provisions of the act referred to, I would recommend that that amount also be transferred to the War Loan Sinking Fund.

SPECIFIC TAXES.

Referring to Table D, you will find the aggregate amount of specific taxes paid by Railroad Crmpanies to be $160,667 14, by Banks $900, and by Insurance Companies, $40,039 74. Two Railroad Companies only are in arrears with the payment of their tax, the Detroit and Milwaukee, and the Amboy, Lansing and Traverse Bay.

The Detroit and Milwaukee Railroad stands charged with a sum of $22,000, which is said to have been paid to John McKinney, then State Treasurer, in 1860. As no such payment appears on the books of this office, and no official receipt has ever been given for the same, the amount still remains a charge against that Company. I have been unable to ascertain whether any former Attorney General, or the present incumbent, has ever taken any steps towards collecting that amount; it seems, however, desirable that some effort should be made to accomplish a final result in the premises. Without making any special recommendation in this peculiar case, I leave it with your wisdom and judgment to take such action as you may consider judicious and for the best interest of the State.

The Amboy, Lansing & Traverse Bay Railroad has paid the specific tax for the year 1862, through C. C. Trowbridge, Esq., the Receiver. The tax for all subsequent years remains unpaid. It amounts to $1,308 27, for 1863. Since that time the Company has made no report to this department; but, in as much as in all probability the capital stock of the Company has not changed, the same amount of $1,308 27, will be due for each of the subsequent years.

A. N. Hart, Esq., of this city, is at present Receiver of the Company, and he has promised to settle the tax accounts at the earliest possible moment. I would, under ordinary cir

cumstances, long ago have endeavored to enforce the collection of the taxes, by issuing a warrant to the Sheriff of Shiawassee County, to sell the "rolling stock" of the Company; but knowing that the Sheriff would have been unable to discover any rolling stock belonging to the Amboy, Lansing & Traverse Bay Railroad Company, even if he, another Diogenes, with a lantern in his hand, had traversed the entire length of said Road, I abstained from any such action, which would have been "sysiphus" labor.

The Amboy, Lansing & Traverse Bay Railroad Company has not been in the habit of owning any "rolling stock," but has for several years borrowed from other companies. If, in accordance with my recommendations in former reports, the Legislature had passed an Act, giving the State a prior lien on the property of corporations for delinquent taxes, something might have been accomplished in the above direction, but, as the case now stands, it would be of no avail. For the interest of the State, I hope that Mr. Hart, the Receiver, will redeem his promises.

The tax paid by Insurance Companies in 1866, is four times larger than in 1865, a result which I anticipated in my last report. The tax received from Banks amounts to only $900 this year, which was paid by the Jackson City Bank, the only Bank still in existence under the General Banking Law of the State. This Bank does not issue or circulate any notes, and thus there are no duties connected now with the office of Bank Note Register, created under the General Banking Law of the State, with a salary of $800 per annum. As this office has become a sinecure, I recommend to abolish the same at once.

I also recommend to tax the capital stock of the National Banks of this State, provided this can be done without conflicting with the laws of the United States, which I think is possible.

CLAIM AGAINST GENERAL GOVERNMENT.

This claim, the details of which you will find on page ten of my report for 1865, still remains unpaid.

When all accounts and vouchers had been forwarded from this Department to the Secretary of the Treasury, up to May 1st, 1865, the Governor attempted to collect the amount duc our State, or at least some part thereof but the powers that be at Washington willed otherwise.

Our accounts, I understand, were not looked into until spring, 1866, and when they were finally examined, some of them were entirely rejected, and others suspended. They were suspended principally, for the reasou that some vouchers were not certified to according to the rules and regulations that are made in the departments at Washington. In some instances, as I have been told by the Governor, the authorities at Washington wanted the certificate of a Quartermaster, instead of that of a Captain, or vice versa ; in other instances that of an Adjutant instead of a Colonel, and so forth.

