APPENDIX TO THE BREVIER LEGISLATIVE REPORTS.
TWELFTH VOLUME.
The Wabash and Erie Canal--Debate in Continuation.
IN SENATE.
TUESDAY, January 17, 1871.[IN CONTINUATION--PAGE 99--BOTTOM OF THE FIRST COLUMN.]
The concurrent resolution of Mr. Brown see page 21: the joint resolution of Mr. Caven see pages 27 and 28: the memorial from holders of certificates--see pages 65 and 66; and Mr. Hughes' amendment to Mr. Brown's resolutions--see pages 82 and 83being the special order--
Mr. HUGHES said: I think there are but two courses to persue on this whole subject of the State debt; one is to take hold of it and investigate it, have it fully reported in an official form before the Senate and then take such action upon it as we may think expedient and proper, and the other is to postpone the subject and have nothing to do with it. I do not think, myself, that there is any middle ground we can occupy. I would like to see the matter go to the Committee of the Whole and be fully discussed if that is the pleasure of the Senate; otherwise I would be glad to have it distributed to appropriate standing Committees and let it there be investigated; otherwise I would be glad to see the Legislative business of the session relieved of the constant consumption of time and paper that would be necessary to do justice to this State debt question, and put it out of the way.
I will move to indefinitely postpone all that portion of the special order except my own resolutions which I think are the best--I don't propose to introduce resolutions myself and then move to indefinitely postpone them. We had as well take the sense of the Senate now as to whether we are to investigate this question and vote or act upon it or not. It is not worth while to spend several days in its discussion and then say we will take no action. Either way will suit me, but I owe it to myself to say that I consider this matter of sufficient importance to require and demand investigation. I have made the motion for the purpose of ascertaining the sense of the Senate and for that purpose alone.
I think the outstanding Internal Improvement bonds ought to be paid, if the amount is not too large. I suppose when it comes to the details we can provide by some new bonds or some other way in which the credit of the State can be maintained. I will put my motion in this shape as to the indefinite postponement of the memorial.
Mr. GREEN. I am glad the senator proposes to divide the question. There is too much matter for us to postpone at this time. We have a very heavy grist in the mill in the way of resolutions and amendments on this subject. For one I am in favor of discussing the Wabash and Erie Canal question. It has been brewing for a long time; it is early in the session; it is now upon us, and I had just as leave settle it this session as at any other time. I would like to have a full discussion of the sesolutions of the senator from Jackson [Mr. Brown] as well as the amendments offered by the senator from Monroe [Mr. Hughes.] I concur in part of the resolutions of the senator from Jackson, and part of the amendments offered by the senator from Monroe, but I do not concur sufficient to vote for either proposition. I am in favor of keeping the matter up in order to dispose of it for this term. I do not see how we can get at any one of these questions on the motion to indefinitely postpone; I would rather see them come up up on their merits and have them voted up or down. page: 423[View Page 423] Hence I hope these things will not be hurried through.
Mr. SARINGHAUSEN. Mr. President: I move that two hundred copies of the resolutions with reference to the Wabash and Erie Canal be printed with such amendments as may be offered.
The LIEUTENANT GOVERNOR The motion is not in order pending a motion to indefinitely postpone.
Mr. DWIGGINS. Mr. President, I submit that this proposition has been discussed for the last two years all over the State, through the public prints, on the stump, in these Legislative Halls, and I submit that it would be dangerous for this General Assembly to pass it over without some legislation, as we are informed that there is now a, suit pending for the purpose of foreclosing a lien for the payment of some outstanding bonds, thereby jeopardizing the sale of this Canal, with its tolls, &c. It strikes me that this question is of too much importance to the people of the State of Indiana to pass it over without being thoroughly investigated. I entirely concur with the senator from Monroe [Mr. Hughes] in favor of having a thorough investigation of the entire matter, but we will never get at an investigation by moving to indefinitely postpone. I hope the Senate will not vote to indefinitely postpone the memorial, the concurrent resolution, or this proposed Constitutional amendment, for the people of the State of Indiana, sir, demand that this Legislature should submit some kind of an amendment to the Constitution about this matter for them to vote on.
Mr. MARTINDALE. Mr. President: While I voted for the reference of this memorial from the holders of the Canal scrip, to the Judiciary Committee as between the Committees to which it should be referred, I suggested at the time to senators the propriety of the indefinite postponement of that memorial. And I wish to say to the senator from Monroe [Mr. Hughes] that I will vote for that branch of his motion. I do so because I desire to treat with disrespect the memorialists and not because I desire to treat with any disrespect the Senate or Committee to which it was referred. All the subjects embraced in the memorial have been embrased in arguments, in messages and in Canal literature in the Legislature for the last four or five years. And upon that subject--that is the subject of the assumption of the Wabash and Erie Canal scrip, as contained in the memorial, I have said that my mind was made up and I think the mind of the Senate is made up and I did not wish to cast any vote that would treat the subject with seriousness.
