and in the vicinity of the spot where the said loan was proposed to be expended not, how ever, for the full amount thereof, but limited to $10,000, as appears by the record on the 22d of October following. The powers given to the agent seem to have been broad, for, in the words of the resolution "The common council say they do hereby invest him (the agent) with all the powers and authority invested in them (the council) by the charter of the city and the amendments thereto, so far as relates to the negotiation of said loan." Thus it will appear that while it was necessary under the law to obtain a vote of the people for a loan of $25,000, the council by their subsequent approval of this arrangement, seem to have virtually contracted a debt of a much larger sum; for the stock of said Trust Company has been, at times, of scarce any value, and at the present day is quoted at about ninety per cent. below par. Had the loss of this stock fallen on the city, as it might have done, if it was liable, certainly to the extent of $10,000 if not to the whole sum, it would have rendered the evils of our situation much greater, and ought to serve as a caution in future to reject altogether any proposition to involve the city in debt. A compromise was made, and the city was finally relieved from these demands by relinquishing their claim upon the bank at Albany for $2,000 of the loan which had been withheld by them on that account. It is proper here to state that it was claimed by the agent who negotiated the loan, that the city was not to be held accountable for the loss or depreciation on the stock before referred to. But subsequent proceedings go to show that other parties to the contract thought differently, and the final action appears to confirm it. The committee are, however, of the opinion that the proceedings were illegal from first to last.

On or about the 27th of October, 1838, the commissioners of the canal fund were informed that the money was subject to their draft, and the work was commenced. The treasurer's accounts on the 4th of November, 1838, show a credit of $23,000, drawn from the bank at Albany or transferred to the credit of the Bank of River Raisin and the Merchants and Mechanics' Bankof Monroe. At a meeting of the commissioners on the 4th of November, 1838, proposals were made by Luther Harvey and others to take the contract for the work, esti

mated at 55,000 cubic yards, at 40 cents per yard, amounting to the sum of $22,000. This proposition was rejected, two members of the board dissenting. One of them, the acting commissioner, believing that it would have been more judicious to let the work by contract, resigned his appointment. The board then proceeded with the work under their own supervision, appointing another acting commissioner, and placing in his hands the sum of $5,000 to expend on the same. A proposal was submitted at this time by the River Raisin Bank and Merchants and Mechanics' Bank for the use of the funds, $15,000, to be put to the credit of the former, and $10,000 to that of the latter, they to pay the agent of the city for his services in negotiating said loan, but not to pay any interest. This proposition seems to have been accepted. The committee can see no good reason why this money was withdrawn from the bank at Albany and deposited in the banks here, as by the report of the agent the city was to have been allowed interest at the rate of two per cent. by the bank at Albany. Eastern drafts at that time were at an unusually high rate of premium, the profit of which was thus given to those banks. A sum in all probability equal to $2,000, if not much more, was thus relinquished for their benefit. How much they paid the agent for his services does not appear. The banks did agree by their proposals to pay out on the works the bills of specie-paying banks. How far this was complied with the committee are unable to say; but it is reasonable to suppose that they availed themselves of every opportunity to pay out their own notes instead thereof, the difference being very great, as there was at this time a general suspension of specie payments, and but one or two banks in the State continued to redeem their notes.

Up to the 13th of August, 1839, the board had expended in all upon the work the sum of $19,611.40, when it was entirely arrested in its further progress by the failure of the Merchants and Mechanics' Bank, and soon after by the River Raisin Bank. In the former at the time of its failure there remained the sum of $2,633.45, and in the latter the sum of $755.12. The Bank of Albany had also at this time refused to pay the balance of the loan, being $2,000 before alluded to, alleging that the stock of the Trust Company bad depreciated, and

claiming the difference of the city. Thus it will be seen that more than one-fifth of the loan was at a critical time rendered unavail. able to the prosecution of the work, causing by its interruption great injury, no doubt, to that which had been done. On the 7th of April, 1840, the board presented a report of their doings, and claimed to have finished 45,000 cubic yards out of 55,000 as estimated for the whole work, and say "but for the stoppage of the banks the loan would have been more than sufficient to finish the entire work." About $5,000, say they, would be more than sufficient to finish the entire work. Yet that sum has been expended with $14,000 more by subsequent taxation, and still it is not entirely finished.

We present below an abstract of the amount expended up to this period, and invite the attention of our fellow-citizens to the fact that so small a proportion appears to have been paid out for actual labor on the work. It is a fact

that is to be taken into consideration when we are asked to vote for this or that appropriation and it is desirable to know how much of any sum is necessarily absorbed in preliminary proceedings, or consumed in injudicious management of public affairs.

Abstract of amounts expended out of Canal Fund to date, August 13, 1849.

Interest for six months on loan..

€

$ 875 00 200 25 70 50 47 00 15 75 2,049 62 23 63 $3,281 75

3,669 10

Flour

Beef

47 75

658 00

6 91 226 25

Hardware

Blacksmithing.

Stationery

Wheelbarrows.

