THE
BREVIER LEGISLATIVE REPORTS.
THIRTEENTH VOLUME.
INDIANA LEGISLATURE.
HOUSE OF REPRESENTATIVES.
TUESDAY, December 10, 1872.The House met at nine o'clock.
On motion of Mr. McCONNELL, the reading of the journal of yesterday was dispensed with.
THE WABASH CANAL MATTER.
The SPEAKER announced the special order, viz.: the consideration of Mr. Kimball's bill [H. R. 129] and the bill [S. 83] to protect the Wabash and Erie Canal.
Mr. CAUTHORN moved that Mr. Kimball's bill [H. R. 129] be laid on the table, the Senate bill having provisions more acceptable to all parties.
Mr. KIMBALL seconded the motion.
Mr. SHIRLEY moved to recommit Mr. Kimball's bill to the Committee on Ways and Means, with instructions to add a section discriminating and providing against the payment of any bonds or stocks not declared to be a lien on the canal. He wished by this to protect the interests of the people as far as possible. There are two classes of these bonds: a certain class that are a lien on the canal, and another class that are not. The payment of the latter class should not be contemplated in this bill. He was not willing to undo now what was settled under the Butler bills--not willing to do now what the people in 1847 declared they would not do. He was not willing that what is not declared to be a lien on the canal should be paid by this bill.
Mr. KIMBALL. This was unnecessary. The committee had already disregarded similar instructions. He was opposed to making any discrimination between these bonds, for he would not sanction repudiation, and the idea of the amendment in that you will repudiate certain of these bonds. He moved to lay the bill and the motion to recommit on the table.
Mr. RICHARDSON demanded a division of the question, so by yeas and nays the motion to recommit was tabled first, and then Mr. Kimball's bill [H. R. 124] was laid on the table--yeas 81, nays 1.
The SPEAKER. The question is on the third reading and passage of the bill [S. 83] to provide for certain bonds or stocks of the State issued prior to 1841, and tit was read the third time by the clerk.
Mr. BOWSER proposed a resolution. That the trustees of the Wabash and Erie Canal be instructed to appeal the case in the Cass Circuit Court, which resulted in the Garrett judgment, to the Supreme Court, to employ counsel, and pledging the State to pay costs and fees therein.
Mr. KIMBALL. We have no power over these trustees. We can't instruct them to appeal, and they won't appeal. We can gain nothing by such instructions. It is only making delay. The session is coming to a close. The 27th of this month is the last day of grace, and the House should not delay this matter an hour longer. If any one was opposed to the bill, he wanted him to declare that opposition openly, and not cover it up under the pretext offered by this proposition for delay.
page: 226[View Page 226]Mr. OFFUTT differed with the gentleman from Marion as to the power of these trustees. One of these trustees is appointed by the State, and under instructions here he might appeal. There is a difference of opinion among legal men of the State as to the State's liability; and considering the majority of the people are opposed to the passage of this bill, it would be time enough to pay those bonds after the court of final resort shall have determined the question.
Mr. GREGORY thought there was a wide difference of opinion as to the State's liability. He especially cited the opinion of the Hon. Daniel D. Pratt, that, under the provisions of the Butler bill we are not called upon to pay any part of those bonds or stocks adjusted under the Butler bills.He was satisfied that the canal trustees would acquiesce in an order to carry this matter to the Supreme Court.
Mr. PEED thought this a matter of too great importance for hasty action, and that it should go to the Supreme Court. The settlement of the internal improvement debt under the Butler bill was a final one. The parties accepted the canal subject to all the liens. If we have taken no advantage of them it is no business of ours. Let them settle with their creditors They have never carried out their obligations. We should require them to come in and show clean hands. The legal questions involved are grave ones--the whole subject is involved in doubt; and the people should be given the benefit of that doubt. He was satisfied that the people were opposed to this bill, and that his vote against it would be in accordance with the wishes of his constituents. It was his conviction that by paying this portion of the indebtedness of this canal, we would be paving the way for the payment of the entire debt of the State under the old internal improvement system.
