Expenses from the improvement fund for the year ending June 30, 1903. Contract on building kitchen and bakery 800.00 Bake oven, patent right and supervision of construction. 600.00 600.00 Paid for labor.. 92.00 CAPITOL BUILDING AND GROUNDS. During the fiscal year ended June 30, 1963, the amount expended in maintenance of the capitol building and grounds, necessary equipment of the various offices in the building, and necessary improvements, amounted to the sum of $5, 800.81. In this amount are included the cost of painting the roof of the capitol building, which was $240, and the construction of a building on the grounds to be used for a storage house and greenhouse, which cost $500. These items, being improvements, should be deducted from the $5,800.81, leaving the amount expended for the care of the capitol building and grounds $5.060.81. The rent derived from Federal officials who occupy offices in the capitol building amounts to the sum of $1,320 per annum. The net expense of maintenance therefore to the Territory amounts to the sum of $3,740.81. The capitol grounds consist of 10 acres planted in trees, shrubbery, hedges, tropical plants, and flowers. Of this tract 5 acres are in lawns and flower beds, presenting a most beautiful and attractive appearance. At all times during the year the flowers are in bloom and the hedges and lawns fresh and green. This state of perfection has been attained by reason of the ability of the florist and his assistants in charge of the grounds. Segregated from the above amount, the cost of care of the grounds, paying for water, and all other expenses incidental thereto, amounted to the sum of $1,943.62. In 1889, when the legislature determined that the capitol was to be permanently located at Phoenix, an appropriation was made to obtain grounds suitable for its construction. Provision was made for laying out the grounds in driveways, walks, trees, and shrubbery, awaiting such future time when the legislature should provide for the construction of the capitol building. How wise this forecast of the future was is best shown by the results obtained. We now have a capitol building, completed in the year 1900, that is indeed a credit to the Territory, surrounded by grounds that, by reason of the design selected and the attention given them, are unexcelled, and by many conceded to be the most beautiful in the United States. BOARD OF LOAN COMMISSIONERS. The loan commission held its first meeting during the past fiscal year on November 17, the meeting having been called by the governor, as chairman of the board, in obedience to the decision of the Supreme Court of the United States establishing the legality of the commission. A number of applications were on file with the commission requesting the refunding of county and municipal indebtedness, and all of these were taken up and disposed of in a satisfactory manner during the year. In the matter of the application of James R. Thorpe for the funding of bonds of Navajo County bearing 64 per cent interest, numbers 36 to 71, inclusive, into Territorial 5 per cent funding bonds, a resolution was adopted by the commission on December 13, 1902, providing for the exchange of the principal and interest due on the said bonds. The said exchange was made on January 15, 1903. The application of the Valley Bank asking for the refunding of certain warrants of the city of Tombstone was refused and refunding denied owing to legal questions arising as to the validity of the warrants presented to the commission. The application of the North American Trust Company for the funding of sixteen Yavapai County P. and A. C. railroad bonds was considered by the commission, and, on December 13, 1902, a resolution was adopted directing the purchase of these bonds and the issuance in lieu thereof Territorial funding bonds equal in amount to the principal of the bonds together with the unpaid coupons thereon, with interest on the unpaid coupons from the date that said interest became due until the time of actual payment. At the first meeting of the commission, on November 17, 1902, the mandate of the supreme court of Arizona, commanding the loan commission to exchange certain bonds of Pima County for Territorial funding bonds, was laid before the commission by the chairman. Representatives of the holders of the bonds and of Pima County were present at several meetings held for the consideration of this matter, and on December 23, 1902, a resolution was adopted by the commission suspending further proceedings in the Pima County bond matter until the action of the supreme court of the Territory was known upon a motion presented by the respondents to recall, vacate, and annul the writ of mandate issued by the supreme court of the Territory on October 31, 1902, and issue in lieu thereof a writ conforming to the mandate of said court issued March 22, 1901; that by reason of the filing of this motion and the matters raised thereby, the Commission was in doubt as to the extent of its authority in the premises, and directed further instructions from the court on the questions raised. It appears that the mandate of October 31, 1902, contained the additional words "together with legal interest on all defaulted coupons from the date of their maturity," and that after the words "upon the surrender of the said bonds and all unpaid coupons thereto attached,” it contained the words "or belonging thereto," and that after the words "or for so many of said bonds and interest," it contained the additional word "coupon," none of which additional words were in the final judgment and mandate of the supreme court of Arizona issued March 22, 1901. By an order of the supreme court the mandate of October 31, 1902, was made to conform to the judgment rendered by the same court on March 22, 1901. Thus a saving of thousands of dollars to Pima County was made, as it was evidently not the intention of the court that the interest on the coupons should be funded. On February 10, 1903, the commission adopted a resolution, in obedience to and in compliance with the mandate of the supreme court as modified, providing for the redemption, refunding, and delivery in exchange for the indebtedness of Pima County, amounting to $319.791.23, Territorial funding bonds bearing interest at 3 per cent per annum. This exchange was made on March 13, 1903, a balance of $275.29 being still due the hondholders. It was the desire of the