-tion and intent of this law which have not been settled by the courts, and which are frequently difficult of determination. The solution of these questions has imposed a large amount of labor upon this office.

The law has in some respects been criticised as imposing a hardship upon persons who succeed to property subject to the collateral inheritance tax. One case where such criticism was made came to this office for determination.

The decedent was a resident of Pennsylvania and owned real estate in Iowa. By the terms of his will he directed that all of his real estate be sold and converted into personalty, and then divided among certain collateral heirs.

Under the laws of Pennsylvania, a will which provides that real estate shall be converted into personalty, draws to the jurisdiction of that state such real estate as personal property of the deceased, although it may be situated in another state; and under the decisions of the courts of that state such real estate becomes liable to pay the collateral inheritance tax imposed by the laws of Pennsylvania.

Under our statute there is no doubt that real estate situated within this state is liable for the collateral inheritance tax imposed by the laws of this state, and the diverse holding of the separate jurisdictions thus makes such property subject to double taxation. This is undoubtedly a hardship upon the persons who succeed to the inheritance of such real estate, but I see no way out of the difficulty, except for the supreme court of Pennsylvania to reverse its decision as to the liability of real estate located elsewhere than within its jurisdiction to pay a collateral inheritance tax within that state. The holding of that court has, by the courts of several states, been criticised as being clearly illogical, and not in harmony with the taxing powers of the several states.

On the whole, however, I believe the collateral inheritance tax law is salutary in its effect, beneficial to the state, and produces a revenue with as little hardship as any system of taxation which has been devised.

CORPORATIONS.

The law requires the attorney-general to examine and approve the articles of incorporation of certain classes of insurance companies, and the amendments thereto, before the same can be approved by the auditor of state and a certificate issued to such

company giving it the right to transact business within the state.

This provision of the statute necessarily also brings to the attorney-general for examination the policies and contracts proposed to be issued by such insurance companies, as well as their by-laws which fix the method of transacting their business. Such examination imposes upon the attorney-general a large amount of labor and responsibility, and there should, in my judgment, be a provision of law requiring insurance companies to pay a reasonable compensation for such labor.

In my opinion all articles of incorporation required by law to be filed with either of the state departments, should be submitted to the attorney-general and to the executive council for approval, and that no grant of corporate rights or of corporate franchise should be made by the state except upon such approval.

Corporations seeking corporate franchises and powers from the state should submit to the attorney-general and to the executive council not only their articles of incorporation, stating in general terms the character of the business of the corporation, but a complete plan of the business sought to be transacted by such corporation, stated in detail, that such officers may determine before a corporate franchise is granted by the state and a certificate issued to such corporation authorizing it to transact business within the state, whether the business which it proposes to transact is a legitimate business, and not opposed to the public policy of the state.

A large portion of the entire business transacted within the state is done by incorporated companies, and many corporations are asking that their articles of incorporation be filed by the secretary of state and a certificate issued permitting them to transact business, which, to say the least, is of doubtful legitimacy. Bond and investment companies, co-operative and home building associations and other companies and associations of like character, have multiplied rapidly throughout the state, and are claiming the right to transact business within the state, practically without the supervision of any of its officers.

While the power to determine whether the business proposed to be transacted by a corporation is legitimate, must necessarily, in some degree at least, be lodged with the secretary of state or other officer to whom the articles of incorporation are presented for filing, the right to reject and refuse to file articles of incorporation of companies seeking to transact a business which is against public policy, should be clearly defined by law and, in my

judgment, lodged with the attorney-general and the executive council.

No corporation desiring to transact a legitimate business within the state can object to its articles of incorporation being examined and passed upon by the attorney-general and the executive council, and such a law would have the effect of preventing the organization of companies for the purpose of transacting a business of doubtful legitimacy.

INSURANCE LAWS.

The insurance laws of the state are inadequate for the government and control of insurance companies doing business therein. They are incongruous, inharmonious and conflicting, and I believe it would be wise for the legislature to repeal every line of the present insurance laws and enact a complete, harmonious and adequate insurance law by which the various kinds of insurance would be classified and the rights and duties of insurance companies clearly defined.

