Mt. Vernon Republican (Mount Vernon, Ohio : 1854), 1858-01-12

              'ill f ' wl mem mmr VUJU IV. MOUNT VERNON, OHIO, TUESDAY MORNING, JAN. 12, 1858. NO. PAH TIE US OF OHIO. Hava 70a subscribed for the good old Ohio vuxtivator tor 1858 ( it is the Farmers and Gardeners' own paper. Published twico very Month, in book form, suitable for binding.Terms $1 a year, single copy; three copies iw 9t, j ior j ; nine lor and Mopy extra to the getter up of every club of 9. Djjuuimeng sent iree. Address S. K HARRIS, Columbus, 0., Jan. 5, '58:w3 Editor and Proprietor. GOVERAUK'S MESSAGE, Senators and Representatives : xou are summoned, by the suffrages of Your fellow citizens, to the important duties of legislation, ai a period of peculiar interest both in State and National affairs. The year just closed has been strongly marked by prosperous and adversecircumstan- ces. Abundant harrests have fulfilled the farmers' hopes ; almost nnbroken health has blessed our homes and animated our activities ; Industry, in every vocation, has successfully pursued its legitimate objects; Education, with steady enlarging aims, and powers constantly augmenting, has prepared the youth for the duties and responsibilities of citizenship; and Religion, unembarrassed by the interferences of the State with the domain of conscience, has fulfilled its holy mission of instruction in the duties of the life which now is, and of preparation for tho awards of that which is to come. In short, no year since the organization of the State Government, has been more conspicuously distinguished by substantial-increase in all the elements of real wealth, permanent power, and true greatness.And yet, this year, so distinguished by these circumstances of prosperity, has bean marked, hardly less conspicuously, by the evils of disordered currency, prostrate credit, and impaired fortunes. The financial embarrassments which have affected the citizens of Ohio, in common with those1 of the whole country, have been augmented in this State, by special and peculiar causes. The criminal misconduct of a former State Treasurer, resulting in a defalcation of over half a million of dollars, concealed -from the people by the false statements and reprehensible contrivances of himself and his successor in office, deprived the Treasury, at a critic. il moment, of the proper means of paying tho interest on the public debt, and of meeting the ordinary demands of the public service ; while the failure of a great moneyed corporation, intimately connected with the business interests of the community, suddenly disclosed the alarming fact, that a vast proportion of all the immediately availuble resources of very many of the banks of tho State, had been abstracted by tho fraud of its cashier in New York, and converted into means for postponing, if not averting its full. It is a most gratifying fact, and it well illustrates the energetic good faith which so honorably distinguishes the people of Ohio, that, notwithstanding these embarrassing circumstances, every obligation of the State has been punctually fulfilled, and her banking institutions, with very few temporary exceptions, have performed their entire jduty of specie payments, without evasion and without delay. The disorder and embarrassments of the present time, thus manfully encountered, must Soon pass away. They may check for a mo ment, but cannot arrest the advancement of the State. Our fertile soil, our productive mines, and our variepHndustry, will soon rrt dress present inconveniences, and revive, in full measure, our financial prosperity. That you may clearly see the foundations of this anticipation, permit me to direct your attention to a brief review of our industrial condition, which will be more fully exhibited by the reports of the Commissioner .of Statistics, and of the State Board of Agriculture. Of the 25,570,900 acres which constitutes the area of the State, according to fodoral computation, no portion worth consideration, can be classed as absolutely uncultivable. Only 10,300,000 acres, however are actually cultivated, and of these, only about 6,000,-000 acres by the plow, while more than 15,-000,000 yet remain to be brought under contribution to our power and wealth. This whole area, with a trifling exception, is reduced to individual ownership, and is divided among about 290,000 proprietors, exclu- Alnn .l.i ninnnrP rf f . n-n nta Ii u n irn r 1 (Til U1U ilia umivm ui " 1J iu.o. b quantity of land hold by each proprietor, is estimated at about ninety acres. This division of the land into small properties, promotes improvement in methods o'' - culture, augments production, insures individual independence, and contributes largely to the security of public freedom, Kv-ery tendency in the opposite direction should be watchfully observed, and wisely checked. The value of these pniiertie8 as assessed for taxation, is $435,602,055, and that of town lots and chattels is, $413,626,120 making an aggregate of $849,329,081. The real value lurgely exceeds $1,000,000,000. The present population of the State, upon ' the best attainable date, is estimated at 2,-400.000 persons, of whom nearly all, except the very young and the very old, are actively engaged in pursuits which increase or preserve publioand private wealth. The efficiency of this vast human energy is enhanced almost beyond computation by the machinery so extensively introduced into every department ot industry. The agricultural machines, put in operation during the last few years, do the work of more than 100,-000 agricultural laborers, and,. do it quicker, tetter, and cheaper than they could. It is difficult to make" any estimate even proximately accurate, in respect to machinery othor- 1 T . ". 