YOM JIF .17. NEW SERIES. COVERSOn_MBSSICB. To the Honorable, the Senators and .Members ; of Hie House of Representatives of the. Com- ' monwealth of Pennsylvania : •GENTLEMEN :—ln submitting to the Genera! ! Assembly my last annual communication, it is the source of unleig -i gratification to be able to announce to the • .pie, am. to their Kepre sentati es, that n -withstanding the present un- 1 favorable crisis HI the monetary affairs of this country, and the general prostration of business and credit, the financial condition of Pennsyl vania is highly satisfactory. The receipts at the State Treasury, from all sources, for the fiscal year ending on th 30th of November, 1860, were $3,479,257 31, to which add the available balance ;n the Treasury on the Ist day of December, 1859, $839,323 09, and the whole sum available for the year will he found to be $>..318,580 -to. The ex p. nditure?, for all purposes, "for the same peri- 1 od, were $3,637,147 32. Leaving an availa ble balance in the Treasury, on the Ist day of December, 1860, ol $681,4-33 08. The fol lowing items are embraced iu the expenditures for the fiscal year, viz : Loans redeemed, $664,857 65 Relief notes cancelled, 1,811 00 Interest certificates, 2,439 52 Domestic creditors' certificates, 5 40 Damages on the public works, and old claims, 22,644 32 Making, of the public debt actually paid during the year, the sum ot, 691,757 89 The funded and unfunded debt of the Com monwealth on the first day of December, 1859, was as follows : FUNDED DEBT. 6 per cent loans $400,63) 00 5 do 37,625,153 37 4j do 388,200 00 4 do 100,000 00 Total funded debt 33,513,983 37 UNFUNDED DEBT. Relief notes in circulation, $101,213 00 Interest certificates outstanding 18,513 82 Do unclaimed 4,448 38 Domestic creditors 802 -60 Total unfunded debt 124,977 70 , Making the entire debt of the Common- 1 wealth, at the period named, $35,63?,96l < 07.- The funded and unfunded debt of the State, at the close of the last fiscal year, December I,j iB6O, stood as follows : FUNDED DEBT. 6 per cent loans $400,630 00 ; 6 do 36,967,295 721 4i do 381,200 00! 4 do 100,000 00 Total funded debt 37,849,125 70 | UNFUNDED DEBT- Relief notes in circulation $99,402 00 , Interest certificates outstanding 16,074 30 ! Do unclaimed 4,448 38 j Domestic creditors'certificates 797 10; . i Total unfunded debt 120,721 7S Making the entire public debt of Pennsylva nia, on the Jst day ot December last, $37,969, 547 50. To pay the principal and interest of these debts, besides the ordinary sources of revenue, the Commonwealth holds the following mort gage bonds, derived from the sale of her pubiic improvements, viz : Bonds of Pennsylvania railroad company, $7,200,000 00 Bonds of Sunbury ar.d Erie rail road company, 3,500,000 00 Bonds ot Wyoming canal company 281,000 00 Total, 10,981,000 00 At the close of (he fiscal year, on the first day of December, 1857, the public debt of this Common wealth, funded and untuned, was $39,881,738 22 It is now, at the close of the fiscal year, 1860, 37,969,847 50 Having been reduced, during the last three years, 1,911,890 72 The available balance in the Trea sury on the first day of Decem ber, 1857, was 528,106 47 On the first day of December, 18- 60, it was, 681.433 08 Exceeding the former balance in the sum of 153,326 61 Add to this the sum paid at the Treasury during the past three years, lor debts and claims a gainst the Commonwealth, ari sing out of the construction and maintenance of the public im provements, and which was sub stantially a part of the unfunded debt ot the Commonwealth, a ir.ounting to 171,664 82 And we have the sum of 324,991 43 By adding this sum to the amount paid on the public debt from December 1,1857, to De cember 1, 1860, to wit : $1,911,890 72, it will be found that during the past three years j the State has not only met all her ordinary li- j abilities, including the expenses of the govern ment, and the interest on her public debt, but : has diminished her actual indebtedness the 1 sum of $2,236,882 15. When it is remembered thai for the last three vears the tax on real and personal estate has seen but two and a half mills on the dollar, while from 1844 to 1857 it was three mills— tiiat for the past two years and six months the i r'ate has received no part of the tax on ton- ! nage due from the Pennsylvania railroad com- ! pany—and that since July, 1859, the interest I on tfie bonds held by the State against the Sun | btirv and Lrie railroad company has remained | due ami unpaid, it is certainly cause for hear ty congratulation, that, without aid from these iindortant sources of revenue, so great a reduc tion ot the public debt has been accomplished 'in comparatively so short a period. The fun ded debt of the State is now less than it has , been since 1842, and the unfunded and floating debt, which at that time arnounded to upwards ! of two millions of dollars, has been almost en t.rely redeemed. It is now reduced to $l2O, i2l iS—and ol this sum over ninety-nine thousand dollars consists of relief notes, most of which are undoubtedly either lost or destroyed and will, therefore, never be presented for pay ment. The claims against the State, accruing from the construction and maintenance of her canals and railroads, are now reduced to a mere nominal sum ; and, in the future, after providing fur the ordinary expenses ot govern ment, her revenues and her energies may be ex clusively applied to the payment of tile inter est, and the discharge of the principal of her public debt. The people o! this Commonwealth have hith erto m>-t, vvith promptness, the demands made upon them, from time to time, for the ways and means of "replenishing the Public Treasury; and now, that they see that the onerous debt with which they nave so iong been burdened, is each year certainly and rapidly disappearing —that tile amount required to meet the interest is annually being diminished—that consequent ly a still greater sum can each year he devoted to the reduction of the principal of the debt, without r.-s irting to add it i >nal sources of reve nue—and tha:, with a proper husbanding of the resources of the State, the day is not lar distant when direct taxation in Pennsylvania will cease altogether—Uie payment of such taxes as may for the time be required to meet the pub lic necessities, will continue to be met with cheerfulness and alacrity. Put they will un questionably hold those to whose care Illsv have entrusted ihe financial interests of the State to a tigid accounrabiiyty. That there should, at this particular juncture, when the business and monetary afiatrs of the country are so greatly depressed, be the strictest economy in public expenditures, is so manifest, that it can scarce ly be necessary to call attention to so plain a duty. It is equally clear that any legislation . winch would, tend greatly to lessen the ieve i nues ol the Commonwealth would, at this time, j be peculiarly unwise and inexpedient. The I exigencies ot the future no man can foretell the prospect before us is beclouded with d.pbt i and uncei taiuty—it is, therefore, no mure than I the p art of w tsdom to guard, with unceasing vigilance, all our present sources of revenue, j and to thus t e prepared k t +*)ssibie con tingency. Since July, 1858, the Pennsylvania railroad ! company has refused to pay the tax on tonnage required to be paid by the act incorporating fhe J company, and its various suplements ; and. ; there is now due to the State, on that account, J exclusive of interest, the sum of $674,296 22. < Including the intrest, the sum now due is about $700,000. Before my last annuafimessage was • communicated to the Legislature, a case had i been tried in the court of common pleas of , Dauphin county, between the Commonwealth j and the railroad company, involving the qin-s --| tion of the constitutionality of this tax, which ' was decided in favor ot 'he State, and the im | position of the lax pronounced constitutional. | In January last, another suit was tried between i the same pirties, in the same court, involving j the same question, with a like result. In De | cernber last, a judgment was obtained in the dis j trict court of Philadelphia, upon one ol the ; semi-annual settlements, for SIIO,OOO. So j that judgment lias been ob'.aioed lor $365,000 j ol the debt, being the whole amount which be i came due prior to 1860. The tax, which ac , crued during the past year, amounts to S3OB, I 829 03. The first settlement for the year is j before the Dauphin county court, on an appeal i taken by the company , and the second, or last j settlement was made hut a few days since by the accountant department of ttie Comrnon j wealth. I After the recovery, in the common pleas of j Dauphin county, the cases were removed by j writs of error, taken on behalf of the defend j ants, to the Supreme Court of this State, where j they were argued in June last, and in October | that tribunal sustained the decision of the court ; of common pit as, and held the tax to be clearly ! constitutional jthus uniting with the law ma i king power in affirming the right of the State | to tax a corporation under a law to which it ; owes its existence. But, notwithstanding this j concurrence ol opinion and action on behalf ol the constituted authorities ot Pennsylvania, j the litigation is not \et an end ; for the rnil j road company has recently removed the casts, I by writs of error, to the Supreme Court of the j Untied States, where they are now pending. That the decision of that court will, when made, hilly sustain the right of a Sovereign i State to enforce a contract between the State . and a corporation, and entirely vindicate the ' power i)i a State to impose such taxes upon corporations, as