Daily State Sentinel, Indianapolis, Marion County, 9 January 1869 — Page 2

DAILY SEN'

Hf HUy i

Smummrj t.

23T

OOVEBUOW** ME—AUM.

Gentlemen of the Senate and Rouse of Rfpre«entaiive»^Tho people of IndUna. In ordaining their Conntltution, ezpreaaea their gratitude to Almighty tied for the free exefoiee of the right t# choose their own fbrtn of government; and may I not, in commencing the performance of the duty lor which we are now assembled, invite yon to Join with me in ascriptions of praise and thanksgiving to the asms Beneficent Father, fur permitting us to meet under such auspicious circumstances, to engage for a season in the performances ot duties pertaining to the practical execution of powers thus or-

dained.

The labors of the husbandman during the year that has just dosed, have been rewatded with plentiful harvests, the health ofour people has ih the main been mercifully preserved, peace has dwelt within our gates, and a reasonable degree of proeperity within our homee; and although the wise and the good can not fall to regtet the existence of many evils in society, detrimental alike to individual and social prosperity, notwithstanding these evils, we may congratulate ourselves that the age in which we live la an age of progress, and that the mass of onr people are gradually, but surely, advancing toward s higher and better civil-

isation.

“The unity of government which constitutes us one people,’' so long threatened br rebellion and Us sequences, would seem to be re-established on enduring foundations; and If we, and those who shall come after us, are Mtbfnl to the high trusts confided to ue, we may well hope that our prosperity, State and National, will continue to remote generations of our posterity. aovamroR Joseph a. wmoht. Although It is a matter of which you are all cognisant, 1 would foel that I had failed to perform my duty, if 1 omitted officially to call your attention to the foot, that ainoe the adjournment of the last session of the General Assembly, one of the most distinguished of my predecessors, who for many years filled a large and honorable place in the political history of this State, and who enjoyed in no common degree the confidence and affections of Hb people, has departed this life. I allude of conns, to the late Joeeph A. Wright. He died at Berlin, the Prussian seat of government, on the nth day of May, 1967, being, at the time of his death, the accredited Minister of the United States to that Court. The high character, superior abilities and long and honorable idenflfioaifotl of Governor Wright Wjth the public history of Indiana, suggest* that the General Assembly should take ••oh aotion, in view of hla departure, as will assure the people, and especially the surviving members of his bereaved family, that nis lohg, faithful, upright and valnsble public services are held in grateful remembrance. Before dismissing this subject, 1 desire to call your attention to the fact that, with the siugle exception of the late Governor A. P. Willard, the State does not possess a portrait of one of its deceased executive officers. It seems to me that the State Library could receive no more appropriate adornement than would be afforded by the likeness of Its early Governors Who have passed from the scenes of earth.

STATE DEBT.

The State's outstanding Indebtedness, for convenience of reference,may bea; p oprlately classified as Foreign and Domestic. That which I shall, in this ootnmuiiiottlon, designate the Foreign Debt,

consists,

1. Of the two and a half and five cent, certificates of stock, i - ' d u’ui the adjustment imuie betwcu.. the State and a majority of her creditors in pur*

per u! r

suance of the legislation of 1940 and 1947,

ailed the "Butler Bill.’’

2. Of the eix per cent, bonds issued

commonly callei 2. Of the six

under the legislation of 1901, for war purposes, and commonly called the “War

Loan Bonds.”

The Domestic Debt of the State la that which she owes to her own educational

Institutions, and consists,

1. Of the Vincennes University Bonds. 2. rtf the State's Indebtedness to the Common School Fund, for moneys belonging to that fund, and used by the State in the redemption of her two and a half ami five per cent, certificates of stock and for other State purposes. This Indebtedness is included In four non-ne-gotiable bonds of the State, executed by authoritv of law, und payable to the School fc'und, with interest at six per

cent., psyablo semi-annually.

According to this classification, the Foreign Debt of the State was, on the •1st day of October, 1807, as stated In the Auditor's Report of that date, as follows,

vli:

Five per cent, certificates 13,751,230 33 Six per cent. War Loan Bonds 237,000 00

Total t3,Wl,*W 33 The domestic debt of the State was, at the same date, October 31, 1867, as stated in the satne report, as follows; Vincennes University Bonds.,9 05.685 00 School Fund Bonds 3,307,092 16

plan mw bring tarried out, of Invoating cates ofstook, ased the following langl ‘"Phepresent, m<fde Of invsnfttig th* Sinking Fundtfs ohietly in Mortgages upon real Mtatt to bdr ritiaeas. The facilities tiros afforded for borrowing money, create a spirit of speculation, often terminating in bankruptcy and rain to the borrower. The long lists of lands forfeited to the Fund for non-payment of principal and intercut, admonishes ns to seek for some efber mode of Investment which shall be equally safe and produetive. “1 have repeatedly suggested, and now renew the recommendation, that the (linking Fund Commlaakraers should be anthoriaed to Invest this fond, from time to time as it may accumulate in their hands, in the bonds of the State, under appropriate limitations as to principal and market value: thus changing the character of our obligations from a for-

in the eaoompltshment of that high and

most ennobling object of human government, the education of our youth. It Is a high trust, and will be raoet truly performed when we shall connect the education of our children with the character, integrity and honor of the State.” What Governor Wright so forcibly recommended has, to a considerable extent, been •ooompliehed under the legislation inaugurated at the special session of the General Assembly in 1805; and It Is hoped that It will not be abandoned to return to a system which experience has

condemned.

The non-negotlable bonds which have been Issued to the School Fund should be considered as a perpetual loan to the State. Instead of taxing the people to pay a debt which they virtually owe to themselves, In order that It may be lent on mortgage security to a chosen few, let It remain a loan to all for the benefit of I have Intentionally excluded from the two foregoing classes of the pnbllo debt, a comparatively small balance of old Internal Improvement bonds which the holders failed or refused to surrender under the "Butler Bill,” and upon which no Interest has been paid since 1941, except as hereinafter stated. Notwithstanding the foot that no interest has been paid since 1841 on these bonds, they have annually appeared In the reports of the Auditor of State as a part of the public Indebtedness. From 1804 to 1867 inclusive, the amount of these bonds outstanding was stated at 9363.000. The bonds thus reported were each of the denomination of 91,000. and consequently there were 363 In all. Kight ot these bonds were hold by the Board of Hlnklng Fund Commissioners in trust for the Common School Fund when that board ceased to exist, and Its effects were passed into the bauds of the Auditor of State under the legislation adopted at the special

session of 1865.