Now I wish to say with regard to the resolutions of the senator from Jackson [Mr. Brown] and the amendments offered by the Senator from Monroe, that a joint or concurrent resolution passed is no legislation. It is a simple expression of opinion of this General Assembly. It has no weight with any other co-ordinate branch of the government, nor with the people, and with due respect to the gentlemen who have introduced them I think they themselves will concede that although we may pass them they establish nothing, they are not conclusive, and I therefore think it unnecessary to consume the time of the Senate in discussing them, and in voting upon them; although I believe I would vote for most of the resolutions offered by the senator from Monroe. But there is one question involved in his resolution I am not so sure about, and that is the one directing the Governor to invest these bonds in the Canal scrip. I am not so sure but that would be in violation of legislation commonly known as the Butler bills. If so, I should be in favor of postponing them also.
Then comes the other branch--the proposed Constitutional amendment. Is it possible that any senator upon this floor will obtain any light by the discussion of this subject? If it is and gentlemen desire it I will not object; but I conceive the only question involved in this matter is the phraseology of the Constitutional amendment itself. I believe every senator has his mind made up and is ready to vote upon the question aside from the question of phraseology.
Mr. HUGHES. I will suggest a difficulty in the way. There are senators on both sides who entertain the opinion maintained in the speech made by the senator from Jackson. On the other hand other senators hold different views, and when it comes to passing a Constitutional amendment we have to make up our minds upon a grave and difficult question of law.
Mr. MARTINDALE. This suggestion has nothing to do with it one way or another. The passage of the proposed Constitutional amendment does not affect the rights of these parties one way or another--they have not surrendered their Internal Improvement bonds, and the question whether the State owes them today cannot in any way be involved.
Mr. HUGHES. The senator does not understand me; the Governor has paid a portion, and the question is, whether that is a violation of a contract.
Mr. MARTINDALE. What has that got to do with the passage of the Constitutional amendment which declares that we will not pay a different class of bonds?
Mr. HUGHES. The State is pledged not to pay the very bonds the Governor did pay.
Mr. MARTINDALE. I take the position that the question, whether the State is liable for the Internal Improvement bonds or whether she should pay them, is a question foreign page: 424[View Page 424] to the adoption of a Constitutional amendment and has nothing to do with it. I think these Internal Improvement bonds stand upon a different basis from the Canal scrip, are not affected by the Constitutional amendment; and therefore it is not important that we understand the subject before we say by the Constitutional amendment we will not pay the scrip. I do not think the question can be made plainer as between the memorialists and the people of the State:--they came forward and sought an adjustment of the debt; the adjustment agreed upon was that they should take one-half the debt in scrip and the other one-half in bonds of the State which have since been paid. Now what has the State done?--What equity is there that the State should go into an investigation to know whether she should pay the other half of the debt which has been paid in a certain commodity at the solicitation of the creditors? I do not desire to set up a man of straw by putting into operation an investigation into a subject that I believe contains not an iota of merit.
Mr. BROWN. Are you in favor of this State primarily assuming the payment of these outstanding, unsurrendered Internal Improvement bonds, principal and interest?
Mr. MARTINDALE. As far as my own individual feeling on that subject is concerned, as suit has been brought against the State in Carroll county, I would be in favor of authorizing the Governor to defend that suit to the last Court. These parties who hold these Internal Improvement bonds not having participated in the arrangement made, I do not believe we could make a contract with other creditors that would bind them. The senator [Mr. Brown] made an able speech on this subject--I endorse much of it, but the idea that a debtor can call around him all his creditors but two or three and settle the debts of those two or three who don't come into the arrangement, is new to me.
Mr. BROWN. There is not one line, syllable or letter in the speech I had the honor to deliver before the Senate, in which I took the ground that the State is not liable for the payment of the outstanding Internal Improvement bonds, but I expressly said that the State is liable for the payment, of every bond held by every person not a party to the contract of of 1846-7. My position is this in short; that the holders of the Wabash and Erie Canal are bound to protect themselves against these outstanding bonds. In the first instance they are to come to the State and have them sold under the Butler bills, the same as a man having a piece of property that is encumbered is bound to remove the incumbrance.
Mr. MARTINDALE. I do not contravert the question. Unless in the transfer there is an agreement to assume and pay a prior incumbrance; then the obligation does not exist. The Indiana Central Canal, the Madison and Indianapolis Railroad and a large amount of other property is bound for the payment--
Mr. BROWN (in his seat.) That has to be sold first.
Mr. MARTINDALE. The party purchasing that property don't undertake to discharge the incumbrance. It is certanly due where there is no compromise with creditors that the State should meet them fairly.
When the United States held our bonds she had the right as she did, to say to the State of Indiana, "I will not settle with you--will not pay you nearly one million of dollars until you adjust your one hundred and ninety bonds held by me for many years;" and I say that the taking up by Governor Baker of these bonds was simply a settlement--it was not a payment by Governor Baker of these bonds. There was so much due to the State of Indiana, and the General Government had passed a joint resolution that this settlement should not be made and nothing paid to the State until these bonds were adjusted. The Legislature was not in session; there was nearly a million of dollars tied up in this question; they bundled these bonds up and dispatched them to Indiapolis with the balance of the money due the State; and the Governor did nothing in this matter that would entitle him to censure. He has done right. What he has done has saved the State of Indiana over fifty thousand dollars. Making a calculation of the interest on these bonds from the time he redeemed them, and upon the interest of the debt due the State gentlemen will find it amounts to over fifty thousand dollars.
Mr. BROWN. How much would the Governor have saved the State if he had adjusted them according to the Butler Bills?