Mr. KIMBALL did not want to appear before the House too often. The point aimed at by this amendment is that this matter may be delayed. The State can not be made a party to this suit without delay, for which there is no occasion at all. He urged the justice of the case of the bondholders contemplated in this bill, and to deny it by legislation would be to attempt to make that law which contravenes the Constitution of the United States. For two years the subject matter which the resolution aimed to place before the people had been discussed by them. He wanted, in determining this question, to lose sight of all party feeling. Part of the debt has been paid, and part has not been paid. It is argued by some that the payment of these bonds will be a violation of the proviso of the Butler bill. They know that that proviso does not save the State as against those who refused to settle with the State under its provisions. This is no argument in favor of postponement And he referred to the published opinion of Hendricks, Hord & Hendricks, distinguished lawyers employed in behalf of the State, to the effect that the provisions of the Butler bill do not save the State from the payment of these unsurrendered bonds. The opinion of these gentlemen may be relied upon; their argument went out to the country two years ago, and it is conclusive against the proposed amendment.
Mr. WILSON, of Ripley, confessed to having had difficulty in determining this question; but he was satisfied of his duty to protect this bill against any motion to postpone. Gentlemen talk about a contract. Were the holders of these bonds parties to that contract? It requires two parties to make a contract, and were the holders of these bonds parties to that contract? He read from one of these bonds to show that the faith of the State of Indiana was irrevocably pledged for the payment of them. In opposition to those who urge that this case be appealed to the Supreme Court, he alleged that it is the first duty of members of this General Assembly to determine what the law is, just as much as it is the duty of the Supreme Court. The Legislature must determine this question of law for itself. If the canal is sold to pay this judgment, the State becomes liable for the payment of the whole canal debt. But he went upon higher ground. The faith of the State was pledged for the payment of these bonds, and anything short of that would be repudiation.
Mr. WALKER considered that the only question is, whether we will recommit this bill with the instructions. It had been remarked by the gentlemen from Morgan and Johnson that this question has not been before the people of the State. Two years ago there was no 27th of December before us. If that had been before us, then this question could have been before the Supreme Court, and we might have their judgment now. But it was not invited then; and he asked if the proposition now to appeal this case did not look simply like delay; and could the State of Indiana afford this? Had the people complained of their Representatives because they refused to submit this question to the Court of final resort? He was op- page: 227[View Page 227]posed to the amendment and moved to lay it on the table.
Mr. OFFUTT demanded the yeas and nays, and they were ordered and resulted--yeas, 76; nays, 14; so the motion to recommit was laid on the table and the question recurred on the passage of the bill.
Mr. SHIRLEY moved to recommit the bill with instructions to add a section that no bond or certificate of stock, or principal or interest thereon, shall be paid under this act, which is not declared a lien on the Wabash Canal conveyed under what is known us the Butler bills.
Mr. WALKER moved to lay this upon the table also, but withdrew the motion to give opportunity for debate.
Mr. SHIRLEY said that the only emergency was to provide for the bonds which are a lien upon the canal. He was pledged to his people to oppose any law providing for the payment of any bonds which are not a lien upon the canal. These bonds cost the holders not more than five per cent. If a refusal to pay these bonds was repudiation he cared not. During the canvass it had been charged against him that he desired to come here and pay the whole debt. On the contrary he was opposed to the payment of any part of it.
Mr. WALKER said the faith of the State was pledged for the payment of her outstanding bonds, and she could not afford to go before the money markets of the world and plead the baby act.
Mr. HENDERSON said that two years ago he did not hear a person express an opinion in favor of paying these bonds, nor did we hear anything in favor of it during the canvass. Let it go before the people again; let it form the question in the next canvass, and see who will return here. Let it be discussed openly. In his county it had only been discussed through a secret circular, charging the Democrats with a purpose to pay the debt.
Mr. HELLER said the House had passed an amendment to the constitution declaring the debt should not be paid, and now it is proposed to pass a law saying a part of it should be paid. The old bonds have not been so effectually canceled but that an expert can efface the cancellation marks, and again throw upon the market an un-lantity of old bonds. He exhibited one of the old bonds, and said he could produce a bag full in a little while. With this danger staring us in the face he felt that he would be safe to vote on the side of economy.
Mr. COWGILL thought there was no more direct way of making the State liable for the payment of the $20,000,000 of internal improvement bonds than the success of the course adopted by the opponents of this bill.
Mr. KIMBALL was sorry the gentleman from Morgan and Johnson (Mr. Shirley) had made this a party question. As a Republican, he would not make it a party question. Indiana had already purchased eight of the bonds it was proposed to repudiate, and derived a part of her school fund from the interest thereon. The General Government owned sixty seven of them, and Garrett had paid gold for his bonds. He could not vote to repudiate those obligations of the State.
