USA > Ohio > Ohio legislative history, 1913-1917 > Part 31
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That the Commission has already made great progress is evidenced by the fact that it has received requests from corporations, chambers of commerce, civic organizations, and other states for information as to its methods which have been so widely commented upon by the press and by investigators who have come from other states to observe the progress being made.
Throughout the years in which the merit system has been in opera- tion, the Commission has had the willing assistance of representative business and professional men of the state, as well as the co-operation of department heads, and the assistance of technically trained persons in the service, in working out its plans for improvement. This practice of calling to its assistance representative men from every walk of life has
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OHIO LEGISLATIVE HISTORY.
resulted in the creation of a wholesome public sentiment in favor of the merit system, which will undoubtedly make its administration much easier in future years, and will attract to the public service trained and ambitious workers from every walk of life.
With this favorable public sentiment, with a definite promotional system established, with uniform salary schedules for similar work, with standard requirements for entrance and advancement, and with a proper system of training employes and instilling into them the idea of service, which will be an outgrowth of present plans, the State of Ohio can look forward with confidence to the establishment of a merit system second to none, and may expect increasing effectiveness of public administration.
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OHIO LIQUOR LICENSING DEPARTMENT
MR. M. M. ROSE, Washington County.
MR. WILLIAM F. MASON, Chairman, Butler County.
MR. G. GOLDSMITH, Secretary, Crawford County.
MR. JOHN F. NOLAN, Jefferson County.
STATE LIQUOR LICENSING BOARD.
On September 3, 1912, the people of the State of Ohio, by a vote of 273,361, as against 188,825, adopted an amendment to the Constitu- tion of the State known as Section 9, Article 15, which in part declares :
"License to traffic in intoxicating liquors shall be granted in this state and license laws operative throughout the state shall be passed with such restrictions and regulations as may be provided by law, and municipal corporations shall be authorized by general laws to provide for the limitation of the number of saloons."
The General Assembly of the State of Ohio on April 18, 1913, enacted a law (the Greenlund Liquor License Act) which carried into effect the provisions of this amendment to the constitution.
On August 14, 1913, Hon. James M. Cox, then Governor of Ohio, appointed the first State Liquor Licensing Board composed of Charles L. Allen, of Marion County, to serve two years; Byron M. ClenDening, of Hamilton county, to serve four years; and J. H. Secrest, of Allen county, to serve six years. The Board organized on the same day and elected Charles L. Allen as Chairman, and Robert S. Hayes, of Mont- gomery county, as secretary.
On August 2, 1915, Frank Hay, of Stark county, was appointed by Governor Willis to succeed Mr. Allen, whose term had expired, and Mr. ClenDening was chosen as Chairman of the Board. On August 9, 1915, Mr. Secrest resigned and Governor Willis appointed as his successor M. M. Rose, of Washington county, who is still serving. At the same time Mr. Hayes resigned as secretary and J. L. Hampton, of Franklin county, was appointed to succeed him.
On October 22, 1915, Governor Willis removed Mr. ClenDening as a member of the Board upon the claim that he had participated in the McDermott Law Referendum, and Mr. Hay was made temporary chairman. A few days later Governor Willis appointed J. E. Hurst, of Tuscarawas county, to succeed Mr. ClenDening, but he really never served. In fact, through court action, Mr. Hurst was never rated as a member of the Board and never drew any salary for his services.
Immediately after Mr. ClenDening was given notice of his removal he filed an action in mandamus before the State Supreme Court, alleging that his removal by Governor Willis was illegal, in which action he was sustained by the full bench of the Supreme Court, and on December
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13, 1915, through an order of the Court he was reinstated to his posi- tion as member and Chairman of the Commission.
On March 27, 1917, Mr. Hampton resigned as secretary and John F. Nolan, of Jefferson county, was chosen as his successor. There was no change in the personnel of the Board until June 1, 1917, when Wil- liam F. Mason, of Butler county, was appointed by Governor Cox to succeed Mr. Hay, resigned.
The next changes on the Board came in January, 1918, when Mr. Nolan, the then secretary, was appointed by Governor Cox to succeed Mr. ClenDening, who had resigned his place on this Board to accept another appointment of the Governor's to membership on the Public Utilities Commission. The appointment of Mr. Nolan made all mem- bers of the Commission unexpired term members and none eligible for selection as chairman under the law. An organization was, however, effected by the choosing of Mr. Mason as Chairman, and the appoint- ment of G. Goldsmith, of Crawford County, as secretary, to fill the vacancy caused by the elevation of Mr. Nolan to membership on the Board.