Mr. MARTINDALE. There was no authority given the Governor to adjust them. The General Government said: "We will surrender these bonds only at par." Governor Baker had no alternative but to leave the matter unadjusted or accept these bonds at par and in the manner the General Government offered to surrender them.
Mr. BROWN. Does the senator pretend to say there was any law, resolution or authority conferred by the State, giving the Governor special power to make the settlement he did make?
Mr. MARTINDALE. The gentleman is simply asking questions to get me doubly upon the record. I have stated there was no authority, and specially stated why he did it without authority of law. This debate has embraced three or four subjects while there is probably but the one question pending, to indefinitely postpone the memorial. I will vote to postpone the whole subject except the proposition for a Constitutional amendment. I page: 425[View Page 425] will not vote for the indefinite postponement of that and I advise senators not to.
Mr. BROWN. The distinguished Senator from the Capital district [Mr. Martindale] is pleased to criticise me because I do not fully endorse the settlement, His Excellency made for some three hundred and twenty thousand dollars worth of Internal Improvement bonds, and is pleased to criticise the resolutions I had the honor to present to the Senate upon that subject, and yet, standing upon the floor of the Senate, and speaking with some deliberation and I judge considerable preparation he has confessed everything against His Excellency that the resolution recites against him. The Senator from Marion says the Governor made the settlement he did make without authority of law. That is all the resolution says. Then if he criticises that resolution, I hope, when his remarks are given to the country, in order that he may maintain a consistent position before his constituency, that he will repudiate his remarks here. But, Mr. President, the senator from Tipton [Mr. Green] is mistaken when toe says this memorial is the same presented ho the Legislature in 1857.
Mr. GREEN. I did not say this was the same. This is probably abridged and improved a little.
Mr. BROWN. I should think an abridgment of this question on the part of the bondholders would be an improvement of it. I am in favor of the postponement of this memorial and the senator from Marion [Mr. Martindale] upon that point expressed my sentiments and opinions. I do not desire to be understood as treating with discourtesy the memorial itself, or as intending discourtesy to those who have sent it here. The Constitution of our State allows the people to petition and that carries with it and enjoins the duty upon the General Assembly to treat petitions with due consideration and respect. This memorial in my judgment has received all due consideration and the respect to which it is entitled. It came here several days ago, has been placed upon the desks of Senators and I have no doubt every Senator in the Chamber has read it, There is nothing new in this memorial; there is no reason assigned in it in addition to those assigned in the memorial presented in 1857. The only reason stated in this memorial why the General Assembly should redeem the Wabash and Erie Canal and involve this people in a public debt of somewhere between fifteen and eighteen million of dollars is the old cry of the incorporation of Railroad companies--the permission of Railroad companies to incorporate under the laws of Indiana. The memorial of 1857 makes a better defence for the General Assembly of the State which authorized incorporated Railways than it lies in my poor mouth to make.
I do not desire, for one, to give this memorial any further consideration than necessary to come up to the performance of that duty which is incumbent upon me to treat it with courtesy and respect; because it is not unfrequently the case when desiring to accomplish a wrongful purpose, those who desire the accomplishment of it, approach the party they seek to have the accomplishment of it brought about by, in peace meals; gently at first; easily in the commencement; showing but little of their scheme at first; giving but little vantage ground in the commencement; driving their stake down not so deep in the start; seeking to get a simple foothold in the commencement only; but finally the time comes when they can walk in triumph. That is what these invidious men are seeking to do with the Indiana Legislature.
Now that is the earnest desire of these men that are crying out with such denunciation against the faith and honor of Indianathey seek to beguile the Legislature little by little, until they have bombarded us into a surrender. For one, I shall never consent to give one inch of ground to the importunities of these men that have no just or equitable claim upon the State in my judgment. They said they would take the Wabash and Erie Canal for one-half the debt and I say let them keep it for one-half the debt--the other half the State has paid.
As the only question before the Senate is upon this memorial I shall say nothing upon the subject so fully gone into by the senators from Monroe and Marion, except that I desire to say I hope the whole subject will not be postponed, because I do not think we can do justice to our own sentiments and opinions upon a mere motion to postpone. I have some reasons for favoring a Constitutional amendment which I desire at the proper time to give to the Senate.
Mr. HUGHES. While I am going to vote for indefinite postponement, at the same time I must say that I am not in favor of repudiating the old Internal Improvement bonds, and thereby lay the foundation for this claim on the part of these petitioners.
Mr. BROWN. Neither am I.
Mr. HUGHES. I am opposed to your last resolution because it amounts to a repudiation of those bonds and may lay a foundation for a just claim.
Mr. BROWN. That is a question of law. The bonds are charged on the Wabash and Erie Canal.
Mr. GRAY. I fully concur with the senator from Jasper [Mr. Dwiggins] that this thing has been sufficiently discussed. If there is anything in the world the holders of the Canal certificates are not afraid of, it is buncombe speeches in this Chamber. They don't care a straw for them. I am willing to say that my page: 426[View Page 426] mind is fully made up on the question. I am going to vote for a Constitutional amendment in favor of prohibiting future Legislatures from paying these bonds except under the provision made in the Butler bills. I believe, however, the State ought to pay the old Internal Improvement bonds that were not settled under this adjustment.