Thus it appears that out of the large sum of $25,000 only $7,997.63 was paid out in money for labor, $2,882.75 for material, etc., $5,417.15 for pork, provisions, blankets, etc., leaving about $2,400 consumed chiefly in salaries in a period of time but little over nine months. Among the items of provisions we observe an extraordinary disbursement for pork. We can conceive of no just excuse for such an appropriation of the funds of the city. Was it a speculation entered into in its behalf? This cannot be supposed, for we find no authority for such an operation. It might have been considered a safe investment, and perhaps proved better than a deposit in the banks; yet it was an inconvenient sort of currency. It would not have been necessary for the prosecution of the work, as at all times money has been much more available for labor than any description of dicker. The accounts show that some of it was sold to the merchants in town, and, as the committee believe, a portion of it was ultimately lost.

After the failure of the banks, it would appear that nearly a year elapsed before anything more was done on the work. On the 2d of November, 1840, George W. Strong made application to the board, and they concluded a contract with him to complete the canal on the following terms, viz.:

In personal property in hands of commissioners

In debts due them

2,882 75 7,997 63

32 12

$19,611 40

$770 90

640 88 670 69

Balance in Merchants and Mechanics' Bank 2,533 45

$4,615 92

to be paid to him upon the completion thereof by drafts on said banks, which he was to take in payment whether paid by the banks or not. This was a favorable contract for the city under the circumstances, but if the means of the board

had been in their own hands instead of insolvent banks they could doubtless have effected a much more favorable contract.

On the 29th of August, 1843, the council made another contract with Mr. Strong, associated with Mr. Campbell, for the further prosecution of the work or completion thereof, for the sum of $7,250, to be paid $500 in advance, $5,000 as the work progressed, and $1,750 out of a tax to be collected thereafter. This contract was based upon the expectation of a vote of the freeholders authorizing another loan of $10,000. The same was obtained on the 11th of October following; but instead of a loan an issue was made of bonds, which were in fact paid out upon the contract. There was a form of borrowing and lending, yet there was no money passing. Of this loan of $10,000, levied and collected by special tax upon the people in the year 1843, to pay the bonds last above referred to, the following is the disposition:

Excavator purchased of Campbell & Strong Expended at Bar Point under direction of Mr. Disbrow

$2,485 10 4,870 00 1,000 00

1,804 94 $10,160 04 The surplus was probably out of city funds. By the preceding statement it will be seen that out of said tax of $10,000, there was paid to Campbell and Strong upon their contract only $4,870, leaving due to them, when it should be completed, the sum of $2,380, to be raised by another tax or paid out of other funds than those provided for it. In addition to this, Messrs. Campbell & Strong presented the following account on the 18th of February, 1815 :

Extra work and hinderance by washing of banks in consequence of running boats__ $2,009 64 Extra work upper end of canal.... 222 32 Lost time and damage in consequence of injunction Discount on funds received.

200 00

And it here will be noted that a sum that should and only could be legally raised by a vote of the people, is taken out of the general fund and thus collected from personal property, which is not holden under the law for any part of such expenditures.

Another loan, or rather tax, is voted by the willing people on the 17th of March, 1848, of $4,000, and a contract immediately made with H. W. Campbell for the completion of the work again for $4,000. An additional allowance was subsequently made to him of $104.79 for discount on funds previously paid to him, upon which he claims to have sustained a loss of ten per cent., but which the committee are assured, a large part was used by him at the par value thereof. The final payments of the balance, amounting to $1,200, due to Messrs. Strong & Campbell and to H. W. Campbell on their several contracts, was paid only a few days ago (February 7, 1850), out of the taxes collected for 1849.

560 00 $2,991 96

Of these items the council allowed $1,654.82. These sums must have drawn heavily upon subsequent appropriations for the canal, and finally, as we believe, upon the general taxes of the city.

This is a brief history of the amount loaned for canal purposes, or raised by direct tax upon the inhabitants, for the prosecution of the work, the several contracts founded upon the same, and the manner in which the money has been disposed of.

UN

NDER the ordinance of 1787, the territory north west of the Ohio River was given a temporary government under the name of the Territory of the Northwest. It embraced what now constitutes the States of Ohio, Michigan, Indiana, Illinois and Wisconsin. In 1796, the Northwest Territory was composed of five counties, with names and boundaries as follows: Wayne-including the settlements on the Maumee, Raisin and Detroit Rivers, with its seat of justice at Detroit; Washingtoncomprising all that portion of the present State of Ohio within forty miles of the Ohio river and between the Little Miami and Muskingum rivers, with Marietta for its county seat; Hamilton--embracing the region between the Little and the Great Miami, and within forty miles of the Ohio, with Cincinnati as the seat of justice; Knox-containing the country near to the Ohio and between the Great Miami and the Wabash Rivers, having Vincennes as its county seat; and St. Clair-embracing the settlements upon the Illinois and Kaskaskia Rivers, as well as those upon the Upper Mississippi, the seat of justice being at Kaskaskia. By the ordinance of 1787, it was provided, that when a State should be formed of the eastern portion of the Territory, it would include the territory "lying north of line drawn east and west, through the southern extreme of Lake Michigan," which should remain a portion of such State until such territory should contain 60,000 inhabitants. In disregard of this provision, however, the enabling act of Congress (1802) providing for the organization of the State of Ohio, fixed the northern boundary of the proposed State on the line above. mentioned, whereby what is now Michigan was excluded from the proposed State and attached to the Territory of Indiana, with its seat of government at Vincennes, a distant and very inconvenient point. This was very unsatisfactory to the inhabitants of that region,

who protested positively against it. It was not long, however (1805), before the Territory of Michigan was established, with its capital at Detroit.