1. 1 .. - . . 1 .. .1 tnst employed. It is reasonuuiy cuiuijiiicu, however, that the steam engines alone, now in use ia Ohio, perform labor equal in quantity to that of more than half a million men, and better in quality, as well as cheaper in cost The forces of nature thus engaged to the service of man, through the instrumentality of machinery, augment the means of existence, comfort and enjoyment in Ohio, at least four fold. The results are seen on every hand, in the increased rewards of labor, and in the improved and constantly improving condition of the people. Some general statements, under a few leads, willcloarlyexhibitthe more important elements of this industrial progress. I. Agricultural Fnlucts ' . . Jn 1847 according to the best information, - the value of vegetable products, was $67,952,500 the value of animals and am. , mall products...,.-'. 83,915,000 Tot val. of agricultural proJucts$151,867,500 Jn 1849 according to the census of 1850 the value of vege- , table products was45,554,549. . That of animal products ..43,458,098. Making the total val ue of vgncultural products $89,012,617 auu allowing ana increase oragri cultural production in eight years.... .$62'854,852 .mo y hub oi uve siock in I8u7 was .... . . . .$73,687,480 i ue imue oi uve siock in law was.-. $44,121,741 Increaso in sovon years $29,565,749 No single fact connected with the aericultu- ral results of the past year, is probably of grcator importance than the establishment by actual experiment, of tho practicability of mo prouuoio culture 111 U1IIO. o the Sorchnm. or Chinese and African Sugar-canes. The cost of these experiments to the public spirited agriculturists by whom thoy wore made, in land, labor, and machinery, is estimated at not loss than $100,000. Their results secure to our agriculture a new plant, the cultivation of which promises most liberal returns for labor and capital in the form of forage, sy rup, ana, probably, sugar. Tho culture of the grape has also been largely extended ; bringing into most profitable use hillsides too steep for other cultivation. II. Manufactures, Mechanic Art) and Mines. Tho value of the products of Manufactures and Mechanic Arts in 1857, is estimated at 4100.000000 The value of the products of Minos at 10,000,000 Total value of products in 1857$110,000,000 The value of the like products in 1849, according to the Federal census, was $62,647,259 Showing an increase of annual production in eight years $17,352,741 III. Commerce and Navigation. Vessels built in 1856 97 Tonnage of them 29,633 tons. Registered and enrolled tonnage in 1856 106,541 tons Registered and enrolled tonnage in 1849 57,100 tons Increase in sevon years 49,441 tons Vessels entered Uluo ports from Canada in 1856 612 tons Tonnage of them 79,595 tn's Vessels entered same ports from Uunaua in loot) 248 tons Tonnage cf them 24,481 tn's Increase in number " " tonage IV. Railroads Miles of Railroads in operation in 1857 Miles in 1854, according to Compendium ot Census 364 tn's 55,112 tn's Increase in three years XumUer of miles constructed in 1857 Number of miles in progress about 50 ,.80C Total cost of Railroads in Ohio. .$90,000,000 Estimated gross receipts 10,000,000 net " 4,500,000 According to the Compendium of the Census, Ohio had in 1854, more miles of railroad in operation than any other State in the Union. The same statement is probably true at this time. If so, the railroads of Ohio form about one-eighth of all tho rail oads in the United States, and more than one fifteenth ol all in the world. V. Export and Consumption. The value of vegetable products exported in 1857, is estimated at $23,800,000 The value of animal products .... 24,500,000 " " mineral " .... 2,100,000 " " products of manufactures 20,000,000 Total exports The total products shown are $70,400,000 as above $201,867,500 Leaving for home consumption. $191,467,500 These condensed statements exhibit clearly, the immense actual resources of the State, and inspire a just confidence in her future progress.It will be seen that manufactures and mines contribute in increasing proportions to the aggregate of annual productions. The coal fields of Ohio are pearly equal to the entire coal fields of Great Britain, and fully equal to those of all Southern Europe. This luct, in connection with the immense beds of iron ore so widoly diffused in the State, demonstrated the vast capacity of O.-io for mineral produc tion and for maniilactures. Still Ohio is cu phuticully an agricultural Stato. The products of her farms, during tho last year, very largely exceeded in value, the entire cotton crop ol' the United Stales. An interest so important cannot L' oo earnestly commended to legislative regard. The State Board of Agriculture has performed aservico of great value in stimulating and promoting agricultural improvement, and its annual reports add lurgely to our stores of agricultural knowledge. But this Board cannot do all that bhould be done or must be done, if we are to retain our present agricultural position. I respectfully suggest to your consideration, the expediency of establishing an agricultural Institution lor the instruction of tho rising generation in those branches of knowledge which pertain especially to the theory and practice of fanning. It is thought by persons qualified to judge, that such an Institution could be so organized and administered that it would almost, if not altogether, sustain itself. No one can doubt that any cost of which it could be the occasion, would be repaid to the State a thousand fold in benefits.Whilo on the side of industrial development there is so much to excite gratification and inspire hope, there is another class of facts essential to a correct cstimat of our condition, which must not be overlooked. Tho Commissioner of Statistics has instituted extensive inquiries, with a view to ascertain, as accurately as possible, the debts duo from the State, from corporations, and from individuals. It is obvious that, except as to debts of record, It was impossible to obtain precise results; but it is believed thtt tho following statement is at least an approximation to the truth : Debts of the Stato, Foreign and Domestic $ 18,402,095 Corporate debts of Towns, Counties, and Municipalities, are about.... 