If to this sum is added the $250.000 renewal revenue bonds also paid in 1881, issued under the act of May 9, 1879, will make the aggregate reduction of $362,000 of the liabilities of the State, within those two years.

This large sum of interest annually paid on the bonded debt of the State is a heavy draft on the energies and industries of our people, and should be reduced as rapidly as possible by the reduction of the debt. This can only be accomplished by severe economy in the appropriations of your respective bodies. I do not suggest parsimony, which, if carried to too great an extent, is as productive an evil as profligacy, but that judicious economy which is impressed with enlightened statesmanship and a proper conception of the destiny of our prosperous State.

Not having been supplied with the necessary data, I am not able to make a definite estimate of the amount of money necessary to be raised by taxation for carrying on the State government for the years 1885 and 1886. I think the amount will approximate $2,500,000, which will not materially differ from that of 1883 and 1884. The increased population of the State, with the necessarily increased demands upon its resources, may increase that sum a few thousand dollars.

The following table shows the receipts from all sources, with the disbursements, transfers and balances for the year ending December 31, 1884:

The revenue laws of this State are not perfect by any means. It is especially defective in that part governing assessments. I think that office should be a salaried one, commanding better pay and better talent. I call the attention of this body to a letter of especial merit. from Tandy H. Trice, collector of Buchanan county, in reference to the defective points in the revenue law. It is now in the hands of the State Auditor, and will be laid by him before the Committee on Ways

The above statement includes bonds issued to the Hannibal & St."

Joseph Railroad Company.

The annual interest on the public debt, as it existed January 1, 1883, amounted to $1,018,680.

As it now exists, the annual interest amounts to $910,490.

The annual interest on the bonded debt, as it now exists, is $708,180. On the certificates in the School and Seminary Funds the annual interest amounts to $202,310.

These tables show an increase in valuation in 1882 over 1881 of $47,544,369.11. In my former message to the legislature this language was used: "If the rate of increase in values is as great for 1883 as 1882, I think the valuation will exceed $700,000,000." It exceeded my anticipation. It is $725,775,259.45, an actual increase of 1883 over that of 1882 of $76,508,016.59, an increase of $122,052,385.70 in values for the years 1881, 1882, 1883. This rapid increase in values must soon secure a reduction of taxation, the desideratum of all good government. Under the constitution, the rate of State tax cannot exceed forty cents on the $100 valuation. Section 8 of Article 10 of the Constitution reads as follows: "The State tax on property, exclusive of the tax necessary to pay the bonded debt of the State, shall not exceed twenty cents on the hundred dollars valuation; and whenever the taxable property of the State shall amount to $900,000,000, the rate shall not exceed fifteen cents." If the large number of bonds, notes and other evidences of debt, now held in concealment within and without this State by its citizens, were honestly given in to the assessors, that amount would be largely exceeded at the present time. If, in the wisdom of this legislature, the expenditures of the public money should be carefully guarded, and made only in the reduction of the existing State debt, in the preservation and enlargement of its various institutions of learning, and to carry on the necessary expenses of the State, then in my opinion we may begin to look to an early day, when the reduction of taxation may be had-I hope before the next general assessment of property is made, which will be in two years from this date.

PUBLIC DEBT.

The public debt has been reduced during this administration as follows:

If to this sum is added the $250.000 renewal revenue bonds also paid in 1881, issued under the act of May 9, 1879, will make the aggregate reduction of $362,000 of the liabilities of the State, within those

two years.

This large sum of interest annually paid on the bonded debt of the State is a heavy draft on the energies and industries of our people, and should be reduced as rapidly as possible by the reduction of the debt. This can only be accomplished by severe economy in the appropriations of your respective bodies. I do not suggest parsimony, which, if carried to too great an extent, is as productive an evil as profligacy, but that judicious economy which is impressed with enlightened statesmanship and a proper conception of the destiny of our prosperous State.

Not having been supplied with the necessary data, I am not able to make a definite estimate of the amount of money necessary to be raised by taxation for carrying on the State government for the years 1885 and 1886. I think the amount will upproximate $2,500,000, which will not materially differ from that of 1883 and 1884. The increased population of the State, with the necessarily increased demands upon its resources, may increase that sum a few thousand dollars.

The following table shows the receipts from all sources, with the disbursements, transfers and balances for the year ending December 31, 1884:

It

The revenue laws of this State are not perfect by any means. is especially defective in that part governing assessments. I think that office should be a salaried one, commanding better pay and better talent. I call the attention of this body to a letter of especial merit from Tandy H. Trice, collector of Buchanan county, in reference to the defective points in the revenue law. It is now in the hands of the State Auditor, and will be laid by him before the Committee on Ways

and Means.

An efficient revenue law is the source of much strength to the State; a bad one of corresponding and vexatious weakness. Since I have occupied the executive office, my official intercourse with the Auditor's office has been pleasant and instructive; finding the Auditor ready at all times to give me desired information and valuable. aid in the interest of the State.

FUNDING THE PUBLIC DEBT.

The bonded debt of the State now amounts to $11,803,000, and matures as followe:

Of this sum this General Assembly must provide for the payment or funding of the following portions which mature before the ThirtyFourth General Assembly shall convene:

There will be in the treasury on the 1st day of January, 1885, $1,413,895.37; of this sum $1,200,000 can be safely used in a further reduction of the debt, leaving upon that calculation an existing debt of $932,000 to be provided in 1885 and 1886. I think the incoming reve

nues during the year 1885 will meet that sum, leaving only the bonded debt maturing in 1887 to be provided for in some way. To be prepared for any emergency that may arise, I suggest that such legislation be had as will provide for the whole of the debt maturing in 1886 and 187. If the revenues of 1885 are sufficient to defray the expenses of the State government during the year, and a sufficient surplus be left to pay the sum maturing in 1886, then such legislation can do no harm. The State should be subjected to no hazards.

I think the State will have no difficulty in refunding that portion of its debt that matures in 1886-7 at a lower rate of interest than it is now paying, and the bonds will be readily sought at a premium. This is the tribute that the financial world pays to the "uniformly economical and careful administration of the affairs of the State."

No arbitrary prices can now be fixed by this body at which to fund. the debt. It will be wise to leave it, to a large extent, to the discretion of the Fund Commissioners, only restricting the limit of the bond to twenty years, payable after five years, and not to bear a higher interest than four per cent. The terms and the conditions under which we are called upon to provide for these maturing bonds are quite favorable. Our debt has been rapidly reduced during the last ten years, while the revenues of the State are being constantly increased, and its capacities. steadily developed. The organic law of the State places such an insurmountable safeguard around its debt and credit that no evasions can be made, by even the most adroit, of its iron rules and sacred determination. These considerations place our bonds in high estimation upon the stock boards of our country.

SINKING FUND.

There was appropriated by the last General Assembly $900,000 for the redemption and purchase of the bonds of the State. It is re gretted that a larger sum had not been appropriated, as it could have been wisely used by the Fund Commissioners. As it is, a large sum was left idle in the treasury for many months, which could have been used for the redemption and purchase of interest-bearing bonds. Hereafter such errors should be avoided. If the money is not demanded in the interest of the State and for the special purpose for which appropriated, the mere act of appropriation will do no harm.

HANNIBAL & ST. JOSEPH RAILOAD CASE.

In my last message to the legislature the controversy between the State and the railroad was fully presented up to the status then reached