I have no desire to make a speech upon this matter, but I shall if the discussion is continued, and when I take part in the debate, I hope to be able to take exceptions to many of the assumptions the senator from Jackson [Mr. Brown] made in regard to the old Internal Improvement bonds not settled in the adjustment. The senator said all the creditors assented to it. If he can give any evidence that holders not represented in that adjustment ever did assent either in person or by agent, I am with the senator and opposed to paying them off.
It is hardly worth while for us to talk of violating the Butler bills. Prior to 1867, the sinking fund had invested in various bonds among them eight thousand old Internal Improvement bonds, and the Legislature took these bonds and sold them and put them into one non-negotiable bond, thereby recognizing the validity of these eight old Internal Improvement bonds as being equitable and just, and paid the interest on them. They acknowledged them as valid claims upon the State for the purpose of schooling our children, and I know no difference between those eight and the other outstanding bonds.
I hope the Senate will indefinitely postpone the memorial and the resolution of the senator from Jackson and all that part of the amendment offered by the senator from Monroe, except that which says we will provide for the payment of the old Internal Improvement bonds; then I propose to vote for the Constitutional amendment. If these motions do not prevail I shall take it as an indication that we are to go into a discussion of the whole matter, and I shall then take part in it.
Mr. ROSEBRUGH. Mr. President: I desire to say a few words on this question. It seems to me the principal difficulty that arises from this transaction is this: we have devided the subject matter, and got it before the Senate in various forms; for instance, it is first here upon the prayer of the memorialists, secondly upon the resolution of the senator from Jackson, and thirdly, upon the amendment of the distinguished senator from Monroe. I apprehend the Senate desires to act advisedly upon the question; that is, simply, we do not wish to rush through legislation and act unadvisedly upon the question, but we desire to place upon the records of the Senate a complete justification of our action.
It seems to me it does not make much difference as to the subject matter, whether it comes upon the memorial presented, or whether upon the resolution introduced by the senator from Jackson, or whether upon the Constitutional amendment proposed by the senator from Marion [Mr. Caven.] In each and every case the same substantial proposition arises and is to be discussed and settled by the action of the body. The memoralists claim they are entitled to remuneration on two grounds; first, on account of internal improvements, and second, on the ground that parties who hold the old original Canal bonds have been paid and for that reason that all the creditors of the State should be treated equitably.
What I desire to state is this: it is a judicial question whether we take it upon the memorial, the resolution of the senator from Jackson or the proposed Constitutional amendment. And being a judicial question, upon which there is scarcely one opinion entertained with reference to the precise question by any two senators, I insist that it is emminently proper for the Senate, under such circumstances, to refer it to an appropriate Committee--and it makes no difference whether you refer upon the memorial of the bond holders; although if referred upon that we may be giving them some little distinction;or whether the reference of the subject is made upon the resolutions. Then upon this ground, inasmuch as it is a judicial question as to whether the payment by the State without process of law, that is without, a judgment of Court, of these old bonds--these Internal Improvement bonds; as it is a judicial question, whether a voluntary payment by the State will raise any obligation on the part of the State to pay those who entered into the Butler bill arrangement; for that reason, and that alone I desire this matter be referred to the proper Committee, where it was first placed upon the motion, I believe, of the senator from Marion, and there carefully and judicially investigated.
I apprehend no gentleman desires to evade any responsibility which rests upon him; I apprehend every gentleman desires to do justice to the State and to all parties concerned; and at the same time Mr. President, I apprehend we are not here simply legislating to suit the sentiments of the hour. This matter is part of the history of the State of Indiana. We are legislating not for ourselves; and I desire that we should proceed with that firmness in the investigation which shall reflect credit upon the State and do justice to all. I desire such an investigation had and such a memorial left in the annals and archives of the State as may be an everlasting monument to the justice and wisdom of this Legislature.
For these reasons I am opposed to the indefinite postponement of this resolution, and I page: 427[View Page 427] am in favor of referring the matter back to the Judiciary Committee for investigation. And I think within the limits of the present session it ought to be reported back and some legislation put through by this General Assembly which will conclusively and eternally settle the matter in controversy.
Mr. SCOTT. Mr. President: When this memorial was presented I, myself, moved its reference to the Judiciary Committee, and not the senator from Marion. With all his sins I do not wish him to bear mine, although I would like to get rid of all I can. How it happened I cannot say, but I hope I shall not be ostracised for that simple fact. While up I wish to say I believe that is the proper place for this thing. It is impossible for us to say we will have nothing to do with that subject. It is too large a matter to be slipped over in that kind of style. I believe I do not know much about the men who hold these bonds, but I believe they are in earnest. I saw their petition in 1857, and they talk as though they have some reason to petition, whether they have or not. Whether they have or not is a matter for investigation, and a matter of serious import.
