We are now enabled to discriminate between the liquidated and the unadjusted portions of the internal improvement debt, and to state the precise amount of each now outstauding due and unpaid.

Of the $1,387,000 full paid five million loan bonds there has been received in payment as above mentioned, $1,121,000, and on account of the Southern railroad $4,000, leaving now outstanding of the said bonds only $262,000; and 309,449 60 of the $367,036 80 "interest bonds" issued and issueable for interest on said full paid bonds, according to the provisions of act 73 of 1843, have also been received on account of the sale of said roads.

The balance of these outstanding bonds together amount to $319,587 20, and now constitutes all of that portion of the public debt which the laws have liquidated and acknowledged.

The coupons of the whole original amount of the said bonds up to and including those due July last, have either been surrendered up and paid into the state treasury by the Central railroad company, or a sufficient sum in money to pay the same have been received from them as the law required. There is therefore no interest due on any part of the above amount which has not been paid, or which we have not ample means in the treasury to meet, until next January; and for the payment of this, and all subsequent dues for annual interest on the above remaining balance, provision is made by the above mentioned

act.

On the first day of January next, there will therefore become due the coupons for that period, amounting to $9,587 61, which according to the requirements of the said act, must be apportioned among the several counties and be assessed upon the taxable property of each respectively, at the next annual session of the boards of supervisors.

Before the period of that assessment arrives, however, the coupons for July next, amounting to the same sum, will have become due, and it will therefore be the duty of this office, upon the maturity of the coupons for January and July as aforesaid, to notify the proper authorities of the several counties of the amount required to be raised by them respectively as their quota for the payment of the same; but the amount will not be assessed until October 1848, and more than two years thereafter must elapse before the whole of it can be collected and received into the state treasury.

In view of this fact, and that the amount of said interest will be less

than $20,000 annually, it may be deemed proper by the legislature to direct the prompt payment of the same as it falls due semi-annually, from the funds on hand in the state treasury, which of course would be reimbursed from the proceeds of the said tax when collected and received in due course of law; and such payment I think might be made without impairing the ability of the treasury to meet the more legitimate demands upon it.

The balance of the principal of the "interest bonds" now outstanding, amounting to $57,587 20 it will also be noticed, becomes due in 1850, and provision for its payment at maturity should be made, in accordance with the promise of the state.

The said act No. 73, of 1843, which also provides for the settlement and adjustment of that portion of the internal improvement debt consisting of the amount of principal received on the $3,813,000 bonds delivered to the U. S. Bank with the interest thereon, requires the surrender of all the said bonds for cancelment before the holders thereof shall be entitled to receive new bonds for the amount of principal and interest actually due, subject besides to a deduction of 25 per cent for damages to the state on account of the non-payment of the remaining instalments of the five million loan.

More than four years have elapsed since its enactment, and no surrender of any amount has yet been made in accordance with its terms. But by the provisions of the act for the sale of the Central railroad, the ratio of allowance on these bonds was based on the actual amount received by the state, less three per cent for damages as aforesaid, and at this rate, $60 243 27, or the nominal amount of $199,000, have been paid into the state treasury.

It is now understood that these bonds which had been hypothecated as collateral securities with the European creditors of the U. S. Bank, have been proportionally divided between the holders thereof, and it is submitted whether justice to this class of our creditors does not require that the law should be so modified as to permit any one or more of such bondholders to surrender such portions as they may respectively possess for adjustment, upon the same basis of allowance provided in the act authorizing the sale of said railroad.

This portion of our indebteduess, now unpaid and outstanding, being the whole amount actually received, with interest on the same to January 1848, after deducting all payments made by the Central and Southern railroad companies, amounts to $1,700,480; from which if we deduct the amount of damages claimed as aforesaid at the rate of

three per cent, with interest thereon to the same time, the nett balance remaining due including interest as aforesaid, will then be $1,597,545 14;-and for information and convenience this debt is thus variously exhibited in the foregoing statement.

My views on the subject of this class of indebtedness, as embodied in my last annual report, remain unchanged. The lapse of time, I think, makes it more "fully apparent that every principle of sound policy requires not only an early and equitable adjustment of this debt, but also a speedy extinguishment of it, as the ability of the state will permit."

If we intend to repay what we have received and justly owe, with lawful interest, as we undoubtedly do, can it be a true policy to procrastinate the payment, and allow the debt to accumulate?

The amount of principal and interest due to January, 1848, after deducting damages as aforesaid, if funded to that time, would be subject to an annual interest of $95,852 71; and as I have before remarked, under similar circumstances, if this were so funded and we should now commence to pay interest on it annually, in seventeen years hence we would have paid in interest, more than the whole amount of the present debt of principal and interest, and yet it would be all still remaining against us.

