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tion, as the public had hoped and expected the causes of delay were such as the board could not control or remove.

By the act of 21st February, 1843, the board were authorized to purchase rail road iron and spikes sufficient to complete the central road to Marshall and the Southern road to Hillsdale and to pledge for payment the net proceeds of the public works.

The leg slature in making this appropriation probably supposed that ample means were thus furnished for effecting the object intended; but the scrip then outstanding, which constituted a large por tion of the receipts upon the works, greatly lessened the availability of their income. A great portion of the scrip issued had been with. drawn from circulation during the preceding year, and the opinion was entertained that the remainder would in like manner be withdrawn during the year then commencing and now brought to a close. The net proceeds of the works of internal improvement, however, constituted by far the greatest item of the sinking fund by which that species of indebtedness could be diminished, and the irentire appropri ation to another object would leave the scrip in circulation without any adequate fund for its immediate redemption.

Such was the state of things presented to the board under this ap propriation. They were in doubt whether the legislature designed they should use in the purchase of iron all the net proceeds of the public works, including scrip, or only such portion as should be received in specie funds. With a view to promote what they deemed the best interests of the state, they determined to contract, if possible, for the iron on such terms as would enable them to pay for it without making sacrifices on account of the depreciation of scrip, and, though a longer time may in consequence be required for making the payment, they believe they have effected that object. The whole quantity of iron requisite has been contracted for and the greater portion of it received. The sum of $24,333 13 has been paid upon the purchase without any sacrifice, a part having been received in a par currency and the residue obtained by an exchange with other funds.The remainder of the net proceeds, being scrip, has been deposited in the State Treasury and credited to the sinking fund.

The Southern road is now completed and in use from Monroe to Hillsdale, a distance of 68 miles. As, however, by reason of una

voidable delays in the reception of the iron, the season was far advanced before its completion, and as the necessary locomotives and other stock could not be obtained until some time afterwards, the amount of receipts the past year will not afford correct data on which to predicate estimates hereafter.

The construction of the ship canal at Monroe, conducted by private enterprise, was not so far advanced in the early part of the season as to afford to vessels navigating the lakes an accessible harbor; and on this account the business of the road was also diminished. I have heretofore had occasion to call the attention of the legislature to the importance of a safe and convenint harbor at Monroe. Several years ago the general government commenced the construction of a ship canal near the mouth of the Raisin which was designed for that purpose; but having abandoned the work the citizens of Monroe, at their own expense, have re-commenced it, and, notwithstanding the magnitude of the undertaking, they have made considerable progress. It is, however, only from an appropriation by Congress that the original design can be completed and the consequent advantages fully realized.

It has been represented to the board of internal improvement, by petitions numerously signed, that the interests of the state would be promoted by continuing the use of the branch railroad from the Monroe depot to La Plaisance Bay. The board, however, under the joint resolution of the 8th of March last, determined to relinquish to the proprietors of the latter place, gratuitously, or at a nominal rent only, the use of this road until the ensuing spring, with a view of referring the subject to the decision of the legislature. The road is deemed to be no longer of any benefit to the state, but it is represented that the owners of the ware-house at La Plaisance Bay, if granted its gratuitous use for a period of years not less than five, would make it tributary to the southern road, and thereby increase the business and revenue of the latter. The subject is of sufficient importance to merit the investigation of the legislature.

Under the disadvantages alluded to, the whole receipts upon the Southern road, during the year ending November 30, 1843, were $24,064 50, which have been expended in running the cars, repairs and construction of road, and in repairs and construction of cars.The superintendent estimates the net proceeds to be $7,906 85.

The Central railroad is yet completed only to Jackson, a distance from Detroit of eighty miles. The board, at the time of making their last report, hoped and expected to finish this road to Marshall before the close of the last fiscal year; but the extreme difficulty of obtaining timber for the superstructure, with the means put in their hands for the purpose, has caused great delay in the progress of the work. The grading can be effected for the pay offered, without much inconvenience, other than, perhaps, an increased price for the labor performed; but in the purchase of materials, of every description, necessary to finish the road, the board have encountered obstacles difficult to be overcome, and embarrassments of a most perplexing character. It should be borne in mind that, though the legislature has made appropriations, it has not, during the last two years, furnished a dollar in money towards the construction of any of our public works, and their accruing revenue had all been previously anticipated by the issue of scrip. The wonder then is, not that the board has done so little, but that it has been able to do so much.

