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U$ J70I7. 1,33 (173^/
HARVARD
COLLEGE
LIBRARY
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DOCUMENTS
ACCOMPANYIHG THX
JOURNAL
OF THS
HOUSE OF REPRESENTATIVES
or THE
STATE OF MICHIGAN,
ANNUAL SESSION IN 1839.
PrJaled by yiftac of u Act of the Legislature, under the MpervUioD and direction of
E. J. ROBERTS,
CLERK or THS HOUSE OF RKPRESENTAT1VK8.
DETROIT:
J. S. AND 8. A. BAG6, FRINXEBS.
1839.
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HARYAtt) COLLEGE LIBRARV
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{KS^lof2.h33 (ie3<»)
/2<1 % « «a ^.*— : - i
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J
DOCUMENTS-
GOVERNORS MESSAOE-
Felbw CiHzms of the Senate
and House cf Representatives :
Addressing to you the last annual communication I shall be
called upon to present to the people of Michigan, It is a source of
unfeigned gratificatfon to be able to congratulate you on the
prosperous condition to which our rising commonwealth has at-
tained. You are assembled at a period of peculiar interest Our
people have been favored with general health ; rich rewards have
been gathered in the fields of agriculture ; and in every branch
of trade, industry and labor have been crowned with iTnexampled
success. With such an earnest from the past, and with juit
hopes and expectations for the future, we cannot fail to reach
that high destiny which has been assigned us with our sister rs-
publics.
Neither are these indications of' prosperity confined to the
Kmits of our own state. We have but to look abroad unod the
condition of our common country, to be satisfied with Ae lot Pi^
vidence has assigned us. With a government the freest in the
world, we are exempt from internal dissentions ; our external
relations with foreign powers are as yet undisturbed ; our com-
merce is known to every clime; the increase of our population is
beyond former example ; and on every side our country presents
the evidences of that continued faVbr which has elevated us from
feeble and dependant colonics to an extended and powerful con-
federacy.
Based as our government is, upon the representative will 6f
the people, the legislature is emphatically the depository of their
lights and liberties. It will, therefore, fellow citizens, become
vott to watch with a vigilant eye the diflerent interests committed
to j^our charge, to guard against all encroachments upon the
rights of those you represent, to expose all abuses of power or
1
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8 HOUSE DOCUMENTS.
trust, and to provide wholesome checks against subseauent dan*
ffcrs. Coming as you do, from the immediate body of the people^
knowing their desires and wants, it is expected that your wisclom
and patriotism will supply the deficiencies and correct the errors
of other branches of the government. No station, therefore, cao
be more important, than the one you now occupy. In the dis-
charge of your duties, you are bound by the strongest obligations,
to emleavor to perpetuate the principles upon which our govern-
ment has been founded; you are caHed upon to chensh that
ardent attachment for liberty and equal richts» which can alone
secure the happiness of the American people ; and it is expected
that by your precept and example, you will foster a veneration
for the institutions of our country.
The officer at the bejad of the treasury will lay before you the
condition of the finances of the state. rVoni hfs representation*
it will be seen that the current receipts into the treasury fot the
past year, have fiillen short of the expenditures of the govern-
metttf un(|er appropriations by law* The amount of receipls
from the first day of January, to the twentieth day of December,
eighteen hurnlred and thirty-eiffht, was one hundred seventy-
s^ven thousand six hundred andsixty^two dollars, twenty qsnts ;
the expenditures during the same period, amounted to one hun-
dred eighty-five thousand five hundred and sixty^eight dollars,
seventy-six cents, showififf an excess of expenditures of sdvefl
thoqsaiid nine hundred and six dollars, fifty ^•six cents. This defi-
}oien(gr in the revenue, is deepl]^ to be regretted, and caHs for the
prompt and e6Scient interposition of the I^slature. Vou will
peroeivey from the report of the Auditor General, that the amount
of taxes due and unpaid by the difierent counties, will nearly
^ual the sum of fifty thousand dollars. This inattention on tlie
tart of the officers of many counties, to the solemn requisitions of
kW,;must prostrate the energies of the state government, unless
corrected ; and I submit to you, whether some additional remedy
should not be provided against this gross neglect of duty. The
neglect in the assessment and returns of some of the counties
must also be remedied by special le,nrislation, at your present
session. Sensible that the subject requires the immediate consi-
deration of the I^islature, and satisfied that the existing defects
in our revenue system demand a prompt correction, I earnestly
invoke your attention to the adoption of such measures as wifl
lelieve the people of Michigan from the otherwise inevitable con-
^uence, an embarrassed and bankrupt treasury. It is but just,
however, to add» that in addition to the deficiencies in collebting
;tl^ revenue^ ti^ heavy charges incident to the operations of a
\iew state, and which have t^en drawn from the general fund
under the sanction of your predecessors, vdll in some d^free ofier
a justification for the balance against the treasury.