These eight bonds hnd been held by the (Unking Fund Commissioners for more than twenty-five years, and no interest had been paid thereon subsequently to the year 1841. By the Act of March 7, 1907, entitled “An act to consolidate certain bonds, stocks and accounts of the School Fund into one non-negotiablo bond and maklngothor provisions in relation thereto,” the validity of these eight bonds was recognised, and the principal and all the accrued Interest thereon was included in the new non-negotiable bond given by the State to the School Fund, in pursuance of the provision of that act. This reduced the number of these old

itUUy overruled by the same tribunal; and folloiring the interpretation given by the Supreme Courts of Ohio and Wisconsin, to similar Constitutional provisions, tbejust principle was established that the Constitutional restriction applies to every speclee of taxation imposea under or In

and Erie Canal and impose upon the peo- tually overruled by the eame

the convey anee ef the. caagHfo^Uire venues, and some 800,000 aoret of land, under tne provisions ofthe “ Bntlsr Bill.” No such sffort shall receive aid from any official action ot mine, and I, therefore, refrain from making any reoom-

ndatl

provement bonds still outstanding. The adjustment made under tne 1 ler Bill” was, as between the State

to these old internal im-

T-

“But-

State and

the creditors who assented to the arrangement, a complete aooord and eatlsfooifaction. One-half of the debt tinguished and ceased to be a debt against the State, and was charged, exclusively, with the assent of the creditors, upon the canal and Us revenues. The old evb; dences of debt were surrendered and cancelled and we Issued new five per cent, certificates lor onft-half of the principal, and now two and a half per cent’s for one half of the accrued interest; the eanal was surrendered to the creditors by conveying it to trustees, the majority of whom were selected by them, and the certificates of canal stock Issued at the same time, for one-half of the debt on their face, show that the creditors were to look exclusively to the canal for the redemption of those certificates, and not to the Htate. To acknowledge any liability on the part of the Btate tor the payment of any part of this canal debt, would be to create a new debt for a purpose expressly Interdicted by the Constitntlon. The Constitution, in terms, declares that “no law shall authorise any debt to be contracted on behalf.of the State, except In the following cases: to meet casual deficits in the revenue; to pay the interest on the State debt; to repel invasion, suppress insurrection, or If hostilities be threatened, provide for the public de-

fence.”

In 1857, the General Assembly passed a Joint resolution declaring that the General Assembly has no power under the Constitution to purchase the Wabash and Erie Canal; and that if It had the power. It would be impolitic, unwise and injurious to the host interests of the people of the State to purchase said canal. 1 respectfully recommend that the substance ot this resolution be readepted at the present session. At the last session of the General Assembly, a lolnt resolution passed the Senate, but was not acted upon in the House, proposing an amendment to the Constitution declaring that the General Assembly ehall never Incur any debt or liability, or recognise any claim whatever, growing out of or connected with the Wabash and Erie Canal, or matters pertaining thereto, except as provided for in an act entitled ‘An act to provide for the funded debt of the Slate ot Indiana, and lor the completion of the Wabash and Erie Canal to Evansville,’ approved January 19, 1810, and the act supplemental thereto, approved January 2 , 1947: and said acts should never he construed so aa in any manner to create any liability or legal obligation on tha part of the State to pay the canal debt, but that the proposed amendment etioubi not be^onstrued as affecting the rights of pemma holding the obligation* ff the State, and who w9re not paftlHto the adjustment of the debt oi the State, as made in said acts of

1840 and 1847.

The princiftil of the entire debt of the State prhif to the adjustment under the "Butlurynil,” was over 911,000.000, and the accrued Interest then unpaid wu* over 93,000,000. The one-hall of the canal debt, including interest at five per cent.,

species of taxation imposed under or In pursaanoe ot State law; not requiring that the same rate of taxation shall be Imposed in one connty or elty that is assessed in another county or city, but that the rate of assessment shall be equal and uniform on all property, real aad personal, within the Jurisdiction or terri-

tory In which the tax is levied.

If the tax be a State tax, it most be uniform and equal on all property In all parts of the Btate. If it be a eounty, township or city tax, it mast be uniform and equal on all property throaghout the county, township or city in which the

levy is made,

vy la made.

This Inst and reasonable interpretation of the Constitution removes all obstacles

In the way of an equal tax stocks with other property, towns and cltlea munioip

— -- J — exempt!

pital, (th

nstltntlon removes all obstacles

taxation of bank

In the larger

municipal taxation la

necessarily onerous, and by exempting large amounts of banking capital, (than which no other property can better afford to pay taxes.) the burdens imposed for the benefit of all, are made to foil unjustly on other property and capital not

thus favored.

For the year 1967 and 1863, the tax placed opon the duplicate for State Debt Sinking Fund purposes was twenty cents on each one hundred dollars In value of taxable property, and the collections for those years were made accordingly. The correctness of this lev/ depends upon the oonstraotion of three separate and distinct acts of the General Aasembly. and In my judgment, a correct construction of these acts only authorized fifteen cents on each one hundred dollars in value of taxable property. The acts upon which this question depends are those of March Uth.loOl, entitled “an act in relation to applying certain funds therein named to the payment of the public debt, and raising a revenue for the support of common •chools,” etc.; the act of May 13,1961, anthorizlng the Issue of war loan bonds, and the State debt bill of December 21, 1804. The act first named authorizes • five cent tax for the reduotion and ultimate extinction of the public debt. The act Of May 13, 1861, authorizes a five cent tax for the payment of the interest, and final payment of the principal of the war loan bonds, and the act last above mentioned authorizes a ten cent tax for the redemption of the five and two and a half per cent, certificates of State stock outstanding. I think the five cent tax authorized by the act of March 9,1861, was merged in and repealed by the ten cent tax levied by the State debt hill of December 21, 1865, and left the rate of taxation at fifteen cents on each one hundred dollars in value of taxable property for State Debt Sinking Fund purposes. I have caused estimates to be made, and am satisfied that a State Debt Sinking Fund tax of fifteen cents on the hundred dollars for the year 1809, and a tax of tea cents on the hundred dollars, for the same purpose, for the year 1970 will bo sufficient, with the aid of the Sinking Fund assets in the hands of the Auditor of State, to pay off all the foreign indebtedness of the State with the exception ef the old Internal Improvement bunds: and thereafter, no taxes for Sinking Fund purpose* will be required. 1 inerefore recommend that these rates be established tor the years above mentioned, respectively; for State Debt Sinking Fund purpooes, and that thn levy of twenty cent* on the one hundred dollars of value,

Two coupon* ot lost bond*.... t. Allowance on account of 109 day man not yet paid because of deficit In approprition -

888 60

bonds to 345. Afterwards, in 1909, eight t Mince the adjustment, would now amount others of these bonds were surrendered | to aniue 915,uuu.ouu. If the assumption of

Total : 93,432,000 16 In making an exhibit of the amount of the foreign State debt-in the report alluded to, no two and a half per cent, certificates were reported as then outstanding. As the holders of these had been notified to present them at the State Agency in New York for payment, and as the money was there for the redemption of all of them, they were treated by that report as redeemed. There was in point Of foct f however, at the date ot that report, and still is. as will hereafter beexplalned, a small balance of these two and a half per cent, certificates outstanding, but they have ceased to bear Interest, as the money Is In the treasury ofthe agency wherewith to redeem them, and the holders have been duly notified to present them. In the report of the Andltor of State, for the fiscal year ending October 31,1808, herewith respectfully submitted, the foreign debt or the State is thus stated, vis; Five per cent.eertlfloatee outstanding at the laet named date 93,822,924 66 Six per oent war loan bonds... 210,000 oo Two and a half per oent certificates 7,260 13

Total 93,640,184 79 This exhibit shows that there was a reduotion during the fiscal year 1868 of the amount of the five per cent, certificates and war loan bonds outstanding of 9468.811 66; or deducting the two and a half percent, certificates, amounting to 97.260 19, not stated In the report ef 1867, a net reduotion of the foreign debt during the fieeal year 1869 of 63. Since the end ofthe fiscal year (October 31,1868,) five per oent. etocke have been redeemed at par to the amount of 9466,796, and war loan bonds have been redeemed In like manner to the amount of 93,000, making together 9469,796. The foreign debt ofthe State, as It now stands, exclusive of the old Internal improvement bonds, which will be siibeeqnently mentioned, may be etated aa follows, vis: Five per oent. eertlflcatefl 12,867,129 66 Two and a half per oent certificates 7,200 13 War loan bonds 207,000 00

