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GOVERNOR'S MESSAGE.

Fellow Citizens of the Senate and House of Representatives:

The People of Michigan have committed to us the responsibilities of the State Government for the coming two years. We assemble to enter upon our duties in a time of great se... riousness and public trial. It will become us to pause at the threshold of our term and survey the work before us, acknowledging our entire dependence upon that Divine Providence which is constantly over us alike in war as in peace. The state of the country and the temper of the times demand a cautious wisdom and patriotic energy in every department of government. Our first duty is naturally and properly with the internal affairs of our own fast growing Commonwealth. And here we are not without many causes for congratulation. After some years of difficulty, the State finances are free from embarrassment, all the avocations of business flourish, barvests are abundant, general health prevails, and the diffusion of education is almost universal. The public order has been main. tained, and all the institutions of civil government hold undisturbed sway to the general happiness and security of the peo. ple. Our one great need is national peace, and the only road to that leads through the gate of victory.

FINANCES.

I extract from the report of the State Treasurer the following statement of the present financial condition of the State:

* The total amount of receipts of the office for the fiscal year is.....

$1,124,595 10, The balance against the Treasury, and in my

favor, Nov. 30, 1861, was..... $27,179 79 The tuial of payments for the year, is 896,624 69 Leaving a balance in the Treasury of 200,794 62

$1.124,595 10

STATE DEBT.

The funded debt of the State is as follows : 1. Full paid $5,000,000 loan" bonds, 6 per cts.,

6 due January 1st, 1863,..

$ 177,000 00 2. Adjusted bonds, 6 per cts., due Jan. 1st, 1863, 1,746,185 00 3. Temporary Loan, 7 per cts., due Jan. 1st, 1878, 50,000 00 4. Renewal Loan, 6 per cts., due Jan. 1st, 1878, 216,000 00 5. Canal Bonds, 6 per cts., due Jan. 1st, 1879,.. 100,000 00 6. War Loan, 7 per cts., due Jan. 18t, 1886,.... 607,300 00 7. Outstanding Internal Improvement Warrants,

3,553 75

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FUNDABLE DEBT.

8. $140,000 outstanding part paid "$5,000,000"

Loan, which, when funded, will amount to..

80,999 80

Total of funded and fundable debt,.

$2,981,038 55

THE TRUST FUND DEBT

Is made up of the following items, to wit:
Primary School Fund,
University Fund,....
Normal School Fund,....
Rail Road Deposits,...

{$753,801 73

185,887 33 22,453 47 2,217 32

Total,

$964,359 85

The wise legislation of your predecessors'has placed the publio credit of the State upon a firm basis. Adequate sinking funds were provided for the gradualj but certain extinguishment of th: present debt, and a system of taxation inaugurated which is not burdensome, but sufficient for all present needs, thus preventing any further increase of the State debt. In this connection I have only to recommend that this policy be continued ; that no new schemes, involving large expenditures, be undertaken, and that for the payment of all extraordinary appropriations, a tax be levied at the time.

In pursuance of the act entitled "an act to provide means for the redemption of the bonds of the State, maturing Janoary 1st, 1863," "approved March 11, 1861," negotiations have been entered into for the exchange and sale of the 2,000,000 loan bonds, and the objects of the act fully accomplished. I think it may now be said that the turning point in the financial affairs of the State has been safely passed.

Under the “act authorizing a war loan,” bonds have been issued and sold to the amount of six hundred and seven thousand three hundred dollars, and the money has been expended in pursuance of the law. The principal portion of this sum has been expended in raising and equipping troops for the General Government, and for which the State has a claim for reimbursment. The accounts and vouchers have been forwarded to Washington for allowance, and no doubt will be adjusted in due season. When so adjusted the amount will be due to the State less the direct tax due from the State to the National Government, amounting to $426,498 84.

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STATE PRISON.