Mr. WALKER said the argument was drifting away from the question to the general merits of the bill, he therefore renewed his motion to lay the motion of Mr. Shirley upon the table.
The motion to lay upon the table was agreed to--yeas 59, nays 35.
Mr. OFFUTT moved to lay the bill on the table.
The motion was rejected; and the question recurred on the passage of the bill [S. 83.]
Mr. SHIRLEY said the gentleman from Marion [Mr. Kimball ] expressed regret that he had made this a party question. The Republican party has charged by secret circular that the Democrats were coming here to saddle the canal debt upon the people. The gentleman concedes that the State is only liable for 114 of these bonds, and yet asks me to sit here and make the State liable for the whole 191. They say we are honorably bound to pay them. I deny it. To carry out faith with his constituents, he would vote against the payment of one cent. He was not willing to go one step beyound the Butler bill.
Mr. SMITH was willing to go upon the record on the main issue. It was placed more upon the moral than upon a legal basis. Even in that aspect he thought it was against the bondholders. Good legal opinions had been offered on either bide. He was in favor of waiting and having the decision of the Supreme Court. The people have once decided this question against the bondholders, and he was opposed to reopening it. The argument that the bonds should be paid because the State is able to pay them is not a good one, neither was the argument that the selling of the canal would render the State liable for the payment of the canal debt. The holders of the canal took it with a full knowledge of its incumbrances; and even agreeing that the friends of this bill are right as to the question of the State's liability for the unsurrendered bonds, the owners of the canal can on- page: 228[View Page 228]ly have recourse against her for the amount of the judgment recovered upon the bonds which remain a lien upon the canal. He deprecated the disposition to rush into extravagance, and much as he might desire to see the Republican party defeated, he did not wish that end should be accomplished though the means of its extravagance, as the people would in any event be the sufferers.
Mr. BUSKIRK was not alarmed by having this word "repudiation" thrust in his face. It was but a word after all, and words carry no weight except as they are considered in the light of circumstances. The gentlemen from Marion [Mr. Kimball] was himself guilty of repudiation in voting for the recently passed constitutional amendment. That meant nothing if it did not mean repudiation.
Mr. KIMBALL said he had voted for that amendment in order to prevent future payment of one-half of the debt which had been already paid.
Mr. BUSKIRK said the gentleman was right in so voting. He had voted that way himself, and in so voting they had both incurred the odium of repudiation. He believed the people were opposed to the payment of this debt, and if any odium was attached to the refusal to pay, it must revert to the people. If there had been any repudiation, it had been effected twenty-six years ago. This was an attempt at resurrection, not repudiation. Garrett had no moral claim superior to that of the holders of the canal certificates. The latter had come up to the help of the State in her extremity, while the former had not. If he believed the State, by refusing to pay these bonds and allowing the canal to be sold, would become liable for the old canal debt, he would support the bill, but this argument had no sound basis. The adoption of the constitutional amendment will effectually settle that. The friends of the bill can not be sincere in this, or they would not have voted down Mr. Shirley's amendment to provide only for the payment of the bonds which are a lien upon the canal. They not only voted that down, but they stifled debate, and he had a right to charge them with being insincere. Those who accepted the canal with all its incumbrances, having done so with a full knowledge of those incumbrances, can have no recourse against the State. He believed the payment of these bonds would give them a better claim than they have, for they could say you have violated your part of the contract as stipulated in the proviso to the Butler bill, and we can come in with our original claim. He deprecated the consideration of this as a party question. It could only be made such by the majority, and their present course tends to make it so; but he stood the peer of the gentleman from Marion, and nothing the opposition could do would throw him from his footing as an independent representative.
Mr. HENDERSON said before the vote was taken he wished to remind his fellow representatives that they were acting on their own responsibility, without instructions from their constituents. He knew of no community or county in the State that wanted to pay these bonds. Hence, it certainly could not be regarded that a delay of a few days to examine the question before voting would be improper. His people certainly did not want to pay these bonds, at least, and he should therefore vote against it.
Mr. CLARK said he would remind the gentlemen that there was at least one member whose people, if they had not formally instructed him, had at least indicated their views very clearly. The subject of the payment of the bonds was discussed during the canvass, and there was no voice raised against the payment. He thought that an honest man, who failed in business and took refuge behind the bankrupt law, if he ever rose to affluence, was bound to pay his honest debts. It seemed to him that the State of Indiana was bankrupt in 1847, and if she is able to pay her debts to-day she is bound to do so. He should, therefore, vote aye.
