SUPPLEMENTARY
TO
THE BREVIER LEGISLATIVE REPORTS.
VOLUME ELEVENTH.
The Governor's Action in Regard to the Settlement of
Certain
Old Internal Improvement Bonds----Debate in Continu
ation.
IN SENATE.
THURSDAY, April 29, 1839.[IN CONTINUATION-p. 126.]
Mr. CARSON offered the following concurrent resolutions:
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 1860, 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 principal or interest due, or to become due, on the old Internal Improvement bonds, except as provided in the acts of 1846 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 the 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. SCOTT had moved to refer these resolutions to the Committee on Federal Relations.
Mr. CARSON had moved to make these resolutions the special order for this afternoon at two o'clock.
Mr. WOLCOTT had moved to indefinitely postpone the resolutions.
Mr. CARSON had modified his motion so as to make his resolutions the special order for to-morrow afternoon in Committee of the Whole Senate, and thereupon-
Mr. HANNA said :
Mr. President : I regard the action of the Governor, if acquiesed in by the Legislature,as only an entering wedge for the payment of about eight millions of dollars-or the entire amount of outstanding old internal improvement bonds. The Senator from White [Mr. Wolcott] is trying to repudiate a portion of this debt, and trying to sanction the action of the Governor in paying another portion. Why is it that a portion of this debt is more sacred than another portion? What kind of justice is this? Is it right that the men who had bonds against us and refused to surrender them and take the Wabash and Erie Canal and eight thousand acres of land-is it right that the men who refused to help us in the time of need shall be paid for it in this way? They refused to extend to us a helping hand and now the Governor says that is a sacred debt and paid it off in full out of an acknowledged debt of the General Government,as the Governor called it "an allowed claim."
The holders of these bonds refused to assist us-these very men held back and would not lend us a helping hand in the darkest hours of 18478and yet the Governor says they shall be paid in full, and the Senator from White moves to postpone any proposition to inquire into the Governor's conduct. He demands, as a partizan, that we shall not investigate this subject at all. He insists that the light of Heaven shall not shine upon this dark transaction in which three hundred and twenty thousand dollars of your money has been expended without authority! Is that kind of course to be pursued here? I want this thing to be investigated, and I want to know if whether it was just and right to be done in the manner in which it was done?
I hope this motion to indefinitely postpone will not prevail. But what else has the Governor done? He has employed an agent to transact business for the State without author page: 317[View Page 317] ity - some clerk, perhaps, instrumental in preventing the settlement of these claims. He employed him, and promised him forty or fifty thousand dollars if he will stand out of the way and let these claims be settled! What right has the Governor to do these things? Is fretting himself up as the controling power in Indiana? I fancy we have laws here, and if we have no law governing this body or the Governor, let him stand out of the way till we make a law. The time has passed when one can can control things in the State of Indiana.
Mr. FISHER, (interposing.) Does not the law of 1865 authorize the Governor to appoint agents?
Mr. HANNA. I asked the Senator, the other day, why this appropriation of five thouand dollars to the Adjutant General was made, when I saw him walking about the streets, apparently with no business on his hands, and the Senator said it was necessary to continue that office to settle up the claims of the State against the General Government; and vet we turn to the report, and see that the Governor has hired a man for forty or fifty thousand dollars to do the same thing.
Mr. FISHER. The law fixes the pay of the Adjutant General the same as a Brigadier General.
Mr. HANNA. I see no use for an Adjutant General in Indiana.
Mr. FISHER. Will the gentleman introduce an act to abolish the office?
Mr. HANNA. I am not running the Legislature. I am only trying to open a little light occasionally on subjects that come up here. I stand here now, asking light upon this expenditure of a vast sum of money without authority of law. I ask for the yeas and nays upon the motion to indefinitely postpone the matter.
Mr. FISHER. Mr. President: This matter has got into an interesting condition. The Governor thought the passage of a law making any other provision than that contemplated in the acts of 1846-7, might compromise the State with regard to that whole debt. Here is a party owing us money, and will pay it if we take these bonds. The Governor took them. This is not a resolution to approbate the action of the Governor, by no means. It is a resolution censuring him, and if you don't censure for that the Senator from Sullivan, [Mr. Hanna,] says you lay yourselves liable to pay all this great internal improvement debt, and ff you don't censure the Governor you show you are in favor of the assumption of this old debt! That is great logic.
Mr. TURNER. How can we abrogate the debt? The money is paid over. Have we the power to compel the paying of it back?
Mr. FISHER. I suppose we have not. But what could be done with the General Government, when it said to the State: We won't pay you unless you take your note-here it is, you may take that or go to the dogs?