Is it not then the dictate of wisdom to commence immediately and make provision, not only for the payment of the annual interest, but for the gradual, though ultimate extinguishment of the principal;-for unless we do this, it is certain that all the evils and embarrassments incident to a perpetual debt must be entailed upon us.

But under any circumstances, should not the certain and rapid accumulation of the debt be prevented, by providing for at least, the payment of the annual interest thereon. Can it be doubted that a state which exports the products of its own growth and manufacture, besides supplying the demand for domestic consumption within its limits, to the amount of five millions of dollars annually, and the aggregate valuation of whose taxable property actually exceeds a hundred millions, has the most perfect ability to accomplish, at least, this much?

The fact that this portion of our indebtedness remains unadjusted, cannot, I think, affect the propriety of providing for the annual interest on the amount we acknowledge to have received, for the debt is still due, is increasing at a rapid rate, and it must, with all its certain annual accumulation, be eventually paid, or repudiated.

We know that the people of Michigan have never contemplated for a moment, a resort to the latter alternative, and any insinuation of such contingency would be an outrage upon their sense of honor and good faith.

They have at all times, and through various mediums, solemnly declared their intention to liquidate and pay all that they have actually received and honestly owe. And they have given positive proof of the sincerity of this intention, by making an early and satisfactory settlement with one classs of creditors, by providing for the payment of the annual interest on the amount found to be due, upon such settlement; and by a voluntary surrender of all the valuable public property towards the payment of the entire debt. Thus far they have preserved the most perfect good faith, although encompassed with pecuniary embarrassments, and it will scarcely now be believed that they refuse to offer honorable and just terms of settlement to another class of creditors, or that they unnecessarily procrastinate the payment of their just dues.

This debt then must and will be paid, and we are under obligations to ourselves, as well as to our creditors, to make every proper effort to provide for its liquidation and extinguishment at as early a period as is possible.

Shall we then offer the terms of settlement above suggested, and provide for the payment of the annual interest on this portion of indebtedness, as in the case of the debt on the full paid bonds? The belief that such terms will be accepted, is much strengtheued by the fact that the holders of these bonds have already surrendered $199,000 of them, at the rate provided for their allowance; and it must be recollected, that any given years' interest could not be paid within the same year of its assessment, but that from one to three years must elapse before the entire proceeds of any one years' tax which may be assessed, could be collected and received into the state treasury, under the ordinary provisions of law. Still it may be

deemed proper to fund this debt with the interest up to 1850, and to commence thereafter the payment of the interest thereon, together with a part or the whole of the principal of the "interest bonds" then due, and in such case sufficient time would be afforded to ascertain and know the views and intentions of the said bonholders. If such views should be adverse to the acceptance of the terms proposed, the amount contemplated to be raised by direct tax, or such other amount as the legislature may then deem proper, can be most profitably and benefi

cially invested in a sinking fund, which, under the control of certain state officers, or other fund commissioners, may be compounded and augmented, and certain portions of its proceeds be used under proper restrictions to purchase in the market these and other evidences of our state indebtedness not due, thus absorbing the principal, and gradually extinguishing a debt which if suffered to accumulate, must eventually rest like an incubus upon the progress and prosperity of all.

The foregoing views are with great deference submitted for the consideration of the legislature, in obedience to the legal requirement to "recommend such improvements in the financial system of the state,” as I may deem expedient; and the subject is now respectfully resigned over to the authority, whose acts are law.

From official certificates filed in this office, it has been ascertained that many of the plats or maps of the several villages in the state, have either been imperfectly executed, or illegally recorded.

Some of them do not describe the lands surveyed and laid out; some have been merely filed for record; the acknowledgment of others is defective, or it is altogether omitted; and in some cases, the plats have neither been filed nor recorded.

It is the opinion of some of the ablest lawyers of this state, that "town plats" thus situated, were insufficient and therefore invalid; and that especially were they required to be acknowledged by the proprietors of the lands laid out, and afterwards to be recorded, i. e. transcribed. It is therefore held that unless these plats were so acknowledged and recorded, they were an arbitrary division of property into parcels, in a mode not known to the law, that they could not be legal notice to the assessors, of the lots and subdivisions represented by them, and consequently no assessment of the same as village property according to the said lots could be legally made.

Such have been the views, also entertained by this office for many years past, and its practice has been in accordance therewith, as appears by its books and records, which show the rejection of taxes and cancelment of sales of lots in sundry ahd various villages on account of the defects or omissions above mentioned.

My own judgment approving such views, and under advisement by the Attorney General, I have conformed my official action thereto, and have continued the practice adopted by my predecessors.

Different and contrary opinions are also entertained by some, on this subject, but this fact only proves, in advance of its adjudcia