teeen months, that being the time they remained in his possession, this attorney charged the State at the rate of a thousand dollars a year with fees in addition for all services actually performed; and though during that period he claimed, in his account presented, to have been a special agent of the State in attending to its interests and making negotiations in relation to claims assigned, yet he neg. lected to make investigation into the state of the securities, or to give any satisfactory statement respecting them, for the reason, principal, ly, as appears by his letter on file in the office of the State Treasurer, that he had no funds to meet the expense. They have since been deposited in the hands of Messrs. Lee, Dater & Miller, a responsible mercantile house in New-York, who will receive any payment that may be offered, with no other expense to the State than reasonable "compensation for services rendered. The direction of the Legisla ture is requested in regard to the course to be pursued with these assets.

From the assets of the Michigan State Bank the trustees have collected in state securities $29,641 71, and have obtained lands in settlement with some of the debtors estimated to be worth $12,075 50. A large amount of these assets before their assignment to the State, had, for the purpose of collection, been put into the hands of two gentlemen, partners in the profession of law, who now under prétext that injustice has been done that institution by enactments of the Le'gislature at its last session, refuse to account to the trusteess or to pay over any moneys by them collected. Proceedings have been instituted and are now pending in the court of chancery by which the legality of their refusal will be tested. These assets amounted nominally, at the time of the settlement with the bank, to above $630,000, but it is believed, that, with the best possible management, the amount to be realized will be comparatively small. The report of the trustees is herewith transmitted.

There is now due the State Treasury from the several counties $112,409 81, of which $58,296 07 is for assessment of 1842. There is now remaining due in the Auditor General's office for unpaid taxes the sum of $138,225 87. The amount due the primary school interest fund remains in the Treasury on deposite.

The above together with the lands already mentioned and the revenue of the Central and Southern Railroads, constitute all the resources of the State from which income can be expected the ensuing year.

The entire expenses of the State government, during the year ending Nov. 30, excepting expenses of the State prison, amounted to the sum of $45,640 76.

I herewith transmit the first annual report of the board of Auditors appointed under the act of the 14th of February, 1842, and which contains a statement in detail of their proceedings during the past year.

I invite your attention to a thorough examination of the situation of our finances. A state can never be truly prosperous while its finances remain in an uncertain and embarrassed condition. Ex. penses should be incurred for necessary objects alone, and the strictest investigation made into the justness of all claims that are present. ed for your allowance. As a great part of the expenditures for the support of the state government are made in payment of the members of the Legislature or for printing and other objects incident to its session, you will, I doubt not, so direct your labors that while you will not act with precipitation or pass enactments crude and undiges ted, you will at the same time, with a view to diminish the burdens upon the people, bring your session to a close at as early a day as is consistent with the public good and a proper despatch of public bu siness.

In connection with the subject of our finances, I deem it my duty to call your attention to the unseated and unpatented lands within the limits of the state. The quantity and value of this domain, and

a due regard to the rights of Michigan as an independent state, seem to demand at least an inquiry into the right of its fee; exempt from taxation, as claimed by the general government.

The states, under the compact of the federal constitution, are more properly confederated sovereignties than integral parts of a central government. The present confederation differs little from that formed before the adoption of the constitution, except in the enumeration of powers, and the certitude with which they are delegated.

The states then are sovereign, and one of the most essential attributes of sovereignty in a state, is it right to possess all waste and unpatented lands within its limits, and to dispose of the same at will.. This right is not only claimed and exercised in regard to wild and unoccupied lands, but in regard to those occupied and improved, when the proprietor dies without heirs recognized by law, or when, from any cause, no claimant can establish a legal title.

The sovereignty of the original states conferred the title by which they hold the public lands within their limits, and why should not the same efficient cause produce a like effect in the new states? The indipendence of the one class is, in all respects, as perfect as that of the other. Congress may adrait new states, but it can superadd no conditions. The constitution makes no distinction in regard to their rights, and none can be made by other authority.

Congress has, however, exacted from the new states, as a condition of their admission, a conventional acknowledgment of the proprietary interest of the general government in the public domain, totheir own exclusion. This is at least an indication that the general government has not full confidence in its title by reason of any constitutional provision; for a right conferred upon that government by the instrument from which it derives its existence, requires no additional sanction to give it validity; and such an acknowledgment, exactou is the price of admission from a state, not yet a member of the Un'on, end when no other of its acts would be recognized as. legal

would be void for duress, if it were not void for violation of the constitution. Congress cannot bargain with the states for their reserved

rights.

Conceding, however, that by the terms of their original grant, and by the second clause of the third section of the fourth article of the Constitution, the fee of the public lands is secured in perpetuity to the general government, then we may well inquire what impediment exists to prevent their unrestricted taxation by the statos.

The right to assess and levy taxes, is an attribute of sovereignty, and without its exercise no government could exist. The states would be neither sovereign nor free, if they did not possess the power to levy all needful taxes for their support. No authority but the federal constitution can restrict them in the exercise of this power ; and where, it is asked, with most emphatic meaning, is to be found in that hallowed instrument, the provision that takes from a state the right to tax all lands within its limits? If the clause of the Constitution adverted to confers the title upon the general government, the sovereignty of the states yet remains undiminished in regard to the right of taxation. No constitutional inhibition can be pretended, and the right has never been surrendered by Michigan, since she has been an acknowledged member of the Union..

I have much confidence in the correctness of the views here briefly presented, particularly those which relate to the right of taxation; yet, as a different doctrine has so long prevailed, and as the new states have so long acquiesced in the claims of the geueral government, I am prepared at this time to recommend no definite action in regard to the subject. It is of deep concernment to the state, and requires mature and deliberate consideration. hastily taken, and none that it would be found necessary to retrace.

No step should be

The Geological and Topographical survey of the State, upon the plan originally proposed, has been steadily progressing and the field work has been brought to a close. The original plan of organization for the completion of this work was such that a large amount of

the labor, which in the surveys of others states has been performed by assistants, was here imposed upon the person to whom was entrusted the charge of the work. For this reason a considerable amount of office work yet remains to be performed. The large amount of materials collected for the final report are yet to be arranged, the analysis of minerals and soils to be finished, and the drafting of geological and topographical maps to be completed.

While it is desirable that the results of this work should be laid be fore the public at as early a day as possible, sufficient time should, nevertheless, be allowed for the digestion and compilation of the final report and for drafting the necessary maps and diagrams.

The publication of the topographical maps of the state and of the counties, as required by law, was suspended in consequence of the embarrassments of the treasury, but has recently been resumed by the geologist and maps of several of the counties will be speedily laid before the public,

If the commencement of a geological survey of the state was now the question presented for consideration, I should have no hesitation in recommending its postponement, and, whilst I think the survey now in progress was prematurely undertaken, yet as it is so nearly brought to a close, true economy seems to require its completion.

During the year ending October 31st, 1842, fifty convicts were received into the state prison, and during the same time four escaped, one was killed in his recapture, one died, nineteen were discharged by expiration of sentence, two were pardoned by my predecessor and two by me, and at that date eighty-seven still remained. The whole value of labor performed by convicts during the year, is estimated by the agent at $9,127 04, and he is of opinion that the entire yard wall and other necessary improvements in the prison, may be completed by the labor of convicts during the present year, without appropriation from the Legislature. After the completion of the prison, it is hoped that the proceeds of convict labor, now applied to the improvements in progress, will be sufficient to defray the entire ex