The adoption of the license system and the passage of the Green- lund Liquor Licensing Law found forty-three wet counties in the State, which immediately came under the provisions of the law. The State Board promptly began the work of selecting two commissioners of op- posite politics in each of these wet counties, and these commissioners duly appointed opened their offices, equipped for business, on Septem- ber 1, 1913. Between the first and fifteenth of September in this year 8,817 applications for license were filed with the county boards. After a thorough investigation of the qualifications of the applicants, 5,489 were granted licenses and 3,328 were rejected. On November 24, 1913, when the new license law went into effect 2,977 saloons were compelled to close their places of business. Of this number 1,493 were disreput- able places, which should never have existed. The closing of these places was the first effect of the new license system. The passage by the voters of the State of the Home Rule Amendment in the fall of 1915 increased the wet counties in the state from 43 to 76. Since that date two counties in the state have voted dry, leaving at the present 74 wet counties under the jurisdiction of the Board. In these wet units there are over 6,000 saloons.
One of the very satisfactory developments shown by the first year's experience was that the administration of this law had not cost the tax-payers a single penny. The financial statements since the creation of the department to the present time fully justified the wisdom of the creation and plan of the State Liquor Licensing System and com-
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OHIO LEGISLATIVE HISTORY.
pletely refuted the charges that it would be a burden to the tax-payers of the State. Not only has the system been so carefully and economically administered by the State Board that it has proven self-sustaining but the first annual financial statement shows that at the close of the first fiscal year in 1914 the Board had to its credit the neat sum of $583,886.94.
This amount was accumulated not by taxes paid by the people of the state in general, but by the saloon licensees themselves, each of whom pays into the State Treasury each year for the maintenance of this department the sum of $105. This is exclusive of the Dow- Aiken tax.
On October 13, 1914, with the approval of the Governor, the State Board transferred $750,000.00 from its own fund to the General Revenue Fund of the State.
The first annual report of the department which took in the busi- ness of the first fiscal year ending August 3, 1914, shows a total receipt of $832,300.35, which included an appropriation of $165,000.00, and an expenditure of $248,413.41, leaving a balance of $583,886.94.
The second annual report which included the business to and in- cluding August 2, 1915, shows total receipts, including the previous year's balance, of $1,253,521.21. The expenditures for the year amounted to $992,808.80, which included the transfer of $750,000.00 to the Gen- eral Revenue Fund, leaving a balance of $260,712.4I.
The third annual report for the fiscal year ending June 30, 1916, shows receipts of $962,937.53, including the previous year's balance. The expenditures for the year amounted to $858,703.58, which included another transfer to the General Revenue Fund of the State in the sum of $650,000.00. This left a balance of $104,233.95 in the Liquor Fund.
The fourth annual report for the fiscal year ending June 30, 1917, shows receipt of $800,542.05, including the balance of the previous fiscal year. The expenditures were $205,948.87, which left a balance in the fund at the beginning of the present fiscal year of $594,603.18. This has been supplemented since July, 1917, by a half year license period receipts last October and a full year in April, 1918, in all some- thing over $975,000.00. Allowing the usual expense, estimated at $210,000.00, there will be a balance in the Liquor Fund at the end of the 1918 fiscal year of approximately $860,000.00.
One of the principal features of the Liquor License Commission is what is known as the Inspection Department. The entire work of the supervision of the liquor traffic was changed by the License Act from the Dairy and Food Commission to the State Liquor License Com- mission, which at the present time has a field force of thirty inspectors and examiners at work. These men are authorized and empowered
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OHIO LEGISLATIVE HISTORY.
to inspect licensed and unlicensed dealers in intoxicating liquors; to examine and investigate complaints against druggists and physcians and ascertain if licensed dealers are conducting their places according to law. The principal work of these men is the apprehension of boot- leggers or those handling liquor illegally, and the detection of licensees who are violating the liquor laws of the State.