Mr. CAUTHORN said this was perhaps the most important subject that would come before this Legislature, and he agreed that there ought to be a full and fair discussion of its merits. He also agreed that it should not be made a partisan measure. He did not know what was the feeling of his own county on this question. If he did he would carry out their wishes, and if he could not do it conscientionsly he would resign and go home. But as they did not instruct him, he proposed to follow his own views and opinion on the subject. He knew that legislation is too often influenced by lobbyists. Every member on the floor should act for himself. What do the friends of the bill say it should be passed for? In the first place it is to prevent the happening of an uncertain contingency that the State will be in danger of being saddled with a debt of twenty millions that was canceled by the transfer of the canal. Another reason is that if you don't do it the credit of the State will be gone; that we will be repudiators. If the State would be liable to page: 229[View Page 229]any such charge he would vote for the passage of the bill. He would do almost anything to preserve the glory and credit of the State. Bute he denied it, and called upon the friends of the measure to snow where the credit of the State was ever pledged for the payment of these bonds. He defied the Attorney General or anybody else to tell him where the credit and faith of the State was now at stake.
In 1832 the first act in this State on the subject of internal improvement, was passed. At that time lobbyists told the people that these improvements could be made for $200,000. They issued 200 bonds for that purpose. They were put on the market, and these Wall street sharpers took them. The State charged these bonds on the Wabash and Erie Canal and its tolls and revenues, and guaranteed that they would be sufficient for that purpose. Not one of these 200 bonds was ever surrendered or canceled under the Butler bill, nor paid by the State. The Supreme Court of the United States has decided that they are a prior lien on the canal. All the arguments of the gentlemen apply with equal and greater force to the 200 bonds issued under the act of 1832.
To sustain this position, Mr. Cauthorn read from the decision of the Supreme Court in the case of Beers against the Trustees of the canal. He then proceeded to give a history of the legislation on the subject subsequent to 1832, and the acts done in pursuance of it. He charged that of the ten millions issued in 1836, the State lost five millions by the frauds of the agents, who appropriated them to the payment of their own private debt. Unfortunately, they were thrown on the market and got into the hands of innocent purchasers. Thus they remained until 1840, when the great crash came. Upon their motion in 1846, the compromise was made. The proposition came from the creditors. They knew if they could get the canal lands from the State it would be a good bargain. He argued that by the terms of the legislative contract, these bonds were all paid and the holders could never set up a claim against the State for their payment, otherwise than was provided for by that contract.
Mr. KIMBALL said the act of 1847 contained a clause which expressly declared that the tolls and revenues of the canal, the lands, etc., were specially pledged for the payment of the debt and the State bound herself not to permit an appropriation of such tolls and revenues, etc., for any other purpose. The whole question was summed up in that very clause. If we stand by and permit the tolls and revenues of the canal to be sequestrated we do precisely what we pledged ourselves in that act not to permit to be done. He held that it was the duty of the State to stand by her pledged faith. If the law releases a man from an obligation and he afterwards becomes able to pay it and refuses to pay his debts he is a dishonorable man. Shall the State of Indiana be less careful of her honor than a private individual? By the arrangement that was made, which was at the instance of the creditors, when a man voluntarily surrendered his bonds he took one half in cash and a lien on the canal for the other half. When these men refused to surrender, they refused to eome under the contract and could not be bound by it, and he stood ready to cast his vote for the bill to sustain the honor of the State. The question had been submitted to the people. Everywhere he spoke during the canvass he mentioned it, and proclaimed to the world and the people of Indiana, that he, as a member of his party was in favor of voting for the payment of that claim. He stood to-day, not as a partisan, but as a citizen to discharge his duty.