commission to give Pima County an opportunity to pay the balance of $275.29, and the commission so arranged with the bondholders. However, Pima County regarded the payment of this balance as an acknowledgment that the entire indebtedness is just and it refused to pay the balance. The loan commission, in the final settlement of the matter, is compelled to issue a bond in the sum of $275.29. The city of Tucson has made application for the refunding of certain municipal indebtedness, a matter which is still before the commission. TERRITORIAL INDUSTRIAL SCHOOL. By an act of the last legislative assembly the name of the reform school for juvenile offenders was changed to the Territoria! Industrial School. This was done in order that the stigma attaching to the original name might not become a burden to the youthful offenders when they should leave the institution after serving a sentence. It is a matter of fact that convicts are confronted with insuperable difficulties upon leaving prisons and taking up the struggle for their daily bread. It was the intention of the legislature that every possible opportunity should be given the youths who shall have served terms in the Territorial reformatory, and in changing the name of the institution they at least removed the brand of disgrace and widened the opportunities of those who shall go forth from the school to battle with the world. The school was established by an act of the legislature of 1901. Benson, on the transcontinental line of the Southern Pacific, was selected as the town where the school should be located, and in January, 1902, ground was broken for the building. The outside dimensions of the building are 120 feet in length by 54 feet 6 inches in depth, two stories in height, with a basement 50 by 35 feet under the two wings. The stone used in the building is white tufa, quarried from the Tucson Mountains. It is faced on the inside with brick manufactured in Benson. The building was completed and turned over to the board of trustees on the 11th day of October, 1902, and has been in charge of a competent watchman ever since. Further improvements and the active operation of the school were delayed, owing to the shortage of funds. The last legislature, however, made ample appropriation to complete the building, furnish, and maintain the same for a period of two years. It is the intention of the board of trustees to open the school on the 1st day of October, 1903. The erection of a windmill and two iron tanks of 5,000 gallons capacity each will be completed before the opening of school in the fall. The windmill and tanks will be located at the artesian well and pipes run to the building. Two reels of 100 feet of hose each have been placed in the building for use in case of fire. A sewer system is also being constructed. The inmates for the school at the start will come from the different counties of the Territory where youthful offenders are serving sentences and from the Territorial penitentiary where there are a large number of convicts of minor age. The present board of trustees of the Territorial industrial school is composed of A. H. Emanuel, of Tombstone; Ben Heney, of Fairbank, and H. Buehman, of Tucson. Mr. Emanuel is chairman of the board and Mr. Buehman secretary. Secretary Buehman reports the following disbursements for the year ending June 30, 1903: Architect balance Fifield & Gallagher. Total. $494. 26 8, 153.00 19.85 9, 458. 22 WORLD'S FAIR BOARD. The first board of managers for Arizona at the Louisana Purchase Exposition, to be held in St. Louis in 1904, was organized April 8, 1902, by the election of Hon. W. H. Barnes as president, T. E. Dalton as secretary, W. C. Bashford as treasurer, and C. E. Taylor as superintendent of collections and exhibits. The twenty-first legislative assembly of the Territory provided for the sale of bonds to the amount of $30,000, this sum to be used for the collection, arrangement, and exhibit of the products of the Territory at the exposition. The bonds were sold to the Bisbee Bank at a premium of 7 per cent, thus adding $2,100 to the sum appropriated, and making the total amount to be expended by the board of managers $32,100. On April 1, 1903, the present board of managers was organized by the election of Hon. A. J. Doran as president, H. B. St. Claire secretary, Hon. B. A. Packard treasurer, and R. N. Leatherwood superintendent of collections and exhibits. The board at once entered upon the performance of its duties as prescribed by the Territorial statutes, and Mr. Doran proceeded to St. Louis to arrange for the required space for the various exhibits and select a site for the Territorial building. The building, while inexpensive, will present a creditable appearance, the design of architecture being Moorish and Spanish. The building will cost about $2,500. Mr. W. R. Norton, of Phoenix, Ariz., is the architect. The board of managers has made applications for necessary space in the mines, agricultural, horticultural, educational, and forestry buildings, and the board expects also to have a creditable exhibit of dairy products. The boards of supervisors of the different counties of the Territory have expressed a willingness to cooperate with the board of managers in the effort to bring before the world the unlimited resources and the remarkable development of the Territory. Many of the boards of supervisors will issue pamphlets descriptive of their respective counties and embellished with half tones, which the board of managers will distribute judiciously. Prof. William P. Blake, Territorial geologist, will classify and catalogue the mineral exhibit; and Prof. N. G. Layton has charge of the educational exhibit, being assisted by prominent educators in the Ter ritory, the lady board of managers, and county superintendents. Special attention will be given to the collecting and preserving of fruits for exhibit, and the presentation of cereals, both in straw and grain, will be given attention. The mineral exhibit will consist of ores of every description, including gold, silver, copper, lead, turquoise, zinc, mica, iron, gypsum, manganese, ocher, wolframite, onyx, monumental and building stone, oil shale, mineral clay, lime, cement rock, coal, asbestos, and all other products of the Territory in this line. All exhibits will be sent to two assembly points, viz, Prescott and Tucson, for classifying, labeling, and cataloguing before shipment is |