While the amount received into the treasury in the two preceding years was only,..

The large disbursements from the treasury have been on account of appropriations made by the last Legislature for the Asylums in process of erection at Kalamazoo and Flint, for additional buildings in the State Prison, for the House of Correction for Juvenile Offenders, and for the Agricultural College, while the ordinary expenses of the State Government have yielded to a rigid system of economy, and been very materially reduced. The whole amount allowed and paid by the present Board of State Auditors up to the 1st of Dec. last, beiag a period of one year and eleven months, was.

While there was allowed and paid by their predecessors in the month of Dec., 1854,....

Under the law passed Feb. 12, 1855, requiring the holders of the part-paid 5,000,000 bonds, to present them to be adjusted, there has been refunded,..

1,553 86

$82,220 49

68,071 35

$1,708,235 00

124,392 55

And there only remains of that portion of our indebtedness in bonds unliquidated, an amount equal to,..... It is believed that these bonds will soon be presented to the State Treasurer and new bonds issued therefor. This happy adjustment of the part-paid bonds of the five million loan which have so long hung over the State, enables us to see clearly the exact present condition of our State indebtedness.

1

The funded and fundable debt of the State is as follows:

University Bonds, due July, 1858, ...

99,000 00

Detroit and Pontiac Railroad Bonds, due July, 1858,

97,000 00

Full paid five million loan Bonds, due January, 1863,..

177,000 00

Adjusted Bonds, due January, 1863,..

1,708,235 00

The part paid five million loan Bonds outstanding when

funded, will amount to..

124,392 55

Outstanding Internal Improvement Warrants,.

Total amount of State indebtedness, Nov. 30, 1856,

...

It will be perceived that there will fall due, of these bonds, on and before the 1st of January, 1859,..

On the 1st of January, 1860,

4,158 35

$2,274,935 90

216,000 00

40,000 00

And the remainder on the 1st of January, 1863. So that our entire State indebtedness will become due within a period of six years. No provision has been adopted in conformity to the requirements of the constitution to create a sinking fund for the redemption of this debt It is, perhaps, too late now to undertake to provide for its payment by this mode, but it is our duty to adopt such measures as will make certain provision for the payment of the debt as it falls due. Although the surplus moneys in the hands of the State Treasurer have earned five per cent., and brought a handsome sum into the treasury, yet it must be recollected that the State pays an interest of seven per cent. to the several trust funds to which this money belongs. A proper foresight and economy would therefore seem to dictate that all the surplus money on hand should be employed in the redemption of our debt, and the purchase of our stocks, even before they fall due.

In directing your attention to this important subject I trust that such measures will be adopted as without excessive or burdensome taxation, will soon relieve us from all indebtedness on account of the five million

loan, with which in an evil hour our young and prosperous State became encumbered, to be remembered only, as a warning against future rashness or improvidence.

I concur entirely with the Auditor General in his recommendation for amendments, in the manner of assessing property, and in levying and collecting the taxes. All the property in the State should bear its just proportion of its burdens, and your action will be required to make the system more perfect, compelling it to do so.

STATE PRISON.

The Report of the Inspectors, Agent and other officers present a minute and accurate account of the condition financially, and otherwise, of the State Prison. I invite your attention to the suggestions contained therein for legislative action as worthy of your consideration.

The rapid increase in the population of the State, and especially in the cities and large towns where crime mostly prevails, has been attended with a corresponding increase in the number of convicts in the State Prison.

On the 1st of December last, the Prison had 349 convicts, being an increase of 58 in 1855, and 45 in 1856.

A frequent personal examination of the Prison within the last two years enables me to state, that there has been a great improvement in its character for cleanliness, order and discipline, as well as economy, taking into consideration the increased price of fuel and provisions, which enter so largely into prison expenses.

The greatly enhanced prices, in the new contracts for the labor of the prisoners, is an indication of confidence in its management and discipline. Under the old contracts from 50 to 80 men were employed in making wagons at 38 cents per day; under the new, the price has been increased to 53 cents. Under the old contract from 80 to 100 men were employed in manufacturing agricultural implements at 31 cents per day, under the new 564 cents per day for the same number of men is obtained; under the old contracts 20 men were employed making shoes at 35 cents per day, under the new from 25 to 40 men are let at 56 cts., per day, making a difference in favor of the State on these three contracts of about $14,000 per annum.