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ft aflbnfeio^ thehigbe«l gratifrjtion tprepew jtny cpogi^uiift-
fipQS oa toe successfulprogres^ of our works of internal imprpve-
floent^ £ach division of the Bysiem has been prosecuted with an
4N)ergy and activity, h^hly creditable to tho^e to whom they ar^
entrusted* The oeotraT road is under contract as far as JacK$oq«
being a distance of seventy-eight miles from Detroit, and locations
lire DOW in progress as far as Kalamazoo* ope hundred and lorty
miles firoip Detroit By the agreen)ent with the contractor, that
CrtioQ of this road between x psilanii and Ann Arbor, should
ve been ready fo;* the iron rails, as early as the month of Octo-
ber, btU irom some cause^ is not as yet completed. On ihe south-
erR rood a commendable energy has been evinced. Thirty miiie^
of this roadf as far as Adrian* will be ready for laying the ir(^
earl^ in the ensuing spring ; it is under contract as far as Hills-
4a]e, and the engineer are completing the final locations on the
Ibird division, ^ fiso* as the villa^ of Branch. The Saginaw apd
Cliotoa canals are in active progress ; the same may be said of
the northern railro&d, which has been placed under cQptract for
dearing and grubbing from Fort Huron to Lyons. The con-
tracts u>T the construction of the canal around the falls of the Saujt
de Ste* Marie have be^n let, and the work itself will be commeQ-
md at an early day. Additional experience bat serves to confirm
the importance of this laat improvement, and it is hoped it ma^
command the consideration of the l^i^Iature. For a more parti-
cular and detailed statement, however, of the condition and pro-
grespi of our internal improvements, { beg leave to refer you to
the report of the comnMssionerSt which will be laid before you
withogt unneeessary dela v.
The eiipenditures in this department, thus
$888,301 03. On the central road, the e:
9572,789 «9^* the southern, 9216,825 70;
^8 69 ; on the Clinton canal, $3^1,098
•]7;203 99; the Sault de St^. Marie canal,
the difikrent navigable streams, 924«139 64.
^ only work which has been completed,
income. The returns of the collector exhil
aoeat of receipts, and they auggr well for the ultimate success of
thi^ road, as a work of public importance. From the month of
Pdbrnary, 1833, when the road was opened* to the eighteenth day
of December U»u the ej^tire receipt of tolls amounted to 981,-
604 54* The n^aober of passenj^ni who have passed over this
road* waa twenty-eigh^ thousaod seven liundred and fifty one ;
Hbe ampiint of merchandise transported, nine millions seven bun*
^Hpd and niinety-two thousand four hundred and fifteen ppunds ;
fuaidlba nuiaber of barrels of flour, fifieon thousand and fifty. This
pnomol iQfieista^fiSiw deth^^in^ the ejipenses of the road, is
a pp l i caW a ig the puiyoses of tb^ ain^iqg TurKJL apd is now in bank.
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4 HOUSE DOCUMENTS.