As far as I am concerned I am not willing to leave it wholly to newspapers because at some time it must be determined, I insist it cannot be wholly determined by a Constitutional amendment; at least I am not so informed that I would be willing to risk that thing entirely upon that point. Therefore I wish it investigated not on account of the petitioners but on account of the people of the State who are interested. Upon the Constitutional amendment I am not now prepared to vote. Although that matter has been before the people for nearly three years, I have not had an opportunity of satisfying my mind of the correctness of that thing, although I intend to vote for it. I did oppose it two years ago but I intend to vote for it now whenever it comes before this body; but I do not wish it to come now, because I would like to have my mind better prepared than now. I want to hear from learned Senators the effect of that Constitutional amendment before I vote for it. It is an expression of the desire of this State on the question of the redemption which is provided for in the Butler bills. That expression may as well be by simple resolution or enactment as by a Constitutional amendment; and the only thing that troubles my mind is whether it does not surrender to the bond holders the entire control of the Canal from the beginning. It is a very serious question in my mind whether it may not withdraw that controling power the State has and leave them absolute owners and controlers. If members upon the floor interested along the line of that Canal are willing now to take the plunge; I, myself, living where it has become nothing but a mark in the sand may well take it; for I look in a great measure to them, they being more interested. All we wish to provide against, as far as my people are concerned, is that they never shall be liable to pay the Canal certificates which they are not liable for, in my judgment, unless this or some other legislative body shall provide by law for that thing. Therefore, for these reasons, I am opposed now pressing action on the Constitutional amendment. I prefer its reference to the law Committee of this body and if they say it is proper and safe I shall vote for it. It they say it is not proper and safe I shall still vote for it because I know the people want it--I know the people demand it and I am determined to vote for it in some shape.
Now, Mr. President, as far as the resolutions of the Senator from Jackson are concerned, I have no objection to their indefinite postponement if they will not carry with them the amendments of the Senator from Monroe.
Mr. HOOPER. Mr President: There seems to be a disposition on the part of the Senate to investigate this question which I believe to be right. I desire to say that while it may be true that most of us have made up our minds on the question of this memorial and know precisely how we will vote upon it--and believe there is really nothing ,in it and that the memorialists have no case--yet if we propose to investigate this question at all, I think this memorial ought to go with the other matter to the committee which is to have charge of it. We can not satisfy the people by refusing to meet a question presented to us. If this is a question of so much importance and there is so much anxiety about which we all know to be true, I say this memorial ought to be met and ought to be answered. I believe we ought to settle the whole question, if posible, this session so there may be a definite line of action settled with regard to the whole matter. For that reason I shall vote against the indefinite postponement of the memorial.
Mr. JOHNSTON. Mr. President: I represent a people who feel a great interest in the subject of taking back, as it is termed, the Wabash and Erie Canal. My constituents believe the State adjusted that claim, and paid one half of the debt with the Canal according to contract and that being done we think the holders of this Canal ought to abide by it. I, sir, have read the memorial; and, by the way I want to remark that the payment of the outstanding bonds is not included. As I understand it, it is simply a memorial of the stock holders of the Wabash and Erie Canal at the present time. Senators, I presume, are well acquainted with the transaction although it has been a long time since. The bondholders came voluntarially and asked the Legislature to make this arrangement; if the State page: 428[View Page 428] would surrender the Wabash and Erie Canal with all its appurtenances it should be in payment of one half the debt, and upon their statement that they represented the bondholders the State went into the arrangement and the contract was made. In this memorial they State that the bondholders held meetings both in the United States and in Europe and agreed to certain things, and the contract was made. While Indiana was in debt to these bondholders they sent their represenatives for the purpose of making a contract and whether or no they were all represented is not for us to stop to inquire. They said they were representing the entire bondholders--the contract was made, and no man that didn't consent to that contract came here and objected to it. That contract was made in good faith on both sides and now the question before the Senate is as to this memorial.
From whence comes this memorial? It comes from men holding stock in the Wabash and Erie Canal. They urge the State to rescind the contract, take back the Canal and pay the bonds they have surrendered as part of the contract with the Slate. The question is whether we shall indefinitely postpone this memorial or not? I imagine Senators are satisfied as to the justice of this memorial. I for one am ready and willing to vote upon it. I read the memorial before I left home and came to my conclusions upon it, and my opinion is not changed. I am ready to vote for its indefinite postponement because I think they have no claims upon us and that they have no right to come here and urge us to rescind a contract they themselves made.
Mr. HAMILTON. Mr. President: I have no disposition to make a speech upon this subject? The question is now upon the simple proposition: What is the most judicious way of disposing of this memorial? I think I have arrived at the correct conclusion that the memorialists have no just claims, and that seems to be the only opinion. And now is it best to say that we will return it to the committee and let an answer go upon our journals? If my constituents thought I would vote to pay ihis claim they would wait upon me and ask me to resign.
While I concur with the Senator from Montgomery [Mr. Johnston] as far as not paying this claim is concerned, I disagree as to the manner in which this Senate should express itself upon the subject. I concur in the views of the Senator from Whitley [Mr. Hooper] to send this matter to a Committee, let the Committee investigate it and then the matter would be settled and the memorialists will not come here again. We are said to be repudiators; and to abruptly set this matter aside and not investigate it will only furnish another pretext for the journals across the waters to say we are repudiators. Let us so settle this matter that the memorialists will never bother the Legislature again. Consequently, from these considerations, I shall vote against the indefinite postponement of this memorial.
