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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 beer 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 fiscal 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 net 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 net proceeds from these works 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 these warrants, but also to meet by the first of January, 1846, upwards of $50,000 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 parcels 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 impracticabiliiy 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 node 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 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, provided 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 burden of 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 fifty thousand dollars. If it can be safely estimated that the nett proceeds of the Central and Southern Railroads, for the ensuing year, will be sufficient after paying off their indebtedness for iron and other materials, to meet that amount of interest on those warrants, and also the interest that will fall due on our internal improvement stock in January, 1846, then it would seem to be advisable to pay up as much as possible of the back interest on warrants at that time ; but if there should be any deficiency apprehended, there is no doubt that a large majority of the holders of those warrants would be perfectly willing to have the greatest portion of the back interest funded together with the principal. The first of September or October is suggested as the most appropiate time to make the annual interest on those warrants or bonds payable, as that would be an intermediate time between the periods, when the interest on the five million loan bonds would be payable, and would make the interest on the warrants fall also upon that half of the year, when the proceeds of our public works will always be much the largest. All of which is respectfully submitted.

JOHN J. ADAM,

State Treasurer:

(A.) Abstract of Receipts and Expenditures for the fiscal year, Dec. lst,

1843, to Nov. 30th, 1844, inclusive.

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To balance, Nov. 30th, 1843,
“ receipts during fiscal year ending Nov. 30, 1844,

$85,789 55 405,824 66

$491,614 21

CR.

1844.

Cash.
By warrants paid, treasury notes cancelled, &c., Dec.

1st, 1843, to Nov. 30th, 1844, os balance on hand,

$455,189 24

36,424 97

$491,614 21

(B.) Ledger balances on State Treasurer's books, November 30th, 1844.

DR. Cash,

$36,424 97 Internal Improvement fund,

207,957 27 Treasury notes' interest,

13,638 65 Primary school interest fund,

329 86 University interest fund,

172 34

$258.523 09

CR.

General fund,
Redemption account,
Contingent fund,
Library fund,
Primary school fund,
University fund,
State building fynd,
Treasury notes,

$76,836 31 2,572 00

692 91 3,078 34 54,799 00 39,212 48

1,282 05 80,000 00

$258,523 09

{C.] Warrants outstanding November 30th, 1844. Internal Improvement fund,

$520,457 55 General fund,

$5,461 68 Contingent sund,

250 00 Redemption account,

14 51 Primary school fund,

3,000 00

8,726 19

$529,183 74

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