It is true, this duty is collected and paid into the treasury of that State for revenue purposes, from the company operating this road, but it is in fact paid from the pockets of the freighters themselves, among whom the business men of Iowa constitute no inconsiderable number.

This was and is a clear violation of the Federal compact, as I believed, and was advised by learned counsel, and therefore felt it my duty to direct a suit to be brought in the name of the State of Iowa against that State, to test the validity of such a law, in the courts of the country.

CODIFICATION AND REVISION OF LAWS.-The Commissioners appointed to prepare a code of civil and criminal procedure, and to revise and codify the laws of the State, will spread before you the .work of their hands, which should engage your attention in the early session, whilst the several committees are preparing other measures for your consideration.

The very cursory reading which I have been able to give to a portion of the civil practice act, made a favorable impression upon my mind, and it is to be hoped, upon a full and careful examination by you, that it will be found quite acceptable, and that you will not feel it necessary to make many changes in the same.

INVESTIGATING COMMISSIONERS.-Under the law of 1858, requiring me to appoint commissioners to investigate the State and Executive offices, I appointed Messrs. Jno. A. Kasson, J. M. Griffith and Thomas Seeley, whose reports will be laid before you.

Their examinations have embraced the transactions of several years, and their reports contain much valuable information and statistics not elsewhere found. Indeed, a very cursory inspection of their reports, will show how full and satisfactory, and at the same time with what ability and thoroughness the investigation has been conducted; making it unnecessary, perhaps, ever to go back of these reports for additional information, in regard to the manner in which the business in these offices has been conducted. They present, in my judgment, many important suggestions respecting the executive administration, some of which may require legislation, and to which I ask your careful attention. Among the more important topics presented by them for consideration, I mention the following:

OFFICE OF SECRETARY OF STATE.-In this office are deposited most of the bonds executed to the State. No provision of law

exists for recording them. Many of them secure the State against malfeasance in office, in very large amounts, some of them being for over 200,000 dollars. The commissioners suggest that it should be required by law, that the officer charged with the custody of any such bonds, should immediately on filing it in his office, deliver it to the Register of the State Land Office, to be recorded in a volume to be kept for that purpose, and that such copy and certified transcripts from it, should be made prima facie evidence of the contents of the original in courts of justice in this State. The original and the copy being thus kept in separate departments, would diminish the hazards of loss by fire or otherwise.

STATE LAND OFFICE.-It appears by their report on this office, that sundry books are still wanting, to comply with the terms of the act establishing that office, and fully to accomplish the object of its establishment; also that no records or papers respecting the territorial grant of lands on which Iowa City is situated, were found in the office.

It further appears that many errors exist in the patents of lands issued by the Secretary of State, prior to the organization of this office, which demand correction and adjustment. Other important facts and suggestions are contained in the report on this office, to which it would be well to give attention.

OFFICE OF SUPERINTENDENT.-This department was found in a very unsatisfactory condition, mainly attributable to the confusion occurring during the superintendency of Mr. Eads. The commissioners were unable to state the accounts of that office from any reliable data found among its papers or books. From data found elsewhere, they ascertained the amount of the 5 per cent. fund received from the United States, up to the 1st of June, 1858, to be..... $552,609 08

And amount of premium on drafts therefor, by Col. Benton, to be.....

Making a total of.

Of which is only accounted for..

37 98

$552,647 06

403,672 36

Leaving a balance unaccounted for of . . . . .

$148,974 70

This amount represents the sum loaned to individuals, retained, or otherwise disposed of by Mr. Eads-the condition and security of which was reported upon by J. M. Beck, Esq., under the direc

tion of a former General Assembly, but which is more fully traced out in the report of the commissioners, who find against Eads an actual deficit of some $72,880 97; subject, however, to a deduction of Waite's note, $1,000, since paid, and whatever else may be realized from the collaterals held by the State.

The commissioners found no account in this or any other office, showing the amount of School fund chargeable to the several counties of this State, as five per cent. fund distributed to them, or as proceeds of sale of school lands held by them, and enabling them to ascertain reliably the present amount of the school fund' of this State.

Taking the figures furnished by the last report of Superintendent of Public Instruction, and correcting the computation made by him, the total amount appeared to be $2,071,241 59. But they do not consider this sum as reliably ascertained.

The present constitution (Art. 7, sec. 3,) requires that all losses to the permanent School or University Fund, of this State, which shall have been occasioned by the defalcation, mismanagement, or fraud of the agents or officers controlling and managing the same, shall be audited by the proper authorities of the State. The amount so audited, shall be a permanent funded debt against the State in favor of the respective fund sustaining the loss, upon which not less than 6 per cent. annual interest shall be paid.