Mr. GREGG. Mr. President: I shall vote for this motion, and I propose to give my reasons briefly. Before I came up here I received a memorial from these parties, which I hold in my hand. I investigated it and I found it was a memorial pretty much the same as that presented to the Legislature of 1857. I then investigated the proceeding of the Legislature of 1857, as to what it had done with regard to the prayer of these memorialists. I found that the Legislature had taken the whole case into consideration and had passed on it; and I believed that was enough for these gentlemen. I believe they have had their day. They had their claims duly, honestly and fairly considered, and I am ready to vote for the indefinite postponement of this memorial, and with that vote I shall aim to stop their propositions. I vote with that view, for the simple reason that they have been once before the Legislature of the State of Indiana, and the Legislature of 1857, duly and fully considered all their claims and passed upon them, and that record is my record to-day. I think they ought to be content with the consideration they have received.
The motion to indefinitely postpone the memorial was then agreed to.
Mr. HADLEY. I desire to strike from the resolution of the Senator from Jackson that part which states that the payment by the Governor of these old bonds was in direct violation of the acts of 1846-7, and meets with the disapproval of the General Assembly. It has been stated by the Senator from Randolph [Mr. Gray] that in 1867 this Senate, and a large majority in the House of Representatives, expressly provided for the payment of eight of these bonds in the possession of the School Fund Commissioners, and for us to say to-day, by solemn legislative act that it was in direct violation of law, would be to reverse our record. And it does not evince any great degree of modesty for us to say when these old bonds are held in trust for the education of our own children they should be paid, while on the other hand when they are held in trust for the education of Indian children they should not be paid. It seems to me that would he repudiation in its worst shape.
Then I wish to provide for the destruction of these old bonds and coupons, rather than encumber the archives of the State with them without the hope of obtaining any benefit from them. By the 15th section of the act of 1847, it is provided that the State on coming into possession of any of these old bonds shall hold them upon the same terms as other creditors--shall be entitled to their pro rata interest in the rents of the Canal. Now, while it is provided that the State shall hold the bonds it is not page: 429[View Page 429] made the imperative duty of the State to hold them, but in her discretion, she may destroy them. And now this being legitimate under the enactment of the Butler Bills, it occurs to me it would be prudent to destroy these bonds rather than encumber the archives with them. I am informed that the probabilities are that some ten or a dozen coupons of the old bonds are already stolen--nobody knows where they are. If we keep these bonds in the hands of the Governor or the Treasurer of State they may be stolen and forty years hence be presented for payment. While there is no probability of ever receiving any profit from these bonds, why not destroy them? I offer the following amendments to the amendment of the Senator from Monroe: [Sae page 99--top of second column.]
[They were laid on the table by yeas 27, nays 17--see pages 99 and 100.]
Mr. DWIGGINS. Mr. President: I offer the following substitute for the resolutions of the Senator from Jackson [Mr. Brown] and the pending amendments. [This substitute is printed on page 100.] I propose to substantially adopt the preamble offered by the Senator from Jackson except his last whereas, for that is simply condemning Governor Baker for taking from the United States the bonds referred to and allowing for them payment of war claims. Now, sir, it seems to me folly if I appoint an agent and authorize him to do certain things and in the discharge of that agency he does something, whether authorized or not, just exactly as I would have done had I been present, to blame him for doing so. He does that which I approve, and when he reports to me I say, "Sir, I gave you no authority to do that notwithstanding I approve of what you have done." For myself I approve of the action of Governor Baker for several reasons.
There can be no question, sir, in my mind, as to the legal and moral responsibility of the State for the payment of these bonds. If the State is liable for their payment and the bonds were due, as they were, then it was the duty not only the privilege, but the duty of the Governor when he had the means to redeem the indebtedness of the State, and pay off the obligation of the State which had long since been due, whether there was law for it or not. Why is it necessary to pass a preamble and resolution condemning the action of the Governor and then in another resolutions approve what he has done? The Senator from Monroe adopts the preamble and part of the second resolution, and thereby condemns the action of the Governor in the payment of these bonds, while in the third resolution he says the General Assembly will make provision for the payment of these bonds, thereby recognizing the legal and moral obligation of the State for the payment of these bonds. I hold that the Governor has done what is right and what the State is bound in honor to do--then why say the Governor had no authority of law to do it notwithstanding we approve it? Why in the first place condemn, and in the second place approve?
It matters not whether there was authority of law or not so he did what was for the best interests of the State. That is the question for this General Assembly to determine, and I want Senators to come square up to it and if they take the ground that the State is not liable for the payment of these bonds; then, sir, Senators can well condemn the action of the Governor in paying the bonds; but if we are liable--if the State is bound to pay them, why condemn the Governor if he done precisely what the State was bound to do?
Now it is said by some Senators, that there is no question in their minds of the legal liability of the State to pay the bonds not surrendered under the Butler Bills, but they are not willing the Legislature shall pass an act to pay these bonds until the parties holding them have succeeded in defeating the State in a law suit. I claim that is quasi repudiation. It is saying "we know we owe you this money--we are legally liable to pay it, but never will until you law it through." What is the sense, reason or justice in the State expending five or ten thousand dollars in Attorney's fees, and in the end doing what Senators say we are bound to do now? Why not do right without being compelled to do it?
