for the twenty thousand dollars, into the eastern banks, by some financial arrangement. Detroit, March 26, 1839. ARBA K. MAYNARD. Know all men by these presents, that I, Arba K. Maynard, of Sherburne, Chenango county, N. Y. have made, constituted and appointed, and by these presents do make, constitute and appoint, Philo S. Rawson, of Detroit city, my true and lawful attorney, for me, and in my name, place and stead, and for my use, to bargain for, and actually purchase, on such terms as to him shall seem proper, one of the chartered banks in the state of Michigan, my said attorney selecting such chartered bank as aforesaid as he shall deem most for my interest, I hereby giving and granting unto him, my said attorney, full power and authority in and about the premises, and generally to do and perform all and every act and thing whatsoever, requisite and necessary in the premises, as fully to all intents and purposes as I might or could do if ally present for the purposes aforesaid, and also to purchase for me as aforesaid, a first rate mill privilege for a flouring mill, either with a flouring mill erected thereon or without. In witness whereof, I have hereunto set my hand and seal, the 5th day of January, 1839. (Copy,) In presence of S. W. CORBIN. ARBA K. MAYNARD. (No. 44.) Report of the joint select committee to investigate the negotiation of the Five Million Loan. The select committee appointed by the House of Representatives, in conjunction with a like committee appointed on the part of the Senate, acting under the following resolutions, to wit: Resolved, That so much of the Governor's message as relates to state loans be referred to a special committee of seven members, with power to send for persons and papers. Resolved, That so much of the Governor's message as requests a committee of investigation to inquire into the manner of the negotiation of the $5,000,000 state loan, be referred to a select committee of seven, to be composed of one from each senatorial district, to be appointed by the president of the Senate, with power to send for persons and papers, to fully investigate the same, and to report their proceedings therein to the Senate. Resolved, (the Honorable Senate concurring.) That the select committees of the Senate and House of Representatives upon the subject of the $5,000,000 loan, be a joint committee for the purposes and with the powers as conferred upon said committees, by the respective resolutions under which the said committees were appointed. Having discharged the arduous and responsible duties assigned them, beg leave to submit the following report: That by an act of the legislature, approved March 21st, 1837, the Governor was authorized and directed to negotiate a loan not exceeding in the whole, $5,000,000, at an interest not exceeding five and a half per centurn per annum, redeemable at the pleasure of the state, at any time after the expiration of 25 years from the first day of January, eighteen hundred and thirty-eight, on the best and most favorable terms, that could, in his judgment, be obtained, provided the certificates of stock or bonds, which in effecting said loan it became necessary for him to issue, should not be sold less than their par value. Under this act, a discretion was vested in the Governor, by which he was authorized to make such arrangements, contracts and agreements, in behalf of the people of this state, as in his judgment would secure the payment and safe transmission of the moneys as should arise from the sale of said bonds or certificates. All expenses incurred by the Governor in carrying out the provisions of the act, were provided for, to be paid out of the fund for internal improve ment. At the suggestion of a capitalist in the city of New York' through whom Governor Mason had unsuccessfully endeavored to negotiate the loan, and who recommended certain alterations in the act, by which the interest should be increased to 6 per cent per annum, and that both principal and interest should be made payable either in the United States or Europe, as should be deemed most advantageous; by an act of the legislature, approved November 15, 1837, these amendments were adopted. These two acts contain all the legislation upon the subject. At the instance of the person alluded to, J. Delafield, Esq., of New York, an attempt was made to sell in London, bonds of the state, to the amount of three hundred thousand dollars, but the efforts to accomplish this object by Mr. King, of the house of Prime, Ward and King, were unsuccessful. In the mean time, in anticipation of the sale of these bonds in London, it was agreed between Governor Mason and Mr. Delafield, that the latter should advance to the state one hundred and fifty thousand dollars, which amount, upon the drafts of Governor Mason, was paid. Without any stipulation which would warrant it, and contrary to the expectations of Governor Mason, these drafts were met by bills of exchange on London, and a necessity arose of remitting funds to that city to meet these bills, or suffer the drafts to be protested, and which were returned dishonored. Bonds to the amount of five hundred thousand dollars were sold to Oliver Newberry, Esq., at a premium of six per centum. Upon this contract two hundred thousand dollars and the premium of six per cent were paid, and the remaining bonds of three hundred thousand dollars were returned by Mr. Newberry. In May, eighteen hundred and thirty-eight, a contract was entered into between Governor Mason and E. R. Biddle, Esq., of Jersey City, for the sale of