THE OLD STATE DEBT.
Mr. CARSON offered a concurrent resolution, as follows:
Be it Resolved, By the Senate, the House of Representatives concurring, that the action of the Governor of the state of Indiana, and his agent, the Adjutant General, in the settlement of the old Internal Improvement Bonds, held by the General Government in trust for certain Indian tribes, referred to in his message of 1869 to the General Assembly, was unauthorized by the laws of the State of Indiana.
RESOLVED, That the General Assembly of the State of Indiana should make no provision for the payment of the principal or interest due, or to become due, on the old Internal Improvement Bonds, except as provided in the acts of 1845 and 1847, known as the "Butler Bills."
RESOLVED, That the action of the Governor in the settlement, through his agent, the Adjutant General, of $250,000 advanced to Governor Morton by the President of the United States, in 1863, was unauthorized by law, and that no legislation sanctioning the settlement of the matters embraced in these resolutions and referred to by the Governor in his message, as embraced in the report of the Adjutant General, should be entertained or proposed by the General Assembly.
Mr. HUGHES raised a point of order as to the consideration of the first resolution, the Senate already taken definite action upon the subject matter of it.
The LIEUTENANT GOVERNOR decided the point well taken, and declared the resolution out of order--it containing matter heretofore indefinitely postponed.
Mr. CARSON then withdrew his resolution.
Mr. WOLCOTT called up his concurrent resolution proposing an amendment to the constitution of the State so that no law shall be passed to pay any stock issued to pay the old Internal Improvement or Wabash and Erie Canal Debt.
Mr. WOLCOTT, in reciting the history of this matter was understood to say that the first proposition made by the creditors in 1847 was to take the Canal and eight hundred thousand acres of land, and from the sale of the lands and the use of the canal derive what revenue they could in payment of the obligationthe State reserving the right to redeem. The act of 1846 by the thirty second section thereof pro- page: 408[View Page 408] vided a different arrangement. The thirty second section is this:
SEC. 32. It shall be optional with the State, at any time hereafter, to call in and require a surrender of the outstanding stock issued under the first section of this act, by giving to the holders of such stock a new certificate for the one-half of the principle thereof, to bear interest at and after the rate of five per centum per annum, and which principal and interest shall be payable and redeemable by the State out of the revenues thereof; the principal to be payable at the pleasure of the State, and by giving to such holder another certificate for the other half of the principal of such stock, to bear a like interest of five per centum per annum, and to be paid and redeemed, and only paid and redeemed out of said canal lands, and the tolls and revenues of said canal as provided in the eighth section of this act and from and after the time that the State shall call in said stock, issued under the first section of this act, and shall issue new certificates as aforesaid, the State, its faith and revenues shall be only pledged and responsible for the payment of one-half of said principal and interest at the rate of five per centum per annum thereon, and fertile other half of said principal and interest the holders of said certificates shall look solely and exclusively to said canal and the tolls and revenues of said canal, as provided in the eighth section aforesaid of this act; Provided, however, that the State shall have the option of redeeming said canal certificates out ot the revenues of said State, in the same manner as if this sec ion were not adopted; And, provided farther, that the excess of the revenues of said canal lands and tolls, and the revenues of said canal over paying said interest of five per centum per annum on said canal stock, (if any there be) shall be applied to the redemption and absolute retirement of said canal stocks.
The first section of the act of 1847, adopted the above reservation in the thirty-second section of the act of 1846.
The canal represented one half the debt only--the State issued bonds for the payment of the other half; so there was transferred to the creditors property costing the State double the amount of the debt, and in addition to that was added eight hundred thousand acres of very valuable land. All this: the works, internal improvements, side cuts and eight hundred thousand acres of land were turned over. Now, probably by a cause which could not be foreseen, the schedule and lands have failed to pay off the incumberances against the property and yet the debt is charged against the State. The object of this resolution is to confirm the agreement heretofore made by the State on this subject and to remove and settle this question for all time to come. It is a question in which the people feel there is some danger.
But it is said: Why press this question now? In answer I will say, The creditors are pressing this question.
Mr. SCOTT (interposing.) Does the gentleman consider there is any legal liability on the part of the State to pay these creditors'?
Mr. WOLCOTT. I do not know. Some think there is however. Still they are here before this General Assembly, and they have been here before this. The Trustees have deviated from their true duties and their trust and come here as advocates of this canal interest, and it is not the first time. [Here Mr. W. read from the report of the Trustees of the Wabash and Erie Canal to show that they were trying, argumentively, to raise the presumption that there still exists a debt on the part of the State and that the canal property is simply held as collateral]
Our Agent of State frequently met persons engaged in buying up the certificates of stock representing claims against this security, and when he told them that these claims would not be recognized in Indiana, he was told that the fund was so large they could bribe the General Assembly. Now in view of the fact that such reports come to us from the Agent of State, and that the canal Trustees themselves, have become advocates of these bondholders, I have introduced this resolution for an amendment to the Constitution which when confirmed by the people will only reaffirm the act or contract of 1846 and 1847.
Mr. CARSON. Mr. President: This is an important subject. It is of too much importance to be passed lightly by. I was the author of the original proposition at the last session of the Legislature to incorporate in the Constitution a provision that the State was not to incur any liability on account of the Wabash and Erie Canal. I then stated that it was a proposition I was not prepared to discuss, but should it be passed upon at that General Assembly, when the next General Assembly met, that Assembly and the people could act upon it more intelligently. Since that time I have informed myself more fully upon the subject, and can see its magnitude and importance. I do not concede that the State has ever parted with the fee simple of the Wabash and Erie Canal. I do not concede that the bondholders or the Trustees of the Wabash and Erie Canal held it for any other purpose than as a matter of trust, and when the object of that trust is accomplished it will revert to the State of Indiana. Now, sir, it is a little too late in the forenoon to continue any extended remarks and I will move that the Senate adjourn.
The motion was agreed to.
And then--
The Senate took a recess till two o'clock, p. m.