Now sir, I apprehend there is no question plainer to any lawyer than the proposition that the State of Indiana is legally liable to pay the bonds that have not been surrendered under the Butler bills. Mr. Butler said in his correspondence with the Governor, that he was not authorized to represent all the bondholders. He expressly so stated, but stated that he represented a large majority. After the Butler bills were passed it was an optional question with those not represented to come in and surrender their bonds or not. Suppose I am largely in debt, and I go to certain of my creditors and say, "Here, I turn this property out to you if you will give me a receipt for all I owe you." They think it the best they can ever get and they accept, but some gentleman does not and a while after he comes forward and says "sir I hold your obligation and I want you to pay me the money." I say to him "I made an arrangement by which I transferred my property to my creditors, but you did not see proper to come in; and I don't propose to pay you a dollar." Now is there a lawyer upon this floor would say I was not legally liable to pay this claim? Shall not the State of Indiana keep faith? The State will compel an individual to keep faith with his creditors.
page: 430[View Page 430]I claim that there is no proposition clearer than the proposition that we are legally liable and morally bound to pay the bonds not surrendered under the Butler bills.
Mr. HUGHES would accept a portion of the substitute.
Mr. DWIGGINS. It will not do for us to allow the canal to be sold if thereby we would violate our contract made under the act of 1847. I cannot see any reason why we should allow it either. If we owe bonds we owe them, and if they are due we should pay them. I don't see any reason why this session of the Legislature should seek to avoid the responsibility of making provision for the payment of these bonds. I do not desire that the matter should be rushed through. It has been said that the passage of these resolutions would amount to nothing. That is true, but in order that we may arrive at the kind of bill we want it is as well to discuss the proposition upon these resolutions as upon a bill.
I apprehend that a majority of the Senate, perhaps all, are agreed upon one provision, and that is, that the State does not owe these Canal certificates, and I apprehend that a large majority are agreed upon another; that the State is legally liable for the payment of these bonds not surrendered under the Butler Bills. The question to be discussed is, the manner of arriving at what we all desire.
Mr. BROWN. The Senator from Jasper [Mr. Dwiggins] says, if we owe these bonds why not come up at once, and pay them? For the best reason in the world. While I concede that there is a liability on the part of the State to pay every unsurrendered improvement bond under the act of 1846-7, I must say more than that; that by a learned decision of the Supreme Court of the United States, the revenue, lands and proceeds of the Wabash and Erie Canal are also liable for the payment of these bonds. The law of 1836, expressly makes the State a guarantor and not primarily liable. Then when the creditor has selected which one of the remedies he will pursue instead of coming here and asking us to make good plighted faith,only plighted as guarantor, I ask whether wise statesmanship, economy for the people and an earnest desire to keep ourselves out of the clutches of these men, would step in and tell their creditors "Give up your own choice and we will pay the money in the first instance." There is where the gentleman has placed himself. The only proper course for the true friend of the people of Indiana, is to stand by the contracts of 1846-7.
Now Mr. President, the learned Senator put another question with considerable emphasis. He said: "Why is it you don't pay the Internal Improvement bonds now? If the State owes them why don't you pay them?" That was pat to the whole Senate. He assumes in the first place, a proposition that is incorrect, which is that the State is primarily liable, and couples with it an interrogatory to the whole Senate. I would answer him out of the mouth of the Governor he stood up here and attempted to defend. Here it is: [Mr. B. read: "I would unhesitatingly recommend that provision be made" &c.--see top of page 9 suffix to volume X BREVIER LEGISLATIVE REPORTS.]
Mr. DWIGGINS. Do you endorse that and make it your own statement?
Mr. BROWN. Sufficient unto the day is the evil thereof. I will ask the Senator if he endorses that? I will come the yankee on him.
Mr. DWIGGINS. I will give the same answer.
Mr. BROWN. No matter what my opinion is, this Senate two years ago adopted the very policy and plan I am now advocating; that was that no provision would be made for the payment of these unsurrendered bonds. The Senator has made a new discovery when he says these bonds must now be paid. The Senator has not read all the messages of His Excellency; he has not pursued His Excellency in his circuitous routes on the Wabash and Erie Canal question; and in my judgment the last message, if acted upon favorably, is very dangerous conduct for the General Assembly of the State of Indiana to adopt. There was a solemn contract made between the State and those who entered into the compact, and I say here in my place upon the floor of the Senate that if that provision is broken--if the State voluntarily pays these bonds in any manner other than the manner solemnly pleged, it breaks the whole contract and restores these men to the position they occupied before these funded debt bills of 1846-7 were passed.
I may not be so learned as the gentleman over the way, but it seems to me that when two parties agree as far as they are concerned, that they will carry out a transaction in one particular way, when one party breaks it, it manumits the other. For that reason I think a voluntary payment of these Internal Improvement bonds will do more to raise a strong equitable claim in favor of the holders of the canal stocks than any possible measure this General Assembly will pass.
Mr. GRAY. I desire to ask what the Senator means, when he said in his speech the other day, that the settlement under the Butler Bills paid one half of the debt?
Mr. BROWN. Not to recapitulate what I said on that subject my idea is this;and if I err in the opinion, I err with some illustrious gentlemenwhen these creditors took the Wabash and Erie Canal and its eight hundred thousand acres of land, they took it in absolute payment and discharge of the whole debt. If you examine the first four sections of the page: 431[View Page 431] acts of 1846-7, in my judgment, you can place no other construction upon it.