"When it is borne in mind that the receipts as above stated, have
accrued on only twenty-eight miles of tne road, it is fair to eon-
elude that, in progress of time, when the entire work is completed,
the resources of the state developed, and the enterprize of our
increasing population actively employed, i{ will yield a* return of
income beyond our most sanguine expectations.
But this flattering exhibition must not lead us to forget the cau-
tion and economy with which our expenditures should be made.
We have adopted a system of internal improvements which wiH,
for its success, demand the exercise of our most rigid economy.
The works we have in contemplation, embrace, in all, a distance
of eleven hundred and nine miles, and are to be constructed at an
estimated expenditure of seven million seven hundred and ninety-
four thousand four hundred and thirty dollars, exclusive of all
cost for cars, locomotives, and other machinery. This estimate,
it is feared, will fall short of the actual cost of these works ; and
with such apprehensions, it will behoove the legislature to guard
with scrupulous care the fund assigned to this branch of the go-
vernment. Examine rigidly the expenditures of the commissiori-
ers. Let no complaints pass unheeded. Direct your committees
to investigate fully the proceedings of the present and previous
boards of commissioners, that it may be distinctly known to the
people of Michigan, if there has been any profligate expenditures,
or improper use of the public moneys.
Connected with the internal improvements of the state, there
is a subject, to which I beg leave to call your impartial conside-
ration. Under the act of March 21st, 1837, the Governor of the
rized to negotiate a loan of five millions of dollars.
!)een fulfilled, and I now submit to the legislature
it negotiation.
[)n the enactment of the law authorizing this loan,
gotiaiion was placed in the hands of a competent
y of New York, it being impracticable for the
e slate to devote personally to the undertaking,
lich its magnitude required. Although confident-
is time, that a negotiation would be closed, at an
in consequence of the embarrassed state of the
and the difficulty attending the sale of American
le expectations of the agent were left unrealized,
wever, to sav, that this assurance of the agent was
ices from Europe, received through the banking-
the foreign negotiation was entrusted. As an
loan would be concluded, the agent agreed to ad-
ite, on his own account, one hundred and fifty
s. This amount was received, and contrary to
J or instructions, through bills drawn on London,
le Michigan state stock. The subsequent recep-
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HOUS£ DOCUMENTS. S
tidQ in London of tfie amended law, authorising the loftn, htdooed
Ihe contracting parties to break off the negotiation, which wooid
have been successful, had not the amended, as well as the original
law been defectYve. This feiture in the foreign negotiation, com*
pelled the reimbursement of the sum received through the medi-
um of the European bankers.
To satisfy the legislature that this stock has been introduced
into the European market under the most fiivorable auspices, it is
but necessary to state, that it was entrusted to tlie bands, and re-
ceived the personal attention of a member «f the house of Prime,
Ward and King, of the city of New Y<H'k. Mr. King thus re*
ports the result of his attempted negotiation in London :-— ^ The
bonds were received in Lond<m in December, 1^7. Preparao
tory negotiations had been entered into there, with a prospect of
success, in the anticipation that the amendatory act ot Michigan
wouki have been clear and explicit as to making principal and
interest, both in stcrlhig n^ney, payable in London. Said amen-
datory act, as also tne oridnal act, relating to these bondi,
nowhere expressly and directly, nor in anyway but by inference,
authorized or permitted the payment of the principal abroad,
although it was explicit as to tbe payment of interest. But it
directly limited the rate at which payment of either or both should
be made m London — at par, or 94 44-100 per £l sterling,
although it requires, that any premium or gained exchange upon
*ihe. negotiation shouki be accounted for to the state of Michigan.
Thus, although the state might receive the proceeds of the bonds
in sterling abroad, at a premium of ten par cent, ]ret it wouM
.'only refund the money and pay the interest at par — in other
wonfe, to receive 94 8S*100 per '£ sterling, but to pay back
t4 44- too per £ sterling. It was then thought practicable to
negbtiate for bonds in doHars, principal and interest payat>ie ki
New York, but the uncertainty- as to rates of exchange, ren-
dered any probable price ki London insufficient to cover limits.