Total..,...4.....m.m..........9*1,081,899 79 Toward the payment of this we have in the general treasury, belonging to the State Debt Sinking Fund, and exclusively applicable to that purpose, the sum of 9247,091 72, and In the treasury of the agency at New York 943,200 97, making together 9290,292 69, and leaving the amount of five and two and a half per cent, certificates and war loan bonds unprovided for 92.791,107 10, and being equivalent to a reduction of our foreign debt, etnee the eoiniflenoorhent of the fiscal year 1808. of 91,200,130 20, all ef which was accomplished without contracting any new debt or liability by the process. The domestic debt ofthe State as stated In the Auditor's Report for the fiscal year ending October 81, I9n4, as follows, via: Non-negotiable bonds held by the School Fuud. 99^61,916 16 University bonds 63,585 00

Tolal 93,654,901 15 This shows an increnae In the domeatlc debt of the State during the fiscal year or 8242,234 00. This increase was occasioned by the Issuing of two non-negotiable bonds to the School Fundi On*, dated May 1, 1868, for |184,000 60 Another, of eame.date, for........ 49,006 00

Making together ....4224,000 00 , l“«r#aee tot" be deducted 82,000 on account of the rednetlmi of the University bonds daring the Id hie lest meeaugg to tk* General Assembly, Governor WrlffM, In not, in recommencing *P aheadunfsept qf the were aagS ”iil W K. !J

this immense burden is to be proposed, let the proposition be made to the people themselves, who will have to liear it, by submitting a constitutional umwmiuivut

upon which they can vuto.

to the Agent of State, and new five per cent. State stock* were issued to the holders under the "Butler bill," for one half of the principal ofthe bonds so surrendered, and new 2J4 per cents were issued fur one half of the interest which had accrued up to the date of the surrender, thereby reducing the number of

those bonds outstanding to 337.

At the time the State suspended thn payment of Interest on her Indebtedness in 1841, the General Government held 211 of these bonds In trust certain Indian tribes. The State failed to pay any Interest on the bonds so held by the Government after the year 1811; but tlie latter at different subsequent periods applied moneys to which the State became entitled from the snlesnt the public lauds within her limit* (commonly called the

three percent. fundjamotinUngln the ag-- praiser of real estqto for such county. A gregate to 9108,208 59. This application ofl proviso to the section declare* that, notb-

gregate to 9108,203 59.

the three per cent, fund paid the interest on 92,131 of the bonds so held by the Government up to July 1, 1056, and on the remaining seventy up to July 1,

1955.

In April, 1868, one of our Senators in Congress, Kon. O. P. Morton, wrote to me that a bill had been introduced into the Senate, which would lie pressed to an early consideration, directing the Secretary of the Treasury to deduct from the amount that may be due to any State on account of war claims, the principal and Interest of all bonds issued by bach State and held by the Government; that this bill was especially intended to cover the old bonds of Indiana, which were purchased by the Government for Indian annuities. Senator Morton, in the same communication, desired mo to state in reply what objections, if any, I had on behalf of the State to the passage of the bill. I promptly replied that If any objections, legal or moral, could be urged to a proposition that IheGovemment should retain out of the adjusted claims which it owed to the State, a sum sufficient to liquidate the principal and Interest due on any bonds held by the United States against the State, I was ignorant of the existence or nature of euch objections. Subsequently, In July, 18<W, the Secretary of the Interior, In whose custody these bonds wore held, filed two caveats with the Secretary of the Treasury, one in relation to 141 of these bonds, which had matured in 1857, requesting that payment be withheld from the State Silt of the balance found to> be due to her for expenses Incurred in thn suppression ofthe rebellion, of such sum as would cover the face of tne bonds, and such Interest as might have accrued thereon.; the other caveat was In relation to the remaining seventy bonds not matured, and requesting that the interest accrued thereon mlgut be withheld in like manner. Copies of the caveats were communicated to me by the Secretary of the Treasury, and in consequence thereof, I directed the Adjutant General of the State, who had previously been especially charged with the adjustment of our war claims against the Government to proceed to Washington toobtain Information as to these bonds, and also in regard to the amount of the three per cent, fund due to the Btate from the United States. The Adjutant General proceeded to the oapltol and performed the duty assigned him In a highly satisfactory maimer, obtaining full information on both subjects, which was duly reported to me on hla return. Subsequently, on the 8th day of September, 1808, by my direction, the Adjutant General wrote to the Secretary of the Interior requesting that the proper steps might be taken for the settlement ofthe principal and Interest due on those bonds, by the application of a sufficient amount of Hie allowed war claims of the State against the Government to that pnrpoae. This letter remaining, unanswered, I wrote myself to the Assistant Secretary of the Interior on the 19th day of October, 1908, to the eame effect. Copies of these letters are embodied In the Adjutant General’s report herewith suhmitted. The result was that the Secretary of the Interior sent an agent to this city with tbe bonds so held by the Government, and on the6th day of November, 1868, the 141 bonds past dne, the principal thereof being 9141,060, anil the accrued Interest thereon being 9136.300, were surrendered to me with the a-taHiod coupons, and I deposited them In the vault of the Treasurer of StitO. The p;diielp«l and Interest of these 111 bonds a mounted to $277,300. Of the seventy remaining bunds not matured, the Secretary of tin Inferior .could only produce sixty-nine, <<ne having been lost or mislaid, bnt he b id two of the coupons of tbe lost bond. Xlie conpons of tbes* lam mentioned bonds, representing Interest to the amount of 948,625 were detached,and surrendered to mo and deposited with the Treasurer of State. The total amount of principal and Interest settled was 9328,925; and 1 requested In writing that the secretary of the Treasury would transfor that amount out of the allowed war elalina of this Btate ecainat the Government to the credit of the Secretary ofthe Interior, In eoneideratlon ofthe eurrender of aald bonds and oonpone. The Government still holds tbe aixty-nlue bonds, the Interest thereon being settled to July 1, 1868; and tbe principal being not yet due. This leave* 196 or these old bonus still outstanding, 126 of them being fo the hands of persons other than tlu> Government, and one claimed by th* Government being Inst or mislaid. Ik will remain for tbe General Assembly ih It! wisdom, to determine what aotjqq, If any, ekpuld be taken with rafor>1 nee to these old bond*. Lweuld unhesitatingly reeoeenend that peo visions be made for their a4Jd9tment. but for the ' jffdraSasdP ct wklritlt "* Mid will be i present ar at seme fo-

il * con t OV STATE TRBASL'REIi,

The State Troanurer’a report will be laid before you, from which it will be seen that hU department is lu a very sat-

isfactory condition.

ASNKSSMEXT A5D TAXATION.

By the firKt section of the act of December 21, 18.»8, providing for the appraisement uf real estate, the Board of County Couinilsalonerd of each county were required, at '.lie lirs! term after the passage of the act, or at a epocial Hessian to oo immediately called, to appoint an ap-

Total - - 11,867,187 66 And for a fuller exhibit of the condition of our war claim! I refer you to a detailed statement which I have prepared, and will submit with this communication aa an appendix thereto. HEW BDILDIKQ FOB SUPKEHB COUBT, STATE OFFICERS, ETC. By en act of Mare^ 9,1867, the Governor waa authorised to eanee to be erected on ground belonging to the Btate. a building suitable and convenient for the use of the Supreme Court and officers of State, at a cost not exceeding fifty thousand dol-

lars.