Mr. HUGHES. Suppose the State pays off some of these bonds, gentlemen say there is a breach of contract; and suppose it is; if it is, it does not give them a claim upon the State, because it is a case of a wrong without any injury. Every bond the State pays off enhances the value of the present stock that much--one half--and is a benefit beyond a question to the present holders of the canal. Now how much damage could be recovered by a suit at law for any kind of an injury?
Mr. GRAY read from Mr. Brown's speech, the paragraph commencing, "It seems to me clear that"see top of second column, page 385.
Mr. BROWN. I say so now, sir. But the first question the Senator put was, whether the transfer of the property paid one half the whole debt. You say, as I understood, that it paid one half of the surrendered debt.
Mr. GRAY. Yes sir.
Mr. BROWN. Governor Baker says this: [Mr. B. read the paragraph commencing, "The adjustment made"--see page 9 of the suffix to volume X BREVIER REPORTS.]
Mr. GRAY. That is the debt surrendered.
Mr. BROWN. It don't say so. It says one half the debt. What do the words "the debt" mean Mr. President? It says one half the debt. What was His Excellency talking about? Was he talking about five or ten bonds? No sir, he was talking about the public debt Indiana owed in 1846-7. He said one half the debt was paid.
Mr. MARTINDALE. If he will read it again the Senator will find Governor Baker refers to one half the surrendered debt.
Mr. BROWN. I have read all he says upon the subject. This is the first time in the State of Indiana the question, has been mooted that the transfer did not discharge the State from liability to pay one half the debt. It never was mooted until after His Excellency, unauthorized by any law of the State, stepped outside of his duties and paid off some three hundred thousand dollars of these bonds: and thereupon we find the holders memorializing the State to take back the Wabash and Erie Canal, and His Excellency in doing what he did did much to encourage these gentlemen; and his act is followed up by Senators on this floor saying that the transfer of the Wabash and Erie Canal paid one half of the bonds surrendered and not one half the whole debt. The compromise of 1846-7 was made upon the understanding of the law of 1836, I put upon it--that was that the Canal was to be ex-exhausted before the State was touched. I lay the maxim down that the Wabash and Erie Canal must take up the Internal Improvement bonds and then comes in the State of Indiana, to have them adjusted according to the contract of 1846-7. While if I don't mistake the position of the Senator from Monroe he thinks we should take them up and then have them adjusted. That is the difference between us. I would not enforce my opinions without considerable hesitancy against the Senator but in a case of doubt I desire to give the State the benefit of the doubt.
The State is too high to be damaged by the cry of repudiation made upon her because she desires her creditors to keep the faith of 1846-7. The State has lived in spite of the cry, and will continue to live until the echo dies away, and those who gave sound to it have gone out of the minds of the public. The action and conduct of these creditors of the State give conclusive interpretation as to the meaning of the statute, and there is not one of them pretended to say this Wabash and Erie Canal did not pay one half of this whole debt. Even if the technical construction of the law of 1846 might bear out the opinion expressed by the Senator from Randolph [Mr. Gray] that construction is overthrown by the contemporaneous history of the State and her creditors, and that history is that the transfer was a discharge of the debt.
Mr. SCOTT. Why has the State paid interest on these outstanding old Internal Improvement bonds to the United States for the last twenty years?
Mr. BROWN. Simply because she had her hand in the lion's mouth.
Mr. SCOTT. Did the State ever protest against the payment?
Mr. BROWN. I don't know. I will ask the Senator, has the State paid one dollar of interest on these bonds to individual holders?
Mr. SCOTT. Yes sir. She paid eight of these bonds amounting to eight thousand dollars to the School Fund.
Mr. BROWN. By the radical Legislature of 1867. I repudiate the act.
Mr. SCOTT. Does that repudiate the law Mr. President?
Mr. BROWN. That is not an answer to the question. I repeat it again: Has she ever paid interest to an individual holder of the internal Improvement bonds?
Mr. SCOTT. I dont know that she has.
Mr. BROWN. I know she has not.
Mr. SCOTT--
Mr. BROWN. I cannot give way further.
Mr. SCOTT. Mr. President he has asked me a question.
Mr. BROWN. I take back that.
Mr. SCOTT. I don't want to answer it, sir. [Laughter.]
Mr. BROWN. From 1846, after the adoption of the Butler bills, to the present day, there has not been an individual holder of the Internal Improvement stocks of our State that has ever received a dollar's interest upon these page: 432[View Page 432] bonds, not one; and if it was just that the school fund and the General Government should receive their interest upon these bonds I think it has been bad management upon the part of the public servants that they have not paid individual holders.
But as my friend has called up the act of 1857 as showing the history of the progress of the times upon the subject, I can give him another item. After the passage of the act of 1857, and after the settlement made by Governor Baker, eight of these bonds held by private citizens were presented for payment perhaps they were presented for payment because of the action of His Excellency and the legislation of 1867but what was the fate these individual holders met with, when they offered their bonds? They were sent to the State agency, the bonds were laid upon the block, the executioner's axe was applied and the holders sent away with one half. If he insists on the law of 1857 as a precedent for the payment of these bonds, I will put the precedent I have cited side by side with it.
Mr. GLESSNER, made an ineffectual motion--see bottom of first column page 100.
