a barter of the honor of Florida to avoid any pecuniary responsibility, believing, as I do, that the bond holders must first seek redress from the stockholders of the Bank, before they can, with propriety, look to the ultimate responsibility of this Territory, I cannot recommend the adoption of any measure for their relief, until they shall have pursued, to its full extent, the remedy which the law affords them against the parties first liable on the bonds. Until this is done, no responsibility, in my opinion, can rest on this Territory.

During the past year, the Union Bank of Florida has failed to pay the interest due on the bonds of the Territory issued for its accommodation, and on which its entire capital was raised. But no demand has been made on the Territory for the payment of this interest; and I indulge the hope that the Bank will hereafter be able, as I am sure in good faith it is willing, to meet this engagement, and save the Territory from any embarrassment which might arise from its continued failure to do so.

Notwithstanding the large amount of liabilities which the Bank has retired within the last twelve months, and the curtailment of its circulation, which does not at this time exceed ninety two thousand dollars, its paper has fluctuated in value, and has circulated at a discount of from two to three for one in specie. This extraordinary depreciation of the notes of the Bank does not arise from the present amount of its circulation, which might easily be absorbed in the payment of its debts, but from the embarrassment and necessities of its debtors, who have been frequently compelled to part with the paper of the Bank, at the discount above mentioned, when they might, and under other circumstances would, have paid it at par on their notes in Bank.

The notes of the Southern Life Insurance and Trust Company have nearly disappeared from circulation; and when disposed of in exchange for specie, they have passed at a discount even greater than that of the paper of the Union Bank. It has, however, a very small amount in circulation, which may readily be taken up in the payment of debts due that Institution. It is gratifying to witness the laudable effort of this banking company to retire the certificates guaranteed by the Territory.Since the last adjournment of the Legislative Council, one hundred and fifty of these certificates, for one thousand dollars each, have been returned by its agents to the Executive, and have been cancelled, in conformity with the provisions of the act entitled "An act prescribing the manner of cancelling the faith bonds and guarantees;" which, with the five certificates for an equal amount each, surrendered during the last session of the Council, leave outstanding unredeemed, two hundred and forty five certificates for one thousand dollars each. From the successful efforts heretofore made by this Institution, to take up this paper, as well as from the assurance given by its agents, we

may indulge the hope that, in a short time, the whole number of these certificates will be retired, and the Territory relieved from all the responsibility it has assumed for this banking company.

A reasonable expectation may also be entertained that, in the process of time, it will, under the management, of its present able and judicious agents, overcome its present embarrassments, and be prepared to transact business in a manner profitable to itself, and useful to the country.

From the view I have laid before you, of the present condition of the Banks of the Territory, now in operation, you will perceive that neither of them can, at this time, afford the least facility to the business transactions of the country-that their notes are at so great a discount, and so fluctuating in value, as to give insecurity and a want of confidence in all who are compelled to receive them, in the absence of a better currency.From this cause, and the great scarcity of gold and silver, the circulation of the Territory is now confined, in a great degree, to the paper of the Banks of the neighboring States, many of which are of doubtful credit at home, giving merited distrust of the value of their notes here. The paper of these Banks has either flowed in this Territory in the natural channel of business, to fill the vacuum occasioned by the delinquency of our own institutions, or it has been introduced by design, on the part of their agents, to give it a wider circulation, and increase its credit where the character of the Institution from which it issued is but little known. From the repeated loss heretofore sustained by the people of Florida, in consequence of the sudden and unexpected explosion of foreign Banks, having an extensive circulation among us, we have reason to apprehend similar results hereafter, from the present state of things.

The charter of the Bank of Florida, which has remained dermant for a number of years, has recently been purchased by an individual, for the purpose of putting this Institution again in operation. It is one of the safest and best charters which has ever been granted in this Territory, and provides better than any other against an over-issue, and the consequent depreciation of its paper. The capital stock of this Bank is six hundred thousand dollars; and if put in operation, and conducted according to the provisions of its charter, it may afford all the facilities for commercial purposes, which will probably be required in this Territory for many years. Books of subscription for the stock, I understand, will be opened in a short time; and it is believed a sufficient amount of capital will be paid in to enable the Bank to commence business. If successful, under judicious management, the operations of this institution would give renewed life and animation to business of every kind; it would furnish a sound currency for the country, and drive from circulation the depreciated paper of our own Banks, as well as

the foreign Banks of doubtful credit. A few weeks will develope the views and intentions of this banking company. If the line of policy which it may indicate for its government should be such as to justify a well-founded confidence that it will afford the facilities demanded by the necessities of the country, no other moneyed institution will be required. But if, on the contrary, it should be discovered that this Bank will not af ford a circulation based on specie or its equivalent, adequate to the wants of the country, and to enable the planters to find a market at home for their cotton, and other articles of domestic produce, I then respectfully suggest the propriety of chartering another Bank, for the accomplishment of this desirable end.

Past experience has shown us that this Territory does not require a very large banking capital, and it now exhibits the dangerous and fatal consequences of borrowing money from Banks, for any other than commercial purposes. But the present condition of the country shows with equal force the neces sity of some local institution of this kind, to operate in exchanges, and furnish facilities for the purchase of cotton. It is generally the interest of the planter to sell his crop at the nearest market, where it will command a fair price; and he should not be drawn from his ordinary avocation, and driven to the necessity of shipping his cotton to a foreign market, from the want of any advantage the Legislature can confer on the country.Should it be deemed expedient to charter another Bank, with sufficient guards and restrictions to prevent it at any time from issuing paper beyond its means of redemption, thereby preventing effectually all the evils attendant on a suspension of specie payments and a depreciated currency, I have every confidence that there is an ample fund in the hands of individuals unemployed, which would be invested in the capital stock of such an institution; that it would very soon be put in'operation, and contribute greatly to relieve the present depressed condition of the country.

