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liove an enlightened statesmanship will much longer permit our Territo ry to languish for want of communi cation. WAGON ROADS. Two roads have been constructed the past season, principally by the mili tary authorities. One leading from Prescott to Albuquerque, New Mexico, has been graded and straightened so that a saving in distance, over the old road, of about seventy miles, has been attained and a much better one secured. The other leads from Camp McDowell to Prescott. It is said that this road shortens the distance about eighty .miles from Tucson and Southern Ari zona to Prescott and northern and central Arizona. "When once traveled, it will undoubtedly prove superior to the old one. Mainly through the en terprise of San Diego, a good wagon road has been constructed from that town to the Colorado Eiver, at Arizo na City, and a large number of our morcliants are now getting their goods from San Francisco by that route. Too much credit cannot be accorded to San Diego for the liberality and en terprise displayed in the construction of this road. Although not within our boundaries, it is much to our ad vantage. TELEGR.UHS. A telegraph line has been constructed and, if not now, will shortly .be in op oration batween Tera Cruz and Texas. An extension of the line is projected to Guaymas with .fair prospects of speedy consummation, and" it is propos ed to extend it on to California via Tuc son and Arizona City. This enter prise would prove of great advantage ' to the Territory, and it will be your duty to aid and encourage it to the ex tent of your power. With this line completed, but a brief period would elapse before Prescott and the princi- pal towns of the Territory would be connected by the telegraphic wire. IMMIGRATION. Many of the States and Territories have taken active measures to invito immigration, and experience has prov en that their prosperity has thereby 'been rapidly enhanced. Our sister Territory, New Mexico, has recently hold a Territorial Convention for that purpose. "We have large tracts of un occupied lands, possessing superior ag ricultural advantages, with grazing fields sufficient to feed, without labor or expense the year through, millions of stock, in one of the most salubrious oiimates on the continent. Notwith standing the hostility of the Indians, a small colouy located near togeiher, and co-operating with each other would be comparatively safe from depredations. 1 would reccommend the adoption of such means as will bring these fasts prominently before tho public, together with such infor mation as will enable immigrants to come here in the cheapest and easiest manner. MINING. It is estimated, with all tho disadvantages of high transportation, limited capital and Indian hostilities under which we labor, that annually over one million of dollars in gold and silver is taken from our mines. I confidently believe this sum would be increased fifty fold, within five years, if the obstacles before referred to were removed. During the past year, several new and valuable min ing discoveries have been made. Among them are tho Burro" mines near the eastern boundary of the Ter ritory. I visited this locality 'in May last, and from the surface indications, there appears to be one of tho most extensive and probably one of the richest mineral deposits yet discovered. There is a great scarcity of wood and water near the mines, but money, skill and energy can overcome these diffi culties. Another very rich discovery of gold quartz has been made in the Bradshaw mountains, between Pres cott .and "Wickenburg. I have seen a large variety of samples of this ore, and. can testify to its value. Consid erable quantities of it have been re duced in a crude way by tho arastrar process and it yielded from 100 to 300 per ton. A small mill is now in process of erection at the mines, and I confi dently expect to see this district rake early and front rank among the best paying in the country. Extensive deposits of good ore have bron discov ered at Date Creek. Tests by the arastrar process have been satisfacto ry and encouraging. A mill has been in operation at Big Bug, on a mining property of that name during the past year, and this enterprise has been highly satisfactory to the own- i ers and of great advantage to the country. The Vulture mine and mill at "Wickemburg are worked with reg ularity and profit. The mill contains forty stamps and is constantly kept in operation with ore from the mine fif teen miles distant. I have visited this mine several times and regard it one of the richest and most extensive known. Much placer mining is car ried on in the vicinity of Prescott with remunerative results, and I con sider it a very inviting field for placer mining. Most the hills adjacent to the Colorado Eiver are threaded with gold, silver and copper veins, a num ber of which are now being operated profitably, and with the assistance of capital, would doubtless be exten sively developed. There are many mines in Southern Arizona that were operated with pro fit by the crude Mexican mode of min ing, long before the acquisition of the Territory. After tho acquisition, con siderable capital was sent here for mining investment with fair prospect of liberal returns but the anarchy in cident to our civil war, which prevail ed for several years, caused the destruc tion or abandonment of nearly all mining enterprises in this portion of our Territory. The proprietor of a mine situated a few miles