The work upon the Central road between Jackson and Marshall, is, however, in such a state of forwardness that the board confidently believe they will be enabled to complete that portion of it the cnsuing spring. The grading has also been let between Marshall and Kalamazoo, and considerable progress has already been made in the work. The principal engineer estimates that, to complete the grading and superstructure to the place last named, a further appropriation of seventy-five thousand dollars will be required, and nearly an equal additional sum to purchase the iron necessary to finish the road.

The whole receipts upon this road the last year, were $149,986 51, of which $74,960 20 was expended for repairs, and running the cars, leaving net profits, $75,026 31. Of the net profits, $32,074 21, being scrip, was paid into the treasury and destroyed; $24,333 13 paid on account of iron, and the remainder expended in the purchase of new locomotives and in the increase, otherwise, of the stock of the two roads.

By an act of the legislature, approved March 1, 1843, the board of internal improvement were authorized to complete the Clinton and Kalamazoo canal between the villages of Rochester and Frederick. Accordingly, the board advertised for proposals; but it being

made a condition that the work should not be let at a price exceeding the estimates of a competent engineer, and all the bids exceeding such estimates, the contracts could not be let, and the object of the act, consequently, could not be carried into effect.

The unusual high stage of water in the St. Joseph river, the last year, together with the unavailable character of the funds appropriated, have rendered it impracticable to make any improvement in the navigation of that stream.

The amount of unexpended appropriations from the internal improvement fund for which warrants will be issued, added to the amount of warrants already issued and outstanding, will equal the value, at the minimum price, of the unsold portion of the half million acres granted by Congress for purposes of internal improvement.

The revenue upon our public works the ensuing year will probably be greater than during the last, but the increase cannot now be estimated with accuracy. As already intimated the receipts upon the Southern railroad will be increased, but from want of means the necessary repairs have not hitherto been made and the road, in consequence, being in a bad condition, will require the expenditure of large sums to put it in a proper state for use. The stock also is insufficient and a considerable portion of its income must be used in building cars and furnishing machinery, indispensably necessary. For these purposes the whole estimated revenue of the Southern road will be required the ensuing year. The receipts upon the Central road, when finished to Marshall, will be also increased; but, as additional stock will then be required, a large amount of accruing revenue must be expended in its purchase.

In the scrip outstanding and the late purchase of railroad iron the net proceeds of all our public works have been fully anticipated until the first day of July 1845; after which period by the second section of "an Act to liquidate the public debt and to provide for the payment of the interest thereon and for other purposes," approved March 8, 1843, such net proceeds are appropriated to pay accruing interest on the bonds and other indebtedness of the state.

The report of the Board of Auditors will make you acquainted with their proceedings, under the "act providing for the final adjustment of all unsettled claims for damages growing out of the internal

improvements of the state," approved March 8, 1843. The Board

have allowed claims on the several works as follows:

for which certificates have been given and warrants upon the internal improvement fund issued by the Auditor General.

The Board of trustees, to whom has been committed the charge of the assets of the Michigan State Bank, have made a report of their proceedings, which will acquaint you with the condition of that fund. You will see that, at every step, they have met with obstacles and been embarrassed by difficulties. The attorneys, with whom a large amount of the assets had been deposited for collection previous to the organization of the board of trustees, refused to recognize their authority or to render to them an account alleging that the late Auditor General was their client, to whom they would render such statement as he should require on payment of costs. Proceedings in chancery were instituted against those gentlemen and a decision obtained favorable to the State. An appeal has been taken and the matter is now pending in the Supreme Court.

A bill had previously been filed by the Bank against the trustees and the late Auditor General, asking a specific performance of that part of the argument, entered into between the Bank and the commissioners on the part of the state, which was rejected by the act of February 7, 1842. A decision in that case was also made favorable. to the state and an appeal therefrom taken to the supreme court where the case remains undecided.

A portion of the assets in question were, for collection, put into the hands of the late Attorney General, who, at the expiration of his term of office, refused to surrender them to the trustees, but on condition that his claim upon the state for professional services, amounting altogether to $4,947 49, should first be paid. This claim is in addition to his salary, travelling expenses, and other necessary disbursements, all of which have been duly paid. He presented to the last legisla