During the four years covered by this report the Department through the activities of its field men have succeeded in placing upon the various county tax duplicates throughout the state 332 Dow-Aiken tax certificates, the full collection of which would have netted $231,- 222.37. Part of this amount, however, was never collected due to neg- lect of County Treasurers and Prosecuting Attorneys in the counties in which the certifications were made.
During the years of this account these field men made 22,348 visits to licensed saloons and 47,295 visits to unlicensed places, or a total of 69,643 visits. Besides this 4,626 trips were made as prosecuting wit- nesses in cases that they had worked up.
Through these visits 424 cases were filed against licensed dealers, while 338 convictions were obtained, which netted to the local districts in which the offenses were committed fines totaling $22,496.
The visits to unlicensed places caused the filing of 2,674 cases. Of this number 2,032 convictions were obtained and fines totaling $407,210 were assessed.
. The total number of convictions during the period as obtained by the inspectors was 2,369, and the total amount of fines assessed amounted to $429,706.
WILLIAM F. MASON, Chairman State Liquor Licensing Board
William F. Mason was born in Hamilton, Butler County, Ohio, May 26, 1868. His parents were Martin and Barbara Mason. The son, William, was educated at Zion's Lutheran Parochial Schools, the Hamilton Public Schools and Hamilton Business College. His first en- gagement was bookkeeper at the H. P. Deuscher Co., Hamilton, O. He is Secretary and Treasurer of The Martin Mason Brewing Co., Hamilton, O. Mr. Mason was married June 20, 1900, to Miss An- toinette E. Rupp and they have six children :
William R., Charles R., Katherine Susanne,
Elizabeth Antoinette, Mary Helen (dead), and James Gordon.
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OHIO LEGISLATIVE HISTORY.
Mr. Mason has served as City Auditor of Hamilton, O .; member of the Deputy State Supervisors and Inspectors of Elections, Oil In- spector of Ohio under Governor Cox's first term, and he was appointed State Liquor Licensing Commissioner June 1, 1918, by Governor Cox.
Mr. Mason is very active in political life and recognized as one of the leaders of the Butler County Democracy.
He served on the Democratic State Central Committee and for the last fifteen years Secretary of the Butler County Democratic Organiza- tion.
MANNING M. ROSE
Manning M. Rose, Republican member of the board, was born in Washington County, Ohio, June 30, 1856. He has resided in Washing- ton County all his life, and has been a resident of Marietta for 34 years. He was educated in the public schools. Mr. Rose was married to Louesa M. Beish, January 1, 1878, and they have two children, both living.
During President Harrison's administration Mr. Rose was chief of the Surveying Division of the U. S. General Land Office, Chief Clerk, and later assistant commissioner of the Bureau.
He served on the State Board of Pardons under the Mckinley administration, and was appointed Postmaster of Marietta by President McKinley and served for thirteen years in that office during the admin- istrations of Mckinley, Roosevelt and part of the Taft administration. Mr. Rose is an active Republican, and served as chairman of the Re- publican Executive Committee of Washington County and president of the Marietta Board of Trade for two years.
In August, 1915, he was appointed on State Liquor Licensing Board by Governor Willis for the term ending August, 1919.
JOHN F. NOLAN
John F. Nolan was born at Steubenville, Ohio, December 10, 1891. He is a graduate of Holy Name Parochial High School, Steubenville. His profession is that of a newspaper reporter. Mr. Nolan married Miss Anna Polen.
Mr. Nolan has been Deputy Probate Judge of Jefferson County, Ohio; a member of Jefferson County Liquor Licensing Board ; ; secretary of the State Liquor Licensing Board and he was appointed a member of the State Liquor Licensing Board January 1, 1918, by Governor James M. Cox.
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OHIO LEGISLATIVE HISTORY.
G. GOLDSMITH, Secretary State Liquor Licensing Board
G. Goldsmith was born in Crawford County, July 12, 1872. His parents were Louis and Susanna Goldsmith. G. Goldsmith is a gradu- ate of Northwestern University, and he took special course in Boston. Mr. Goldsmith is by profession a teacher.
He was married June 23, 1904, to Miss Cora Blanche Stiger and they have one child, Lois Ellen. Mr. Goldsmith served four years as City Treasurer, Bucyrus, and four years Clerk of Courts, Crawford County. He was chairman of the Crawford County Democratic Execu- tive Committee for a number of years. He was appointed as Secretary to State Liquor Licensing Board by Governor Cox January 1, 1918.
