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manifest injustice should be at once corrected, and it may be done without increasing our Funded Debt, by placing to the credit of the School Fund uncancelled bonds of our Civil Funded Debt, as they are redeemed, until the full amount is restored.

The Act of March sixteenth, eighteen hundred and fifty-nine, directs the Board of Examiners to purchase bonds of the Civil Funded Debt of the State, with all moneys received for School Lands. The amount of bonds purchased under this Act, previous to the date of Treasurer Findley's last annual report, was seventy-nine thousand dollars ($79,000.) On the fifteenth of March, eighteen hundred and sixty-two, there were purchased by the Board bonds to the amount of twenty-two thousand five hundred dollars, ($22,500,) for which the sum of eighteen thousand six hundred and thirty dollars ($18,630) was paid. On the fifteenth of November, eighteen hundred and sixty-two, there were purchased by the Board bonds to the amount of eighteen thousand five hundred dollars, ($18,500,) for which the sum of seventeen thousand five hundred and eighty-five dollars ($17,585) was paid. Total amount of bonds realized to the School Fund under the Act of March sixteenth, eighteen hundred and fifty-nine, is one hundred and twenty thousand dollars, ($120,000.) This sum will be increased by the balance now in the School Land Fund to one hundred and fifty thousand dollars, ($150,000.)

There is unpaid to the Schools, on the appropriation of May last, for interest accruing in eighteen hundred and fifty-eight, eighteen hundred and fifty-nine, eighteen hundred and sixty, and eighteen hundred and sixty-one, the sum of seventeen thousand one hundred and forty-seven dollars and twenty cents, ($17,147 20,) while of the sum of thirty-three thousand two hundred and eighty-six dollars and forty cents, ($33,286 40,) appropriated for the year eighteen hundred and sixty-two, none has been paid. The principal and the interest of these funds should be held of the most sacred character, both because of the obligations imposed in their receipt, and the object for which they were intended.

Our State has the means in her ownership of lands, if the proceeds are properly cared for, to become possessed of a magnificent fund for the endowment of her Common Schools. We are bound to hold this trust sacred, by every principle of good faith to the source whence the trust came, and to those who are to become its immediate recipients. If we would secure real progress and permanent prosperity to our young and vigorous State, its educational interests must not be neglected; on the contrary, they should be nursed with an earnest purpose, and cherished with a liberal hand.

In this regard we may read with profit the history of the older States of our Union. In those communities where the system of Schools is the most perfect, and money is most freely lavished for the education of youth, loyalty and industry are the rule, and treason and indolence the exception. In those States, too, crime is less frequent, and as a consequence, the people are not burdened with excessive taxation to keep up prisons and other institutions of a penal and reformatory character. In States where little attention is paid to schools, statistics show that the reverse of this proposition prevails. Let California ponder the lessons which these contrasts teach.

No exhibit has yet been made by the Superintendent of Public Instruction, for the year eighteen hundred and sixty-two, but estimating from the tables of the previous year, the number of children between the ages of four and eighteen years will now reach nearly eighty thousand. The number under four years of age is about forty thousand. The number

attending Public Schools will not probably exceed thirty-five thousand, and of these, more than one half do not attend six months of the year. Thus it will be seen that there are forty-five thousand children, between the ages of four and eighteen years, who either do not attend School at all, or attend private Schools; the latter class probably bear a small proportion to the number indicated.

The total valuation of Public School property of all kinds, will this year no doubt reach the sum of a million of dollars, while the receipts for School purposes, including local taxation, will be about half a million. These approximate statistics will show you the present condition of our Common Schools.

THE SURVEYOR-GENERAL'S REPORT.

This is a valuable addition to the reports of that important office, and contains a large amount of statistics and other information upon subjects of vital importance to the State. It sets forth with great clearness the condition of our landed interests, and suggests various recommendations to which I would invite your earnest attention. It appears from this report that California has received from the General Government, in her munificent donations of lands, nearly nine millions of acres, of which over seven million acres are devoted to educational purposes. This is a vast interest, present and prospective, entrusted to our people, and, in connection with which, their representatives cannot weigh with too much care the various considerations that present themselves.

Other topics of great importance are ably treated by the SurveyorGeneral, and the reliable character of his statistics will render them a valuable addition to the archives of the office over which he has control.

SWAMP LANDS.