south of Tucson, known as the Lee & Scott mine, recently freighted several tons of second-class ore to San Francisco and received a handsome profit thereon, after defraying all expenses. I believe there are many mines now untouched in this portion of the Territory that can be worked at a profit with capital and judicious management. COAL. No discovery has been made during the past year of greater importance to our material interests, than that of an extensive vein of most excellent coal in the "White mountains near Camp Thomas. It has been used by mechan ics at Camp Thomas and Tucson, and is pronounced by them a superior arti cle. This discovery gives promise that an abnndance of coal will be found in Arizona, and that the operation of railroads and the economical propelling of machinery will not suffer in conse quence of a want of this desirable ar ticle. MINING LEGISLATION. I am generally opposed to legislating upon mining questions, believing the miners of the several districts are bet ter qualified to frame laws for their own peculiar wants and localities than the Legislature of the Territory, and they have almost universally prescrib ed their laws since the early discovery of gold in California, and Congress and the courts have recognized the wisdom of their action. It would be of vast assistance to the mining interests of the Territory to have an Assayer appointed by the gov ernment to assay gold and silver bull ion, and also make reliable tests of ore. "We have many prospectors too poor to pay the expense of making such tests. They are a class of people who contrib ute as much to enrich the world and as little to enrich themselves as any we have, and I think it but right, after they liave endured hardships and braved dangers to make discoveries, that the Government should aid them to the extent of furnishing them free of cost reliable information of what they have found ; besides we are now obliged to ship our ores for assay to San Francisco or Philadelphia, with no ex press facilities, and if returns are ever obtained, it is after a delay of many weeks or months. TERRITORIAL ARMS. I have received from the Government of the United States seven hundred and twenty-four (724) stand of arms -with one hundred (100) rounds of ammuni tion to each gun. I have confided the distiibution of these arms to Col. E. Phelps, at Tucson, and Col. H. A. Big elow, at Prescott, and I call your at tention to their reports for additional information on this subject. A portion of these arms were due the Territory from a fund that is constantly accumu lating to be applied to the purchase of arms for the States and Territories, and a portion Avas furnished the Terri tory in advance by the Secretary of "War, and charged against the fund re--ferred to. It will be several years be fore a sufficient sum will accumulate to pay for the arms already received. I found upon the receipt of these arms that many of our citizens were without arms or armed with inferior weapons, and I considered it my duty, in advance of your action, to place them in the hands of those most exposed to Indian hostilties, and least ablo to purchase them. I believe, in the, main, this ob ject has been attained, and nnrch good has resulted from their use. I have given instructions to require an agree ment, with an- indorser, from each person receiving an arm, to return it on demand to the Governor, or, failing to do so, forfeit and pay $40. After an experience of one year and a half, I am not able to suggest a better plan for the distribution of the3e arms. SURVEYS. "We now have a separate surveying district, with the Land and Surveyor General's Offices in operation. The sum of 10,000 was appropriated at the last session of Congress for sur veys in this Territory. This is quite inadequate for the extension of the surveys as rapidly as the settlements advance. Our farmers are generally anxious to obtain titles to their lands, and to enable them to do so, I trust a more liberal appropriation will be made. TOWN SITES. The Act of Congress regulating the sale of town sites provides that land upon which any town is located may be entered for the use and benefit of the people of said town by the county judge, or mayor of an incorporated city, at 1.25 per acre. It is then made tho duty of said judge or may or to deed the lots to the owners at the pr5 rata price of the land, and expense of the deed. It is reserved to the local Legislatures to establish rules for the disposition of the lots. I deem it a matter of importance that the people be enabled to obtain titles to town property as speedily as possi ble, in order that disputes may be ob viated and that each owner may feel secure in his possessions. SELLING LIQUOR, ARMS AND AMMU NITION TO THE INDIANS. Complaints are constantly made of sales of liquors, arms and ammunition to Indians, and serious results are lia ble occur in consequence. Severe penalties should be enacted against the sale of liquor to any class of In dians, and also against that of arms and ammunition to any except those known to bo friendly to us, and hos tile toward all of our enemies. AMENDMENTS TO VARIOUS LAWS. The Attorney-General of the Terri tory, in his report which will be laid before you, has made suggestions rela tive to the statutes, to which your at tention is directed. Since your last session, Congress has enacted a lav re stricting the Legislative Assembly to biennial sessions. This has obviated the necessity of annual elections, and J. would recommend that you