Shortly after the adjournment of the laet General Assembly, a consultation waa had between the Judges of the Supreme Court, Btate officers and myself, with reference to the dimensions of the proposed building, and the nnmher and arrangement of the several apartments; and the plan adopted was conformed to their wlshea in these respects. Specifications were prepared, printed and extensively circulated so as to Indace competition in bidding for the contract, and sealed proposals were invited by advertisements. There were quite a number of bids made, and the work was awarded to the lowest bidder, at a price considerably below the Umit fixed by the act above alluded to. My best efforts were made to observe literally the limitation imposed as to cost, and at the same time secure such a building as the wants ofthe public service required, and as would not be a reproach to the State in architectural appearance. With tbe greatest possible care and tbe most rigid economy, owing to necessary changes in the original plan, and additional accommodation* which were not thought of when the specifications were prepared, I was compelled to expend 92,101 65 more than the sum named in the sot, and to leave the Supreme Court room In an unfinished condition. It will require a small appropriation to finish this roem; and there should be provided a stone platform, with iron railing, in fiGnt of the offices on Washington and Tennessee streets. I trust you will cause the building to be examined by the appropriate committees, feeling aasured that you will find that tbe money was prudently expended, end that the building is well adapted to the purpose contemplated by the General Assembly. I have prepared a detailed statement of the money received and disbursed in the erection of the building, which I will suhmit with the contracls and vouchers, and such explanations as may be necessary to the committees to whom the subject matter may be re-

ferred.

Tbe act authorizing the erection of the building appropriated the sum of 940,000 to be provided by a loan of that sum out of the Sinking Fund. No provision was made for tbe obtaining of the money necessary to carry out the intention of tbe act beyond the 940,000 thus appropriated. I was fully convinced that sound economy and the safety of the public records, required that the building should be erected with the least practicable delay; and aa this could not be accomplished without the nooeasary pecuniary means, tbe whole sum expended, namely, 952,129 65, was advanced by ibo Auditor of State out of the Sinking Fund, and a bond was given to that fund for the sum ot 940.000, (part of tbe sum so advanced,) In

for the same purpose for theyoars '68 and pursuance of the requirements ef the act. '06, be legalized, to the end that there ; 1 respectfully recommend that an appromay be no question as to the collection of | priation be made from the State Treasury the unpaid taxes for those years. Unless of *the entire emount so advanced, and yonr appropriations shall exceed wbat I that it be repaid to the Sinking Fund now anticipate, tlio State tax proper can without delay, and that the forty thoualso be reduced to fifteen cents on each sand dollar bond given to that fund bo one hundred dollars of taxable property, cancelled. There is nothing in the conIf the Uoinmittec of Ways and Moans, or < ditiou of the Treasury, present or proany other committee nr member of either apective, to prevent such an appropria branch of the General Assembly, shall ! tlon; and although tbe i

desire to Inspect the estimates upon which I base the opinion as to the rates of taxation necessary for the .Slate Debt, Sinking Fund, and for general revenue purposes, it will afford mu plwasurs to

furnish them.

that tbe Governor shall recommend the amount of compensation that shall be paid to the commissioners and other officials for their services in carrying out the resolution. I accordingly recommend that the per diem and mileage allowed by law to members of the General Assembly be made the measure of compensation. No appropriation was made for record books, stationery, etc., for the use of the Commission, and the Commissioners were compelled to borrow money with which to purchase these necessaries. I submit an account of tbe money thus expended, and recommend that it be reimbursed. As tbe gentlemen appointed to render tbe service by direction of the General Assembly, and while performing it defrayed their own expeuses, I trust there will be no unnecessary delay in refunding the money expended, and In providing for the payment of such reasonable compensation as you may jn your judgment think proper to award. The Commissioners have embodied in their reports a statement of fees claimed by clerks, sheriffs and printers for services rendered under the resolution. It may be proper in this connection to state that the sixth clause or specification of the resolution provides that the State shall In no event be liable for the cost of witnesses summoned on behalf of the claimants, nur lor the cost of summoning such witnesses. It may be that these costs were all made by the State, but it is not

so stated in the report. BENEVOLENT INSTITUTIONS.

Common humanity, as well aa the requirements of the Constitution, demand that the institutions for the education of the blind and the deaf and dumb, and the hospital for the insane, should be liberal-

ly supported.

When the new wing of the hospital for the insane, now nearly completed, shall have been finished and prepared for the reception of inmates, the capacity of the institution will be nearly, if not qnite doubled, and many in all parts of the

ing in the Hi'ction shall prevent the Board oi Commissioners of any county from RpfKdnting a deputy or deputies to the appraiser in case of sickness, want of time or Othor dtsabilitp to dlncUarge thu dutli-nluthe time and manner required by law. The second section of the same sot provides for the election of an appraiser at the October election In 1863, and every fifth year thereafter. There is no provision in the act authorizing the ifoards of Commissioners ofthe several counties to appoint deputies to the appraisers that are to be elected in 1803, and every fifth year thereafter, unless the proviso to the first section confers that power. Appraisers were elected under this act at tlio late October election, ami tbo Boards of Commissioners of many of the counties have already appointed deputies to the appraisers tli»ii elected. In answer to Inquiries made by countv offiuer* the Auditor of State has issued a circular to the several counties, in which he gives the opinion that the Board* of CotnmiMionera have no power to appoint deputies to tbe uppraisers elected by the people; hut that t lie proviso to the first section of th* act only applied to the appraiser* appoin’od for the year 1858 by the Board of Ooinmt*slonors. I believe this opinion to be correct, and there seems to be no power conferred on the appraiser himself to appoint deputies. As the appraiser is required by the 18th section of the same act to return hisuppraisouient to the County Aud-

on or before the fourth Mondi

itor, on

lay of

nate u in-

Muy after his election, there will not bo sufficient time for a single appraiser to make the appraisement within the time limited. Borne provision ehoald be made for appointing assistant Appraisers, or a law should be passed declaring that th* present appraisement shall remain as the basis of taxation for another year, and giving the appraiser elected in each county time to appraise personally all the real estate in his county. It is very important to have a uniform and Just appraisement of real estate for taxation, and It is believed that this will be (letter attained by having one man to appraise all the real estate In a countv than oy having a multiplicity of appraisers in

each county.

The law as It now stands fixes the compensation of appraisers ot real estate at two dollars per day. It is worthy of consideration whether this is sn adoqi; compensation under existing clrci

stances.

The act of March 15, 1867, entitled “An act to provide for the assessment and collection of taxes on shares of stock in hanks, and banking associations doing business in this Htate,” expressly exempts stock lu the Bank of the Btate of Indiana and in the National Banks from taxation for municipal purposes. I respectfully recommend that this section be repealed; and that an amendatory section be passed declaring that shares of stock in these exempted banks shall be taxable for municipal purposes like other

property.

