The following list contains the numbers and amounts of the several warrants upon the Treasury, outstanding July 1, 1861:

Estimated Receipts for the ensuing year.

Balance due from State Treasurer, July 1, 1861,....$18,775 02

Interest on proceeds of University lands sold,..... 30,191 24

From all other sources,.

Cash on hand,.....

3,000 00

33 74

$52,000 00

Estimated Expenses for the year ending June 30, 1862.

It will be seen that the estimated expenditures exceed the estimated receipts by the sum of $2,704 75. To bring the expenditures within the receipts, it will be necessary to curtail the expenditures somewhere. There are three ways in which this can be done. One is, by rescinding some of the appropriations for which warrants have not issued; another, by withholding all appropriations for the increase of libraries; and the third, by omiting to fill any vacant chairs, or to increase the appropriations for salaries; and a possible fourth way, by a general reduction of salaries. The first of these modes of curtailment can only be applied to two items, the $5,000 appropriated for the law building and the $800 appropriated for the Anatomical Museum. The latter, I think had better be rescinded for the present at any rate, as there is no very pressing necessity for it, and it can, without very serious inconvenience, be dispensed with until the funds of the State shall be in better condition. The second of these plans, or withholding all appropriations from all the libraries, would still leave the estima

ted expenditures in excess of the receipts, $704 75, so that in addition to withholding all appropriations from the libraries it would be necessary to rescind the $800 appropriation to the Anatomical Museum.

It will be observed from the foregoing statement that the University is in debt several thousand dollars more than it has means in its treasury to pay. This is not, however, owing to any insufficiency in the means of the University, but owing to the crippled condition of the State Treasury which has induced the inauguration of a policy (a temporary one it is to be hoped) of using the money to the credit of the University Interest Fund, for the purpose of paying other indebtedness of the State, so that when it is needed by the University it cannot be obtained. The Constitution and laws of the State intend and provide that this money shall be inviolably appropriated and annnally applied to the use of the University, and that it shall be paid to its treasurer upon his application therefor, from time to time as it shall accrue and be required. This the present urgent need of the State seems to forbid. Had the money been paid over to the treasurer of the University as it accrued and was applied for, the debts of the institution could all have been paid as they matured. But if the policy of withholding it and appropriating it to other uses not contemplated by the Consti tution and laws of the State, shall be continued, the University must become seriously embarrassed, and its credits and usefulness be greatly impaired, as the Regents cannot, under such an administration of the Trust Fund, make any reliable calculation upon the amount to be received during any given period, nor of the sum with which they may with safety engage to expend during any particular period. There can, however, F think, be no doubt but that this policy will be early abandoned, and that the Regents will not long continue to be further embarrassed by a withholding of the funds, but that they will be promptly paid when applied for as they accrue. Although it may be right and proper for the Regents, as the custodians and supervisors of the interests of the University and the man

agers of its finances, to remonstrate against any misapplication of the Interest Fund, we have no fears that any of it will be ultimately lost under the management of the present able and intelligent gentlemen who are at the head of the State finances, who, we doubt not, are doing in all respects what they deem wisest and best for the interests of the State as a whole.

But

as we are by no means certain of always having as competent and reliable State officers as we now have, and as it must prove in a high degree detrimental to the interests of the University, as well as very inconvenient to the professors and other creditors of the institution if the receipt of its funds is to depend upon the caprice of any State officer, or upon the condition of the General Fund of the State, the Finance Committee has deemed it to be its duty to communicate to the Board of Regents these facts, as reasons for the present indebtedness of the University, and as an admonition to the Board that it is only safe to make appropriations of money that is actually in the hands of its treasurer, and also that the use, by the State, of the money to the credit of the University Interest Fund, for purposes not contemplated by the Constitution or laws of the State, should not be considered as acquiesced in by the Board of Regents, or be hereafter referred to as a precedent which may be safely followed.

It may be that the Auditor General and State Treasurer consider the use of the balance to the credit of the University Interest Fund, as a sort of a temporary forced loan of that fund to the State, upon which they would deem it just and right that the State should pay interest; under which aspect of the case it may perhaps not be amiss for the Board of Regents to present to the Board of State Auditors such a claim in behalf of the University, which would amount to upwards of a hundred dollars a month, at seven per cent., upon the present balance; and as the State is offering to borrow money at even a higher rate of interest, no injustice would be done to the State by the payment of such a claim, especially as it will, if paid, be expended in the promotion of the highest educational inter

H

ests of the State. There is due from the Young Men's Society, of the city of Detroit, the sum of $2,205, for interest, which is accumulating at the rate of $1,470 per annum, upon a principal indebtedness of $21,000, for real estate sold. The excuse given for the non-payment of this interest is, that the real estate for which the indebtedness accrued is the subject of litigation between the city of Detroit and the Young Men's Society, the latter using the name of the University in this litigation. This does not seem to be a very satisfactory excuse for the non-payment of the interest; because when the Society purchased the property, its officers, agents and counsel were fully aware that they would probably have to encounter this litigation; and it was a part of the contract of sale that in case there should be any litigation, it should be at the cost of the Society, and not of the University. This litigation has been decided by the Wayne county Circuit Court, against the city of Detroit, and has been removed to the Supreme Court, where it is expected it will be disposed of at the next term, and there is but little doubt, with a similar result, although the city has raised a new question not before raised, as to the authority of the Governor and Judges to convey the property to the University as a gift.

The accompanying report of the Secretary of the Board of Regents, marked "A," shows the numbers and amounts of the several warrants issued during the year, and the objects for which, and the names of the persons to whom they were issued.

The accompanying report of the Treasurer of the University, marked "B," shows the numbers and amounts of the several warrants paid during the year, and the items of receipts, and the sources from whence received.

The accompanying report from the office of the Commissioner of the State Land Office, marked "C," shows the quantity of University land sold during the year, the number of acres forfeited, and the changes in the amount of the University fund, and how they were created.

The accompanying report of the State Treasurer, marked