extend the term of officers elected at the last general election (in 'all cases you can consistently with the Organic Act) to correspond with this change, and that hereafter our elections be held bienni ally. Congress has also amended the Or ganic Act of the Territory, limiting the jurisdiction of justices of the peace to 300, instead of 100.' I would recom mend that you amend our statutes so as to give them the full amount author i::jd by -the Organic Act. Under the present law, justices of the peace are required to qualify before a clerk of the district court. To do so is often a source of great expense and inconvenience. I would recommend that the law be so changed as to authorize their qualifi cation before any officer qualified to administer oaths. Congress passed an act which became a law January 25, 18(57, conferring the elective franchise, in all the Territories, to citizens thereof, "irrespective of race, color, or previous condition of servi tude," and. the Fifteenth Amendment to the constitution of the United States makes said law common throughout the United States, and was proclaimed legally adopted as a part of the organic law of the coun try March 30, 1870. Congress also passed an act entitled "An act to en force the right of citizenship of the United States to vote in the several States of the Union, and for other purposes", approved May 31st, A. D. 1870. Section 1G of said act provides that all persons within the jurisdiction of the United States shall have the same rigki in every State and Territo ry of the United States to make and enforce contracts, to sue, b3 parties, give evidence, and to the full and equal benefit of all laws and proceed ings for the security of persons and property, as is enjoyed by white citi zens, and shall be subject to like pun ishments, pains, penalties, taxes, li censes, and exactions of every land and none other, any law, statute, or dinance, regulation, or custom to the contrary notwithstanding. Tho stat utes of this Territory are in gonflict with the above referred to laws of tho United States, and consequently null and void inthree particulars ; first, by depriving citizens of color from exer cising the privileges of the elective franchise; second, from giving evi dence, and. third by exempting negroes from paying a poll tax. I would re commend that the statutes of the Ter ritory be so amended as to conform to the laws of the United States. REGISTRY LAW. I am of the opinion that a law for the registry of the qualified electors of the Territory prior to an election is highly necessary. By it, ample time is given for excluding from the roll all but legal voters, while if this duty be reserved for election day with the sur rounding excitements often attendant, even with the most scrutinizing care, illegal yotes are liable to be polled. In the preparation of such a law, great care should be taken to afford facilities for the registration of electors with the least' possible inconvenience. STATUTES OF THE TERRITORY. The edition of the Howell Code is now exhausted, and a large number of officers of the Territory entitled to cop ies cannot be supplied. There are many ambiguous and conflicting laws upon our statute books. I would therefore recommend that you amend such laws as you deem proper, and repeal all those not desirable to retain, and then authorise the compilation and publi cation in one volume, of all general laws of the Territory. This plan was successfully executed in Colorado and New Mexico, and the necessity for similar action here is very apparent. Unless the laws in force arc compiled and published by your direction, it will be at least three years beforo the officers o the Territory can ba sup pb'ed with them. GRAND JURIES. Ono of the most burdensome expens es of our county governments is that of the grand juries. The expense of summoning a grand jury, the fees of its member3,attendance upon their deliberations, and after long delays be tween the apprehension of the aceused and his presentation or acquittal, in volve an expense that severely bur thens the people with taxation, and often cause so much delay that the witnesses cannot be found, and fre quently results in great hardship to the accused. In my judgment, the necessity which originated and led to the adoption of the grand jury system does not exist among a free people possessing equal rights. I call your attention to the subject with a view to your examination of -it, and determina tion whether any change can be effect ed consistent with the Constitution and law3 of tho United States. MURDERERS AND OUTLAWS. The recent murder of three citizens at Mission Camp and the perpetration of two similar acts, on the Gila road, within the past three j'ears by despe radoes and outlaws, have excited ge neral alarm and a feeling of insecuri ty on the part of our citizens. Similar crimes have frequently been perpe trated in other sections of the Territory by this class of men, and almost in variably they immediately afterwards flee to Sonora, in Mexico. These last murders were so atrocious in their char acter and bold and daring in execu tion, that I have regarded it my duty to exercise every power in me vested to arrest and deliver to justice the crimi nals. In addition to offering a reAvard of 1000, I haAre appointed an agent and sent him with a requisition to the State of Sonora to demand, receive and bring them before our courts. I Avould suggest the expediency of your making an appropriation to be placed at the disposal of