pulation, from a continuance of the zoological and botanical departments, and the collection of specimens as contemplated in the act providing for a geological survey, the committee thought it advisable to recommend a reduction of this appropriation to the lowest sum necessary for the completion of the works commenced by the topographer, and the successful prosecution of the saline operations.

This reduction will not only subserve the present interests of the state, but will, the committee believe, meet the approbation of the people. Hereafter, when from a rigid system of economy, our treasury shall be replenished, when our currency shall be restored to a sound and healthy state, when happier times shall dawn upon us, and "prosperity shall be within our borders," other legislatures can, and doubtless will, provide for the development of all our geological resources; but at the present, the exigencies of the times imperiously demand of us, so to husband all our means, as to be enabled to meet all necessary demands that may be made on the treasury.

The general failure of the banks organized under the general banking law, as well as some of our chartered banks, would, in the opinion of the committee, render the services of more than one Bank Commissioner unnecessary. Although a part of the committee were of the opinion, that the services of even that one, might be dispensed with, yet to be prepared for any evils that might arise from the want of such an officer, it was thought advisable to recommend the retaining of one, and although the responsibility of that one will be increased, yet, as his duties cannot be arduous, or occupy much of his time, eight hundred dollars a year will remunerate him for his labors.

The duties of the Superintendent of Public Instruction cannot be so onerous, but that one thousand dollars per annum, will prove an ample compensation for all services rendered.

The committee, though recognizing no claim which the Governor could have for compensation for the services of a private secretary, yet, as the services of such an officer might be necessary during the session of the legislature, thought a per diem allowance preferable to an annual salary.

The committee are fully sustained in their views as to the compensation to the Superintendent of Public Instruction and the private secretary to the Governor, in a report made to the last legislature, by an honorable senator from Wayne, which may be found in Senate Documents for 1838, page 529.

If the object to be attained in the gradual enlargement of the state library, be to provide such books only as will be useful and necessary to the various officers of the state in the discharge of their official duties, five hundred dollars per annum will suffice; but if it be to accumulate a fund of general literature, to amuse

their leisure hours, the sum already appropriated will prove insufficient.

A bill is now before the house, reducing the board of commissioners for internal improvements to four in number. The committee believe that this reduction, while it will diminish expenditures in the form of salaries, will have a salutary tendency in the promotion of economy in all the expenditures of that department, and while four commissioners will suffice to perform all the duties incumbent on them, the individual responsibility of each being increased by a reduction of their number, will prompt to a more efficient and faithful discharge of their duties.

Although not properly coming within the range of duties assigned the committee, yet they would respectfully suggest the propriety of enacting a law to transfer the various specimens in mineralogy, zoology and botany, from the office of the State Geologist to the Regents of the University.

NATHANIEL HOWLAND,

Chairman.

(No. 39.)

Report of the Attorney General relative to the Farmers' and Merchants' Bank of St. Joseph, at Centerville.

To the Legislature of the State of Michigan:

In obedience to the resolution of the Senate and House of Representatives of the thirteenth of February last, "requesting the Attorney General of this state to transmit to the legislature his opinion as to the corporate existence of an institution purporting to be the Farmers' and Merchants' bank of St. Joseph,' at Centerville, whether said institution is amenable to the provisions of the general banking law of this state, and what further legislation (if any) is required to afford a proper remedy to the billholders and creditors of said institution," I have the honor to make the following report:

The history of the Farmers' and Merchants' bank of St. Joseph, at Centerville, or as it has been familiarly called "the red dog," is concisely as follows:

The notice for its organization, it is believed, was originally ordered to be published by some of the citizens of St. Joseph county, but about the time operations were to be commenced a “financier," who had already acquired considerable experience in the science of banking, and who then controlled a manufactory of the most approved material for establishing banks, happened to pass that way, and having his implements, to wit: specie certifi cates, memorandum checks, &c. &c. all ready, he succeeded in convincing the original publishers of the notice so fully of his superior skill in financiering, that the whole management of the concern was at once given up to him, and thus the public are indebted to William S. Stevens of Detroit, for the specimen of "better currency" afforded by the bills of the "Farmers' and Merchants' bank, at Centerville."

It is understood, however, that the engravings were executed and at first designed for a bank at the village of St. Joseph, in the county of Berrien ; but for some reason the original intention of the managing "financier" was abandoned, and the notes or bills of the "Farmers' and Merchants' bank of St. Joseph" were made to hail from "Centerville," by the impression of the name of that village in red ink on the face of the bills, and from this circumstance the bank derived its cognomen of "red dog," a name given to it, perhaps, as a term of reproach by some other "experienced

financier," who deemed his peculiar province encroached upon in the "getting up" of this bank, from the fact that the materials used were not manufactured at the usual mint.