15,000,000 Debts of Mailroad Companies ... 50,000,000 " in Judgment, 10,000,000 " secured by Recorded Mortgages.. ...... 50,000,000 " to Banks and Bankers 25,000,000 " of Merchants due outside the State 15,000,000 Other individual debts... ; 40,000,000 Aggregate debls of all dfcriptions221 .3,Oi5 Debt is not always an evil. Loans wisolv invested by the borrower in agencies of production, such as lands mines and implements or of movement, such as iianals, railroads or steamboats, often afford essential aid in the development of resources, and even create the means of their own liquidation. A few of these debts are of that character. And in many cases the same debt appears more than once in different forms. Far the greater part, for instance, of the individual debts, are due to retail merchants, who, in turn, owe tho same money to banks and wholesale dealers. But with every allowance for these considerations, this mass of indebtedness remains a subject of by no means agreeable contemplation. For its reduction or extinction we must rely on augmented production and increased economy. That these may be safely rolicd upon no one can uoubt who understands the character of our peoplo, and rellects upon tho fact that this indebtedness, large as it is, hardly amounts to one-fifth of the aggregate property in the Stato, and exceeds, only by a third the aggregate products of a single year. I have ulrcudy advorted to the financial revulsion, which has, during, the lastsix months so seriously affected the varied interests of our community. lwite before during the present centurv. have similar revulsions occurred ; and both were accompanied by the same train of calam ities and disasters. The interval from one of these revulsions to another, has twice been marked by a space of twenty years. The causofrof each, though very different in form, may be reduced to the same general expression, namely : th'e reckless contracting of debts beyond means of payment. The spirit of speculation; eager desires for great and sudden gains ; tho spirit of ostentation and luxury, seek gratification through debt. As there is no limit to these passions of the heart, so there is no limit to debts contracted for their gratification, except notorious insolvency which makes credit impossible. Always most active when prices are rising, circulation increasing, and credit expanding, these desires, un checked, never fail, under such circumstances, to reach their crisis in enormous and universal indebtedness, to be speedily and certainly loiiowca Dy wiae-sprcaa collapse and disaster. l'or nearly ten years past the circumstan ces of the country have tended to these results. The influx of gold from California, has rapidly augmented from year to year the volume of the circulating medium; which has been still farther expanded by a vast, though not equal, increase of credit currency. In 1848, before the importation of gold from California had commenced, tho respective amounts of coin and bank notos in the country were as follows: coin $126,753,027; banknotes $128,-506,041. In 1857, the respective amounts were, coin, 276,100,442; bank notes, 214,778,-222.The aggregate currency in 1818 was $255,259,118 The aggregate currency in 1857, was 400,878,664 The increase of currency was. . . 235,019,546 The increase of coin was 149IHG7,413 The increase of bank notes was. 86,272,181 Tho rapid augmentation effected by the increase of coin alone, could not fail to produce marhed effects in the rise of prices, in the multiplication of transactions, in the enlargement of credits, and in the increase of debts. Tho additional stimulation of this tendency by tho further introduction of $80,232,171 of credit currency, sufficiently accounts for all the effects which have been witnessed. No system of currency can insure complete protection against speculation, debt and revulsion; but that system, which, more than any other, directly tends to produce and inflame these evils, is, without quostion, the system of crodit currency. That System, therefore, chiefly demands precautionary measures against such results. Credit currency in the United States is supplied by banks, in the form of notes circulating as money. The number of theso banks, on tho 1st of January, 1850. was 1398 ; their capital, $343,874,272; their circulation, $195,-747,950 ; their deposits, $212,705,602, their orher liabilities, $64 047,823; their specie, $59,314,003; their resources other than specie $820,713,362. The number of banks at the present time probably somewhat exceeds fourteen hundred. Their circulation is stated at $214,778,822, and their deposits at $235,358,-352, and their specio at $60,000,000. It ne-ds but a (.lince at this statement tb perceive that a currency so expanded mnst greatly stimulate hazardous speculation, and tend to financial disorder; and that under the exigency of such di.sov.dcr, the credit currency must become, in part, or altogether, inconvertible into coin. In our own Stato, thoaeare fifty foui banks; thirty six branches of the State Bank and eight Independent Banks, organized under the act of 1815, and ten Free Banks, organized under the act of 1851. According to their quarterly statement, their condition, on the 3d of August, 1857, was as follows : CD O SI 5C C- i.3 00 ... 