The Swamp Land Commissioners submit a voluminous report of their past year's proceedings. From its great length I have not been able to do it that justice which it doubtless deserves. I gather from it, however, that they have segregated a large amount of Swamp Land, and obtained proof that it belongs to the State. They have established thirty-eight Swamp Land Districts, containing four hundred and eighty-five thousand two hundred and fifty-two (485,252) acres of land, and by scientific investigation have ascertained that each and all of them can be permanently reclaimed. The amount of money expended by them is seventyeight thousand eight hundred and ninety dollars and sixty-four cents, ($78,890 64,) of which eighteen thousand one hundred and fifty-seven dollars and ninety cents ($18,157 90) was paid into the Sacramento City Levee Fund, in connection with which a small amount of lands were reclaimed. These, so far as I am informed, or have been able to ascertain, are the only Swamp Lands reclaimed under the Act which created this Commission. Truly, but little seems to have been accomplished for so great an expenditure. If I am mistaken in this conclusion, no doubt the report transmitted herewith will indicate the error.

The Commissioners are of the opinion that, if furnished with a Secretary and Office Engineer, the Board might be reduced in numbers from five to three. I am of opinion that the duties of this Commission properly belong to the office of the Surveyor-General, and that that officer could perform them with a slight additional expense to the State.

I would respectfully call the attention of the Legislature to the Commissioners' report and the suggestions therein contained, and submit the whole subject to your wise deliberation.

GEOLOGICAL SURVEY.

The report of the State Geologist will furnish you with a history of the work hitherto performed by him, and a statement of what is needed to continue and perfect the labors already undertaken. Aside from the valuable addition to science which the explorations and investigations of this officer will make, almost every interest of the State will be more or less benefitted by the publication of the details of his survey. This will be particularly the case with the great mining interest, which was the very foundation of our State, and which still contributes with unceasing flow to our prosperity. If no other branch of our industry were affected, this alone would be sufficient to justify the necessary expense from year to year of a careful and thorough geological survey of the State.

MINES AND MINING.

The question of taxing mining claims by the General Government, after a long slumber, seems to be again revived. The agitation of this subject I cannot but regard as extremely impolitic. In a vast majority of claims it is impossible to estimate their value above what they may afford to the laborer from day to day, and with most of the balance there can be no ascertained permanency or reliableness of value upon which an assessment could be made with confidence or with satisfaction. A tax upon these claims can never be laid that would be just in its burdens or equitable in its results. When the sagacity and toil, the anxiety and patience, of the miner are rewarded with success, the results of that success become the subject of taxation and the source of revenue. There can be no question that the people of the United States have reaped a greater harvest of riches from our mines, under the liberal policy of the Government hitherto pursued, than they would have done had the discovery of our mineral wealth been immediately followed by Federal burdens, which must, of necessity, have been unequally imposed. It is a well known fact, that the yield of our mines finds an almost immediate distribution among our people, a fact that tends as much to strengthen the Government as though that yield went directly to her coffers. It is also well known, that while their yearly product is now equal to what it ever was, and while other interests and other communities are, through this influence, increasing rapidly in wealth, the mining communities do not advance-in fact, it is a question if they do not retrograde year by

year.

Is it well, then, to place any discouragement upon an interest of such vast importance? Should it not rather be carefully fostered and judiciously encouraged?

Improvements above a certain amount upon mining claims, might, very justly, be made the subject of taxation, with every other species of property which is created by wealth, industry, or skill; but if the General Government shall determine to change her policy as to our mines, and must have revenue direct from thom, it were better to dispose of the lands upon which they are found, in small quantities, having a just regard to the acquired interests existing under the past policy of the Government relative to them. I can see no good reason why the Government should retain to her use mineral lands more than agricultural lands, for both must be equally developed by the industry of individuals, and both, without that industry, would be valueless to a nation.

Is, then, the General Government forever to retain these mineral lands, which occupy so great a portion of our territory, over which all the pro

tection of our laws is extended, and our State never to tax the lands, whether she may think it policy or not to tax the mines? The subject is one of importance, but I cannot here discuss it to the extent which it deserves. It is a good rule, however, "to let well enough alone," and is seldom departed from with advantage.

AGRICULTURE.

Of all the varied interests of our State, there are none more important, or that promise more cheering results in their future development, than that which has for its object the cultivation of the soil. Our lands and our climate are yearly becoming better understood, and there is a growing inclination to multiply our resources in an improved and diversified increase of our productions. But there is still much room for immediate improvement. Possessing, as we do, a soil teeming with agricultural wealth, it is much to be regretted that our importations of the products of the dairy, the orchard, the vineyard, and the farm, should still be of such magnitude as are indicated by the published tables of mercantile

statistics.