Banks are generally, If not always, located In Incorporated towns or cities, and derive as much benefit and protection from municipal government as any other persons or institutions, and there Is no justice in exompjing them from their just share of municipal burdens. The stock of the national banks doing business In this Btate ean not be taxed for municipal purposes so long as that of the Bank of (he State of Indiana Is exempt, because the act of Congress requires it to be placed on an equal footing as to taxation with Btate banking Institutions. It is true that tire fifteenth section ofthe charter of tbe Rank of the Btate exempts it* ctifoiulVook and that of Us branches

from fuiiiitcllull taxation, and it is equal- r ly true lint the .Supremo Court of this suhtnot

stale, in 18-.8, declared tills exemption to

bo constitutional. In the decision al- 11

lu .lrd to it was held that the provision of the Coustltutlon which iptket It the duty of the Legislature to “provide by law for a uniform and equal rate of assessment and taxation, apd to prescribe such regulations as shall secure a just and equal valuation for taxation of 'ktl property, both rsal and personal,” has no application to mnnloipal taxation, but reiers to the general levv by the State, and the reason given.la tnat taxes for corporation, township and eoanty purposes can not be equal; that ts, because a different rate of taxation 18 required In one municipal corporation, county or towmalrip than Is da-

mandea. -

therefore

provision a* to <f assessment 8U. v . «*, vpi ty, has no application to county, teWuafiip or municipal taxatfoa. ■■ m uf:: miV^uSS V*Jr“Ki Cl F.S

,Ttl

.nr

tlon has oarefiriJyguarded tlMxtnallerlntarest bnt bM left tha larger unprotected afcdamem Matt* rtlegMatt* diacretlex. .uk*' t >8 tu»r

WAR CLAIMS AUAINsr TUB l/NITKU

tlon; and although tbe mailer escaped my notice when tbe bill was presented for approval, and was, I suppose also overlooked by the General Assembly in passing the bill, since it is essentially a Isw authorizing a debt to be contracted on behalf of thu Htate, and that debt is not for one of the purpose* auifiorizod by

near!

V.'.K I71V.V,, lucijr in a., pa. .3 yj 1 bile State, wbo are now suffering for want of

care and treatment, may be re-

adequate to their wants. Believing that upon a careful examination of their report anil accompanying tables, you will be satisfied that their request for increased liberality on the part of the General Assembly is entirely reasonable. I feel assured that you will not hesitate to make such increased provision as the wants of the institution may justly require. The Board of Trustees of the Institution for the education of the Deaf aud Dumb, as well as that for education of the Blind, ask appropriations for tbe enlargement of their respective institutions. At the time of the establishment of these institutions, the State contained a much smaller population than it now does; and we must not forget that the number of those who need the training which such institutions can alone impart,will increase with our population, and we should be prepared with additional accommodations commensurate with the number which may from time to time be entitled to admission. For a statement of the condition and wants of these benevolent institutions I refer you to the reports of their respective Boards of Trustees, and recommend that every reasonable demand made by those under whose care they are placed may bo promptly and liberally

supplied.

soldiers’ and seamens’ home. The Soldiers’ and Seamens’ Home, near

Knightstown, which was adopted as one ot ttie benevolent institutions ofthe State by the last General Assembly, is in successful operation, and has already accomplished great good in ministering to the necessities of a class of men who have done and suffered much for their country. The report of the Board of Trustees ot that institution is herewith respectfully submitted, to which you are referred for a full history of its operations. The fifty aero tract of land on which the Homo is situated was purchased prior to the adoption of the institution by the legislature, with the voluntary contrihutioua by th» people. Since the adjourn-

chase money, via., from the date of tne

the State of the pur-

(with interest tase.) on or be-

forethe a9th d*y Febra**y»

Diligent effort* were foede «>1I the hundred acre tract of l»nd before mentioned, but only two offer* were made therefor. One of these offers waa so much below tbe real value of the land that it could not be entertained. The other offer of»7,«>O WB5 believed to be the fair value of thq land. It was made by Mr. William MeCarim, of Manon county, but he <Kd not propose to pay any part of the price itt Hia propoBillon was to pay OE^thlrd of the purchase money, with interest, on the 15th of

pnrchse- government

ehase money, Tn^

j of A

remaining third,’wifb

October, 1807; anomra

est, on the 27th day ot Ma y> 18G8 . and the ing third, wifll interest, on the

27th day of May, I860, and to secure the whole by a mortgage en other lands, with a stipulation in the note and mortgage that a failure to pay a ny installment when due should render the whole due and payable. With the concurrence of the Board of Control of the House of Refuge, I accepted Mr. McCaslin’s proposition, gave him a certificate of purchase, showing that be would be entitled to a deed from the State upon full payment of the purchase money- The first and second installments of the purchase money having become dae, and not having been paid, proceedinga were commenced and are now pending for the foreclosure of

the mortgage.

Prior to the location of the House of Refuge, a portion of the people of Plainfield and its vicinity proposed to raise by subscription a considerable sum of money to be donated to the State to aid in paying for the load to be purchased for the site, provided the Institution should be established is that neighborhood. These subscriptions amodnted in the aggregate to 87,379, and were payable in three equal annual installments on the 25th of December, 1867,1868, and 1869 respectively. Of the amount so subscribed, notes were taken from a portion ofthe subscribers, payable in installments as before stated, to the amount of 95,595,* and the residue still stands on the original subscriptions except so far as subsequently reduced by payments. On tbe subscriptions and notes thus taken, there has been collected and paid into the ytate Treasury the sum of9L292 88. The further sum of 9491 95 has been satisfied by work and materials and live stock furnished by subscribers for the House of Refhgo and the farm, making the total sum collected on nores and subscriptions 81,785 83. It is believed that when all is collected that can be collected, the Htate will, with the collections already made, realise from these notes and subscriptions at least 96,000. If this estimate shall prove to be correct, aud the price of the one hundred acre tract of land sold, as before mentioned, ehall also be collected, as it assuredly will, the two hundred and twenty-one acres on which the House of Refuge is located will only have cost the State IfrSOO, over and above the proceeds of the sale of the one hundred acre tract. In the month of October last, I repaid to the Board of Control the 812,000 so borrowed from them; and to do so, 1 was compelled to borrow that amount in another quarter. 1 respectfully ask that an appropriation be immediately made to enable me to refund the money thus borrowed; and also an appropriation sufficient to pay the balance of the purchase money, with interest, due to Downard and Larrance respectively. It affords me pleasure to say that the success of the House of Refuge has exceeded my most sanguine expectations. | I respectfully refer you to the report of the Board of Control for a history of its operations, and commend the iustitution to your fostering care, wiih the expression of a confident belief that, in liberally providing for its enlargement and support, yon will be practicing a wise economy and meeting the expectation* of an

enlightened constituency.

I am fully persuaded that in the execution of our penal laws too little attention has been given to the reformation of offenders; and the juvenile delinquents of the community afford not only a hope, but, in a large majority of cases, an assurance of success in the exercise of reformatory Influences and treatment. It will be seen by the report of the Board of

Mora],

the good

gOI

ell;

tiio Constitution. The Constitution d«- i meat of the last General Assembly the ! Control, that of the 950,000 appropriated dares that no law shall authorize auy i land has .been conveyed to the Board of for the establishment of the institution, debt to be contracted on behalf of the | Trustees, created by the act of last ses- | and for defraying the current expenses : Btate except in the following cases, viz.: j siun. It will be seen by the report of the j thereof, tbe sum of 839,261 25 was ex-

coinmoncoment of tlie war claims against i To meet a casual deficit in the revenue; | Superintendent, accompanying that of pended in buildings and other necessary th* United States have been filed at dif- ! lo P*y the l nt ® re » t 0,1 ‘ho State debt; to j the Board of Trustees, that, since the j improvements; that the expeuses of the

STATES.