3 (- f u. 3 I a m i H w '2 a ,3 Si' CO c (-r-T ti O 0 0 S3 CO n jo v. n o 2 -3 t I i ! a n M , 2 y V 3 i '. H I . li . On the 21 of November thoir evahiiou vtu a follow.: 1 00 it of a c i- to i Ob '3 3I 54 5 O .J -ra bo : - w i- I n I ""I H en &4 B Ht .e 3 ,f Hs '"3 5s 3 3 3 in to 00 oo r Sj 00 00 -i S -3 A -a i 2 (S 40 J 4 ft o in oo m '00 3d A B ? 13 a a a s IS 8 :3 -I S i ! a- s It will be seen from Hie above sLiteuiuni, uiai lie conditiun of the.se bunks, so fur as it is test ed by a comparison of specie and other cash means with immediate liabilities, was stronger in November than in bad been in August. The laws under which these institutions were organized, were framed with special reference to tlif security of the bill-holder. All the branches ol the State Bank are nmdo sureties tor the cireula lion of each : and the convertibility of the notes of the others is required to be guaranteed b) pieages ot state or United states bunds. these salutary provisions have protected the people against serious losses from depreciation hi the notes ot the hanks organized under tuem; mid it is highly creditable to their management that they have passed throui;li the recent crisis, made doubly perilous to manv of them by the embezzlement of their cash balances and collee tion bills at New Turk, without a suspension of specie payments. bull, it cannot be denied Hint Hie danger of a i;eiieral suspension lias been imminent, or that io in e of these institutions have actually been in a condition of legal, while others hnve been in a condition of virtual siupansion. lliee f.iou must necessarily direct your attention to the legislation necessary to protect the people agaiust the hazard of so great an evil. How far the provisions of the charters of tbe Banks organized under the act of 1845, will ad mit of additional pnards nj iinst suspension, is mtXer of doubt. The decision of the majority of the Federal Supreme Court, that the charter of a Bank by Legislative enactment is a contract, and cannot therefore be modified by suhneqiieut legislation, makes the reformation of evils in credit currency always dillicull aud often impos sible. At the present moment, however, it seems not iinprobaule that an act might be framed accep table to these institutions and beneficial to the community, by which a laigor specie basis would lie provided lor circulation and deposits than is now required, and an additional security thus ob tained ugainst suspension. the act ot 18ol, under wmch the other Banks are organized, is amendable at tbe discretion of the Legislature. Their circulation is secured by the deposit of equal amount in State or Federal Bonds. It is plain that in a financial crisis, when bonds o''h1I descriptions are depreciated, thisse' curity becomes inadequate. 1 recommend the provision of adequate guards against such a con tingency by au mcrtase ot tbe proportion ot bonds to currency, and by a prohibition of the leposit of any other bonds Ibau those of the state or of the United States. The experience of the last few vears has dem onstrnted, that the greatest finantial disasters in Ohio are not occasioned by legally authorized banks of issue. Most of the calamities which huva recently fallen upon the business cominuni' ty of the slate, have originated in the failure ot private bankers, and nf the Trust Company, issu ing no notes for circulation. Many of tbeie bank ers, and perhaps the Trust Company also, however, were borrowers from banks outside of the State, of foreign notes, at low rates of interest, to he circulated in Ohio, and redeemed when retur ns I to the issuing banks, by the borrowers. Tbe effect of these arrangements was to introduce in to the state a mass nf toreign bank paper which expelled from circulation not only nearly all the coin, but also nearly all the notes of our own banks, and exposed the continuity to great incon venicnce and loss. I suggest the expediency of so modifying the act of February lllh, 1818, relating to the circulation of unauthorized bunk pa per, as to prevent effectually this mischief. Ad dituiuul protection to the business community, a? well as sunsiummi ueneuts w uiu b-muiu aim stron? banks themselves, would result from the establishment of a Clearing House in Cincinnati fur the banks of Ohio, Kentucky, and Indiana, either through tbe voluntary action nf nf the Institutions concerned, or by the concurrent legislations of (be Siatcs. lna former communication to the Goner il Assembly, while ailinittiui; the convenience of a mixed currency of coin and convertible notes, and tbe improbability that a currency entirely of coin will be soon adopted in the country, IexprcS' sed my own opinion in favor of a currency of coin lor ordinary transactions, and ot larce notes for the convenience of commerce, and at i he same time ured the uecesity of the most stringent legislative guar Is against suspension nl specie payments, and against a inero paper money sys- te n. Subwunent reflection and observation have cuGr ned me in iheso views. A leadinir object in all refutation of rurrency should be to secure the interests of (he masses of the people, hj such provisions as w II ensure to labor inst coiniieiMHtinn in actual value. This . j ...i. . t. . i l . . ; I ! . cannot ne eilecieu wiuieinn lanorer in iaiu in per, subject to continual Uurluniion, mid exposed to all the hiuardvof financial disorder. Wkatevpr ran be constimlinnnlly (T, ctpd by State legislation, towards tbe exclusion of the mailer denomination of nu'es fir circulation. and the substitution