No. 1.

1845.

ANNUAL REPORT of the State Treasurer.

STATE TREASURER'S OFFICE, ? Detroit, December 2d, 1844.

To the Legislature of the State of Michigan:

In obedience to the provisions of law, requiring the State Treasu rer to lay before the legislature at each annual session, a summary of the receipts and expenditures for the preceding fiscal year, and a statement of the balance of cash on hand at its close, I have the honor to submit the following report.

An abstract of the receipts and disbursements, and a statement showing the balance of cash on hand, are given in schedule A. Schedule B gives the several ledger balances on the books of this office on the 30th ult.; and in schedule C, is given a statement of the amount of outstanding warrants on the several funds at the same time. In schedule D, is exhibited a comparison of the ledger balances on the books of this office with the balances on the books of the Auditor General, showing their agreement, when the outstanding warrants on the several funds are taken into account.

In addition to the ordinary disbursements for the current annual expenses of the State Government, which have all, or nearly all, been regularly and promptly met during the last fiscal year, as they severally fell due, there has been paid from the accruing receipts to the credit of the general fund, several items of prior State indebtedness, amounting in the aggregate to upwards of fifty-five thousand dollars, all of which was bearing an interest of seven per cent. against the State. The delinquent tax State stock, originally amounting to $31,000, and which was reduced the previous fiscal year to $27,000, has the past year been reduced to $15,000. The amount of outstanding warrants on the general fund has been reduced from $24,330 78 to $5,461 68; and the tax bonds issued to counties from $37,123 67 to $12,591 Of the $40,000 of treasury notes destroy

ed during the last fiscal year, much the largest portion also was derived from receipts on account of the general fund,—most of the payments to the sinking fund from the proceeds of the public works having been made in warrants drawn in favor of engineers and appraisers, and paid from the proceeds of the several works under authority of a joint resolution of March 6th, 1843.

It is thus satisfactory to ascertain, as the experience of the last two or three years has demonstrated, that the light State tax of two mills on the dollar, which is all that has been levied for the last three years, and which has hitherto fallen considerably short of $60,000 in the aggregate for any one year, has been found sufficient, not only to meet the current State expenses, but with the other ordinary receipts to the credit of the general fund, to extinguish a large amount of State indebtedness, outstanding in the form of State stocks, tax bonds to counties and warrants on the general fund, besides contributing to absorb the largest proportion of the treasury notes of 1841, which have been cancelled and destroyed. The only known demands on the general fund for the past year, which have not been met, are for interest on some general fund stock held by the U. S. War Department, and for the July last interest on a portion of the penitentiary stock, the coupons on neither of which have been presented for payment.

As it is to be hoped that during the course of the present fiscal year, sufficient means will accrue to take up all the remaining outstanding general fund warrants, and the holders of many of them will be unknown at this office, it is respectfully asked of the legislature to invest this department with authority, which is not possessed at present, to stop interest on all or any portion of them, after giving two or more weeks' notice in the State paper, that such warrants will be paid in specie or its equivalent on presentation. And in the event of those warrants being all, or nearly all, redeemed, and funds should accrue some time between January and July, or between next July and the following January, which it would be proper to apply to the redemption of the outstanding tax stock, or county tax bonds, it is respectfully submitted also, whether it would not be justly due to the holders, that authority should be given to allow interest for such time after the last half years' interest fell due, as might intervene up

to the time of redeeming the principal, or giving notice that funds were on hand for their redemption.

The par funds received to the credit of the principal of the prima. ry school and University funds, amounting to $6,000, have been ap plied, as required by act No. 106, laws of 1840, to the extinguishment to that extent of a debt due Thomas Beals, for monies advanced on account of those funds.

The interest due on the University stock for January and July last, was remitted to New York in the month of May, about the same time that it had also been for the two previous years. It is found impossible to meet the January interest of each year, as it falls due, without authority to use other funds for that purpose, or without keeping on hand some three thousand dollars of University interest monies for eight or nine months. Almost the entire receipts to the credit of the University interest fund are received in March and April; and unless money received at that time of the previous year is retained on hand until the succeeding January, the January interest must be allowed to pass over until April or May. The latter course has therefore been followed for the last three years, and as the July interest is paid at the same time as that of January, the delay on one half year's inter- ́ est is about balanced by the advance in meeting the other, before it strictly falls due; and no complaints have been made as to the arrangement, by any of the holders of the stock.