The Commissioners are of opinion that no data exist at this time in any of the State offices, for the discharge of this constitutional duty, and that only the particular examination by a local or general agent in each county, together with a special examination in the State Land Office, of lands sold pertaining to this fund and the consideration therefor, as shown by certificates of purchase and payment; and on examination in the Auditor's office, of vouchers of five per cent. fund distributed to the counties, will render it possible to audit this constitutional claim.

I should be faithless to my convictions of duty, if I did not endorse and specially invite your attention to some cogent reasons which they also offer for a partial change in the management of this fund. While the people of the whole State are liable for losses to the fund, it is only the people of the county who designate and elect the officers managing it in its counties. They suggest that the counties, as principals, should be responsible to the State for the conduct of their own several agents, that the responsibility

of loss may rest upon those only who control its management. This principle is one of universal application in law, is just, and is well worthy of your consideration, as likely to increase the care and vigilance of the people in protecting this important fund from loss. This fund is dedicated to the support of common schools. The efficiency of the system will depend much upon the promptness with which the annual interest upon the fund is paid. I learn that interest to the amount of $120,000 is now due, that should have been paid a year ago or more. The annual payment of interest due this month, it is expected will greatly add to this sum. It is believed that if the counties were made corporately responsible for the payment of the interest of their defaulting citizens, the moral effect would be to stimulate the loanees to pay more promptly their interest, inasmuch as they would be less willing that their own neighbors should pay for their laches than the State at large.

Again, it is suggested whether the annual payment, by the counties, of nine per cent. interest, they loaning it at ten per cent., would not realize a larger annual revenue to the fund, and be much more reliable for the support of common schools, than the irregular payments of interest at ten per cent. dependent upon the promptitude of individuals.

The liability for the principal or the interest of this fund, cannot be forced upon the counties. But it is supposed that the State has the power to withdraw the funds from them, unless, under authority of your legislation they would assume the liability proposed for the conduct of their own officers and agents, in the management of the fund. For other important suggestions bearing on these questions, I respectfully refer you to the 16th and 17th pages of the report upon this office. Also, to a resolution passed by the Board of Education, at its last session, expressing similar views.

TREASURY DEPARTMENT.--The very full report of the Commissioners upon the Treasurer's office, presents several important tables and accounts. The late Treasurer has, during his three terms of office, up to June 1st, 1858, received for general purposes, $938,560.92. Tabular statements are furnished, showing the sour ces from which this amount was derived. After reviewing this entire account, they find a balance against the State Treasurer larger than that fixed by the Auditor, by the sum of $315.28, and ascertained by actual count, on that day, the sum of $845.66 as

wanting in the Treasury, of which $315.28 was not called for by the Auditor's settlement; and of the remainder, a partial explanation is given in the report. At that date a portion of the funds called for was represented by certificates of deposit, which were afterwards redeemed, and the money placed in the Treasury.

They found in the Treasurer's office, an account which has been lost sight of for many years past, relating to the sales of lots in Iowa City, and the payment to the Treasury of a small annual salary therefor, under the supposed authority of a territorial act. I call your attention to the facts there presented, and to the propriety of a transfer of the books and papers relating thereto, from the offices of the Secretary and Treasurer of State, to that of the State Register, and the transfer of the control of any bonds or lots there remaining unsold, to the same office, with instruction to report at your next regular session the condition of said property; how much yet remains to be sold; whether there have been any lots or lands sold, the purchase money of which has not been paid, &c.

Since the date of their report, the system of book-keeping in this office has been changed, and many of their suggestions adopted; the incoming Treasurer having opened new books and improved the system of accounts.

They urge, however, the importance of more frequent settlements with the Auditor, than those now required by law. I commend the various suggestions touching this department of State administration to your sound consideration.

AUDITOR'S OFFICE.-The report upon this office shows some differences in amount of warrants issued, from that indicated by the various Auditors' reports since November, 1852. After examining every warrant entry on the register from that date up to the first of January, 1859, they were posted to certain schedules shown in their report, the total of which should balance the total amount of warrants reported by the several Auditors as issued during that period. There is, however, a discrepancy, partial explanations of which are suggested by the report.

The difficulties in the way of their examination, and of satisfactory results from it, have led them to recommend a radical change in the system of keeping books and accounts in this office. Many improvements, I understand, have been introduced by the present Auditor, not reaching, perhaps, all the changes which they recommend. For the details of this subject, I refer you to the report itself.