of coin in their place, should 14 earnestly attempted The quantity of coin in the country is now to tfeat, and So steadily iu creasin-', that no injury and almost no inconven ience could arise to any interest from jndicious legislation for this object. On the contrary, it seems to me certain that the increased riMiula1 lion of coin which will thus be secured, could not a I tor. suit in most nubstaniial benefits to all iutereM by aduitional securities against fluclil tion and remliiuu. These beneGu eeero to rue 4 so obvious that I should hope for the assent of tue oanss inetnselvej to the legislation necessary to secure them. Without that aisent, under tbe decision already referred to, such legislation would avail nothing, as to the banks organized under tbe act of 1854. Tho existence of ibis decision, the uncertainty of obtaining that assent, the fiict that we are surrounded by Slates whose bauhs issue such notes, aud the practical difficulty of excluding the notes of these banks from circulation in Obio, crea'ed tbe apprehension I have heretofore expressed, that comparatively little can be accom plished in the direction of ibe proposed reform by Slate legislation. These apprehensions vet remain. The effectual remedy is with the Fed. eral Government. Looking at the manifest in-lent of tho Constitution to protect the people from the evils of a paper currency, as well as to the specific powers trrauted to Coiiirrees. I cannot doubt the power of tho National Legislature to prohibit the circulation as money of any substitutes for coin. Nor can I doubt that tbe exercise of that power by prohibiting notes of the smaller denomination, would be wise and saluta ry, the denial ot this power virtually submits the regulation of commerce in its most important instrumentality to the variable and conflicted policies of thirty oue State3, and defeuts one of the main purposes of the Constitution. Entertaining these views, I have observed with regret tbe recent declaration of the Chief Magis' I irate of the United Slates, that "the Federal Government cannot do much to provide against the recurrence ot existing evils," and that "wn must mainly rely on the patriotism and wisdom of the Slates, that "the Federal Government cannot do nuch to provide against the recurrence of exis ting evils," and that "we must mainly rely on dm patriotism and wisdom of the Slates for their prevention and redress." Such declarations, es pecially when accompanied with a recommendai tion of the issue by the General Government of a large addition to tbe mass of paper currency iu the form of treasury notes, are calculated to frus t rate the hopes of reform which might be other wise reasonably entertained. While I do not doubt that the General Assembly will do what' ever may be within its constitutional power towards the object proposed, I respectfully submil hat its whole duty will hot be performed until diis mutter he commended to our Senators and Represt ntatives iu Congress by appropriate res' ilutious. An act to incorporate new banks hafin? been twice submitted to the people in different forms, and having twice failed receiving the popular sanction, H may now ne. properly considered us settled that the majority of the electors do not desire the creation of institutions of the charac ter proposed. 1 see no reason, indeed, especially if small notes be once excluded from circulation, why the business of banking may not bo safely left as open and freo to all who desire to engage iu it, as any other kind of busiuess, care being taken that ample securities be fciven in bonds of the Slate or the Uuited States, and by the pro visiou or an adequate specie luud, lor the prompt redemption of all notes in coin. Bank notes circulating as mouey are debls due to the com' uiunity at large, payable on demand, aud it is the duty of the State, representing the commu nity, to see lliut these-delils are porloctl; occur, ed. Bucb securities are indispensable ; and 1 respectfully submit to your better judgement whether the experience of the last few years does not suggest the expediency nf requirinc similar securities, or at least ol providing eilicient guards of somo kind, insuring prompt payment 1 deposits tor sate keeping. The condition of the State Treasury requires prompt attention. On the 101b of June last, William IT. Gibson; then the Treasurer of State, disclosed to the Slate Anditor the existence of a delict in the State t reasury to the amour. t, as he stated, of about $ j 50,t)U0, occasioned, as he alleged, by the Iclalcaiion of John G. tfreshn, his immediate predecessor. At the earliest practicable moment this information was communicated to me. Up to this time I had not entertained the least suspiciau that Mr. Biesliu bad failed to pay over to his successor the whole amount of public money which had come to his hands, except the sums reported by him as deposited with failed Banks and Bankers, or retained by him under claims for exchang The repeated d c!arationsof Mr. Gibson to ibis enect, in varied forms and on fre quent occasions, connrmea oy the reports ot the several Legislative committees charged with the examination of the Treasury, and by the report of the Auditor, after performance of the same duty, seemed to leave no question on this point. Ibe allegation of the treasurer now made to the contrary, though supported by strongly corroborating circumstances, did not appear to me to be entitled to much consideration, unless con tinned by a thorough and impartial examination. I availed myself of the earltest opportunity of conference with him to urge his resignation, ex pressing to him my conviclioo that he had placed himself; by his own statements, iu the position of a