A large number of the convicts have been employed during the past two years, upon the new buildings, which the increased number of prisoners demanded, and which were authorized by your predecessors, and the labor of quite a number of them will necessarily be diverted to the same purpose for the coming year. When the necessary buildings for the accommodation of the prisoners are completed, it is believed that with proper economy the labor of the convicts can be made to pay the entire expenses incident to the management and control of this unhappy and dangerous class of our population.

The confinement of the Female Convicts in a separate prison, and the employment of a matron to superintend them, has been the occasion of great improvement in the conduct and habits of that unfortunate class. They are neat in their persons, and assiduous in their employment, and it is to be hoped, that under the care and discipline of their worthy matron, their morals and behavior will give evidence of

a permanent reform. The Solitary Cells have been completed, and the prisoners sentenced for life have been removed into them.

A prejudice has existed in the minds of a portion of the community, against employing convicts at labor which would bring them into competition with our ordinary mechanical trades. It would be not only a great expense to the State, but a great injustice to that degraded class of men, to shut them up for a period of years without employment. Nor can it be doubted that it is a great kindness to these men, who have subjected themselves to punishment by resorting to crime, to teach them some trade or occupation by which they can obtain an honest livelihood when the term of their sentence has expired. And it is believed that no public policy is violated by so doing.

We have made but slight progress as yet toward the great end of punishment, which is the reformation of the criminal. An important means for the attainment of this end, is to fit them for employment, by which they can maintain a useful and honorable position in society. I therefore concur with the Inspectors in the propriety of the adoption of measures for the amendment of the Constitution upon that subject.

Your attention is also especially directed to the suggestions of the Agent, that a strong incentive would be furnished for the amendment and good behavior of the convicts, by authorizing the Agent to diminish the period of their sentence a day each month, for every month their conduct is entirely approved. Quite a proportion of the men incarcerated in the Prison are far from being hardened in crime, but are rather the dupes of more wicked and designing men. Such an inducement would increase their self-respect, and might be the means of a thorough reformation.

One of the most unpleasant and painful duties imposed upon the Executive, is to examine and decide upon applications for pardon. It is one of the necessary incidents attendant upon the commission and punishment of crime, that innocent friends suffer more than the guilty convict. The public interests require that punishment, without being too severe, should be certain; and when clemency has been invoked in behalf of a condemned husband or son or brother, in most cases, though it may have excited the deepest sympathy, it has been declined, because it was deemed improper to interfere with a due course of law. In every ease in which I have granted a pardon, so far as the facts have come to

my knowledge, the conduct of the recipients has thus far justified the exercise of clemency, and many of them has been restored to a respectable position in society. I shall transmit to you, in a separate communication, the names of those to whom I have granted pardon, and the reasons therefor.

ASYLUMS.

The Report of the Trustees of the Michigan Asylums will give you a minute account of the expenditure of the appropriation made by the last Legislature, and of the progress in the construction of the buildings to accommodate that unfortunate class of our population.

One wing of the Asylum for the Deaf Mutes and the Blind, at Flint, has been completed, and has been occupied since the first of May last. There are fifty-one deaf mutes and fifteen blind, enjoying the benefits of the Institution, and making rapid progress in acquiring an education under their ardent and accomplished teacher. Additional appropriations are asked for the completion of the buildings. It is the dictate of sound policy as well as humanity, that these great charities should be made effective for the accomplishment of the truly benevolent and praiseworthy objects for which they were established, at as early aday as possible, and I doubt not you will make such appropriations as the condition of the Treasury will admit.

HOUSE OF CORRECTION.

Under the act of 1853, which provides for the establishment of a House of Correction for Juvenile Offenders, the Board of Control have erected and put in operation a building for that purpose. It has now twenty-one inmates, sent there for crime and vagrancy. The main cbject of the Institution is to reform and fit for usefulness, an ignorant, neglected, and degraded class of children and youth. To accomplish this, strict discipline, thorough mental culture, an excitement of the higher moral faculties, and such firm, but conciliatory treatment, as will inspire self-respect, must be exercised, and this can seldom be done by their confinement for a short period of time. I therefore invite your attention to the amendments proposed to the law by the Board of Control, and deem their adoption as necessary to the more perfect working of the institution. Similar establishments in other States have been attended with the most beneficial results, and we may reasonably