in her sovereign will she may deem proper, I cannot for a moment doubt. To complete-the history of this important litigation, and to show (hat every eilort has been, thus far, made to compel the payment of this large sum of money into the Treasury of the State, it is proper to add, that the law offi cer rf the Commonwealth, being of opinion that the writs of error were not issued from the Supreme Court ot the United States in time to prevent the collection of the judgments render ed in the State court?, execution Jwere'issued to the sheriff of the county of Dauphin, and pro ceedings are now pending in the Supreme Court of this State, to determine whether the Com monwealth can compel the payment of the judgments already recovered, before the final decision by the Supreme Couit ol the United States. The Sunbury and Erie railroad company hav ing failed to negotiate its mortgage bonds in BEDFORD, PA., FRIDAY MORNING, JANUARY 11, irl. their present condition, .the expectations con fidently entertained ol an early completion of that most important improvement, have not been realized. The work during the past year, however, although greatly retarded, has been continually progressing ; upwaids of one mil lion of dollars having been expended on the line fioni November 1859, to November iB6O. The v.hnle length of the road, from the borough ol Stirfbnry to the harbor on the lake, ot the city ol E ie, is 288 miles ; of which 148 miles are now finished and in operation, and 115 miles of the remaining portion ol the line are graded : leaving but twenty-five miles yet. to grade. Pennsylvania ! s largely interested in the early completion and success of this gr--at thoroughfare, not only because she is the cred itor of ttie company to the amount ol three and a half millions of dollars, but for the additional, and more cogent reason, that the impiovement, when completed, will open one ol the most important channels of trade between the city of Philadelphia and the great lakes of the wes\ at Hi- best barber op Erie, entirely within the limits of our own State, which has ever been contemplated. Tt will, moreover, devel op the resources of a large portion of North- Western Pennsylvania, abounding with the richest minerals, and a large lumber region of unsurpassed excellence, which ihe munificent hand ot the State has hitherto totally neglected. By disposing ul her branch canals to that com pany, in exchange for its mortgage bonds, the State has already largely aided in the construc tion of this great work ; and it may be ne cessary, to insure its completion, tnat further legislation should be had in order to reader the means of the company available. It is evident that a liberal policy, on the part of the govern ment, will promote alike the interests ot the Gommonwealth and the railroad company . nevertheless, great care should be takeu to pro tect, as lar as possible, the debt now due from the company to the State. If all propositions which may lie made for a change in tlie secu rities now held by the Commonwealth, be care fully considered by the Legislature, and no more yielded than sound economy demands, with proper provisions lor the due application of whatever means may be realized, it is be lieved, that sufficient relief can be gianted to the company, to enable it promptly to finish thp road, while the security remaining will be fullv adequate to insut e the ultimate payment ol ttie principal and interest ol the bonds ol the railroad company now held by the com:noii wealth. I commend this subject to the Legisla! if-p, as one entitled to its most carelul considerately as well oil account ot its vast importancejui that petition of the State through wh;ti*et rarh'7R birt > enables banking institutions already in existence • to continue their business for twenty ytars af- I ter the expira'ion ot their present charters, up on complying with its provisions, by withdraw ing their old circulation, and givpig th" secu rities required for redemption of (heir new is sues. ihe pubiic, lam sure, will rejoice that no further necessity exists for legislative action either on the subject of creating new, or jre-cnar teriugold banks; and that the time and atten tion ol their representatives will now, happily, be no longer monopolized in the codsideration of a subject hitherto productive ot so much strife and contention, it not of positive evil. The rapid increase of private banks, through out the Mate, makes it eminently right that they should be placed under proper [legislative restrictions, and that the large amount of capi ta), thus employed, should be made to contril>- ute its fair proportion to the revenue? of the Commonwealth. Their business, in the aggre gate, is now believed to amount to a sum almost it not quite, equal to the whole business, in the regularly chartered banks ; and yet it is entire ly unrestricted, and