defaulter, aud that be was consequently liable to an arrest, which would in my judgment woik a vacancy, by disamliiy, to be rilled mine diately by the appointment nf a new Treasurer. Mr. Gibson resigned, and I forthwith appoint ed Alfred P. Stone of Franklin County, to the vacant ollice, who gave bonds, was qualified, and entered upon his duties without delay. It seems to be the opinion ot some persons that tbe Governor has some supervision or control over the other Executive Ollice, and is ll.ere' fore in some measure respousible for their ac tion. Such persons do not reflect that each of these officers is elected by the people, and is made by the Constitution wholly independent of the Governor, in the administration ot his own ilepartment, except so far as the intervention ot the latter may be sanctioned by express enactment. The only act providing for any intorven tion of tbe Governor with the action of the Treasurer, previous to Mr. Gibsons resignation, was that of April 8, 1850. That act authorized the Governor, upon request of the Auditor of State, to appoint a suitable person to aid that officer in exuminini the Treasury, and required him to direct the Auditor of State, to appoint a suitablo person to aid that officer in examining the t reasury, and required linn to direct the Au ditnr to mnke such an examination required by il, and reported that tbe funds of the State were safe in the Treasury. He made no rerinest for t'.ie appointment of any nssistant, hn l iu the ab sence of that request there was no n'lthonty to appoint one. llu report, and those of the Leg islalive Commit tees, furnished no ground for any further direction to bim, and none was otherwise made known to me. A further duty was imposed upon th Covcru- or by the net of Mnn-h 31, 1 S"7, which required him to appoint, once m tlT' e months, an examiner of the Tt- astiry. TI e first thren mt n'hs had not expired when Mr. Gibson resigned ; but believing myself warranted in making the np pointment at any time iu the course of that period, Mnd repaniinit thi disclosures which hud been made as demanding an immediate and thorough investignfion, 1 appointed Thomas Sparrow, of Franklin conntv, tn that office. The results of the examination made by Mr. Sparrow, are set forth in his report, which is herewith iransmitted. The nature and extent of the di-Wcstionj the devices by whirh it was noneealed fiom the Legislative commilfeM, and lha Audit tor nf Slat, at the time of their several exami nation , and the respective parts in Ihe criminal transaction, of , he two Ptate Treasurers impli cated in it are clearly stated hi this document. No candid person, I think, ran witbhulJ his as sent from the conclusion to which he arrives. "that John G. Breslis abstracted the mom.ey from the Treasury, and that William II. Gibson, by concealing Ihe defalcation aud denying its existence, disregarded truth and bis sworn ollicial duty." . As soon as this official investigation bad been provided for, ihe facts which had been made known to me were communicated to the Prosecuting Attorney of Franklin cuuuty, who is char ged by lw with tl e predion of all offenses committed witbin its limits; and to the Judges of this judicial subdidisiou, whose duty il is to charge the Grand Jury in regard to such offences. The Prosecuting Attorney was assured of whatever aid the Executive ci old afford to bim in the discharge of bis functions, and he, accordingly received the assistan ce of the Attorney General iu the investigations which took place before the Grand Jury. These investigations resulted in indictments against both the ex-Treos urers. Mr. Gibson gave bail, but Mr. Breslin Hed to Canada. Every effort, deemed lit and expedient by tbe Prosecuting Attorney was made for bis apprehonsion, and tbe charges were defrayed from my contingent fund. A correspondence was also instituted with the Federal Government at Washington, in the hopes of engaging its intervention with tbe British Government, by which means alone the surrender of the fugitive defaulter could be obtained. 1 lie Federal au thorities, however, declined to interfere, on the ground ibat the surrender of a fugitive, charged with embezzlement, was not stipulated in the treaty between Great Britain and the United States, and therefore could not with propriety be asked for. Civil suits have been instituted by tbe Attorney General against the ex Treasurers and their sureties, upon their official bonds. In the course of the investigations, required by these actions as by the crimiual prosecutions upon the indictments found by the grand jury, il is hoped that some further light may be thrown upon the uses made of the money abstracted from the treasury, and that a considerable portion of it, at leust. may be recovered. Up to the time of the disclosure of the deficit, Mr. Gibson bud obtained means for meeting the current demands against the State Treasury, and deceiving the legislative committees and the Auditor, when examining the condition of the ire usury by temporary loanB from banks and bankers, and other devices described in the report of the special examiner. Whether the withdrawal of the monies thus obtaiued and repres ented to belong to the State, constitute a defalcation, and render him liable as a defaulter, notwithstanding he may not have participated in the original abstraciion, is a question for the Courts, The pruet'cnl effect of that withdrawal was to leave the State unprovided with sufficient funds for the payment of the interest on tbe State debt becoming due on the 1st of July, or for tbe ordinary expenses of the government. To obtain these funds was indispensable, and there were but two means of accomplishing the