Mr. TURNER. The Government of the United States never refused to pay allowed claims.
Mr. FISHER. Unquestionably it did, unless you allow a set off.
Mr. TURNER. Our Government had no-authority of law for paying these bonds, even if we never get our pay from the General Government.
Mr. FISHER. Then it would be as it is, with the single exception that the claim of the Government would be running on interest and our claim against the Government would not. It is a clear, plain case, and the advantage to the State is clear and prominent. The power of the Government to do it is a question I am not going to argue at all. I am not speaking to approbate the action of the Governor, but what I am speaking about is this: While this resolution was introduced for the purpose of censuring the Governor, the threat is held over those who might be supposed to approbate the action of the Governor, that unless you vote this censure and condemnation upon the Governor, you expose the State to the payment of this vast debt. The Senators who make this argument understand this as well as we do. They are seeking for political effect, and I am willing they should make all the advantage they can of it.
I would prefer that these resolutions should go to the Committee on Federal Relations, as moved by the Senator from Vigo, [Mr. Scott] for to go into Committee of the Whole to-morrow will lead to just such a kind of discussion as we have got to-day, without the discovery of any new facts, without an investigation of the papers, and without really throwing any additional light upon the subject. The whole subject should resolve itself into this: Shall these resolutions of censure be passed upon Governor Baker, the Democracy contending that if they are not this State will have to pay some fifteen millions of dollars of this old Internal Improvement debt? Those opposed to these resolutions do not think that the action of Governor Baker changes the liability of the State to pay this old debt at all.
Mr. WOLCOTT. Mr. President: Governor Baker in settling the bonds he settled, in no manner affected the bonds canceled under the arrangement of the Butler bill. As correctly stated by the Senator from Vigo [Mr. Scott] the two cases stand upon different ground. The original bonds as issued were obligations against the State; those remaining uncanceled are still obligations against the States.
The bonds surrendered under the Butler page: 318[View Page 318] bill ceased to be obligations against the State and the difference between the two classes of indebtedness are as different and distinct as it is possible to conceive. The action of the Governor in allowing the offset to these bonds, even if recognized by the General Assembly, would not affect the question involved in the interest represented by the surrendered bonds. It is said the Governor violated the law of 1847. I deny any violation, by the Governor, of the law of 1847. I will admit the law reads:
PROVIDED, FURTHER, That the State will make no provision whatever hereafter, to pay either principal or interest on any internal improvement bond or bonds, until the holder or holder? thereof shall have first surrendered said bonds to the agent of State, and shall have received in lieu thereof, certificates of stock as provided in the first section of this act; any thing in this act to the contrary notwithstanding.
Here in the act of 1865, passed eighteen years after the act of 1847, is an entire repetition of the restriction of 1847, because plenary power is given to settle all these claims.
Mr. HANNA (interposing.) I will ask whether that is not the act relating to war claims?
Mr. WOLCOTT. Yes, sir, I will discuss that a little further on. When the Legislature, by the act of 1865, empowered the Governor to settle the claims of Indiana against the United States, imposing no restrictions against that settlement; anything that was legal he had a right to do. These outstanding bonds held by the United States were legal obligations of the State to the United States, and under the act of 1865 the Governor did that which the act of 1865 expressly authorized him to do. There can be no doubt about this question. Why are these series of resolutions introduced? It is not confined alone to the action of the Governor in settling these claims; it implicates the action of the Republican administration since the war began.
Mr. CARSON. Will the Senate allow me?
Mr. WOLCOTT. No; not till I get through. In terms, the resolutions censure not only Governor Baker but Governor Morton. I see nothing in these resolutions but a purpose to sow discord and confusion among our people. It has been the policy of the Democratic party since the fall session began to foment disturbance and discord in the Republican ranks, and I believe these resolutions were introduced for no other purpose. And I say as Republicans we should vote them down. There is no propriety in stirring questions that have been settled for six or seven years; and there is no impropriety in what has been done. I say the law of 1847 did not overleap the law of 1865. But suppose there was a technical objection, and yet the stubborn fact existed that the United States Government held claims against the State and refused to settle unless we offset the claims. The Governor yielded to these coercive influences -
Mr. FISHER (interposing.) Every time the State failed to pay the interest on bonds the General Government continually withheld a sufficient sum to pay that interest with; and a special agent was sent to Washingson during a Democratic administration to try and recover that, but failed.