The number of convicts confined in the State Prison Novem. ber 30th, 1862, was 410, showing a decrease in two years of 211. This is to be accounted for by the state of the country. The sound of the fife and drum on the Southern border has called to the camp most of those restless and reckless spirits who are easiest tempted to the commission of crime. Financially the Prison has been less successful the past year than heretofore. The reduction in the number of convicts has produced a corresponding reduction of the amount received for convict labor, while the expenses could not be reduced in the same ratio. By an unfortunate fire a portion of the workshops was destroyed, and had to be rebuilt at a cost of $5,439 27. These causes, with some others of less importance, have made the prison for the last year, to some extent, a burden to the State Treasury. I am satisfied, however, that this is no fault of the officers. The management has been skillful and economical, and under more favorable circumstances it would have proved self-sustaining

The discipline of this Prison has steadily improved, which I attribute, in a great measure, to the wise statute, giving to every well behaved convict a liberal deduction from his sentence for his good behavior and orderly conduct. The appeal to the hopes of the prisoner has been entirely successful. His love of liberty is stronger than his fear of the lash. After all he is still a man and every amelioration of the hardships of his condition meets a response from his better nature.

The act authorizing the Board of Inspectors, in their discrotion, to release life convicts from their solitary cells, and allow them to labor like other convicts, has proved entirely safe, as well as humane, for the same reasons.

The exercise of the pardoning power, I have found the most difficult and trying of all my duties. So to temper justice with mercy, as to protect society, and yet to some extent spare the criminal, and restore him to the path of virtue and to his friends, is the problem which it is not always possible to solve. A detailed account of my doings in this respect will be submitted as a supplement to this message. I am not aware that any legislation is now necessary for the benefit of the State Prison.

STATE REFORM SCHOOL,

The number of boys now confined in the Reform School is 183. The number rei eived during the year has been 72, while the number discharged is 34 ; being an increase of 38. The school has now become one of the permanent and cherished institutions of the State, and deserves the watchful care of the Legislature. I am surprised at the extraordinary increase of the number of boys the past year. The Board of Control call for more room, and if this rate of increase go on they must have it, unless some other disposition can be made for the future increase. It is worth while to consider if the present laws are not putting too many boys in this school. The great body of them'are'sentenced by justices of the peace. Is this judiciously done ? Is not the road made too easy, so that some boys como here because their parents and friends wish only to be rid of

them. The institution is very burdensome to the treasury, costing some fifteen thousand dollars a year. The Board recommend an appropriation of fourteen thousand dollars to build a wing extending east from the north end of the present building. Whether, all things considered, this is best, I must ·leave to the better judgment of the Legislature. My own opinion is, that it will not be wise to increase the numbers in this school, but to make provision for placing the older and more hardened offenders elsewhere. In any case, I think the family system, with farm labor, is to be preferred.

DETROIT HOUSE OF CORRECTION.

· By section 11 of an act approved March 15, 1861, the Board of Inspectors of the State Prison were outhorized to contract with the city of Detroit for the confinement and maintenance, in the Detroit House of Correction, of persons convicted of any offense punishable by imprisonment in the State Prison, provided that the compensation to be paid should not exceed one dollar per week, and that the persons so contracted for should be male convicts, between the ages of sixteen and twenty-two years, and all females. The city of Detroit has been anxious to make this contract, but the Inspectors have refused, for reasons. stated by them in their report, at page eleven. I have been furnished by the Superintendent with a printed copy of an act which it is proposed to ask the Legislature to adopt, settling this disagreement. The first section constitutes the House of Correction a "State Penitentiary," and the second places it under the control of a Board of Inspectors, to be appointed by the Common Council of the city of Detroit. To this State Penitentiary it is proposed to allow all the courts of the State, in their discretion, to sentence any male convict between the ages of sixteen and twenty-one years, and all females.

The law of 1861 was recommended in my inaugural message of that year, for the purpose of giving to the Inspectors of the State Prison, the power to relieve the prison of some of the barden of excessive members, if it should become necessary,

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