object. Oue was, to call the Legislature togeth er, and await its action : the other, tn make an immediate arrangement, and invoke for it the sanction of tho General Assembly at its next regular meeting. Only eight days would elapse after the resignation of Mr. Gibson before the interest was payable, and that time would hardly suffice for the assembling of the Legislature and the provision of the necessary funds through its action. Under these circumstances, I did not think it advisable to incur the expense of an extra session but advised the making of such ar rangements, By the Commissioners of the Sinking Fund and the Slate Treasurer, as would probably secure the needed, means on the best terms, not exceeding the rate of six per cent per annum on the amount obtained. An arrangement was accordingly made with the Ohio Life Insurance and Trust Company, under which that institution advanced to the State, on the 1st day of July, in New York, tbe sum of $150,000, which sum, with what had been previously provided, paid the interest on tbe public debt, and fully protected the credit of the State. Another arrangement was made with tbe State Bunk and Branches, by which these institutions agreed to pay directly tb the parties holding the warrants of the Auditor upon the Treasurer, the several amounts due them, and await reimbursement ot the principal from the incoming revenues and of interest as six per cent, from the next General Asem'ily, By this arrangement, tbe pecuniary c-xpeuses nf the Slate Government were provided for, and the injurious effect of the defalcation upon the publio interest, as far as possible, averted. I do nut doubt that you will promptly provide for the payment of the interest which has accrued upon the advances so honorably and liberally made. The arrangement with the Trust Company re suited in unforeseen advantage to the Slate. At the time of Mr. Gibsou's resignation, according to tbe Treasury books, there were in his custody as Treasurer, State six per 'cent, bonds to the amount of $209,028,14, deposited as security for the circulating notes of the Seneca County Bunk. Of these bonds, it was soon afterwards ascer ained that 5132,12S,14, had been sent 10 New York, to be couverled, as was alleged into other bonds of a different date; and !u0.- 000 of these had been placed in the handj cf Atwood & Co., wilh authority to sell ; nnd drafts had been made on that firm, and accepted and paid by it, on this credit, to tho amount of $58,-500. Proceedings in Cl'julf of tho State were immediately instituted to obtain possession of these bonds, which resulted .in nil arrangement, by which the bonds were transferred to the Ohio Life Insurance and Trust Company, to be re-transferred to the State, as soon as Ihe money advanced by thai institution in discharge nf the claim of Atwood &, Co. should be realized out of certain securities deposited by Mr. Gibson. Be fore the making of the trausfor according to this arrangement, the Trust Company failed ; ai.d il was ascertained that the bonds bad been convert ed hy its Cashier tn his own use, or that of the institution, by which means the Trust Company bad become the debtcr of the Stato in their foil amount. . Other funds of tbe state in Ibe hand; UIUUIMII. . v.uci iu..-.a v. ...w ......v ... of the Trust Company were also converted iu the same manner, the whole amount mus fmuez-zled was nearly equal tdthe sum advanced, and would have beea almost, if not altogether a total loss, had not the arrangement for the payment of the July interest, created a more man equal ueoi to the Trust Company, and thus secured the state against tho possibility of loss by its failure. Until within a very recent periol notnecluni Ie"islutive guards had been provided for the se curity of the Trei.s ny. The legislation of 185S and 1357, in great part supplied this defect. It made the Auditor of State tho chief accounting officer of the Treasury, and required all pay ments as well as all dVbursctnf a's to ne niai'e iinon bis warrant s it directed the Commiminner of the Sinking Fund to withdraw from Ihe Treas ury from time lo lime me moneys nei.uigiug io that fund ; il provided for the appointment of depositaries subordinote lo tbe Treasurv. and required nf Ibem ample secnriiies for all moneys deposited with them; and introduced oilier im portant checks upon tbe action of the treasurer. Had these provisions of law been adopted ita morliipli fiMr lliu ratification of the present Constitution, il is highly improbable that Ihe defalcation whirh now embarrasses our fii sm.'ts could have o e rrcd. It will he oh wved that the sys m noweMab lished rewmble. in some respects, that of the Indepeadenl Treaury of the United States. Tho resemblance wouit o aiiaon compww u oept as lo receipts and disbursement of revenue in coin, if tbe Treasurer of State were excluded from actual custody of public money, and a:! disbursements by drafts upon them, uuder suitable reslrietions aud regulations. I recommend a pr 'vuiou ol' this nature, and (hat bereuf er all public moneys be required to be eollecta-i and disbarred in specie or notes of specie paying hanks of lln State, and that no) paym'-ut b - mads from tb- T easurvof any coder twenty dollars olheroise than to com. . Bvery guard which legislative wisdom can deviw lioo d be provided agiiwt future misuse of pub" lie tunas. 