Mr. WOLCOTT. That is true. The Government always insisted upon its offset. But suppose the Governor had not under the Act of 1865, technically, authority to make the settlement, and yielded to the demands of fa General Government, yet the claim the State of Indiana held against the General Government would five or six times in amount offset the claim, and be of great practical service to the State; and if there is any responsibility to this matter let it rest with the Governor If he served the State usefully by yielding to a pressure he could not control, he is not to blame. If we pass it by in silence, as at the last session, then the responsibility rests with the Governor and not with the State. These are the reasons I have to give for the course I shall pursue upon this question.
Mr. TURNER. I would like to ask the gentleman a question before he takes his seat. He has referred to the fomentation of discord by the Democrats during the session in the Republican party, and I will ask him if he does not remember that these identical resolutions were presented at the regular session, and that they were smothered by the influence of the "Spartan band" and members of the Republican party, on the ground of a speech by Judge Hughes, that although the thing was not according to law, and we could not give in adhesion to it, the best thing we could do, as we had to submit to the condition of things, and could not get our money back, was to maintain silence.
Mr. WOLCOTT. I deny any intention to smother the resolutions. The motion does not debar full investigation. After about as full investigation as the subject admits of, it was postponed, and let us postpone it again.
Mr. TURNER. There is no disposition on the part of the Democracy that I know of to foment discord in the Republican ranks. We are looking on with complacency at the discords they have, without taking a part.
Mr. CARSON. Mr. President: The Senator asks why these resolutions are brought before the Senate at this time? I would reply by asking why the original resolutions were introduced and sprung upon this Senate without consideration last session: and why the first resolution of that series was adopts without any discussion, indefinitely postponing the consideration of this matter? Certainly page: 319[View Page 319] that was not by any Democratic tactics or maneuvers. After various attempts to discuss the resolutions introduced by Judge Hughes, we failed to do it; hence that they might be Trussed the resolutions now before the Senate were called forth. That is the history of that transaction. Then it was because we apprehended that the action of the Governor committed the people of the State of Indiana to an immense liability and a great wrong by an unauthorized act on his part. Let us read the first resolution. If it is true it should be adopted ; if not it should be rejected.
Mr. C. read the 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.
Now, will any gentleman on this floor tell me it will not require a great amount of investigation for Governor Baker or his friends to show the law by which he settled these claims?
Mr. WOLCOTT (interposing.) Bead section two page forty-nine of the acts of 1865.
Mr. CARSON. That act recites that the Congress of the United States levied a tax of twenty million dollars upon the people of the United States, a certain portion of which was to be paid by the people of each state. There was no discretionary power:-no law prohibiting the claim. It was a debt in ascertained amount. After reciting the facts then it says that Governor Morton permitted the United States to withhold the amount. He assumed the responsibility of allowing that claim. I ask is that settling a claim in a legal way? Does that form a precedent, for a Governor to settle a claim which the State says she shall make no provision for the settlemant of? I take it not at all. The first section of that act provides this:
Be it enacted by the General Assembly of the State of Indiana, That all and singular the acts of Oliver P. Morton Governor of the State of Indiana, in the settlement of the claims of the State against the United States, for enrolling, enlisting, clothing, supplying, arming, equipping, paying and transporting the troops of the State in the service of the United States, and in paying and satisfying the State's quota of the direct tax laid and levied by Congress on the sixth day of August, A. D., 1861, by the due execution of a release or releases to the United States of said claim be, and they are hereby, fully and entirely approved.
Then follows the second section :
The Governor is hereby authorized to proceed with the settlement of said claims by such agent or agents as he may deem necessary, and to file and settle and adjust such other claims as may from time to time accrue against the United States, in the same manner.
Now will the Senator from White [Mr. Wolcott] tell me that includes authority for thesettlement of the old Internal Improvement bonds?
Mr. WOLCOTT. The Governor pursued the usual means of settling obligations or balancing accounts by mutual obligations.
Mr. CARSON. The law says " the Governor is hereby authorized to proceed with the settlement of said claims;" and " such other claims;" What does that mean? "as may from time to time accrue against the United States in the same manner." Does that mean the old Internal Improvement claims that the law says the State shall never provide for the payment of? That is a lame construction. If that is the only authority I think the Senator is prepared to vote upon it now. What is the next resolution?
The next resolution is:
Mr. C. read the second resolution as follows :
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 1846 and 1847, known as the "Butler Bills."
Now is the Senate prepared to make any other provision? I think not sir. If it does, in my humble opinion, it convicts itself of a discernment between creditors. As Judge Hanna said: The man that held on to his bonds and refused to assist the State of Indiana in our time of need is to receive his dollar for dollar while those who came nobly to our aid are to be punished.