PHILIP CHARLES BERG, Superintendent of Banks and Banking
The very responsible position of Superintendent of Banks and Bank- ing in Ohio is at present occupied by one of the most efficient and suc- cessful of the younger contingent of financial men in the State. Philip Charles Berg, formerly cashier of the Farmers' and Traders' National Bank at Hillsboro, Ohio, was appointed by Governor Cox July 25th, 1917, Super- intendent of Banks to succeed Super- intendent Harry T. Hall. Mr. Berg was born at Hillsboro, Highland County, Ohio, July 15th, 1879. His father, George Berg, was born in New York City and came to Ohio when about 20 years old. The son, Philip, was educated in the public schools of Hillsboro, graduating from High School in 1898. He was Deputy County Treasurer for two terms, then became connected with the Farmers' and Traders' Bank, remaining with that institution for 15 years, rising to the post of cashier. Mr. Berg is a most popular Democrat and citizen. His term as Super- intendent of Banks expires in 1920.
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DEPARTMENT OF BUILDING AND LOAN ASSOCIATIONS
The act creating the Bureau of Building and Loan Associations was passed May 1, 1891, and provided that the Insurance Commissioner shall be the Inspector of Building and Loan Associations.
The first annual report of the bureau was filed April 1, 1892, by W. H. Kinder, Superintendent of Insurance, and was prepared by and under the direction of Herman S. Cellarius, Deputy Inspector of Build- ing and Loan Associations, of Cincinnati.
No change affecting the status of the direction of this Bureau by the Insurance Commissioner occurred in the law until 1913, when a law was passed providing for the appointment by the Governor of an Inspector of Building and Loan Associations and creating a depart- ment separate and apart from the Insurance Department.
Prior to the passage of this act, (O. L. 103, p. 181) the Bureau was under the jurisdiction of E. H. Moore, Insurance Commissioner and ex officio Inspector of Building and Loan Associations, and the work directed by James A. Devine, Deputy Inspector. The law pro- viding for appointment of an Inspector of Building and Loan Associa- tions became effective July 23d, and on August 1, 1913, James A. Devine became the first Inspector of Building and Loan Associations, being ap- pointed for a term of three years, his commission expiring August I, 1916.
On August 1, 1916, Leroy G. Silbaugh, of Lancaster, was ap- pointed as Inspector. He served in that capacity until March 31, 1917, when, because his appointment was not confirmed by the Senate as provided by law, he was succeeded by James A. Devine, the present incumbent whose term expires July 31, 1919.
The annual report for fiscal year ending December 31, 1891, in- cluded returns from 465 associations, with total assets amounting to $39,644,728.03.
The annual report for fiscal year ending June 30, 1917, included returns from 675 associations, with total assets amounting to $321,- 741,528.95, making net increase over previous year amounting to $51,248,165.98.
The duty of this Department under the law is the enforcement of the provisions of law regulating and controlling the operation of the
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OHIO LEGISLATIVE HISTORY.
building and loan associations of the State. This is accomplished through examinations made at least annually and through annual re- ports and sworn statements filed with the Department by each associa- tion at the close of its fiscal year.
The primary purpose of the Department is to afford to the de- positor as complete protection as is possible through supervision and regulation. Ohio is one of several states which authorizes these asso- ciations to receive money on deposits, i. e., payments other than those made upon stock subscriptions and which receive a definite interest rate instead of sharing in the earnings upon a dividend basis, as stock ac- counts do. That the confidence of the public is had and that the safety of these institutions is well established can best be ascertained by refer- ring to the tremendous growth of the building and loan associations of Ohio during the past few years, and particularly the year ending June 30, 1917, indicating that prudent, careful and conservative management has been rewarded.
Another safeguard is the requirement of law that not less than - 5% of the earnings of an association shall be set aside each year as a reserve fund, which can be used only for the purpose of taking care of losses. Such reserve fund at the close of last fiscal year had reached the sum of $10,518,879.81.
At the date of last report there were outstanding mortgage loans on real estate amounting to $289,833,655.16, out of total assets of $321,741,528.95 ; loans on other security amounted to but $4,767,183.38, most of which was secured by stock or credits in the building and loan association making the loans.