There is no portion of the United States where a banking institution with a limited capital is more required, or could be better supported than Middle Florida. Although the settlement of this country is yet in its infancy, and improvement of every kind has been greatly retarded by seven years continuance of the Seminole war, the export from two of the Gulf ports alone, during the present year, is estimated at not less than one hundred and sixty thousand bags of cotton. This, even at the present depreciated value, exceeds the sum of three millions. of dollars, and would enable a Bank to operate exclusively in exchange, to its own, and the general advantage and convenience of the country.

I have endeavored, as far as practicable, to enforce the law passed at the last session of the Legislative Council, entitled" An act to organise and regulate the militia of the Territory of

Florida, and repeal all former acts in relation to the same." A partial organization has generally taken place throughout the Territory, and in some counties the law has been executed with all the fidelity which the situation of the country would admit. But it many others, there has been an apparent negligence, and a want of that military pride and spirit, so essential to the discipline and usefulness of the militia. I have used every effort in my power to obtain a report of the military strength of the Territory, in order that the return required to be made to the Adjutant General of the United States Army, by the act of Congress, passed in the year 1803, might be furnishing. In this I have been unsuccessful; in consequence of which, the Territory will loose another year the quota of arms and accoutrements directed by the act of 1808 to be annually distributed among the militia of the several States and Territories of the Union, in proportion to their numbers, to be ascertained by the returns made to the Adjutant General, under the provisions of the act of 1803. Our delinquency in not making these returns for several years past, has exposed us to the remark and just admonition of the General Government. In the year 1840, my attention was specially called to this subject by a letter from the Secretary of War, although I had previously done every thing in my power to comply with the provisions of the act of 1803. In my last annual message, I urged in forcible terms, the necessity of providing by law, under appropriate penalties, for neglect of duty or disobedience of orders, for a better organization of the militia, and for the returns of military strength, required by the act of 1803. But the act passed in pursuance of this recommendation, having provided for no returns to be made until after the company musters, which it requires to be held on the first Saturday in January of the present year, the Generals of Brigade have been unable to anticipate the time, and furnish them at an earlier period. The law, so far as I have power to enforce it, shall be rigidly executed; and notwithstanding the apathy which generally prevails on this subject, I trust there will be in a short time an organization of the militia of the Territory as perfect as the sparse population of some portions of the country will admit; and that we shall be enabled, during the present year, to furnish the returns to the Adjutant General required by the act of Congress, and hereafter receive regularly the proportion to which we are entitled of the arms. and accoutrements provided for distribution by the bounty of the General Government.

I present herewith for the information of the Legislative Council, the annual reports of the Auditor and Treasurer of the Territory, from which you will perceive that there was, on the 17th day of December, 1812, a balance remaining in the Treasury (exclusive of the School fund) of $26,79 cents, and that the outstanding warranns for claims on the Treasury, at

the same time, amount to $16,483 41 cents. The expenses of the Territory for the prosecution of criminals and other necessary expenditures, during the past year, have exceeded the revenue collected during the same period 3,526 00. This increase of the public debt, will probably continue in the same ratio from year to year, until the Legislature shall provide for an increase of revenue, or a diminution of the expenses of the Government. The report of the Auditor shews a balance due the Territory, from delinquent officers, and other sources, amounting to $51,137 22 cents. This sum embraces the delinquencies of the last ten years, and far the greater number of the defaulters have died, absconded or become insolvent. The sum of $6,765 91 cents appears to be due from the Government of the United States, and may at some future day be collected. But with this exception, it is not believed that five per cent will ever be realised from the whole balance reported to be due the Territory. I therefore deem it proper to renew the recommendation contained in my last annual message, to increase the revenue of the Territory, to an amount equal to its annual expenditures, and the liquidation of all just demands against the Treasury. This, it is believed, may be done by a judicious and equal system of taxation, without material inconvenience to any portion of the people. The large grants of land, owned principally by individvals, non-residents, should be subject to taxation in every part of the Territory, in the same manner as similar tracts.— These grant have had a tendency to prevent the settlement of the lands which they cover; and many of them containing hundreds of thousands of acres, and by the assessment of a very small tax per acre, will produce a considerable revenue to the Territory. Counties with a very sparse population, without oppression or injustice to any one, may yield a revenue nearly equal to that of the most populous. The extent of these grants affords no well founded argument, why the land which they embrace, should not be taxed for the necesary support of the Government. They are certainly no more entitled to exemption than any tract of an eighth or quarter section of land, purchased from the Government and settled by individuals. A single year's revenue, derived from a very small tax on lands, would of itself, be sufficient to discharge the entire debt of the Territory, and the ordinary receipts of the Treasury, if properly directed, would, it is believed, be sufficient to defray the current exednses of the Government.

On this subject, however, I deem it proper here to invite the particular attention of the Legislative Council, to the report of the Au. ditor of the Territory, on the several sums, respectively stated by the Auctioneers, as due from them, or paid into the Treasury on account of the tax on auction sales. It will be discovered, and perhaps not without surprise, that three Auctioneers, in the city of Tallahassee, have reported a revenue from sales at auction during the past year,