The assessed valuation of all the property in the State, as returned for 1870, was $86,940,910, and upon this there was levied for State purposes a tax of five mills on the dollar. The total valuation as returned for 1872 is $103,373,826, an increase in two years of over $16,000,000; while it cannot be doubted that the actual increase, from the addition of new property, and the increased value of real estate from the growth of the State in numbers and its rapid material development, is much more than the amount indicated by these figures, and is probably twenty-five millions of dollars. The taxes levied for all State purposes, and collectable in 1873, will amount to five mills on the dollar of the total valuation of 1872.

When the political organization now dominant in the State came into power in 1860, the bonded debt had been carried to the extent of the constitutional limitation ($250,000,) and beside this there was a floating debt of $68,000, with an empty treasury. During the twelve years that have since elapsed, there has been appropriated for, and expended in the construction of public buildings, the sum of $723,967,85, the $100,000 indebtedness incurred to meet the demands arising from the Sioux raid of 1862 has been cancelled, and $296,868.33 interest accruing on the State debt has been paid; a wise system for the sale of school lands has been inaugurated, the fund from which now amounts to $2,780,559.35, which has been so judiciously invested that the increased value of the securities which now represent it is so great as to cover the entire expense of conducting the State Land Department since its organization; while the ordinary expenses of the State Government have been defrayed, and all this without extraordinary taxation or a resort to questionable expedients.

The population of the State has increased in the meantime from 172,023 to 530,000, and the taxable valuation of property from $29,832,719 to $103,373,826. For a more specific statement of the amount of the several Funds, the condition of the various public Accounts, and the extent of the School, Swamp and other lands belonging to the State, as well

as for many valuable suggestions, I beg to refer you to the very able and comprehensive report of the State Auditor. From the report of the State Treasurer and that of the Secretary of State, you will observe that the affairs of their offices are in proper conditiou, and present a showing of due care in the discharge of their respective trusts. To the recommendations of the Secretary as to the means of guarding against the many mistakes annually occurring in the enrolling and engrossing of bills, and to abridge the expenses of legislation, I would particularly call your attention.

INTERNAL IMPROVEMENTS.

On the first of January, 1872, we had 1,550 miles of railroad completed and in operation. We have built and equipped during the year, 356 miles, giving us now an aggregate of 1,906 miles, while about 100 miles have been graded, which have not yet received the iron. The first rail was laid in the State in September, 1862, since which time an average of 190 miles of road per year has been built and equipped. I doubt whether any State in the Union can make a better exhibit.

I regret that the facts requlre me to inform you that all the companies, local and non-resident, operating roads in this State, have set at defiance the legislation of the last two sessions concerning rates of tariff on railroad freights. This is the more to be regretted, because of the fact that the Legislature, notwithstanding the exorbitant charges exacted for years by the roads from the people, dealt with these corporations, not in anger or in a spirit of retaliation, but considerately and justly, allowing them rates that are, as a rule, liberal and sufflcient.

During the past year suits have been commenced against the Winona and St. Peter Railroad Company for violations of the law, and are now pending in the Supreme Court of the State, where it is expected a decision will be rendered in due time decisive of the principle of this species of legislation, One of the suits was for civil damages, and pros

pro or con.

ecuted by the private parties aggrieved by the overcharges of the company. The other was instituted by the Attorney General pursuant to section 9 of chapter 24 of the general laws of 1871. In order to satisfy the people and every section of the State, that no step calculated to ably present their side of the case to the Court was omitted, and acting on the proverb that there is safety in a multitude of counsel, and not because of any doubt of the ability or fidelity of the Attorney General, but with his consent, I extended an invitation to Judge James Gilfillan, of St. Paul. and Hon. R. A. Jones, of Rochester, to aid the Attorney General in conducting the case in the Supreme Court. Judge Gilfillan accepted the appointment, and rendered valuable services in conjunction with the Attorney General. Mr. Jones was not able to appear.