with the exception of a merely nominal license tax, is free from taxa tion. This is unjust to every other class of our | tax paying citizens, and especially so to | the banking institutions holding charters from j the Commonwealth, for which they have each j paid a liberal bonus, and are, in addition, sub j ject to a very large tax on their dividends. I respectfully commend this subject to the atten : tion ol the Legislature. i A high sense of duty impels me again ta call ; the attention of the Legislature to fhe inade quacy ofexisting laws, regulating the receiving, I keeping and disbursement ot fhe revenues ot ; the State. The public moneys are now paid j directly to the State Treasurer, who deposits them, at his own discretion, whenever and wherever he chooses, and pays them out in sums either small or great, upon his own unattested check exclusively. The amount thus recei ved, kept and disbursed is annually between three and four millions nf dollars, with balances on hand, at times, exceeding one million of dollars ; while the bond of the State Treasurer is for only eighty thousand dollars. His ac counts are settled monthly by the Auditor General, by whom the receipts for money paid into the Treasury are countersigned, and these are the only safeguards ptovided by law to prevent the illegal and improper use of the money ot the Slates, by the State Treasurer. Happily the revenues of the Commonwealth have hitherto been safely kppt, properly dis bursed, and promptly accounted for, bv those in charge of the Public ; but in view of the serious defalcations which have occur red elsewhere, and in other States, this fact should furnish no reason why we ought not to guard against loss in the future. Keferring to my former annual messages, I respectfully, but most earnestly, recommend that provision be made by law : First —That no money shall be deposited by the State Treasurer in any bank, or elsewhere, without first requiring ample security,to be given to the Commonwealth for the ' prompt repayment of \such sum as may be deposited ; and that such securities shall be deposited in the ofliceof the Auditor General. Second —That all checks issued by the State Treasurer, shall be countersigned by the Audi tor General, be/ore they are used, and that dai ly accounts shail be kept of the moneys receiv ed, deposited and disbursed, in the Auditor Gen eral's office, as well as in the Tieasury Depart i meat. Thrd—That condensed monthly statements, vei : bv the signatures of the Auditor Gen eral ami State Treasurer, shall be published in one newspaper 10 Philadelphia and one in Har i isourg, showing the balances in the Treasury, and where deposited, with the particular a niount of each dejiosit ; and Fourth —That the bond of the S'ate Treasu rer be increased to the surnol two hundred and fifty thousand dollars. Jhe inspectors of the State Penitentiary for the Eastern District of Pennsylvania, in their annual reports for the yea~s 1803 and 1859, called the att ?nlion ot the Legislature to the in security of such parts of the penitentiary buil ding as were exposed to their own fires and (hose of the neighborhood, and lecommended that roofs of such of the corridors as were cov ered with shingles, and needed renewal, should be replaced with slate or metal. On visiting the institution, my attention was called to the subject by the inspectors. The necessity for the change was so apparent and urgent, that I advised them not to hesitate in having the old, dilapidated and dangerous wooden roofs of such portious of the building as required renewal, replaced with some substantia! fire proof matp- i rial. This has accordingly been done, and I j respectfully recommend that a small appropti- ! ation be granted to defray the expenses incur- ; red. The extraordinary and alarming condition of ] our national affairs demands your immediate at- i tention. On tne twentieth of December last,! the convention ot South Carolina, organized ! under the authority of the Legislature of that State, by a unanimous vote, declared "that the union now subsisting between South Carolina and the other States, under the name of the U- \ nited States of America, is hereby dissolved ;" . and the action already taken in several other Southern States indicates, most clear! v. their intention to follow this example. On behalf of the advocates of secession, it is claimed, thai this Union is merely a compact between the seveial States composing it, and that any one ot the States, which mav feel ag grieved, may, at its pleasure, declare that it will no longer be a party to the compact.