WABASH AND ERIE CANAL.
Mr. BRETT. That the Speaker appoint a select committee of five, with power to send for persons and papers, and inquire: 1. Into the condition of the land office of the trustees of the Wabash and Erie canal at Terre Haute. 2. The quantity and price of land sold by them during the last two years and the disposition of their proceeds. 3. Whether they have transferred or otherwise encumbered any canal lands, and if so how much, with intent to hinder, delay, or defraud any of their creditors who are citizens of this Slate. 4. Whether the injunction granted by the circuit court of the United States was not fraudulently obtained, and with the connivence and consent of said trustees, or some of them, with leave to report any time.
Mr. FISHER could not consent to vote for that resolution without first knowing that something was wrong. If the gentleman could assure the House that there was something requring investigation, he ready to vote for it.
Mr. BRETT. Any person acquainted with the present condition and management of the canal must admit the necessity of investigation. For the last two years, the canal had been abandoned by the bondholders ; and they had obtained an injunction from the United States District Court against the trustees stop the payment of certain claims against the canal out, of the proceeds of the canal lands pledged for that purpose . It was never the intention of the bondhold to keep the canal up. They completed it to Evansville, merely to comply with the terms of their contract with the State. They intended from the first to abandon it as soon as they could do it with a fair share with a view of ultimately getting back from the State the other half of the original debt. The southern end of the canal had never been in a condition fit to be called a canal. Whenever the people wanted to ship their produce on it, they never could rely upon its management. It had no proper attention. They enjoined the lands with a view of turning them to their own account, instead of applying them and the tolls as the Butler bill required. If he had not feared that there had been some connivance against the interests in his region, he would not have introduced the resolution. He acknowledged candidly that he himself was personally and deeply interested in the case. It was not intended that the investigation should be an expensive one. But few witnesses were to be examined, and he believed they would bring out matter of importance to the State. He had as much regard for economy as any, but as ventilation was the order of the day, it was certainly needed here. The trustees had been complaining that the State had not been acting in good faith toward the bondholders. Now let us see whether the bondholders have been acting in good faith toward us. The management of the office at Terre Haute had cost, nearly $17,000 at the end of the year 1859, whilst the canal had been abandoned to those who chose to keep it up out of their own pockets. He was satisfied that there had been connivance and wrong in regard to this injunction, which ought to come to light.
Mr. DOBBINS. In his county, this injunction was having the effect of hindering the entry of the lands. Parties were fearful about sending their money to Terre Haute on account of it. Several applications had been made to him, in which purchasers had refused to enter, from the fact that this injunction has hung up the lands. The object of the resolution he thought was a proper one, and due to the people of the southern part of the State.
Mr. NEBEKER. The gentleman was certainly wrong, about its not being the intention page: 207[View Page 207] of the bondholders from the first to comply their contract ; for they had to advance money to complete the canal. There might be other things wrong; and he would move to refer the resolution to the Committee on the Judiciary, that they may examine and see if the provisions of the Butler bill have been violated.
Mr. FISHER referred to the floods of 1858, high required expensive repairs, and required the money raised from the sales of the lands. These lands, as he understood, were pledged for the redemption of the notes which the subscribers held for the completion of the canal-pledged to refund the money thus advanced. But the money received the lands was taken to repair bridges of Terre Haute. The individuals who these funds had now enjoined them from using the proceeds of the lands for any other purpose. He thought this investigation would bring nothing out more than what is contained in the report of the trustees. The whole case was presented there.
Mr. Speaker ALLEN [Mr. Mclean in the Chair.] The motion to refer had no second. His constituents were interested in this matter. They had wanted to ascertain whether or not the report made by the trustees is true. If true, there was an end of it. But strong suspicions had arisen in the minds of the people in the Southern part of the State, that there exists a connivance amongst the trustees and others against the interests of those along the line of the canal, which they desire to inquire into for their protection. The trustees of the canal have entered into contracts with parties to furnish water power, and thereupon, relying upon these contracts, expensive mills have been erected. The failure to furnish water power have rendered these mills worthless: and when these parties have called on the trustees for damages, they are met with the answer, that the trust funds are exhausted, and there is nothing to pay their damages. An injunction had been not only granted, but made perpetual by the United District Court of this State, enjoining creditors from their pay by execution, and giving the whole of the trust funds for the re-payment of the money advanced, of which the gentleman from Wabash had spoken. This investigation proposes to cover the whole matter, and ascertain what disposition has been made of the trust funds, and whether the decree has been obtained by fraud and collusion. In this view of the case, he considered it highly proper and important that the investigation should be had. It was certainly wrong that our citizens should be made to suffer, whilst the trustees or the bondholders appropriate the trust funds to themselves. If these funds have been exhausted, then they had no recourse. But might be proven that the trust funds are not exhausted; and if they are fraudulently setting them apart for their own purposes, then he apprehended our citizens might enforce their rights. Under this view, he hoped the resolution would be adopted.
Mr. NEBEKER. If, as a corporate body, they had violated their contract, it occurred to him that the State has nothing to do with it. What right had the State to step in now and say that their lands shall be sold, and the proceeds applied in a certain way ? If the State's relation to this matter made the case different from that of any other corporation, he was unable to see it. It was true, that, on account of the State's reversionary interest, there might be hope on their part that she would sometime take back the canal.
Mr. WOODHULL saw no necessity for the reference; and the House rejected the motion of Mr. Nebeker.
The resolution was adopted.