There were several questions growing out of and connected with the organization of the State of Ohio, which co-operated to cause misunderstanding and unkind feelings between the people of what is now Ohio and those of Michigan. In the first place, the general sentiment seems to have been that the movement for the formation of a State Government was premature and unwise. It was not the act of the territorial legislature or of the people, as in other like cases, but solely that of Congress, not only without suggestion by the local authorities, but against their known will, and upon the petition of a few individuals speaking only for themselves. As already suggested, this state of things was then believed to be due to partisan ends sought in the formation of the State. Judge Burnet in his "Notes on the Northwestern Territory" says that so strong was the popular feeling against Jefferson and for Mr. Adams in the bitter contest of 1800, that there were in Hamilton county but four persons known to him as supporting the former, to wit: Major David Zeigler, William Henry Harrison (afterwards President), William McMillan and John Smith. The feeling in Wayne county, now Michigan, if anything, was even more decided in the same direction.

But the most serious of the results of the separation of Wayne county from Ohio in 1802, are not found in the partisan divisions of that day. They were developed in the question of boundary, which assumed grave magnitude several years later. tude several years later. Of this, it will be fitting here to make as brief a statement as may be consistent with a proper understanding of its merits:

1. As already stated, by the ordinance of 1787, creating the Territory Northwest of the

Provided, That if the southerly bend or extreme of Lake Michigan should extend so far south that a line drawn due east from it would not intersect Lake Erie, or if it should intersect Lake Erie east of the mouth of the Miami of the Lake (the Maumee River), then and in that case, with the assent of Congress, the northern boundary of this State shall be established by, and extending to, a direct line running from the southern extremity of Lake Michigan to the most northerly cape of the Miami (Maumee) Bay, after intersecting the due north line from the mouth of the Great Miami River."

As will be seen the question of boundary thus presented rested on what should prove to be the eastern termination of a line drawn due east from the extreme of Lake Michigan, the uncertainty as to which seems to have been recognized by the Ohio convention and carefully provided against in fixing the northern line of the proposed State. In his "Notes," Judge Jacob Burnet, a prominent and active member of that convention, and subsequently a United States Senator from Ohio, says it was generally known to those who had consulted the maps of the Western country extant at the time the ordinance of 1787 was passed, that Lake Michigan was represented thereon as far north of the position which it has since been ascertained to occupy. On a map in the State Department, which was the guide of the committee of Congress who framed the ordinance of 1787, the southern extreme of that lake was laid down as near the 42d degree of north latitude; and there was a pencil line passing through the southern bend of the lake to the Canada line, which intersected the strait

between the River Raisin (Monroe) and Detroit. Judge Burnet says "that line was manifestly intended by the committee and by Congress, to be the northern boundary of this State; and on the principles on which courts of chancery construe contracts, accompanied by plats, that map and the line marked on it should have been taken as conclusive evidence of the boundary, without reference to the actual position of the southern extreme of the Lake.” During the session of the Ohio convention, says the same authority, it was the common understanding that the maps in use were not correct, and that the line should terminate at some point on the strait, far above Maumee Bay. But while the matter was under discussion, a man who had hunted many years on Lake Michigan, and thus was well acquainted with its position, happened to be at Chillicothe, and in conversation mentioned that the lake extended further south than was generally supposed; and that a map he had seen placed its southern bend many miles north of its true position. The effect of such statement was serious apprehension on the subject, and led to the change of line from that named in the enabling act to the one set forth in the State constitution.

It is said that this change at the time was regarded as so serious a matter that some members of the convention hesitated to adopt it, lest it be rejected by Congress and the admission of the State into the Union thereby be postponed. But it was finally adopted and subsequently approved by Congress, in the acceptance of the State with its boundary so fixed. Major B. F. Stickney says the man who gave the information at Chillicothe in regard to Lake Michigan's real position, was named Wells, and that he had been long a prisoner with the Indians in that region, and had thus become familiar with the facts.

The declaration of war with England, which followed in June, postponed action in this matter beyond the passage of a resolution by Congress directing a survey of the boundary line to be made. No steps to that end were taken until 1816-17, when Governor Cass in behalf of Michigan, took measures to secure a survey. The consent of the Indians, who yet held most of the country through which the line would pass, was obtained by Major B. F. Stickney, by request of Governor Cass, when

.