Mr. BRETT failed, upon an investigation to see how a refusal to pay the bonds named in this bill, could in anywise subject the State to the resumption of the part of the State debt for which the canal was taken by the creditors of the State under the acts of 1846-7, commonly called the Butler bills. It is said that the bonds named in this bill are a prior lien upon the canal. Governor Baker said, in one of his messages, that they were only a lien upon that portion of said canal south of the Tippecanoe River; but grant that the lien is upon the whole of the Wabash and Erie Canal, and that the canal should be sold for the payment of the bonds, I still insist that the State would incur no liability to the present holders of the canal. Section eight of the act of 1846, commonly called the "Butler bill," provides that the canal shall be taken, "subject to all existing rights and equities against the State on account of the State, or any part thereof, or liabilities of the State," growing out of, or in relation thereto; and the same to be held by said trustees in trust and security, for the uses and purposes following," etc. From the above extract it is evident that the Legislature intended to transfer the canal, subject to all liens and demands whatever; and the stockholders so understood the contract, as evidenced by the fact that bonds 69 and 70, held by Joseph D. Beers, and 53 and 54, held by Israel Cohen, have page: 230[View Page 230]been redeemed by Charles Butler, the trustee on the part of the stockholders, at his office in the city of New York. The total amount of principal and interest paid on said bonds being $14,450 22, as shown in a communication of a recent date, from Thomas Dowling, Esq., one of the canal trustees, to His Excellency, Governor Baker. I have also been told that one of the trustees gave as a reason for not redeeming the remaining unsurrendered bonds that the trust was unable to do so for want of money. On page 44 of the journal of the last House of Representatives of this State, I find in the message of the Governor of the State therein recorded this extract from an opinion of the Supreme Court, to-wit: "The holders of the latter bonds believed that with the $200,000 lien prior to theirs they would improve their condition by taking the State for one-half the debt and the canal stock certificates for the other." It must be evident from this extract that the Supreme Court construed the law to the effect that the canal was taken by the stockholder subject to all prior liens upon it. Considering the facts, it seems clear to my mind that the State can not in any event be compelled to resume the debt that was adjusted and settled when the present holders of the canal stock took possession of the canal under the act of 1846 and 1847.
Mr. BRANHAM said, when the compromise was made it was the opinion of the House as well as the agent of the bondholders, that the property was not only amply sufficient to pay the bonds surrendered, but to take up all the liens on the canal. That was the basis upon which they all acted. Unfortunately for them and for the State it proved a failure. There is no man in the House now who believes that the canal is good for the debt, and the only thing left is the guaranty of the State. These men took the canal in payment for their debt and made a new contract, and if we allow this prior lien to come and sweep away the canal from under them, it sets the contract aside, and the State becomes liable for the original debt. He called on the members to come up like honest men and pay the obligations of the State. Gentlemen say the question was not before the people. He took the ground openly before the people that we must pay these 191 bonds in order to secure parties contracting and prevent the State's liability to pay the original canal debt. And he told the people if they did not want the bonds paid not to vote for me, and came here with a majority o over 400. He therefore considered himself instructed to vote for this bill.
Mr. SHIRLEY. Gentlemen say in effect: If I take property and sell it with knowledge of the legal insolvency by reason of the prior lien, then I am liable. But if I sell with no knowledge in respect to to the lien, I am not liable. Whenever a man so purchases property, (whether a firm or otherwise) he is subject to the lien.
Mr. BRANHAM. Whilst the purchaser of the property has no lien, the man that has the prior lien takes it.
Mr. WYNN now demanded the previous question, and there being a second by a majorty of the House, the main question was ordered, viz: Shall the bill pass? The yeas and nays being ordered and taken thereon resulted--yeas, 55; nays 41, as follows:
Yeas--Messrs. Baxter, Billingsley, Branham, Broadus, Butterworth, Butts, Clark, Cobb, Cole, Cowgill, Crumpacker, Edwards of Lawrence, Eward, Furnas, Gifford, Glasgow, Glazebrook, Goudie, Gronendyke, Hardesty, Hatch, Hedrick, Hollingsworth, Johnson, Kimball, King, Kirkpatrick, Lenfesty, Lent, McConnell, Mellett, Miller, North, Odle, Ogden, Prentiss, Reeves, Riggs, Rumsey, Satterwhite, Scott, Thayer, Tingley, Thompson of Elkhart, Thompson of Spencer, Troutman, Walker, Wesner, Wilson of Blackford, Wilson of Ripley, Wood, Woodard, Wolflin, Wynn and Mr. Speaker--55.
Nays--Messrs. Anderson, Bowser, Brett, Buskirk, Cauthorn, Claypool, Cline, Coffman, Dial, Durham, Eaton, Ellsworth, Givan, Goble, Gregory, Heller, Henderson, Hoyer, Isenhower, Jones, Martin, McKinney, Offutt, Peed, Pfrimmer, Reno, Richardson, Rudder, Schmuck, Shirley, Shutt, Smith, Spellman, Stanley, Strange, Teeter, Tulley, Whitworth and Willard--39.