— 1 his doctrine is clearly erroneous. The Con stitution of the United States is something more than a mere compact, or agreement, between the several States. As applied to nations, a compact is but a treaty, which mav be abro gated at the will of either party ; responsible to the other tor its bad faith in refusing to keep its engagements, but entirely irresponsible to any superior tribunal. A government, on the other hand, whether created by consent, or by conquest, when clothed with lejej>la!i'"e, judicial and executive powers, is necessarily in its nature sovereign ; and from this sovereignty tiows its right to enforce its laws and decrees by civil process, and, in an emergency, bv its mil itary and naval power. The government owes protection to the people, and they, in turn, owe it their allegiance. Its laws cannot be viola ted by its citizens, without accountability to tie tribunals created to enforce its decreps and to punish offenders. Organized resistance to it, is rebellion. If successful, it may be purged ot crime by revolution. It unsuccessful, the persons engaged in the rebellion, may be exe cuted as traitors. The government of the Uni ted States, within the lim:s assigned to it, is as potential in sovereignty, as anv other govern ment in the civilized world. The Constitution and laws made in pursuance thereof, are ex prissly declared to be the supreme law of the land. Coder the Constitution, the general government has the power to raise and support armies, to create and maintain a navy, and to provide for calling forth the militia to execute its laws, suppress insurrection and repel inva sion. Appiopriate statutes have been enacted by Congress, to aid in the execution of these important governmental powers. The creation of the Federal Government, with the powers enumerated in the Constitu tion, was the 1 act of the people of the United States, and ■' is perfectly immaterial that the people of the several States separately within the territorial limits of each State. The form of their action is of no consequence, in view of the tact that they created a Federal Government, to which they surrendered cer tain powers ot sovereignty, and declared those powers, thus surrendered, to besupierne, with out reserving to the States, or to the people, the right of secession, nullification or other resis tance. It is, therefore, clear that there is no constitutional right of secession. Secession is only another form of nullification. Either, when attempted to he carried out by force, is rebellion, and should be treated cs such, by those whose sworn duty it is to maintain the supremacy of the Constitution and laws of the United States. It is certainly true, that in cases of great ex tremity, when the oppression of government has become so intolerable that civil war is pre ferable to longer submission, there remains the revolutionary right of resistance : but where the authority of the government is limited by a written Constitution, and each department is held in check by the other departments, it will rarely, if ever, happen that the citizen not be adequately protected, without resorting to the sicred and inalienable right to resist and destroy a government which has been perverted to a tyranny. Cut, while denying the right of a Stale to absolve its citizens from the allegiance which they owe to the Federal Government, it is nev ertheless highly proper that we should care fully and candidly examine the reasons which are advanced by those who have evinced a de termination *o destroy the Union of these A merican States, and if it shall appear that any of the causes of complaint are well bounded, they should be unhesitatingly removed, and, as whom: ftr.fißEft, soso. far as possible, reparation made for the past, and security given for the future; for it is not to be tolerated, that a government created by the people, and maintained lor their benefit, -.houid do injustice to any portion of its citi zen*. After asserting her right to withdraw from the Union, South Carolina, through her con vention, among other reasons, declares that she is justified in exercising, at this time, that right because several of the States have for years not only refused to fulfil their constitutional obli gations, but have enacted laws either nullifying the Constitution, or rendering useless the "acts of Congress relative to the surrender of fugitive slaves—that they have permitted the open es tablishment of societies, to disturb the peace of other States : that the people of the non-slave holding States have aided in the escape of slaves from their masters, and have incited to | servile insurrection those that remain—and have announced their determination to exclude the South from the common Territory of the Union. As the Representatives of the people of Pennsylvania, it becomes your solemn duty to examine these serious charges, made by the authority of a sovereign State. Pennsylvania is included in the list of States that are charged with having refused compli ance with that mandate of the Constitution of the United Slates, which declares "that no per son held to service or labor in one State, under the laws thereof, escaping into another, shall, in consequence of any law or regulation therein be discharged from such service or labor, but shall be delivered up. on claim of the party to whom such service or labor may be due."