The running and paid-up stock accounts in the associations as a whole largely exceed the total deposits, and, as a stockholder in a building and loan association bears the same relation, so far as liability is concerned, as does a stockholder in other corporations, this condition is one of the principal factors in determining the safety of such institutions.
These facts are cited so as to show just what has been accom- plished through the united efforts of the officers conducting the business of the associations and the Department in the performance of its pre- scribed functions, both of which are necessary to the complete success of the institutions and this Department in the supervision, guidance and regulation of their operation.
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OHIO LEGISLATIVE HISTORY.
JAMES A. DEVINE, Chief of the Building and Loan Department
Has proven himself a most efficient officer and his record of service is an enviable one. A more extended personal sketch of Mr. Devine is contained in Volume I of this work.
OHIO'S BLUE SKY LAW.
Caveat Emptor, "Let the buyer beware", was at one time good law, but millions of dollars were lost by the unwary investor and unsus- pecting public because of the unbridled sale of alleged securities by irresponsible non-resident parties. These instances were so frequent that The United States Postoffice Department has estimated that the people of this country have been losing annually more than One Hundred Mil- lions of Dollars by speculative schemes which have no more substantial basis than so many feet of "Blue Sky." Experience has demonstrated the fact that some of the grossest frauds have been perpetrated on the public by investment companies, offering allurements to get rich quick, by selling stock in "fly by night" concerns, visionary oil wells, distant mines and other like fraudulent exploitations.
There was an universal demand for remedial legislation. The Con- stitutional Convention in 1912 gave ear to the cry and an amendment was submitted to the people which provided that legislation be enacted to regulate the sale of bonds, stocks and other securities as well as real estate not located in Ohio, and to prevent frauds in such sales. The amendment was carried by 88,000 votes, and in his message to the Eightieth General Assembly, Governor Cox laid special emphasis on the necessity of enacting legislation to the end that the legitimate sale of securities be conserved and the illegitimate sale forever prohibited. A bill was introduced, passed both houses, was signed by the Governor and "The Ohio Blue Sky Law" became effective August Eighth, 1913.
The enforcement of the Statute was placed under the direction of the Superintendent of Banks, who was ex-officio Commissioner of Securities and who was authorized to place the active operation of the Department under the supervision of an Assistant Commissioner. Joseph Harper of Washington C. H. was appointed as the first Assistant Commissioner, in charge of the Securities Division of the Banking De- partment, and served in this capacity until December Ist, 1915. B. F. Skidmore, East Liberty, was then appointed and served until January Ist, 1917, and was then succeeded by W. H. Tomlinson, Dayton, Ohio, who in turn was succeeded by Judge P. A. Berry, Mt. Vernon, Ohio.
On January 28th, 1914, the United States District Court held the Michigan Blue Sky Law unconstitutional and as the Ohio Law was similar in some respects, on February 5th, 1914, eight days afterwards, Governor Cox sent a special message to the General Assembly, then
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in extraordinary Session, in which he said: "To the General Assembly : There seems to be a well organized effort in this country to break down the so-called Blue Sky Laws which have been passed under the police powers of the states for the purpose of protecting investors against fraudulent enterprises. An attack was made on the Iowa law, but the court held it to be constitutional. In Michigan, however, the federal court holds that the law is an unjustifiable exercise of the police power of the state.
The Blue Sky Law adopted in Ohio has justified the principle sug- gested and vitalized by the Constitutional Convention.
"The most careful investigation has been made of the provisions of the law and the trend of judicial logic in the trial of the cases in different parts of the country, and while there is common agreement in the thought that the state has the right, through its police powers, to protect its people against the exploitation of projects fraudulent in purpose and nature, still we must at all times be re- minded that our legislation must assume such form as will keep it consistent with the federal provisions regulation interstate commerce; in short, we can afford to change the form of the Ohio law if it is obviously necessary to retain the sub- stance and preserve the principle involved.
"Notwithstanding the Michigan decision was rendered but a few days ago, the opinion has been fully digested and a bill has been drawn through the com- bined counsel of the attorney general, commissioner of insurance and superin- tendent of Banks.
"It is my recommendation that the language of the law be rendered less am- biguous, that the fees charged be sufficient to meet the cost of the service, that the restrictions be so modified as to provide against constitutional infirmities, and that the commissioner be given the power, in proper instances, to grant tem- porary permits during the pendency of applications so that legitimate business may not be hampered.
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