the entire amount of the state loan to be taken at a par valuation, and the sum of eighty thousand dollars advanced to the state upon this contract, but it was subsequently vacated by the inability of the parties to meet the pay ments. On the first day of June following, a contract was entered into in the city of New York, between Governor Mason and the Morris canal and banking company; for terms and conditions, reference is had to the contract herewith appended, marked (A.) Upon this contract the state have received up to this time, the sum of one million one hundred thousand dollars. Bonds to the full amount of the loan have been executed and deposited in the Bank of the State of New York, $300,000 of which, by a subsequent agreement, have been delivered to the Bank of the United States of the State of Pennsylvania, and the obligation of that institution for the payment of that sum to the state in instalments, conformng with the contract with the Morris canal and banking com pany. The expenses incurred in negotiating the loan, are as follows: Governor Mason's personal expenses to New York twice, Postage on bonds and expenses of special messen- Two and a half per cent commission to Morris ca $927 00 325 00 639 00 125,000 00 8,963 30 $135,854 30 To which is to be added an unsettled account for the printing of bonds in the city of New York. The act authorizing the $5,000,000 loan was imperative in its directions and simple in its detail. It prescribed the manner and condition upon which the faith of the state should be pledged, and it fixed a value below which its stock should not be sold. Your committee refer to the memorandum and quotations of stocks appended to the testimony of Gov. Mason, as well as the testimony itself, which is, with the interrogatories propounded by the committee, herewith submitted as a part of this report, marked (B.) Your committee does not inquire if the compensation stipulated to be paid to the Morris canal and banking company was exorbitant, nor whether a sale of the bonds could have been made on more advantageous terms; they refer to the act of the legislature as their only rule of action. The committee do not discover the necessity or the authority by which drafts were substituted for the notes of the Morris canal and banking company, reference being had to the supplemental contract herewith appended, and the payment in lieu thereof in funds of the various banks of Michigan. In the transmission of a portion of the funds received from the Morris canal and banking company, a circumstance occurred which, if consistent with their duty, your committee would veil in oblivion, not that they would countenance crime or shelter infamy. In June last, Gov. Mason received from the office of the Morris canal and banking company, their notes, to the amount of $110,397 as due and to fall due from that company under the contract he had just made. This sum was placed in a trunk procured for the purpose, and under the superintendence of Gov. Mason, was brought to Detroit. Upon his arrival the State Treasurer executed to Governor Mason a receipt for the entire amount, counting only a pack age of $10,397 70. The trunk with the entire sum was then deposited by the Treasurer in the vaults of the Michigan state bank. Subsequently the money was counted, and a deficiency was discovered of $4,630. Gov. Mason immediately advised the Morris canal and banking company of the deficit, and on the same day that his letter reached the bank, the amount of the deficiency (excepting the sum of $50) was received by the bank through the post office in the city of New York. Your committee, for the purpose of arriving at all the facts connected with the negoti ation and transmission of the funds to the state, called before them again Gov. Mason, and propounded to him the accompanying interrogatories, and received the annexed answers herewith appended, marked (C.) Theodore Romeyn, who accompanied Gov. Mason, from New York, was also called before your committee, and the interrogatories and answers marked (D.) are likewise appended. The committee beg leave respectfully to state, that after a full examination of the laws, documents and correspor.dence connected with the negotiation, their attention was directed to the abstraction of the funds, and for this purpose called many witnesses before them, and have accumulated a large mass of testimony, much of which is irrelevant, and nothing which would tend to identify the person guilty of the foul transaction before a judicial tribunal. It sleeps in the bosom of him who perpetrated the crime. It is due to Gov. Mason and to the public to say, that no imputation whatever rests upon him. The journal of the proceedings of the committee, together with the testimony taken before them is herewith submitted, (except such as is appended to this report) and from its voluminousness and irrelevancy, your committee recommend dispensing with its publication, but that it be placed with the papers of this legisla ture. All which is respectfully submitted. DOCUMENTS. Correspondence, &c. relating to the negotiation of the $5,000,000 loan. Contract with the Morris Canal and Banking Company. Articles of agreement entered into this first day of June, in the year of our Lord eighteen hundred and thirty eight, between the people of the state of Michigan, by Stevens Thompson Mason, Governor of the said state of Michigan, acting in behalf of the people and under the authority of the state aforesaid, of the first part, and the Morris canal and banking company, a body politic |