munication addressed by me to a select committee of the Council. The authority of the agent and the legality of his acts, are therein fully discussed.

By these papers, it appears that 11 bonds have been ostensibly sold by the agent. That these bonds were, at the time of the latest information, held by Mr. Kilbourn, in his own name, (as he declared) as trustee for the equitable owners in New York and Albany.

That $1000 in certificates of deposite of the Ohio Life and Trust Company of Cincinnati, payable in current bank notes, were received in payment of one of these bonds, and paid out by the Receiver on the canal.

That $10,000 were deposited in banks in New York and Albany, in the name of Byron Kilbourn, in payment of 10 of these bonds, and have been expended by him as he affirms.

That 30 bonds now remain in the custody of the Ohio Life and Trust Company, not sold or transferred. That 15 bonds are in the custody of the Bank of Vernon, N. Y., not sold or transferred. These bonds, together with the remaining 44 in the hands of the Loan agent, are the property of the Territory, (if they are property at all,) and the surrender of them can be required and enforced by the Governor, or any authorized agent of the Territory.

Whether any or all of the 11 bonds claimed to be sold, are the rightful property of the holders, is a question upon which the Legislature will be able to form an opinion, upon the facts before them.

The 4th and 5th inquiries are fully answered by the last annual report of the canal commissioner, by which it appears that the total amount of money received from the sale of canal lands, is $13,004 40. That all of this money has been expended in payment of work on the canal, for salaries of officers, and for incidental expenses.

The details of the expenditures will be found in the annual reports of the Canal Commissioners to the Legislature, and in the quarterly reports of the Register and Receiver to the Governor.

The balance of funds in the hands of the Receiver, December 4th, 1841, was 39 cents.

The amount expended by the Canal Company on the canal, is stated in the last report of the Company to be about $25,000. Of

this amount, $10,000 is a debt becoming due on a contract about three years hence, to a contractor for the costruction of a dam across the Milwaukee river. The balance of $15,000, has been expended in making the survey and location of the canal-for obtaining the grant of land from Congress-for salaries and compensation of officers, and agents for printing, and other incidental expenses. I do not know that any sum has been expended by the Company, (excepting the proceeds of the 10 bonds claimed to be sold at New-York and Albany,) for work done on contracts, to construct any portion of the canal. The details of these expenditures I am not able to furnish.

The report of the Canal Company, of the Canal Commissioners, and of the Loan Agent, show the situation and progress of the work on the canal. Work of the value of $25,000, or thereabout, has been done on the dam, guard-lock, and the line of excavation and embankment, about one mile in length. I believe that neither the dam, the lock, or the work on the line is yet completed.

Any opinion expressed in answer to the 8th inquiry, "whether the Territory will ever derive any profit from the proceeds of the canal," would be a mere conjecture.

The investment made by the Territory of the proceeds of the canal lands, may become the property of the future state of Wisconsin, and may be of insignificant or of considerable value.

If the loan of $10,000, is recognized by the Territory, the investment of that sum may also become the property of the future state.

Whether that property will or will not hereafter become valuable and productive, will depend upon the adjustments of the relative interests of the Territory, of the Canal Company, and of the Hydralic and Manufacturing Company, now somewhat entangled-or in other words, upon the control and disposition of the water power.

The presentment of these rights and interests will constitute an answer to another inquiry of the resolutions, relative to the right of the Canal Company to sell Hydraulic power, created by the canal. This inquiry points, without doubt, to a sale or supposed sale of some interest in the water power at Milwaukee, by the canal company. The Canal Company has not, it is believed, by its charter alone, any tangible property in the water power at Milwaukee.

By the 25th section of the act incorporating the Company, it is provided, "That nothing herein contained, shall authorize said Company to take or use more water from any stream or fountain, that shall be actually necessary for the economical navigation of said canal, unless they shall have obtained the right to use an excess of water, over and above the quantity required for navigation, from every person or persons, corporation, or corporations, lawfully claiming the same."