In some of the Principalities of the Eastern Hemisphere, the Governments are noted and renowned for their strong bureaucratic proclivities, and for the "red tape," which is freely used in all their official transactions. It seems that some of our Republican authorities are anxious to become the successful rivals of European bureaucracy.

Certain rules, of course, are necessary and must be established for the adjustment of accounts, but such rules should be in conformity with, and adapted to republican institutions; they should be safeguards against imposition, and not mere formalities.

The claim of our State for clothing, equipping, and feeding troops is so small, it is in proportion to the number of troops so very small, compared with the claims of other States, that we certainly had good and strong reason to expect to be liberally dealt with by the general government, instead of being subjected to such vexations.

The Quartermaster General's Department, I understand, is now supplying, or has already supplied, the alleged deficiency in the vouchers referred to, and I hope that Congress will take such measures as to assist the loyal States in recovering their ust dues.

GENERAL REMARKS.

With an expectation that the fundamental law of our State will undoubtedly undergo important changes before long, and that also changes in our tax and revenue laws, will be made by the Legislature which will follow the next Constitutional Convention, I refrain from making any recommendations for material changes in these laws now, though some changes would certainly be desirable.

The various statutes on taxes and tax titles, are altogether too complicated, and not in all points strictly consistent, clear and definite. During my last official term, I have frequently been asked, "are tax titles worth anything in your State or not, and if not why are they given?" Without entering into any discussion of the value of tax titles, and without commenting upon the various legislative acts referring thereto, allow me simply to remark, that our legislation in that direction, should be more explicit, and less complicated. A law extending the time of redemption of lands sold for taxes to at least three or four years, and imposing an increased rate of interest, from year to year, and the issuing of a title in fee simple, after the expiration of the time of redemption, with such exceptions, certainly, as would be necessary to protect persons who have either paid their taxes, or offered to pay the same within the time limited by law, to the proper officers, seems to me decidedly preferable to our present system of selling lands for taxes, and issuing tax-deeds.

Let us hope that such a law regulating the tax sales, redemptions, and the issue of deeds, will be enacted after the revision of the State Constitution.

In speaking about the revision, it occurs to me that our present Board of State Auditors ought to be reorganized. That Board being composed of the Secretary of State, State Treasurer and Commissioner of the State Land Office, to the exclusion of the Auditor General, mainly audits and allows the accounts for fuel and light for the State offices, for repairs at

the same, for stationery furnished under contract and otherwise, for printing and binding for the departments, for porters' wages, and other purposes of minor importance. Besides, all other claims which are neither provided for by general law nor by special enactment, are to be audited by said Board.

Why the Auditor General, whose official duty is to audit at least nine-tenths of all the accounts and claims against the State, should not be a member of that Board, I am unable to imagine. If such a Board is necessary, and I think it is to some extent, the Auditor should by all means have a seat in it. As far as the accounts for stationery, for State printing, binding, and other items furnished under contract are concerned, the contracts when made, should be filed with the Auditor General, and this officer, on presentation of accounts and claims of that kind, would have to audit them on the basis of the contracts on file-allow them if in accordance with the contracts, or is otherwise, reject them.

This method would simplify the allowance of such accounts, and by no means impair the interest either of the State or of the claimants; on the contrary, it would save the latter considerable trouble and time.

A "Board of Claims," however, should exist, whose duty it would be to audit such claims against the State which are not provided for by law, but based upon and founded in equity. And that Board, in my opinion, should be composed of the Governor, Secretary of State, Auditor General, State Treasurer, Commissioner of the Land Office, and the Attorney General-the Governor acting as chairman, the Auditor General as Secretary, and the Attorney General as legal adviser.

Such a Board, I hold, would be a decided improvement over our present system. It would add materially to the safety and judiciousness in disposing of that class of claims, for which no general or special provision exists on our statute books.

These few remarks, based upon several years experience in the Auditor General's Department, may not strictly be within the