An efibrt was then madef to obtain authority to draw for a giveb
amount, upon leaving the bonds in London, if that should snit the
state of Michigan ; but no such authority, except after sates
made, could be obtained. The rate in London for a Michigan
kmn of six per cent, interest and principal payable in New York,
-would probably be fB5 40<>100, without allowance for oommli-
sion and chargess." Thus much of the report of Mr^ King is
submitted lo you, in" justice to all the parties concerned, and that
the embarrassments attending the negotiation of this loan may be
'fally understood.
m the mean time, however, onder the apptehenskm that the
' deltas in tbe foreign negotiation might leave the board of internal
' unprofsment without the adequate fonds neoessary for the pro-
secution ef the public works under tbeh* ehdige, five faundM
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« UKHmB DOOUMSNTSr
Ikommnd ddlan of mie boodk whmoU ta « gaMteMttif <U«
dly «t ft premium of iix per cent, MyaUe io iha conwH fiiodf
of oiir own bankf. On tbM sale to Mr« Newh^ry, twohuadraj
Ihnuffaod dollars was paid, the remaining three hundred thousand
deiiars of bonds was returned to the state autherities» in cans»*
quence of the inability of the holder to meet his payaoents, or (9
negotiate his stoek* oitber in American or Eurppean maitets.
Previous Io this sale, a proposition was made to the Detrpii oiljr
banks* but they declined entering into anv Begottationa.
For the further purpose of sliowin|[ the embarraasmenU and
difliculties attending moneyed operations during the period the
Jdkhigan loan has been in market, I b^ leave to state, that on
the seventh day of May hist, e written oonlract for tbe entire
loan* at par, was entered into with a gentleman of the city of
JNew York, whose financial relations justified the eoncluaion that
be could command the ability to meet his ei^gi^gement. £ttb(y
thousand dollars on this oonlraci was paidt l^t it was subse-
quendy cancelled, from the inability ot the oontniot^ to meet
Ais additional payments.
Under these ember rassments, and amidst the continued inemase
^f slate securities in both the American and European marbsls,
I dosed a contract in May last, with the Morris canal and banking
eompany» for five millions ef state stock, inckKliiv that issued to
the Ypsilafiti and Tecumseh« and Allegan and Marshall railntwd
eompames, A comr of this contract* together with other papens
felatinff to the suoject, accompany this eemmunioation, anid to
which 1 be^ leave to refer you.
The desire and expectation of all the parties to this contraot
was, that the state o( Miehiffan should realiae the par value of
ber bonds. By the tenns of die oontraett the sale was oensidered
abeoluie, although the agreement itself is shaped as an agenoy.
The feature in the contraa was urged from the feot, mat as
Michigan stock, introduced into the market through other souroea t
hftd sold as k>w as niaety^tliree or ninety-five cents on Ihe doHer,
Ihe Morris canal and baaUqg ceoapsEny were enprefaen9ivef that
in the first disposition of this loan, they shouki oe compelled to
eell below the par vakie oi the bonds. They were unwilliQff to
enceunier this risk, and as the lew ferbade a direct sale at a less
rate than par, provision was made for a commission under an
egency, the company sfuaranteeia^ to the state the difibieat in-
aSdsEients, whether funcb wore rea&sed on a sale of the bonds 4Nr
not. Under ibis ncttotiiilion, one miilioB thiw hundred thousand
dollars has been paid into the state treasury. For the first veer
^iUie notes of the Morris camd and banking company wenetojaave
been received in payment, and to be disbursed by the etatet JmH
Aom consideraiiens cooneeted with our cunesg^r ai hornet ^fcsAe
AUrindy days wm eubsequently enhfltitttted».as nppea^ly tbe
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^ ptspttt^ Th& Mnttbikiff iMiymcAtt 9tt to to nwte
r&trimeiitB of twii hmkhMaad fifty thooMad ddkm
liBOciated wMi the Merrii eanal add banking oempanfv in tba
pMthaae of the Michigan bonds> witt be found persona of high
Mnidmg with the financial fniMic, both in the United S|at8s aind
Europe. With a desii^ to realise to the atate the par value of
her ato6k, atf agent was despatched abroad, who» as late as Otto*
ber t«^my*sixth, e^teen hundred and thirty-eight, had beet
^liable to eflSsct any tiegotiation* Under these embarrassisg
dircutttttancest the Morris oanal and banking company^ as you
will percehre b? the dooumeats tmnsmitted to you, have dosed
tte eAtbe n^otlation by a sate of three millions of stock to the
Bank of the United States, t regretted the necessity of this
iak^ as I had hoped to have saved to the state the payment of si
oemmMooa.