So the bill was passed the House of Representatives.
The House took a recess till two c'clock p. m.
AFTERNOON SESSION.
The SPEAKER resumed the chair at two o'clock p. m., and took up the order of the call for
REPORTS FROM COMMITTEES.
Mr. WALKER, from the Committee on the Judiciary, returned Mr. Jones' bill [H. R. 184] to create the Thirty-second Judicial Circuit, recommending its indefinite postponement.
The report was concurred in.
Mr. FURNAS, from the Committee on Agriculture, returned Mr. Hatch's bill [H. R. 191] to protect stone and timber from unlawful removal with an amendment striking out $500, and the remainder of the section, and inserting "not less than $25 nor more than $300," and adding "imprisonment in the county jail from ten to sixty days."
The amendment was adopted, and the bill ordered to the engrossment.
page: 23[View Page 23]Mr. BILLINGSLEY returned Mr. Butts' bill [H. R. 195] to amend section seven of the supervisors' act, recommending its indefinite postponement, (for the reason that the title does not correspond with the matter of the bill,) and reporting a substitute, viz: A bill [H. R. 225] to amend section two of the act to provide for the protection of wild game, approved March 7, 1867, and to provide for the protection of certain birds and their eggs.
The report was concurred in and the substitute was advanced to the second reading.
Mr. MELLETT, from the Committee on Education, returned Mr. Lenfesty's bill [H. R. 130] to render uniform the rate of interest (8 per cent.) on the Common School Fund of the State, recommending its passage.
It was ordered to the engrossmemt.
Mr. WOODARD, from the Committee on Fees and Salaries, returned Mr. Riggs' bill [H. R 113] to amend section two of the act to amend sections four and seven of the act to provide for the election of Attorney General, etc , approved June 13, 1861, recommending its passage. (It proposes to raise the salary of that officer to $3,000.)
It was ordered to the engrossment.
Mr. COLE returned Mr. Wilson, of Ripley's bill [H. R. 25] defining the salary of the Governor, Judges of the Supreme, Circuit and Common Pleas Courts, and District Attorneys, and to repeal section twenty-four of the act of 1865, to sell certain real estate and provide a residence for the Governor, recommending its indefinite postponement.
Mr. WILSON, of Ripley, moved to recommit the bill with instructions, but before it was reduced to writing, on motion of Mr. GIVAN, the matter was laid on the table.
REPEAL OF THE CORPORATION DRAINAGE ACTS.
Mr. BRANHAM called for the special order and it was taken up, viz: Mr. Butterworth's bill [H. R. 3] to repeal the corporation drainage act of 1869, and the supplemental act of 1871.
Mr. BUTTERWORTH, having introduced this bill and before given his views of it on the floor, he would not now say more than to represent the desirableness of this repeal in the northwestern part of the State, and invoke the House to sweep it from the statute book.
The SPEAKER (Mr. Offutt in the chair) directed the Clerk to read the bill and it was accordingly read the third time.
Mr. HATCH was earnestly in favor of the passage of this bill, and hoped no specious considerations would prevent this swindle from being wiped out. This Kankakee company had assessed a large amount of lands to nearly their full value, which threatened to drive out the owners, but they were subject to the difficulty of selling land subject to such an encumbrance. His people, who have felt its practical workings, unite in pronouncing this law most oppressive and unjust, and ask for the passage of this bill to repeal it as an act of simple justice.
Mr. HELLER also spoke against the bill, and submitted a statement in figures, showing that the Kankakee company have assessed nearly five millions of taxes on 600,000 acres of land--$8 an acre, and more than their value; that they propose to make their ditch some four miles north of the Kankakee stream, taxing the lands on the south that do not require their drainage, and concluding that they might with equal justice extend their assessments to Indianapolis. He also showed from the act their extravagant powers, denouncing it as a disgrace to the statutes, and calling upon gentlemen not specially interested to come up to the help of Representatives from the northern counties, and stamp this swindle into its native mire. We will break the back of this monster, and let it sink into the swamps of the Kankakee.
Mr. JOHNSON having been entrusted by the Judiciary Committee with the investigation of this matter, and complimented by Representatives interested with an invitation to make the argument delivered an elaborate speech on the whole premises. He said:
Mr. Speaker : The pending bill proposes to repeal the act of May 22, 1869, and the act supplemental thereto, approved February 23d, 1871.
The act of 1869 authorizes the formation of companies for the purpose of "draining, reclaiming, and protecting lands which are wet, or liable to be overflowed."