It will lie seen by reference to the

julsnt General’s* report

Ad-

that since thu

ferelit times, as follows, viz.: In the office ofthe Third Auditor of the Treasury claims were tiled for advances in raising, organizing, equipping, subsisting, arming and transporting volunteers, amounting to 88,049,194 17 In the office of the Second Auditor of tbe Treasury claims wurs filed us follows,

viz.:

1st* For ammunition furnished by the Indianapolis Arsenal, established and carried ou by Governor

Mortou : 7*1,M2 81

2d. For expenses for taking cars of and repairing

United Htate* arms 23,010 83 1

3d. For pay of Indiana legion, paid by the Ntato

through Btate i’aytuaalor 513,Wi3 12 i

repel invasion, suppress insurrection, or, if nostllitie* be threatened, to provide for the public defense. I, therefore, trust

the * ‘ ‘

establishment of tne institution, four hundred men, disabled either in the military or naval service of the country,

that the debt thus inadvertently author- 1 fi«ve received the benefits oi the Home; izcii contrary to an inhibition of the Con- 1 th U two hundred and twenty-one of that slitution, will be speedily liquidated by number, after a temporary sojourn at the the necessary appropriations. It may be ! Home, were discharged iu an improved proper to acfil in this connection that the ! condition; that thirty-ono have died, and building has been occupied by the State ! one hundred and forty-eight still remain officers and Judges of the Supremo Court in tb® institution. The Board of Trustees

Making in all the largo sum of. 94,373,051 28 Ofthe above amount*, the second item of 9781,652 34 hud been fully settled and adjusted by Governor Mort*n during his administration. The third item above stated, of 924,916 63, was audited in tlie fall of 1807, and 23,359 28 allowed thereon, which last named hiiui was received bv me December 26, 18157, and then paid into

the Htate Treasury.

After dedusting the sums thus adjusted, there Btl(i remained pending claims, amounting In tbo aggregate to 93.568,002 30. The greater portion of the claims going to make up this amount were suspended. and some of them had been disallowed. The Adjutant General of the Htate did everything in his power to supply the lacking proof, and explain away the objections upon which the various accounts had been suspem^d, and to procure a proper and final adjustment of the claims. Bv mv direction ho made several trips to Washington, and was seconded In his efforts oy the personal Influence and exertion of Henator Morton. I waa determined, if possible, to have the claims prosecuted and adjusted without employing an agent resident at Washington, and promising or paying him a per eentum, aa 1 was informed oilier Htate* were compelled to do. Ultimately. I was advised by Senator Morton, Adjutant General Terrel and others, that unless I yielded iu tills respect, the prospect of getting the claims adjudicated was very remote. I thereupon consented that tlie Adjutant General might employ such an agent, at a compensation not exceeding two per cent, on the amount which should be allowed to and realized by the Htate through his efforts; but that no part of this per centum shquld bo paid until It should bo acted upon and the arrangement approved by the General Assembly. Th* Adjutant General mad* a written contract with Mr. J. A. Coburn, in pursuance of tbl* authority from me, to the effect above stated. I promised to report the arrangement to the General Assembly, and recommend Its approval, which I now do; but I desire it to be distinctlv understood that th* whole matter is open to your investigation, and must be decided by you. I have paid Mr. Coburn 81,250 to meet his expenses while engaged in this service, which sum is to be deducted out of the per centum you may allow

him.

The Government held largo claims against th* Htate, upon which interest was aeerulng, while our unliquidated claims against the Government drew no Interest, hence my great desire for a speedy adjustment of the accounts. The written agreement made with Mr. Cobnrn Is embodied In the adjutant Gener-

refer you for full

subject.

Since the making of this arrangement, and through tlie efforts of the agent so employed, allowances have been mad* to the Htate, on claims which had previously been suspended, disallowed, or not examined. to the amount of 9M>53,407 95; and prior thereto, claims had been allowed amounting to 9305.719 99, the aggregate ot the amounts allowed being 91,* 958,917 94. Of this I received, on the 4tn day of December, 1868, the sum of 991,730 89, wbich I paid into the Treasury of the State on the same day, and the residue of the amount so allowed, viz: 81,807,189 66, was applied aa follows, vis;

Advance to the State by the

United Stales in 1861... 9 460,909 00

Paid Into the Treasury of tbe State by Quartermaster

General Ekin 198,128 14

Advanced to tbe State by the

United States in 1868 183,802 91 Balancejef (Hrjct tax of 1802... 700,442 43

Paid by United States mustering officer in 1863-4 ..... 141 bonds of the State surrendered. Interest thereon to November 1, 1868 Interestea triLOOO other bonds (art yet Jemima.

60,500 47 181,000 00 196,900 00 4M7* 00

siuuo January, 1808,

MOIUiAN RAID COMMIMIBN.

The General Assembly, near the close 1 uf its last session, passed a concurrent 1 resolution alter a bill aomuwhat similar in its nature had failed, directing the Governor to appoint three coniiiiissioii- [ ora, whose duly it should be to hear, determine and adjust all claims for losses wbich had heretofore accrued by reason of the injury, destruction, loss or impressment ol property had or held by any inhabitant of this Htate by rel>el forces uiuior tbo command of John Morgan in tlie year 1803, or caused by the Htate or National forces engaged in repelling said invasion, or caifsud by organized sud equipped troops to repel tbe threatened Invasion of the Btate by the rebel forces under Adam Johnson, In the year 1864. The resolution also directed theGovernor to appoint an attorney, who should be present stall th* meetings of the comuiissiunera, to act aa the attorney of the Htate, aud to look after and protect her interests. Although this resolution bad not the force and effect of law, it waa such a positive and unmistakable expression of the will of the General Assembly that 1 felt it to be my duty to respect it by a cheerful compliance with its rerequlrements. I accordingly, on the 28th day of March, 1807, appointed Hon. John I. Morrison, of Marion county, Colonel John McCrea of Monroe county, and Colonel Hinilh Vawter, of Jennings county, Commissioners, for the purpose Indicated in the resolution. I also appointed Colonel Charles W. Chapman, of Kosciusko county, Attorney for the Htate under the resolution. Colonel Chapman resigned the position about the time the Commission entered upon its labors, and I appointed General Thomas M. Brown, of Randolph county, Attorney for the Htate in his stead. The Commission was authorized by the resolution to appoint their own Clerk, and they did appoint Wui. F. Browning, Esq., of Monroe county, to that position. After the Commission had entered upon its labors, it whs ascertained by experience that its operations would lie much delayed and the expenses enhanced, unless additional clerical force waa employed. I advised the Commission to employ an assistant alerk, and they accordingly employed G. W. C. Self, Esq., in that capacity. The Com-

nd clerks thus emiliove, all faithfully.

, . honestly performed

their duties.

According to the requirements of the resolution, the Commissioners have made a report to me of their proceedinga under the .resolution, and also a supplement to that report. I herewith aubmit both of thoso reporta to you for such action as you in your wisdom may deem proper to

be taken thereon.

I also submit a copy of the resolution under which tbe Commission was organized. All the recorda, books and papers pertaining to the Commission are in my possession, and will be submitted to any Committeo or Committees that either or both branches of the Legislature may

appoint to consider the subject.

It will bo aeon by the reports that the ■um total of all the claims presented to the Commission for adjudication was 9497,399 21-100, and that the sum total of all the claima approved and allowed

amounts to the auiii of 9413,599 48-100.