1 recommend, also, thai provision bm made for thorough examinations into ihe condition of the County Tn-usui , aud full reports of the results, for the information of the General Assembly. , Some farther provision of is i's fledetsary in regard to the custody and transfer of Siate and Federal bonds held by offwers of State, sssecar ity for the circulation of hanks. At present the1 bonds belonging to the Independent Banks erw held by the Treasurer, while ibose belonging to ' the Free Hunks are held by the Auditor. In case of insolvency, the bonds are required lobs'-sold hy the officers holding them, and tbe pro cecds applied in full or p0'i a payment of thet circulation. The large powers con loi red for t hess) ends are liable lo great abuse, and have, iu fuel, been greatly abused, I see no reason why tha bonds belonging to all the banks should sot be deposited with the Treasurer, and such checks imposed upon his action; through the agency of the Auditor and otherwise, as will effectually guard agaiust all abuse. I respectfully recommend to your favorable consideration the angges-ion contained in the report of ihe second ape" cial examination of ihe Treasury herewith transmitted.The transactions above detailed, together, with the outstanding liabilities of 1855, have seriously affected the financial condition of the Slate, as connected with revenim md disbursements. To obtain a clear idea ihe actual situation, it will bo necessary to revert to tbe close of th fiscal year 185 1-5. The balance la Ihe treasury en the 15 November 1855, applicable to the disbursements of 1855-6, waa according to the report of Ihe late Auditor of Stale, ....$702,570 80 But of this baluuce there had been deposited wilh failed banks and bunkers by the outgoing treasurer 204,636 66 And there waa retained by him under claims for exchange, thongli not credited by Ihe Auditor, 13,457 Iff And there had been unlawfully abstracted, as appears from the reports of Ml. Sparrow and present Treasurer 579,911 0(5 Makiug an aggri-gale of. . . , 603,00,4 7tJ Showing Instead of an available balance of $7113,570 BO, a real deficit of 99,433 OS To provide the means of carrying on the Government, in the absence of the reported balance, the outgoing Treasurer obtained from the County Treasurers the sum of (710,715.70, and appropriated Ihe sum of $94,7H(i.25, held in trust for the bill-bolders of the Cm1 Bnnh f Cleveland, making an nggregate of $55,502.05; of which he disbursed in payments for ihe Stale, $517,444.07; and paid over to his successor, in different sums and at different times, 1303,805.34 being tbe whole amount thus obtained and appropriated, except $4,192.61; of which last sum lie retained for exchange, claimed to have been paid for the January interest, $2. 725. 54. The small balance is included in the defalcation as reported by the present Treasurer. Bnt not only waa there this actual deficit of cash means, but debts also existed, contracted in 1855, and, as to the greater portion, without war' . rant or law, to the amount of $t39,605.75. Theso debts originated in supplies and labor, furnished to the State and its 1 nstitutions, for the most part iu good faith; and the creditors, therefore, could not properly be denied payment. Tbe actual condition of the treasury is exhib ited hy the following statement: Agregate of sums deposited with failed bauka and banker, retained for exchange & unlawfully abstracted, 803,004 76 Add um't retained as exchange paid for January interest, lflSO 2.725 54 Also aru't of debts of 1855, unpaid,.' 6?9,G65 75 The total amount Is 1,445,: 96 05 This total exhibits the amount by which the condition of the Treasury was worse than h would have been had no money been deposited . except with depositories giving ample aecorilio-; had arrangements been made with these deposi taries, ns they doubtless might have been, for Ibe payment of the interest on the State debt with) out cost for exchange) had no money been unlawfully abstracted; and had no debts been crei ated to bo paid out of the revenues of subsequent years. Now, If from this total of... 1,445,396 05 There be deducted the reported balance of Nov. 15. 1H55, 703,51) 60 There will remalu, 741,fc25 25 This remainder is the amount left, with nn empty treasury, as a charge upon the revenues of lsj5-6 and subsequent v.irs; except so far as means to meet it might be derived from the claims against depositories aud against the ex-Treasurers and tbtir sureties : nr from revenues due in but not then paid. From these sources have lieen in fact received : Payments by Daniel flecks! oo acc't of depot.il with Dayton Bank .. 15,000 00 Tnxea of Hunk due la 16ij, but paid In 1850, 126,596 59 Total 141,698 S3 The aggregate receipts of 1H55-6. im-lbdinr tho above sums, were 3,6i8,253 81 The aggregate dicburirrtenti as shown bv the Auditor's drafts, Including $'519,60:.;5, paid on acc't of debts . of lb54-5, were 3,712 206 33 i - The excess of disbarsements above receinli,. 13.1,353 51 99,434 K 3.725 54 To which should be added the deficit of eaeh mean, Nov. li.lbjj And exchange reuiued by Drenliu, Jau. l.lrJjC,..., Making an aggregate which had te be provided from oilier sources tnao revenues, an I wn probably in part provided through temporary loans by treasurer Gibson,.. 226.019 21 The aggr-gate receipt 1956-7 were. 8,189,155 64 " rtlsbursf m. ills a: wa by Auilttor'e drafts redefined,. . 3,041,733 7o Cxcees receipts shove draftaredui'd I47,4'J2 lltf Tbeam'l unprovided for fnn revenue Not. lo, Iliad, was, u sees above,. TJb.uiv S. J Derincl from Ihla last amount the ex cess of receipts,..'. v.. 147,423 0? And there reinaliiaatlll unprovided for 76,590 12 To tbli vbotlld be added the exeeu of warm nil bwurd above warrants re-' deemed, of which 1 21, If 3.W were paid by the Stale Banks and Branch; es nuder the amiifomeut,... .. . . . I27.CC7 45 And the aro't dae Seuec cennty B'k ' for boo di eokverted by the Tral Company, 100,000 OO And In Ihe event ef jndlchl dnebion affirming the Caaal CeatraeU, for Ute tiUlrreace betwna anlaal coat 1 - 1 r ei