Mr. SCOTT (interposing.) Do you understand that the State is discharged from any liability on these unsurrendered bonds because that party refused to come in under the Butler bill?
Mr. CARSON. Suffice it to say it places him as the Senator, and the Governor of the State in that condition; and we have no power to relieve ourselves. The Governor could not ignore that law and assume the responsibility. He has no other right to act in such matters except as authorized by law. He don't make law. He assumed these liabilities without authority of law, and he had no more right to than I or any other person in the State. The Legislature recognized the act of 1847 as binding. It is in the nature of a contract. We were bankrupt then, sir, and are in the condition of a bankrupt. And so, when a man compounds with his creditors and some fail to come in their claim is considered void.
What is the next resolution? The question is whether we should or should not make provision for the payment of these outstanding bonds. Governor Baker adjusted some three hundred and twenty-four thousand dollars, and; here are yet some others outstanding held by the Government and in the hands of other persons, but he dare not recommend to the Leg page: 320[View Page 320]islature the passing of a law providing for the payment of these. If Governor baker settled them as an honest debt and paid them off in full, why should he not pay the others? He says he is afraid to advise us to make a law to provide for their payment because it might be construed into a violation of the act of 1847 and we might commit the State to the responsibility for fifteen millions of dollars.
The third resolution is:
Mr. C. read the third resolution as follows:
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 bylaw, and that no legislation sanctioning the settlement of the matters embraced in the 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.
Now I call upon the friends of Governor Baker to show me where Governor Morton ever said that it was a legal liability against the State of Indiana. If you look at his message in 1865 he says it was not; - that the State had nothing to do with it. Then why did Governor Baker assume the responsibility? If there is any law authorizing his action, Governor Baker ought to be able to furnish that law to his friends. All the censure these resolutions pass upon Governor Baker is simply declaring the fact that his action in this matter was unauthorized by law. I do not think the friends of Governor Baker should be so sensitive when he does an unauthorized act as to reuse to tell him so.
Mr. CHURCH, (interposing.) Suppose the Legislature of this State should authorize the Senator from Allen to settle a claim the State had against the Senator from White; and the Senator from Allen goes to settle and finds a claim on two millions of dollars against the Senator from White and he has a claim of five hundred thousand dollars against the State; would the Senator from Allen be unauthorized to settle?
Mr. CARSON. It depends on the circumstances. I say the State of Indiana had nothing to do with this two hundred and fifty thousand dollars. It was no loan to the state. She never recognized it. Then why should Governor Baker assume to step in and settle Governor Morton's matters with the United States? Governor Morton was in the height of his glory and power when the Legislature in settling this matter, what power had Governor Baker to step in without authority of law and settle it? If Governor Baker had authority to do this act he ought to be able to furnish it to us. These resolutions go no farther than to say that the action of Governor Baker was unauthorized by law. If this is not so how long will it take his friends to hunt up the law by which he could be justified in the act? This is not an intricate matter. These things were done unauthorized by law; and Governor Baker never should have paid them without authority of law.
I would like to have this matter set down as the special order for Friday at two o'clock p.m., because I cannot be here next week, and as I am the mover of the resolutions I would like an opportunity of taking care of them.
Mr. HANNA. Mr. President: Before the vote is taken I desire to call attention to the act passed on the 6th day of March, 1865. It is an act in reference, as it states, to the tax of twenty millions of dollars levied by the General Government for war purposes. The quota for this State was $904,875.33. Each State had the right, without the General Government collecting it to assume payment of it. The Governor and certain of the State officers notified the General Government that the State would pay its quota; and they held claims against the General Government for equipments furnished to an amount sufficient to cover the tax or very near it. These claims had been allowed by the General Government, and this act authorized the Governor to proceed with a settlement by such agents as he deemed necessary. That is all there is of it. That these war claims might be offset against the direct tax; and what else? "He should file and settle and adjust such other claims in as may from time to time accrue against the United States in the same matter." There is not a word said about settling any claims in favor of any Indian tribe. The General Government was not the owner of these bonds - an Indian tribe was the owner of these bonds. The General Government held them in trust for the Indian tribe.
Mr. SCOTT (interposing.) Did not the General Government assume the responsibility of investing in the first place?
Mr. HANNA. I don't know what the General Government did. I only view it as a legal proposition. It was a naked trust, and no legal right vested in the United States. Therefore the Governor had no power except self-constituted power to settle these claims. It was not a legal offset against any claims we had against the United States.
Mr. FISHER (interposing.) The Government of the United States had money belonging to the Indians, and in its capacity it bought these bonds and held trust, and paid the interest annually to the Indians, and had as much control of the bond as if it had owned them.