In the meantime complaints have been general of the continuing abuses practiced by the transportation companies. I think there has never been a time in the history of the State: when the people of all classes felt that their leading, vital interests were more depressed for the want of sufficient transportation, or by the exorbitant charges of such transportation as has been furnished them, as during the past year. Especially is this true of the agricultural classes from whom liberal tolls are gathered at each end of the road, paying, as they do, high rates for whatever they receive, and being compelled to sell their own productions at the lowest living prices. It is claimed to be a well-established fact that the value of the entire wheat crop of the State is dictated by buyers operating in the interest of transportation companies, directly or indirectly that those buyers are given such advantages by these companies, that parties not enjoying similar privileges cannot successfully compete with them; that therefore competition is out of the question, and an unreasonable margin is maintained between the price paid the farmer here and that realized by the speculator in Milwaukee and Chicago. Of course the mill men and buyers of limited amounts take advantage of the rates established by the general buyer, and will pay no more. While the prairie farmer groans under these afflictions, the

settler in the wooded districts complains that the policy pursued by the railroad companies towards him, is such as to amount almost to a confiscation of his property; that at the same time that such policy prevents him from realizing the means from his wood to clear off his lands and convert them into productive farms, thus contributing to the permanent business of the road, its inevitable tendency is not only to discourage settlements upon the vast unoccupied tracts about him, but also to discourage the sale of the companies' own lands as well.

The people of our cities are not without their grievances. Though these cities have given hundreds of thousands of dollars to procure the construction of these roads, that they might enjoy cheap transportation, and especially cheap fuel in this rigorous climate, and have materially aided in developing a vast railroad system of which they are the focal points, with great facilities for the carrying of both wood and coal, they have but recently been threatened with a fuel famine and are still oppressed with prices beyond the reach of the poorer classes, and which must cause not a little suffering and much deprivation. Still, within an hour's ride of these cities the settler realizes for his wood hardly enough to pay him for cutting and hauling it to the station. If this policy were enforced for the benefit of the stockholders or the bond holders of the roads, there would be at least the excuse of self interest to be plead in mitigation, but it is manifestly not so. I am constrained to the conviction that our roads, as a general rule, are not operated in the interests of either of these classes, but for the joint advantage of a comparatively few men who control them, and a favored few outside parties, who are permitted to suddenly amass great fortunes through the means of inordinate profits wrung from their unfortunate victims.

Thus are the true interests of the proprietors and the good of the people, whose liberal donations have built the roads, sacrificed to covert speculation.

The solution of the question of how shall we eradicate or even mitigate these abuses, will fully test your wisdom and

sagacity. Judicious legislation will accomplish something toward the desired reformation, and as an intelligent basis for it I respectfully recommend a searching and far-reaching investigation, through the medium of an able committee. Let the parties to these alleged conspiracies against trade and public policy, be required to make disclosures under oath. If practices not sanctioned by the law of the land and sound morality should be found to be common in the management of these companies, which are largely controlled by non-residents of Minnesota, let our statutes be made to comprehend them. Let a conspiracy against trade, or the entering into a combination to prevent free competition and to destroy values, be made an indictable offense, punishable by fine and imprisonment; and in case the directors or managing officers of a corporation are convicted, let such conviction work a forfeiture of the franchises of the corporation. In addition to the required State legislation, let Congress be memorialized to exercise its constitutional prerogative to "Regulate commerce among the several States," and by an act embracing the entire railroad system of the Union, accomplish what the several States, by their discordant legislation, their deficient legislation, and their non-legislation, can never accomplish, or certainly not so satisfactorily.

But the condition of the people of the West needs to be improved beyond the correction of any irregularities or abuses that may exist. They stand in great need of continuous water communication from the Mississippi River and its tributaries to the seaboard. Rapid as has been the development of the railroad system of the United States for the past quarter of a century, it has by no means kept pace with the increase of productions and the demands of exchange. Let Congress be further memorialized to aid in the construction of the required canals. Ask them for the necessary appropriation to carry to a speedy completion the Fox and Wisconsin River improvement, now controlled by the General Government, and that the Niagara Ship Canal may receive the required aid to guarantee its construction as rapidly as can be done without