My own opinion as to the propriety of the Htate affording some proper relief to the sufferers by the "Morgan Raid”

Ill tllltv

missionurs, attorney ar ployed have, aa I boli intelligently and hoi

has long since been publicly expressed in tbe performance of my official dutli

lea. I

nequently diacovered no good reason to change that opinion.

have subseq

ige that opinion. I adopt

the language of my immediate predecessor on this subject, addressed to the General Assembly of 1866, by saying that "the true theory of our Government is, that it shall protect the people In their persons and property against Invasion and loss from the public enemy, or in-

P

domestic insurrection,

losses have been thn* sustained, It la

Where

Jury by

losses hay* wucii tuum ■uokoiuoi, » is mueh easier for the people of the State to bear them in their oollecilve capacity than for tbe particular Individuala ou whom

they have fallen ”

gome ot the classes of claims may be lesa meritorious than others, and acme of the claimanta may deserve 1«m consideration than other*. It will b« seen that ■ome of the claimants are corporations, and lu my Judgment an appeal from them for relief would come with much leas foree than one from a natural person, all of whose possession* had perhaps been ■wept swet by the public enemy.; I submit tbe whole matter to you, with the expression *f the hope that you will give the alalias *f th* arinren a Mrsful, and,

tho town of Plainfield, for that Th* two tracts contain, together,

hundred and

have erected a beautiful brick edifice, capable of accommodating about two hundred men, aud have devoted the old frame building* which were on the farm at tlie time of its purchase,to the use of the Orphans’ Department, in which are gathered eighty-six children of deceased soldiers. Many of these children were taken froiu the Poor Houses of the different counties; and ail of them would have suffered for food, raiment and mental and moral culture, but for tho guardian care which the Htate has exercised over them

iu providing this institution.

1 feel assured that no effort on my part la necessary to ^ecure from you ample provision tor these disabled soldiers aud

orphan children. BOUSE *F REFUGE.

At the last session of the General Assembly a successful effort was made for the first time to execute the mandate of tbe Constitution requiring the law making power to provide Houses of Refuge for tbe correction and reformation of

juvenile offenders.

Tlie third section of the act then passed made It my duty to select and establish a site for tlie institution, and authorized the procurement for that purpose, by donation or purchase, in the name of the Htate, of not less than eighty nor more than three hundred und twenty acres of land, giving preference, other things being equal, to a location central and easy of access from all parts of the State. Shortly after the adjournment of the Legislature, persons interested in the matter were invited by public advertisement to make propositions for the donation or sale of lands which they might judge to be suitable for the site of such an institution. Numerous propositions to sell lands to the State wore received, but no donations were offered. I examixed, either personally or through a competent agent, about thirty farms at different points, with a view to the selection of the best site for the institution, and ultimately purchased two adjacent tracts of land in Hendricks county, near

purpose, her, two

twenty-one acres. The

purchase was made in June, 1867, and in the same month I deposited in the office of the Secretary of Htate a certificate of the location ot the institution, together with the deeds of conveyance by which the lands were conveyed to the Btate. Oue of the tracts, consisting of one hundred and sixty seres, of upland, was purchased from Robert R. Downard for twelve thousand eight hundred dollars (912,800). Tho other, consisting of sixtyone acres and a fraction of superior creek bottom land, was purchased from John Larrance for the sum of eight thousand five hundred dollars (98,500), making the

entire cost 921,300.

By the twenty-fifth section of the act to establish the institution, the sum of fifty thousand dollars was appropriated, to bie paid out of tbo Htate Treasury to the Board of Control of the institution in such sums and at such times as might be deemed necessary and proper. By the twenty-sixth section of the act, the Governor and Board of Control of tbe institution were authorized to sell a tract of land owned by the State, and described in that section, containing one hundred acres, for cash or on credit, and apply the proceeds thereof to tbe purchase of other, grounds and the ereotion of suitable buildings for the institatlon. From what has already been said, it will be seen that It was made ray duty to lo«ate the institution, and to procore the necessary land by pnrehas* or donation, bnt no means wer* placed at my control, except such as might arise from the sale of the one hundred aores of land belonging to th* State, and authorised to be sold a* above etated. As it waa manifest that, with the moat prudent management and th* most rigid economy, the 960,000 appropriated would not be sufficient to erect the necessary buildings, furnish them, end defray the current expenses of the Institution nntii tho meeting of the present General Assembly, I borrowed temporarily, from the Board of Control 912,000, to enable me to make the advance payment on the lend. Of this 112,006, I paid to Mr. Downard 87,000, in pert payment ef the land purchased from him, and agreed that the State would pey him the balance of the purchase money, vis., 15,809, (with interest from the date of tha purchase,) on or before February 20,1869: and, for tbe security of the payment of this amount,* lien was reserved in the deed from Uownard to the State. The residue .of the 812,000, that woe borrowed from the Board of Control, tBl, 95,000, I paid to Mr. Lemaee to payment ef the

institution since it was opened in Janu ary, 1868, including furniture, stock and implements for the farm, and the clothing and support of the boys, etc., etc., amounts to the sum of 920,788 75; and that the Commissioners were compelled, to enable them to keep the institution in operation, to make a loan of 810,000 1 am tally satisfied that the affairs of the instltatution have been wisely and economieally managed, aud that the loan was unavoidable; and it ia due to the Cominiasioners to say that it was made with my approval, and that I personally bound myself jointly with the Commissioners in an obligation to repay the same. I recommend that an appropriation be made without delay to enable the Commissioners to repay the sum bor-

rowed.

BANK OF THE STATE OF INDIANA. I herewith submit the report of the Board of Directors of the Bank of the Htate ef Indiana, and of each branch thereof, made in pursuance of the sixteenth section of the charter of that insti-

tution.

quartermaster obneral’s report. At the last session of the General Assembly Governor Morton submitted, as one of tbe documents accompanying his message, the final report of Quartermastei General Stone. The report gives an account of the|dis4iursemein of hundreds of thousands of dollars, beside other important matters relative to the part taken by this State in the suppression of th* rebellion. The report was not published with the other reports accompanying the message, whether intentionally or by

mistake I do not know.

Believing that the report ought to be published, I have thought it best to call your attention to the matter. The report Is in my possession, and will be furnished should you see proper to ordei its publi-

cation.

I herewith respectfully submit the report of the present Quartermaster General, to which you are referred for information in regard to his Department. STATE PAYMASTER. By the twenty-third section of the General Appropriation bill of March 11, 1867, Major Stearns Fisher, State Paymaster, was directed to pay over to the State Treasurer, on the 15th day of June of the same year, any balance of money in his hands belonging to the State, and to deposit in the office of the Adjutant General all books, papers and property in his possession belonging to the State or connected with the pay department. This direction was strictly complied with by Major Fisher at the time deeignated, and a copy of his report to^he State Treasurer for final settlement of his accounts as Paymaster of the Indiana Legion was communicated to tne. Supposing that this report should, as an item in the financial and military history of the State, be printed either in the Documentary Journal, or in some other form, the same ie herewith respectfully submitted.

STATE PRISONS.

The reports of the Boards of Directors of both the State Prisons show that the finances of these institutious are in a satisfactory condition, and, that tnere has been a great improvement in this respect

within the lost two years.