There are imports into our State which amount, annually, to millions of dollars, the production of which would be perfectly feasible upon our generous and prolific soil. Of these we can and should not only produce sufficient for home consumption, but they should become articles of export, and take their place in foreign markets, side by side with the California cereals which are in so much demand.

Agriculture is the great source whence come the necessaries and comforts and many of the luxuries of life. It is an employment that is at once invigorating and ennobling, and when wisely pursued, where nature has been as bountiful as she has been with us, and where other advantages permit, it becomes the means of creating commerce, of inducing manufactures, and of accumulating wealth.

The Legislature of last winter passed a most salutary law, which of fered rewards in various amounts to stimulate an interest in home productions. This law could most wisely be extended to embrace other articles not therein enumerated.

In connection with the subject of Agriculture, I reaffirm the views expressed in my Inaugural, with reference to settlements upon public lands. I there said:

"It is the policy of the General Government, as it is of the State, to encourage settlements upon lands belonging to the public, and in furtherance of such policy, liberal inducements are offered. Yet, under the ruling of our Courts, the settler, who has gone in good faith upon private lands, not segregated, supposing them to be public, and, in fact, even when upon the public domain, may yet be dispossessed by one whose only claim is that he owns lands within boundaries that include the property in question. That a person who owns or claims but one league of land, should be able to hold, control, and dispossess others from a hundred leagues, is not only manifestly unjust to individuals, but is also to the great detriment of agriculture and the settlement and development' of the resources of the State. I cannot but think that some legislation should be had whereby the settler, who in good faith has gone upon private lands not segregated from the public domain, under the supposition that he was locating upon lands belonging to the Government, should receive such equitable protection as the State is able to give."

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THE PACIFIC RAILROAD AND COMMERCIAL INTERESTS.

I congratulate you upon the fact that this great work, for which Califor nia has so long and so earnestly labored, is commenced, and will be urged, I trust, as far as our State is concerned, to a rapid completion. So much has been said and written upon this subject-its advantages as a means of protection and increase of population-its opening up to us of new and extensive markets-the benefits to be derived from the stimulus it will give to the populating and developing the mineral resources of our State and of the Great Basin-leaves but little for me to offer, even did not motives of a personal character prevent me from indulging at greater length upon the subject, or of offering recommendations or suggestions relative thereto. Still, I cannot forbear alluding to the subject, if only to acknowledge, on the part of California, the magnificent aid granted by Congress to further its construction.

The question of time in the completion of this great work, whether it be a year earlier or a year later, is to California one of millions of dollars to her assessable property, and other millions to her business in

terests.

The natural advantages of California, combined with her geographical location, give assurance of a brilliant future, such as the world has seldom seen. San Francisco, her commercial emporium, is destined to become the seat of a vast mercantile power, which will make her the envy and wonder of modern, as Tyre, Tadmor, and Venice, were of ancient times. Sitting upon her hills like a crowned queen, as she is, with the most magnificent bay in the world spread out at her feet, she is destined to receive the wealth of Eastern commerce, undisputed by any alien power. The products of China, of India, and of Japan, will be poured into her lap, and thence transported to supply the wants of the many millions destined to find a home in that vast central valley of the North American Continent, watered by rivers to which the Danube and the Rhone are but rivulets. Situated on the one hand at the very gate of the Orient, a share in whose trade has ever led to commercial greatness, and on the other connected by an Iron Highway with the vast valley of the Mississippi, California's principal city may become the seat of a commerce hitherto unknown on this continent.

How boundless, how magnificent, the prospect thus opened and within our grasp! The vales and hillsides of our fertile State, tilled by millions of industrious husbandmen-our gold-bearing fields yielding their hidden wealth to the miner's persistent efforts our neighboring Territory, (soon to become a State,) under the influence of labor, and skill, and capital, giving out its streams of silver and gold, surpassing the riches of the land of the Incas-our ships whitening with their sails the peaceful expanse of the broad Pacific-our manufactures, started into new life, availing themselves of our now useless waterfalls, and filling our marts of trade with the hum of industry; all this may be accomplished if we have but the will and the energy to take advantage of the current of events, which point unerringly to these results.

Situated as we are, in a position to command the East and the West, we have but to avail ourselves of these natural advantages to place our commercial metropolis and State beyond the fear of rivalry, or the dread of competition. The future cannot be doubtful if California be true to herself. For the realization of this bright promise no burdensome taxation is necessary, no aid from the State Treasury is required; nothing but the enterprise that appreciates golden opportunities, and the energy that commands success.

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