Iowa has been a fruitful field for the organization of insurance companies. Many companies have been organized within the state apparently for the sole benefit of the managers thereof, and without regard to the interests of the members or policy holders. Under the present law it is practically impossible to prevent the organization of such companies.

An insurance department should, in my judgment, be created by the legislature, which should have the supervision and general control of all classes of insurance, including fraternal benefit societies.

BOARD OF LAW EXAMINERS.

The creation of a state board of law examiners by the twentyeighth general assembly has imposed upon the attorney-general a considerable amount of additional labor. The preliminary work required for the examination of the applicants by the board, necessarily falls upon him as chairman thereof. The operation of the law to the present time has been very satisfactory, and I have no doubt that the ultimate result will be very beneficial to the bar of the state.

In this connection I desire to bear witness to the fidelity and ability of the other members of the board in the work of carrying out the provisions of the law relating to the examination of applicants to the bar. The members were happily selected by

the supreme court, and the work of the board has been most harmonious.

MONEY RECEIVED.

The only money received by me to the present time is the sum of $37.90, which was unexpended balance of the amount required to be deposited with the clerk of the United States supreme court for costs in Campbell v. Waite, which was taken to that court upon a writ of error by the state. The amount was received by me April 17, 1901, and on the same day paid to the state treasurer, whose receipt I hold therefor..

NEEDS OF THE OFFICE.

There is now allowed by law an assistant attorney-general who receives an annual salary of $1,200. In my judgment this sum is insufficient compensation for the labor of a lawyer who is fitted by education and training to do the work of an assistant in this office.

I call attention to what was said by my predecessor in his last biennial report upon the subject, and the comparisons which he makes between the compensation paid the assistant in the aitorney-general's office of this state and other states having substantially the same population. The office of assistant attorney-general must be filled by one who has received a liberal education and thorough training in law, and has had experience in the practice, and yet the salary which is fixed by the legislature as compensation for the time and services of a person so equipped, is $1200-less than is paid the clerks in other departments of the

state.

A bill was introduced in the senate at the last session of the general assembly raising the salary of the assistant attorney-general to $2,000. The committee on compensation of public officers reported it back for passage amended so as to make the compensation $1,500. In this form it passed the senate, but did not pass the house. The same session of the legislature raised a number of the salaries of the clerks and bookkeepers in the different departments, and many of them are now receiving a salary in excess of that paid the assistant attorney-general.

I find no fault with the legislature for raising the salaries of clerks and bookkeepers in the state departments, as I believe the state should pay its employes liberally; but I think the legislature has fallen into a serious error when it expects to obtain a trained lawyer, competent to perform the work required of an

assistant in the office of the attorney-general, for $1,200 a year, I hope the next legislature will see the necessity of fixing an adequate compensation for this office.

A set of the reports of the supreme court of the United States is greatly needed in this office. Aside from the reports of our own court, the reports of no other court are so frequently consulted, and it is a great drawback and hindrance to the prosecution of the work of the office to be compelled to go or send to the library whenever it is necessary to examine a decision contained in one of these reports.

The idea appears to have grown up in the minds of the people, and particularly of the legislators of the state, that the work of the office of the attorney-general can be successfully performed without a well equipped office. Nearly a hundred briefs and arguments in cases are written in a year, nearly as many opinions prepared upon important questions during the same length of time; a large number of briefs in the courts of the state in civil cases must be prepared and the general routine work of the office transacted. All this is expected of the office with a meager equipment and an insufficient and underpaid office force.

It is a great draft upon the time of the attorney-general and his assistants to be compelled to go to the state library every time it is necessary to examine a case contained in a report of the supreme court of the United States. The cost of a set of these reports is small, and they should be made a part of the equipment of the office.

In conclusion, permit me to express my appreciation of the courtesy extended to me by you and the other officers of the state with whom my official duties have brought me in contact, and to say that our relations have been most pleasant during my term of office. I also acknowledge the faithful and valuable services of my assistant, Mr. Chas. A. Van Vleck, and the other members of my office force. If the work of the department is deserving of any commendation, it is largely due to the efficient manner in which they have discharged their duties.

Respectfully submitted,

CHAS. W. MULLAN,
Attorney-General.