Mr. HANNA. As a legal proposition, if there was a court competent to try the case, they could not have offset these bonds to any page: 321[View Page 321]claims held by the State against the General government, because the bonds were in fact the property of the Indian tribe, and not the property of the United States. I refer to this ct of 1865 for this purpose: When I say the governor has been guilty of usurpation, you point to this act and say, Here is his authority, I say it don't refer at all to the Internal Improvement bonds of the State. It don't remove the allegation I make that he is guilty of usurpation and guilty of an act detrimental to the interest of the State. Every one knows these claims were not worth ten cents on the dollar. Twenty years ago we made provisions for their settlement. The holders of these bonds refused to go into that arrangement, and these bonds had not been recognized as a legal obligation from that day to this. True, the Government has, per force, withheld the three per cent., and these bonds have been expensive to the people of the State, and are made still more so by the act of Governor Baker. How is it with the one hundred and ninety-six thousand dollars outstanding? We have never paid interest on them, and the holders have never pretend-to take any process to recover. They were no more than waste paper.
Mr FISHER (interposing.) I would like to ask the Senator if an individual holding one or more of these bonds should become indebted to the State, and suit was commenced by the State, whether his bonds could not be offset as against the indebtedness?
Mr. HANNA. In answer I will say that the United States did not hold any bonds of this State in a condition that they could be used as an offset. It held the bonds as a naked Trustee. They were no more than waste paper.
Mr. WOLCOTT. If your proposition be true does not this follow: that Governor Baker has made no settlement at all, and we still owe the Indians these bonds?
Mr. HANNA. I say he has not settled, for he has no authority to do so; but he has satisfied a claim we held against the United States. I say the act of 1865 gave him authority to settle only a certain tax, and that we have received no consideration for the settlement in question here. Your Governor has usurped authority to do a thing you did not confer upon him the right to do, and now the General Government will hold us to that contract; and We want to say to that man that he has transcended his authority. And that is all I want to say.
Mr. FISHER. It is understood that the general Government is indebted largely to the State of Indiana. Does the Senator suppose she will pay that debt without using other bonds of the same kind she holds? When the a Government refuses to pay unless these bonds are taken as an offset, how are you going to remedy that evil?
Mr. HANNA. If you want the Governor to settle these bonds pass an act giving him authority to do so. Let him act according to law but never suffer an officer to usurp authority. That is the point that I am driving at. I want to meet at the door-step any attempt of the executive to spend the money of the people without authority. Let the voice of the people be heard, and let not an Executive officer undertake to override the law and the Constitution.
Mr. CRAVENS. Mr. President: I know of no nobler sentiment expressed by any leader than that expression of Junius that it was as base in an individual to hear a worthy man abused without attempting his justification, as it is to be the author of the calumny against him. I suppose the purpose of these resolutions is as apparent as that immense flood of light just let in upon us by a puncture of the heavens. There cannot be much difficulty m recognizing it as an organized and intended raid upon the present Executive of the State. That I apprehend to be the great purpose of this discussion; and I am warranted in saying, so, when I recall the sentiments expressed by the recognized leader of the Democracy on this floor-the Senator from Sullivan [Mr. Hanna.]
Mr. HANNA (in his seat.) I deny any leadership.
Mr. CRAVENS. I merely assert the leadership. The Senator from White, at the commencement of the session, introduced an amendment to the Constitution, which declared that the State shall never do any act looking to the redemption of, or liability on account of the Wabash and Erie Canal. It was objected to on the ground that if the debt incurred la that matter was not a debt-an existing debt-there was no necessity for it; and if it was a debt, that proposed Constitutional amendment was simply an act of repudiation. I believe the Senator from Sullivan [Mr. Hanna] introduced that argument and would say upon his, reputation as a lawyer that this great debt was. a debt upon the State and had been for years-and he was in favor of repudiating that debt and also the General Government debt.
Mr. HANNA (interrupting.) I guess the Senator misunderstood me. I said it was a legally existing debt or not; if it was not, then the amendment to the Constitution was unnecessary; if it was we could repudiate it; and for myself I favored repudiation not only of that but of all---
Mr. CRAVENS. Then why censure the Governor of the State for having acted under authority given him by the Legislature? Why censure him for doing the very thing the people of Indiana declared he should do?-settle these claims?
page: 322[View Page 322]He spoke at length in justification of the action of the Executive of the State in the matters questioned by the resolutions under consideration.
When he had concluded-
The Senate took a recess till two p. m.
Subsequently, the pending motion to infinitely postpone Mr. Carson's resolutions agreed to-yeas 20, nays 17.