—So far from admitting tiie truth of"thi3 charge, I unhesitatingly aver, that, niwn a careful exam ination, it will be found that the legislative and judicial action of Pennsylvania, whether as a colony, as a member of the old confederation, * or under the existing Constitution of the United States, has been almost invariably influenced by a proper appreciation of tier own obligations,' and bv a high regard for the rights, the feel iugs and the interests of her sister States. As early as 1705, the provincial authorities of Pennsylvania, after reciting a the preamble, that "the importation of Indian siaves from Carolina, or other places, hath been observed to | give the Indians of this province soi;,-= mbrcge i tor suspicion and dissatisfaction," passed an act against the importation of Indian slaves from any other province, or colony, in America, but at the same time declared, "that no such Indi an slave, as deserting his master's service else -1 where, shall fl* into this province, shall be un deistood or construed be comprehended with in this act." And when, in 1780, more than eight years before the Constitution of the Uni ted States went into operation, Pennsylvania passed her law for the gradual abolition of sla very, mindful of the rights of her confederates, she declared that, "this act, or anything in it contained, shall not give any relief or shelter to any absconding or runaway negro or mulatto slave, or servant, who has absented himself, or shall absent himself, from his or her owner, master or mistress, residing in any other Slate or country, but such owner, master or mistress, shall have like right and aid to demand, ciaim and take away his slave, or servant, as he might have had in case this act had not been made." A provision much more unequivocal in its phraseology, and direct in its commands, than those found, on the same subject, in the Consti tution of the Union. The act, by its terms, wat J made inapplicable to domestic slaves attending i upon delegates in Congress from the other A rnerican States, and those held by persons while passing through this State, or sojourning there in for a period not longer than six months. In 17S8 it was made a high penal offence for any person, by force, violence or fraud, to take out of this State, any negro or mulatto, with the intention of keeping or Selling the said neoro or mulatto as a a term of years. Soon after the passage of this act, the Supreme Court of Pennsylvania decided that it did not apply to the forcible removal of a slavp, by the owner or his agent, but that its object was to punish the forcible or fraudulent abduc tion from the State of free negroes, with the in tention of keeping or selling them as slaves.— Thus, at that early day, giving judicial sanction to the doctrine, that a master had the right to take his slaves wherever he could find them. The first act of Congress providing for the rendition of fugitives from justice or labor, was passed in 1793, and originated from the refusal of the Uovernor of Virginia to surrender and de liver up, on the requisition of the Governor of Pennsylvania, three persons who had been in dicted in Pennsylvania, for kidnapping a negro, and carrying him into Virginia. And when it was found that this Congressional statute did not afford a simple, speedy and efficient remedy for the recovery of fugitives from labor, the Legislature of P-nnsylvania, at the request of the adjoining State of Maryland, in 1526. pass ed her act "to give effect to the provisions of the Constitution of the United States relative to fugitives from labor, lor the protection of free people of color, and to prevent kidnapping." This excellent and well considered law met alt the existing emergencies. It required the jud ges, justices of the peace and aldermen, o< the State, upen the oath of the claimant, to issue their warrant for the arrest of any lugitive from labor escaping into this State ■ directing, how ever, that such warrants should be made retur nable, by whomsoever issued, before a ju ige of the proper county. It required sheriffs and constables to execute such warrants. It author ized the commitment of the fugitive to the county jail, and ot .erwise made provisions to secure.its elfecli ve execution, and at the same time to prevent its abuse. This law continued quietly in operation un til the decision of the Suprenj" Court of the United States, made in 18-12 in the caseofPrigg vs. The Commonwealth of Pennsylvania. The history of this case may be briefly stated : Edward Prigg wa3 indicted in tne court of oyer and terminer of York county, tor kidnapping a VOL. 4. NO. 22.