oil production. It had been made effective for 1935 through 1937 and renewed for another two years, which meant that it was due to expire shortly if not renewed again.

With respect to relief, Governors talked about whether they should be given greater responsibility for selecting and monitoring projects that had been initiated locally but funded federally. One view expressed was that WPA and relief work was keeping people from jobs such as those in agriculture that needed to be filled. On the other hand, a question was raised as to whether someone should be forced to relocate or travel to do agricultural work that would only prove to be temporary and potentially cost more in travel than it paid.

It was mentioned that the Supreme Court had ruled in favor of federal taxation of state employees. Governor Henry Horner of Illinois suggested that Governors have their Attorneys General prepare briefs and express their views on the decision.

Memorable Quotes:

Governor Ernest Marland of Oklahoma said: "...by reason of discovery of many new oil fields...a great surplus of oil was being produced, much more than there was any national or export demand for. This exhaustible, irreplaceable natural resource was dumped upon an already overloaded market and furnished a Roman holiday of wasteful consumption of petroleum product all over the nation and in many countries of the world. The consuming public was getting a cheap, but temporary, joy-ride at the expense of the oil producing industry, the oil producing states, and the safety and welfare of the nation."

Governor George Aiken of Vermont wrote "...it is a distinct tragedy that the opposition of the Federal Administration to the New England State Flood Control Compact, adopted in full accordance with the state and Federal laws, has prevented any start toward even partial flood protection for the people of New England."

Governor Richard McMullen of Delaware said: "I have never been impressed with the idea that a man must...go out on a farm and take temporary employment when he lives in town. He often loses more than he makes."

Resolution Adopted:
Extending sympathy to the southern New England states in the wake of the Great New England Hurricane of 1938.