Unfortunately, however, for this scheme of fraud, even the forms of law were not observed as in most other cases; the usual certificate not having been obtained from the county officers that the managers had complied with the preliminaries required by law, before issuing their paper promises, the legitimate representative of their "specie certificate basis." So anxious was this "experienced financier" to exhibit to the world his specimen of a bank founded entirely upon the "credit system," and capable of an indefinite expansion, without the fictitious aid of a single dollar in specie, that the first notice which the public had of his benevolent intentions to furnish a circulating medium for their benefit, was the presentation of the notes or bills of the bank in payment of his own debts, or in the purchase of property for the purpose of "speculation," the milder term used at the present time to designate a genteel robbery.

By reference to an official letter of the Hon. Thomas Fitzge rald, a copy of which is hereto annexed, dated March 5th, 1838, it will be perceived that although there were thirteen important particulars in which the managers of the bank (so called) had violated and outraged the laws under which they pretended to act, yet at that time they had already afforded community a "circulating medium" to the amount of nineteen thousand eight hundred and sixty dollars, the greatest part of which, it is believed, had been circulated and "palmed off" by the principal “finan

cier."

At the time the above examination was made by Col. Fitzgerald, no certificate had been obtained by the operators in the bank from the county officers, and the law had been so entirely disregarded and violated, that it was deemed impossible to sustain any proceeding against them as a corporation, and no bill in chancery was therefore filed; but those who held their notes were advised to proceed against the individuals concerned, in order to collect the amount due on said notes or bills.

Subsequent to that time, however, the principal "financier," William S. Stevens, made another effort to carry into effect the object (which it is supposed) he had originally in view, namely, to furnish himself, and others who were interested, with the means of carrying on their speculations.

In order to accomplish this object, a new selection of directors and officers was made, and a new organization was attempted under the amendment to the general banking law, approved December 30th, 1837. But at this time also the operators were in too great haste to get their bills in circulation, to take the course marked out by the law, for instead of waiting until the affairs had

been examined by a Bank Commissioner, and his certificate had been obtained, as is required by the 16th section of the amendment above referred to, the directors, immediately upon being qualified, made out the certificate required by the seventh section, (a copy of which is hereto annexed,) and filed the same in the office of the Secretary of State on the 13th day of March, 1838. This was done too in reckless disregard and violation of every essential pre-requisite of the statute under which they professed to be acting. No specie was paid in and possessed by said bank. No actual capital was provided, (though it is said about five or six thousand dollars in specie belonging to the Clinton canal bank, left Detroit for Centerville, under the charge of William S. Stevens, but was returned in a few days.)

- Nevertheless, they were ready to issue bills once more, and no doubt fully believed that they had taken all the necessary measures, such as the publication of newspaper puffs, notices, &c. &c. to ensure a ready reception of their "precious paper promises," thrown forth into the world with a lie upon their very face, as they purported to be upon a bank, which had, in truth, no legal existence, and which never possessed, it is believed, one cent of real capital, and which had nothing to sustain it but the sublima. ted effrontery and fraud of its principal founders.

By reference to the copy of a bond hereto annexed, from William S. Stevens to Thomas W. Langley, it will be seen that there was thrown into circulation about thirty thousand dollars, over twenty-one thousand of which, went through the hands of Stevens; it is hoped that this is the extent to which the public were defrauded, although it is greatly to be feared, that the whole circulation has not yet been ascertained.

To meet this circulation, there is the bond of Stevens, which has, as I am informed, been sued by Langley; some assets and some real estate securities, the amount and value of which, I have not been able to ascertain, but even some of these securities, as I am informed, were obtained by said Stevens, from individuals not connected with or concerned in the bank, in consequence of false representations.

Such is succinctly the history of the Farmers' and Merchants' bank of St. Joseph, at Centerville, and from the facts disclosed, I come to the following conclusions:

1st. That the bank never had a corporate existence.

2d. That although the bank never became a corporation, yet, as those engaged in "getting it up," held out to the public that their proceedings were had, and their bills and notes issued, in ac cordance with the provisions of the act to amend an act entitled “An act to organize and regulate banking associations, and for other purposes," they are estopped from objecting that they are not bound by its provisions, and are therefore amenable to all its