The subject of prisons and prison discipline is one of great importance, and is attracting increased attention throughout the country. It will not be many years before the^State will require additional prisonXceommodatioDB, and in anticipation of that event I desire to .call attention to the propriety and necessity of providing a system of graded prisons. The man who is convicted of tha first offense of which he has been guilty, especially if he be a young man, ought not to be confined with axd put under the influence and tuition of professional criminals whose entire lives hav* been hardened by crime. There should, when increased prison accommodations are required, be established an intermediate prison, between th* House of Refuge and th* present State Priaona, to which tbe more youthful and Ioxe hardened offender* should be sent, and where reformatory influences would b* exerted over the prisoners to a much greater extent than ia possible in our existing penitentiaries. Under such s system, and with power lodged somewhere to transfer Incorrigible prisoners from the intermediate prison to the penitentiarie*, and with authority also to transfer prisoner* who, by their good conduct for a series of years, give evidence of reformation, from th* penitentiary to tbe intermediate prison, we might hope more effectnally to comply with that provision of th* bill of rights, which declares that th* penal code shall be founded on tbe principles of reformation, and not of vindictive justice. There is, however, a present and pressing neoessity for a separate prison for female convicts. There are now some nineteen or twenty women incarcerated in the

tit* tati

;i -j* Vi tiimMtt lOettme net 1

.Vi"! *

'Jj,

sanitary and disciplinary considerations concur in demanding that those women, as speedily as possible, should be removed to a prison to bo j **.>•.-H.*d exclusively for their sex, and i>> '»■ uuder the government of women. Tueir labor is, under existing circumstances, of no value to the Htate, and the cells now occupied by them will soon be required for male convicts. Another want, equally pressings ia that of a reformatory institution for girls. It is impossible to receive girls in the House of Refuge at Plainfield without destroying its reformatory character, and converting it into a juvenile prison. I therefore urgently recommend that a separate prison for female convicts be established with the least practical delay, and that Miere be connected with it on the same grounds ami under the same direction and management, but in different buildings, a reformatory for girls. The number of femato’^senvlcts as compared with the other Jl'ex is not large, so that an institution of very moderate capacity would meet the necessities of the case, and the expense which would be 'occasioned by providieg such an institutios would be

abundantly conpensated by which wonld be accomplished 1

by the evil that wonld be avoided. I have no sympathy with those who think that crime whop committed by woman ought not to be punished; but only insist that the punishment should be adapted to the condition of the offender, and that the laws of common morality and decency ought not to be ignored in its infliction. The fact that it is so difficult to convict women of penitentiary offenses, shows that the public sense of justice and propriety revolts at the idea of sending them to the Htate prisons, and I know of only one other worse place to which a woman could be sent, and that is to the county jail in any of the larger towns or cities of tbe Btate. I commend the subject to your careful consideration with the expression of tbe hope that tbe result of your action will show that the cause of these unfortunate women has not been

presented in vain.

CRIMINAL LAW AND PRACTICE. The barbarous and brutalizing practice of prize fighting is becoming lamentably prevalent in this country, and our own Btate has not been entirely free from such disgraceful and demoralizing exhi-

bitions.

Our penal code contains no adequate provisions, either preventive or punitive, applicable to such cases. I therefore recommend that both of these omissions be supplied by proper legislation, providing upon proper affidavit for the arrest and holding to bail of these intending and preparing to engage in such contests; also by making it a felony on tbe part of the principals and seconds who may engage in a prize fight, and a high misdemeanor on the part of those who, by their presence, may encourage the commission of the offense. The thirty-fifth section of the act of June 10, 1852, entitled “An act defining felonies and prescribing punishment therefor,” should be amended. That section makes it forgery on the part of any justice of the peace to issue blank affidavits or certificates of acknowledgment signed by him, with the intent that such blanks shall afterwards be filled up and used as affidavits or certificates of acknowledgment. It would be difficult to assign a good reason why this statute Should be confined to justices of the peace, or why it should not extend to notaries aud all other officers empowered to administer oaths or take and certify acknowledgment*. The section should also be enlarged so as to embrace within its scope, other fraudulent acts of a similar character, not now provided for, viz: Issuing affidavits filled up and certified as having been sworn to, when, in point of fact, the person .nanfed in tho affiadavit as tbe affiant, never was sworn at all; also issuing affidavits ] and sworU'to when the pretec persons. It is said that frauds of tbe character just indicated, have been committed in issuing affidavits under tbe Regristry Law of 186J. Whether this is true or not, it is manifest that they are as likely to occur,as those guarded against by the section mentioned, in its present

shape.

The reputation ot tho State has been seriously injured since «the last session of the General AssemblyT^n repeated instances, by the execution of prisoners, accused of crime, by mob violence. Within the time mentioned, more than a dozen of persons have thus suffered deatli at the hands of organized bands of men, not acting under the impulse of momentary passion, occasioned by some outrage just discovered, but proceeding with a deliberate determination that evinced a purpose to permit no law, human or divine, to stand in the way of the accomplishment of their subject. In all these cases tbe persons executed were taken by violence from the custody of the officers of the law by whfei they were held for trial for offensee with which they were charged. The pretext set up as an excuse for resorting to such violence is that the law is powerless to punish offenses in certain districts, and that the officers of the law have proved to be unfaithful in the performance of their duties; and yet the men who assumed to sit in judgment upon the law and itAofficers, and who enforce their own uncontrolled and irresponsible will as something above and superior to the laws of the Btate, do not hesitate to shoot down a sworn officer of the law engaged in the faithful performance of hia duty, when such a murderous proceeding is necessary to the turtheraace of their designs or to prevent their

discovery and prosecution.

Whenever I have t een apprised > by the local authorities of anticipated danger of this character, I have qniformly furnished arms to the officers having the custody of prisoners, to the end that they might be securely guarded until trie'd by the proper court. The recent outrage at New Albany owed its success

to the audacity of its

was not anticif

ties or people of that city,

fore these prisoners were confined in the prison in that city, and in anticipation of their delivery there for safe custody, I sent an agent to that place to ascertain

J W AS.a iscaij VS re cm no aUvv.CoM ity of its perpetrators; and ipated by the local authori1 of that city. Some time be-

and report as to their probable safety if they ahonld be there delivered and Imprisoned to await their trial. The result ofthe inquiries made assured me that 110 danger of violence was to be apprehended if they were delivered and imprisoned for trial at New Albany, and I so informed the Secretary of State of the United States, wbo had telegraphed me on the

subject.

I respectfully submit to you whether suitable pecuniary rewards ought not to be authorized to be offered and paid for the discovery and arrest of those who were engaged in the perpetration of tho recent terrible tragedy, aud for tho detection and arrest of all who may hereafter be engaged in similar acts. ' It should also, in my judgment, be made a felony to join or De a member of 'any organization or association which has for its object the usurpation of the functions of the Judiriary by condemning and punishing others for real or pretended offenses. It is also worthy of consideration whether some legislation is not called for providing for the custody >nd safe keeping of prisoners accused of crime, at points in the State distant from the scene of the commission of the alleged offenses, where it is made to appear that there are reasonable grounds to apprehend mob violence, if confined for trial at or near the place where the offense is charged to have been committed. I have long been satisfied that it would be wise to allow courts and Jurors a larger degree of discretion than they now possess in assessing the punishment, on a conviction, in a certain class, or perhaps classes of felonies. Especially is this true of the crime of larceny. The punishment for grand larceny,*can n*t, In the case of a male adult, be less than two years’ confinement in tbe State Prison. This, in some cases, is an excessive punishment. In petit larceny the punishment may be as low as one year in the penitentiary, or for any determinate period in the county jail. The distinction between grand and petit larceny is purely arbitrary, depending on the va'lue of the property taken. If the value is five dollars or upward, the offense is grand larceny; if under five dollars it is petit larceny. The moral turpitude involved In a given cose of grand larceny may be less than that pertaining to another of

in the punishment of the crime of per- ' Jury; aud it ia believed that no good reason can be assigned for denying it as to the offense ot grand larceny, if, indeed, the diktinctien oetween grand and petit larceny ahonld exist. I respectfully recommend that the distinction between grand and petit larceny be abolished, and that courts and jnries be allowed a large discretion in aaiwalng the punishment on conviction of larceny. Or if it is not thought beat to do this, reduce the minimum punishment for grand larceny from

two yean to one year.

By onr Oonstitntlon, white male perof foreign birth, of the age of

Southern’Prison, to th* great detriment twenty-one yean and’ upwards,'who of sound morality, aa w*U aa th* good hav* resided in th* United States one