diminution of available means for the prosecution of the public works, by the extra amount of interest required to be paid. At the request of governor Mason, I visited New York for the purpose of adjusting this difficulty, but found by inquiry, that the state was, so far as regarded the payment of interest due on the 1st of July, to the then holders of the bonds, liable, and the payment then to be made, by the Morris canal and United States bank to the state, I was given to understand, would be, only upon an assurance upon my part, as agent of the state, that provision should be made out of the funds at my command, for the payment of the interest upon the whole loan. My predecessor having acted, in drawing for funds accruing on the 1st of July, upon the supposition that the interest upon the amount of capital actually received by the state only, was then due-left me short of ready means with which to make the payment of $150,000 in the sum of $102,110 69. Feeling a strong desire to preserve the faith of the state inviolate, without reference to the right of the Morris canal and banking company to claim interest upon the whole sum, but with the sole reference to the rights of the then holders of the bonds, I was obliged, at much considerable extra expense to the state, to go into the money market and purchase available cash funds to supply the deficiency then existing. The sinking fund account will show the details of that transaction. By reference to the subsequent contract, a copy of which is herewith submitted, and also a schedule of the payments falling due to the state, it will be seen that the state is credited with the interest accruing on the several payments, (commencing with the 1st day of January, 1839, and ending on the 1st day of January, 1843,) up to the date of the maturity of each payment-and the difference of interest between the amount. actually paid, and to be paid, up to the expiration of those payments, and that received of the Morris canal and United States bank, upon the instalments as they respectively fall due, form the precise sum the state should pay, provided she made the payments of interest as fast as the capital was received. The justice, then, toward the state, by the present mode of paying interest, is caused by its being obliged for a series of payments to be in advance of interest, but which advances accrue to the state by the subsequent payments of interest, less the amount of interest upon the sums advanced by the state. I annex a statement illustrating my views of this matter. State Prison accounts. Appended are the several accounts and statements required to be rendered to this office by the several officers in charge of that department, as follows: Inventory, marked No. 2. Outstanding accounts in favor of, and against the state, marked No. 3. Agent's report, marked No. 4. Commissioner's, or disbursing agent's report, marked No. 5. Also, the account of this department with J. H. Titus, commissioner, for funds received on account of the state loan of $40,000, and the disbursement by him, allowed by the auditor general and carried to his credit, showing a balance against the commissioner of $1,603 33. A contract of sale was entered into by his excellency governor Mason, with Messrs. William Ford & Sons, for the bonds authorized to be issued for the purpose of constructing the prison, and their bond, with approved security for the faithful performance, on their part, in making payments, was taken and filed with the treasurer. I regret, however, to say that that firm have failed on their part in making the monthly payments, as stipulated in the bond, (they having paid only $12,572 48, up to this date.) In consequence of this default, it was deemed advisable to place the bond in the hands of the attorney general for collection. I would respectfully suggest in all future disbursements by the agent of the state prison, the propriety of his being required by law, to take duplicate vouchers for all disbursements made, one set of which he shall retain in his office, and the other transmit to this department with his annual account current. To a want of a proper system of keeping the accounts at the prison, and of taking proper vouchers for the disbursements, may be attributed the confusion in which the former agent's accounts were found, and the measure herein, proposed is intended, in part, to obviate future difficulty. The general law of the last session, relating to this department, is defective in many particulars; it was no doubt intended that the payment of expenses for transporting prisoners to the prison by the sheriffs, as well as the expenses for clothing and victualling them, should be borne by the state. Sufficient authority has not, however, been given by that law to authorize the auditor general to draw on the treasury for those expenses, as well as for several others of minor importance. A thorough revision of it is, therefore, respectfully recommended, that the present ambiguity, and want of authority in the law itself, may be removed. Wants of this Department. The increased and increasing labor required to perform the numerous duties of this office, absolutely requires additional aid. The general supervision of the various duties required ditor general, will demand the aid of at least three clerks-one, whose special duty shall relate to the writing required in the various accounts with the state treasurer and other state officers, and two others to attend to keeping the accounts with delinquent taxes, and meeting demands upon their time, by persons applying to make payment of taxes. I would, therefore, respectfully recommend the passage of a law to meet this contingency-the appropriations for the payment of whose services should properly be made for one, payable out of the general fund, and the other two out of the delinquent tax fund. I would also respectfully propose, that in future the auditor general should be required to open a set of books, and keep accounts with the various appropriations made by the legisla ture, wherein credit shall be given to the various persons or objects appropriated to or for, and charges from time to time made against the same, as warrants are drawn-a system that, heretofore, has not been adopted in this office, and the want of which has, in one instance, been the means of over-payment to a state officer of a quarter's salary, and in one or two other instances to small amounts to other individuals. At present, in order to determine whether an appropriation to any person, or on account of any specific object, has been paid, or exhausted, or not, searches have to be made through the books, embracing perhaps a year's business, and when so made may be attended perhaps with doubt as to the result. The adoption of the system proposed would also enable the auditor general more readily and at short notice, to answer the inquiries of the legislature or executive, and would be the means of embodying information in regard to the expenditures upon various objects, that would be found useful for future reference. The additional yearly expense of adopting the system will be but trifling, and when compared with the end attained, is unimportant. All of which is very respectfully submitted. 1839. Henry Howard, Treasurer, in account current with the DR. Jan. 3, To cash received of P. M. Phil 10, lips, for peddler's license, $10 00 30 00 10 00 16, bank, bonus to 1st Jan. inst., "received of Merchants' bank, Jackson county, bonus, received of Wm. Anderson, 412 50 63 84 24, "received of Wm. Anderson, 200 00 $1,080 34 15, 21, 22, sheriff of Berrien county, "received of the bank of Con- "received of M. Chapin, for ten "received from bank of St. Clair, in full to Jan. 1st, 39, 125 00 Mar. 7, received of J. H. Cleveland, 59 89 State of Michigan, for the quarter ending March 31st, 1839. 22, 29, Feb. 4, 7, 312 50 2.75 826 50 3,000 00 "do favor Digby V. Bell, "do favor C. C. Hascall, for "do favor Manhattan bank, of interest on university "do favor John J. Adam, for superintending the publica- "do favor Ezekiel W. Davis, "do favor Alva Fuller, for "do O. B. Hart for expenses of committee on the loca- 200 00 2 25 47 00 11 00 3,260 25 |