A« a justification for ck)Siog Ihh negotiationy the parties in their
oomimnnicatien say : ^ After ooMuhing with those interested wkh
tiSv m the cootraot and acency made with you on behalf of jrour
state, we have come to the conclusion, that we see no prospect ef
benefiting you^ by decKnio^ the oflbr now made to ust and have
therefore closed with the party mahinff the offer to purchase at
par. We are free to confess^ that the recent advices freai
Euroee, of the sreat and unexpected accumuhition of American
eeeotities oibfed at low rates, and the fact that sonw of the moat
tiadotibted state stocks have been uified upon that tnarket fay
banking-houses, whose connections with this country had led os
to expect a dififerant course, have inspired no little apprehensiona
of ttimleasant results^ and have caused us for some time past^ la
feel tnat the commission stipulated for, forms but an tnadeqaaie
coik^jbeDsation for continuing the risk of the foreign market
Banaiiq; hooses in London give a very gloomy aspect to the feet-
ing in rMird to Amerkan securities) and the Great Western baa
actually brought back a large amount of six per cent bonds pay*
able in London, from utter inability to realize fonda upon them,
except at immenae saoifice. In awidition to all this, sterlioff rix
Kr cent bonds, have been mcently soM in this city at one wmt
ed and tfiree, and more are ofibred at the same rate, which
WoqM nodoce the rate of your bonds, being payable in this ooo»-
try, to about ninety4wo cents.**
I hav«r thes^ as coociselv as a correct understandhi^ c( the
tdbjpa wonM permiti stated to yod the proceedings which hat*
heen had onder the act antfaorasing a loan of five mttliona of do^
lars for purposes of interna) bnprovements. The negotiation
emued hito was the most fav<»mbie presented by the market ;
hidead it became a question, whether this contract should be ae*
eqiMd, wear works of idtetnal improvement be arrested. After
malisti MtbettatkM, it w«a belisved that a saspaoskwi of ear
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8 HOUSE peXJUMBNTe-
^Mrbsof ioternai ieoproveiaent at this tiiiH3» would hare provsea
more pn^udical to the publie interest than the sale of stock which
bai been made. No other motive has actuated the Executive,
thpn a desire to discharge his duties with fideli^, and to advance
the prosperity of the state $ he can only regret, that he is unable
10 report a more satisfaetory resuh to his eflbrts. ,
. The negotiation of this loan was committed to the Executive,
^:ontrary to his sense and opinion of what was due to the public
interests. At the last session of the legislature, he earnestly
recommended, by a special message, the appointment of loancoai^
missioners ; he stated his inability to devote the proper time to
Ihe duty imposed upon bim ; and above all, urged that it w^
wrong in principle to intrust sudi heavy interests to the uncont
trolled discretion of one individual, when no corresponding securi-
ties to the state existed. Whilst the commissioners of other states
devote their undivided exertions to the negotiation of their loans,
find are present a greater portion of the year at the theatre of
iheir operations, the time of the executive of fhis state has been
loo much divided between the ordinary duties of his office and tus
negotiations abroad, to secure a proper attentioa to the important
trusts committed to him* If» then, it should occur to the legisla-
iture, that the success of this loan would have been promoted had
it been placed in other hand^, the loss may, in part, be attributed