Under the provisions of acts No. 20 and 83 of last session, the University interest fund has been relieved from the payment of interest on the $100,000 loan to the University, to the amount of $1,432 80; transfers to that extent having been made from the sinking fund, on account of treasury notes and warrants received to the credit of the principal of the fund, and for purchase money of the building in this city bought of the regents for state offices. As there had been received at the end of the fiscal year just closed, in treasury notes, warrants, &c., to the credit of the principal of the University fund, the sum of $39,212 48, and the University interest fund will be entitled to a credit quarterly for the interest on this amount and on what further sums may be paid in as principal under the provisions of the acts above mentioned, the other sources of revenue to the University will be relieved from meeting, during the ensuing fis

cal year, two-fifths or more of the $6,000 of annual interest on the University stock.

The second section of the act of February 21st, 1843, making appropriations on the Central and Southern Railroads, pledged so much of the nett proceeds of those roads, after the iron for the completion of the former to Marshall and of the latter to Hillsdale, should have been paid for, as might be necessary for the payment of interest then accrued on all outstanding internal improvement warrants drawn prior to that date, and for the payment of interest on said warrants annually thereafter, so long as the principal of the same may remain unpaid. It is to be expected that during the current fiscal year, the payments for the railroad iron purchased under the provisions of the above mentioned act, will have been completed; and it is therefore hoped that sufficient nett proceeds from these roads will be paid into the State Treasury, next summer, or early next fall, to meet the back interest on the above warrants, as the state must rely mainly, if not entirely, on the surplus receipts of these roads, not only for the payment of interest on those warrants, but also to meet by the first of January, 1846, upwards of fifty thousand dollars of interest then falling due on the first sold portion of her internal improvement bonds-and which, in case of a settlement being had prior to that time in regard to the remaining five million loan bonds, which had been partially paid for and were hypothecated by the late United States Bank, is liable to be increased to ninety thousand dollars or upwards.

The attention of the legislature is however directed to this matter at present, solely for the purpose of suggesting the propriety of some further legislation to enable the interest on those warrants to be paid more conveniently to the several holders, and at a great saving to the state, in the time and labor that would necessarily be consumed in the office of the Auditor General, without some further provision of law, than now exists, to regulate and facilitate the payment.Without further legislation, the amount of interest due would have to be cast and payment of the same endorsed on each warrant, and a receipt for the interest on each warrant or parcel of warrants made out and signed by the holder, to be filed in the Auditor's office as a voucher for each warrant drawn for interest. The number of these payments in each year would be so great, that the time occupied in preparing the

vouchers and making out the warrants, would probably be equal to that of one clerk, for several months. To say nothing of the almost total impracticability of making the proper endorsements on many of the warrants, which have become so mutilated and defaced as to be altogether unfit for any fair or legible writing, or of the insecurity of relying upon such endorsements for the amount of interest due, without searching in each case through a large and continually increasing file of vouchers, it is respectfully submitted that if interest is to be paid annually upon those warrants, as guaranteed in the above mentioned act of 1843, the only safe and regular mode of accomplishing it, would be by funding them as a state stock, in bonds of one thousand dollars each, as far as practicable, with an issue of some smaller bonds of one or more hundred dollars, for fractions or small amounts; to all of which bonds would be attached of course coupons for each year's interest, as it would fall due, until the principal was made payable. This, it is believed, would be satisfactory to a large majority, and most probably so to all of the holders of those warrants, as well as be a matter of economy, and safety on the part of the

state.

In any law passed, providing for funding the warrants specified in the aforesaid act of Feb. 21, 1843, there should be some discretion left with the officers authorized to issue the bonds, to include more or less of the back interest as principal in the bonds, both with a view of avoiding the necessity of issuing any bonds for fractional dollars and cents, and also, if acceptable to the holders, to avoid throwing the of burden from two to four years back interest upon the income or proceeds of the public works for the ensuing year, when they will in all likelihood be least able to bear it. It is perhaps hardly necessary to add, that the bonds and coupons, so far as the latter shall be due or past due, should be made receivable for public lands of the state, and in payment of such debts, as the warrants themselves are now receivable for.

The amount of warrants on the internal improvement fund drawn prior to February 21, 1843, has been ascertained by an examination for that purpose, to be about $239,000; and the interest due on them by next September or October, would probably average about three years, which, on the amount now outstanding, would be equal to about