The act incorporating the Hydraulic and Manufacturing Company, approved February—,1839, gives to said Company the privilege of erecting a dam, five feet above high water, across the Milwaukee river, on section 12, (upon which the canal dam and lock are now situated,) and to use the water of the river for Hydraulic purposes, subject to the right of the canal company.

All the law upon the subject is here presented. The rights of the canal company, to which the Hydraulic charter is subject, are the rights to erect dams, construct locks, tow path, and canal and use so much of the water of the river as may be needed for the economical navigation of the canal.

The use of the surplus water of the river for Hydraulic purposes, is given to the Hydraulic Company on certain conditions.

Whether those conditions have or can be performed, may be a question. The canal company does not possess, and cannot therefore sell the use of the surplus water, of the Milwaukee river, for hydraulic purposes, unless it has acquired that use by purchase or grant from the rightful owners.

lic

But, I understand, the company has nominally sold to the Hydraucompany, all of its interest in the water power created by the canal, and has thereby undertaken to sell the perpetual use of the dam and works of the canal, for the purpose of using thereby the surplus water for Hydraulic purposes.

The canal company then undertakes to sell the use of the works, but not the right to the use of the water.

The exclusive use of the works is valuable property, which the future State can acquire and absolutely control. The exclusive use of the surplus water, is granted upon condition; and one of those con

ditions is the reserved right of repeal. The ultimate and exclusive control of the water power, then unquestionably will reside in the State. That control should be retained and exercised, if it should become necessary, in order to protect the interests and rights of the Territory,care being taken to secure the equitable rights of individuals.

The consideration of the sale made by the canal company, as it appears of record, was the the sum of $27,000, secured by mortgage of the privileges and property of the Hydraulic company, and also a release by the Hydraulic company to the canal company, of water power sufficient to carry eight run of stones.

The investment, therefore, of the Territory in the work of the canal, may hereafter be made by the state of Wisconsin an available and valuable interest.

The answer to another interrogatory, as to the liability of the Territory to pay, within two years any interest for on account of any debt contracted on behalf of the canal, must depend upon the legality of the loans of $11,000.

If the loan of $10,000 is not recognised as lawful, or voluntarily assumed, the interest to be provided for on any debt contracted, cannot exceed $70 a year.

It is not in my power to give the committee any information of service, in reply to the last inquiry of the resolution.

The committee must resort to the company, which will doubtless be able and disposed to make known the terms upon which it will treat with the Legislature.

Very respectfully,

Your obedient servant,

JOHN H. TWEEDY.

LETTER OF T. L. OGDEN, JR., TERRITORIAL

ENGINEER.

MADISON, January 28th.

Hon. A. G. ELLIS,

DEAR SIR,―There is a mile in length of the Milwaukee and Rock river Canal, more or less, now under contract or completed.

Of this mile, the different portions of work entirely completed would. amount, in the aggregate, to about a half mile; and would embrace the most expensive sections that have been contracted for-on the remaining half mile the work is half completed.

The dam requires to be graveled; it is completed with the exception of this. The timbers for the guard lock are prepared and half of them are in their place.

It is not in my power to give the information sought for in less general terms. An answer stating the amount paid to contractors, and also the amount necessary to be paid to meet the contracts on the remainder of the work, would be more satisfactory, but this information is not in my possession.

1 am, sir, respectfully,

Your obedient servant,

THOMAS L. OGDEN, JR.

COMMUNICATION OF BYRON KILBOURN, PRESIDENT OF THE MILWAUKEE AND ROCK RIVER CANAL COMPANY.

To the Honorable House of Representatives:

Having prepared a communication in accordance with certain resolutions of the Hon. Council, asking for information relative to the Milwaukee and Rock river canal, and the terms on which the Canal Company would relinquish their rights to construct said canal-and similar resolutions having been adopted by your body, I beg leave to submit for the information of the House, a copy of said communication, with the request that the same may be received as an official paper from said Canal Company, and printed for the information of members, and of the people of the Territory.

On the 18th inst., I had the honor of receiving from the Secretary of the Council a copy of the following resolutions to which I responded briefly and in general terms next day, stating in conclusion, that I would "take great pleasure in uniting with any committee of either house of the Legislature, in devising such means and measures as will