the Excecu tive for use in cases of this character. THE INSANE. No provision has been made for the care and maintenance of this unfortu nate class of our people, and speedy action should be had in their behalf. It Avill probably bo sometime before the Territory Avill be in a condition to incur the expense of erecting buildings suitable for an asylum ; and knowing that the State of Nevada had contracted Avith California for the care of: her insane, I addressed a letter to the Governor of California inquiring upon Avhat terms the insane Avero re ceived from Nevada, and also if simi lar arrangements could be effected for the care of those of Arizona. Tho Governor in reply informed me that he Avas not advised of the particulars, but had addressed a letter to the Superin tendent, at Stockton, asking him to fonvard me the desired information at as early a day a3 possible. As soon as I receive the information, I will lay it beforo you. v , TERRITORIAL PRISONERS AND PRISONS. By laAV, the Territorial prisoners are incarcerated in the county jail of tho several counties in which they are con victed. Such jails afford no facilities for the employment of the convicts or the exercise of reformatory measures over them. Their maintenance is ex pensive and the jails generally inse cure, of teu requiring a guard to prevent their escape, and frequently compelling the officers to chain them to f he floor. By act of Congress, approved Jan. 22, 1867, it is provided that the net pro ceeds of the internal revenue of thie Territory that accumulate during the fiscal years ending June 30, 1866, '67 and '68, should be applied to the eree- tion of a Territorial Penitentiary; the sum not to exceed 40,000. I am not informed of the amount of money that has accumulated under this act, but the necessity for speedy action is bo urgent that it Avill probably be good policy to commence the work with the money on hand and erect a building for present use in accordance with the means, having in vieAV in its construc tion the adding to of other building as necessity requires and the funds Avill admit ; and in the future improvement of the structure, the labor can be prin cipally performed by the convicts. THE WESTERN BOUNDARY OF THE TERRITORY. A tract of land along the eastern bank of the Colorado Eiver and upon whioh a portion of Arizona City is located, is claimed by the State of California; and until within the past year, the revenue officers of San Diego county have collected the taxes on the proper ty located thereon. Over a year ago the subject of jurisdiction was raised in the Internal Eevenue Depart ment, and the matter Avas referred to Judge James of "Washington, D. C, for examination and decision. After a careful inv&stigation of the subject, he decided that the disputed territory be longed to Arizona, and the officers of this Territory were directed to collect the revenues therein. That the dispu ted territory belongs to Arizona, in my judgment, does not admit of a doubt. Suite have been commenced in fhe county of Yuma in the 2d Judicial chVric to bring the matter to an issue and final adjudication. As there Ayill be some ouflay attending heso suite, and the Territory being equally inter ested with the couny, it is but jusithaf the Territory should bear a portion of the expense. TERRITORIAL FINANCES. The reports of the Treasurer and Au ditor, which Avill be laid before you with their respective statements in detail, show that the financial condition of the Territory is in a very satisfactory con ing interest at 10 per ct. per annum dition. According to the Treasurer's report to the last Legislative Assem bly, the outstanding indebtedness bear amounted, NoA'ember 1, 1S68, to 26, 961 05, and the cash on hand to 2, 86S 06, leaving a balance of 24,092 99 of indebtedness above the amount on hand. It appears from the statements now- presented, that the receipts since the last report amount to 36,243 49. Add to this the amount in the Treasury Nov. 1, 1868, and avo have a total of 39,111 05. During that period, there AA-as disbursed 34,960 11, leaving a balance in the Treasury of 4150 94. The present indebtedness amounts to 501, leaving a balance of 3,649 94 cash in tho Treasury over all liabilities against the Territory. Estimating the losses sustained from Indian, hostilities, the general insecuri ty of life and property Avhich necessa rily discourage immigration, the in vestment of capital and the develop ment of our resonrces, and also that the rata of taxation for Territorial purposes has been only fifty cents upon each 100 of taxable property, cause this exhibit to be particularly gratify ing, and firmly establish confidence in the solvency of the Territory. It is encouraging, also, to be able to state that the finances of the counties are in a very satisfactory condition, their Avarranta commanding nearly par in the market. NATIONAL AFFAIRS. Under the AYise and economical ad ministration of PresidentjGrant,the na tional debt is fast being paid off, taxa tion reduced, and tho country rapidly approacliing a sound financial condi tion as is unmistakably indicated by the appreciation of its currency. It is also a subject of congratulation, that while Avar and desolation are SAveepinjr over portions of Europe, and crowned heads are leading their subjects to slaughter by hundreds of thousands to extend their dominions, that our own favored land is at peace Avith all the world, and harmony has taken the place of discord throughout the length COUGLITOKD ON VXQS 4TH.