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Nov. 30. J. C. Bailey, for amount paid Sagendorph, Darling,

and others, grading for plank walk, and team
work, ....

$18 00

H

No. 3.

LEGISLATURE, 1855.

ANNUAL REPORT of the State Treasurer.

STATE TREASURER'S OFFICE,

Lansing, Dec. 30, 1854. S To the Legislature of the State of Michigan:

The undersigned has the honor to submit the following, his Annual Report for the fiscal year, ending Nov. 30, 1854, containing statements showing the condition of the several Funds.

The balance in the Treasury on that date, was Five Hundred and Fifty-three Thousand Four Dollars and Eight Cents. During the fiscal year just closed, all demands on the Treasury have been promptly met, and a large surplus has accumulated with the public depositories, for which the State has this year received interest at the rate of 3 per cent

per annum. I submit also, herewith, the Annual Statements of the condition of the several Banks in this State, at the time of my Annual Examination in December.

In regard to the Government Stock Bank, at Ann Arbor, I have to report that, something like a year since, , the Bank demanded of me a further issue of countersigned notes, on the securities then on deposit in this office, which consisted of U. S. Stocks, and upon which I had issued notes at par, or 100 cents on the dollar. The Bank claimed a right to notes to the amount of the market value of the securities, which at that time was 109, which I refused, but afterwards, on their filing in my office the opinion of the Attorney General, that they were entitled by law to them, I issued the amount demanded.

On the first day of December last, the Government Stock Bank of Ann Arbor, having refused payment, on demand, at its office, of $39,300 of its notes, the holder thereof, on the 2d day of December, made and filed in this office, his affidavit of the fact, pursuant to the 7th section of the Charter of that institution; by that section, the State Treasurer is, in such case, required to "give public notice that the notes of said Bank will be redeemed at his office;" and he is authorized and required thereby, “ to sell at public auction or private sale, within twenty days, so much, of any stock deposited with him, as shall be necessary to redeem any notes of said Bank, and apply the proceeds of said Stock in the redemption of such notes."

The undersigned, deeming that this section authorized and required the Treasurer to proceed at once in such case, to the redemption of “such notes” as might be specified in the affidavit, and not doubting that the Stocks deposited in the Treasury, for the redemption of all the notes of the Bank, were, at the rates at which they were held on deposit fully sufficient to redeem all its issues at par, or with such small discount only, as the present depreciation in the value of said Stocks might cause, proceeded to make an arrangement with the holder of the notes referred to, by which, in redemption thereof, he delivered to the holder, so much of the Stocks deposited, as at the rate of 109, would fully redeem the bills specified in the affidavit.

The undersigned, on the 7th day of December, proceeded to adver tise the remaining stocks of said Bank, amounting to $37,500 for sale, as required by the 7th section of the Charter of the Company, and notified all holders of notes of the Bank, that its notes would be redeemed at his office, out of the proceeds, pursuant to the 7th and 12th sections of its Charter. These Stocks were sold at private sale to the Peninsular Bank of Detroit, and realize 106 on the dollar, and the proceeds are retained in the Treasury, for the purposes contemplated by law.

At the earliest time practicable, the undersigned, in concert with the Secretary of State, acting under the 12th section of its Charter, declared the Bank insolvent, and appointed Addison Mandell, Esq., of Detroit, Receiver, &c., of all its assets, who gave approved bond, as required by law, and has proceeded to the discharge of his duties under that appointment

The undersigned begs leave to state, that at the time of redeeming the notes of the Bank, by the exchange of stock, as above stated, he acted in full belief, that the holder thereof by the true intent and meaning of the 7th section of the Charter, was entitled to receive the stocks at the rate at which they had been received by the Treasurer; and therefore, that an arrangement by which so much of the stock securities of the Bank as were necessary for that purpose, should be received by him at the full value for which they were deposited, (which was 109) would not only discharge his legal claim against the Bank, as fixed by law, but would be advantageous to the rest of the bill holders, inasmuch as the stock was then selling at about 102 or 103.

Since the proceedings above related, the undersigned has been informed and advised, that in the opinion of highly respectable counsel, who have been consulted in the matter, the 7th and 12th sections of the Charter of the Bank do not admit of the construction given them by the undersigned, giving preference to the holder first presenting bills of the Bank for redemption at the State Treasury; but that such holder must come in and receive such dividend or proportion only as shall ariso upon the full and final liquidation of the affairs of the Bank by the Roceiver. The undersigned begs leave to state that in the proceeding above mentioned, he acted according to his best knowledge and belief of the true intent and meaning of the law, in perfect good faith, and supposing that he was merely discharging the duties incumbent upon him by the Charter of the Bank, in such way as would best subsorve the interests of all the creditors of the Institution.

Ho regrets to be compelled in candor to say, that rumors are curront and generally credited, that the Bank referred to, has made some considerable over-issue of bills, beyond the amount of stock deposited in the Treasury. The undersigned is at present unable to say whether the rumors are founded on fact; but he feels it his duty to himself, to say here, that if such shall be found to be the case, it has been effected by fraud on the part of some person or persons, not connected with this office, unknown and unsuspected by him; and that in all his action in the issue and registry of bills, and in the redemption thereof as above stated, the undersigned is conscious of no errors other than such as may have arisen from a misunderstanding of the law; and that, if any such over-issue has been made, it has been done without his knowledge or assent, through imposition practiced upon him or his Deputy, by the agents of the Bank. He therefore begs leave to assure the Legislature, that it is his earnest desire that a full investigation of all the facts and circumstances, be ordered by your honorable body, as early in the session as practicable, in the fullest confidence that however unfortunate his action may be found to hare been, it will clearly appear to have been had in perfect good faith towards all concerned. All of which is respectfully submitted.

B. C. WHITTEMORE,

State Treasurer.

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