A company organized under this act can not consist of less than three members, all of whom must be owners of lands to be affected by the proposed work.
The process of forming the company is simple in the extreme.
Three or more persons owning lands of the character indicated, come together and sign articles of association, specifying the name and purposes of the company, and file the articles thus signed for record in the offices of the Recorders of "each of the several counties in which any part of the work shall be situated, and from the page: 232[View Page 232]date of filing the same for record in either of such counties, such companies shall be a body corporate with all the powers incident to such bodies." When the corporation is thus formed "it shall have power," in the language of the statute "to straighten, widen, deepen and make new channels for the whole, or any part, of any river or water-course, and to construct any dykes, drains, levees and breakwaters, and to do everything which they shall deem proper to accomplish the purposes for which the company shall have been organized."
In order to raise money for the prosecution of the proposed work, the company may apply to the Circuit or Common Pleas Court of any county in which any part of the work shall be situate, or to a Judge in vacation, and it is made the duty of the Court, or Judge, upon such application, to appoint three appraisers. These appraisers "examine all lands, the intrinsic or market value of which may be by them supposed to be liable to be affected by the construction of the proposed work."
The land, for the purposes of the appraisement, is listed in forty acre tracts. No estimate is made of the value of the lands themselves.
They estimate:
1st. The injuries which the land will sustain.
2d. The benefits which the lands will derive from the proposed work.
These estimates are made in schedules, signed and sworn to by the appraisers. The schedules are filed in the offices of the recorders of the several counties, and, from the time of filing, become liens upon the lands assessed for the amount of benefits, less the amount of injuries.
These liens are, to all intents and purposes, involuntary mortgages upon the lands, and section eleven of the act of 1869 provides that they may be enforced by foreclosure the same as mortgages. There is no requirement that these corporators shall be occupants of the land, nor even residents of the State. They may be non residents. They may be foreigners. There is no provision fixing the quantity of land which they shall own, either individually or collectively. They may own but forty acres of land each, or but forty acres, or more or less, all together. The powers accorded them by this statute are unlimited in their extent, and monstrous in their character.
A few unprincipled speculators, residing perhaps in a distant State, happening to own a small tract of wet lands, or lands liable to be overflowed--lands which may be worth five dollars per acre, or which may be almost worthless, may, under the provisions of this law, take possession of the whole of a valuable water coursemay absolutely control the great domain through which it passes, and may prostrate the interests of half a million of the people, and so long as the law remains no power can check them. Their power is bounded only by their own recklessness or avarice.
Under this statute two or more companies may organize for the purpose of draining the same region of country, or of straightening, widening or deepening the same watercourse.
In point of fact the Kankakee Valley Draining Company and the Newton County Draining Company, have both actually organized, for the purpose of performing exactly the same work, upon the same river, and the same lands, and taxing, within the limits of Newton county, the same people, and I believe the Supreme Court have held both organizations valid. And in the conflict and confusion of rights which must follow the people are to suffer, and nobody but a lot of dishonest adventurers are to be benefitted.
ELECTION OF DIRECTORS.
Section 2 of the act directs that the members of the company "shall elect from their number not less than three nor more than seven directors, of the time and place of which election the members shall notified by notices signed by three members and posted in three public places near the work, five days before the election."
After the first election the company must hold annual elections, as provided for in section 4, "at such times and places as the company shall appoint, for the election of directors, of which twenty days' notice shall be given by one week's publication in one newspaper of general circulation in each county, in which any part of the work shall be situate; and if there is no such paper, then by posting notice in three public places near the work."
Now these requirements for notice to be given of elections amount to just nothing at all. Notices of the first election must be posted five days near the work. The Kankakee Valley Draining Company propose to straighten the channel of the Kankakee river. Dense jungles and dismal swamps extend from the banks of the river a distance of from three to ten miles in either direction. If they could hire one of the wild Indians still lingering in that region to work his way through the swamps among the poison vines, and the snakes, page: 233[View Page 233]to the bank of the river, and pin up the notices on three saplings five days before the election, this would be good notice under section 2, and if the feat were performed twenty days before the election it would be good notice under section 4. Mark, the notices are not to be posted in each county where the work lies, but if posted in one county, it is good notice to all persons in all the counties. The Kankakee river runs the length of eight counties, so that if the notices are posted in the swamps at the western State line, they are as good against the people of St. Joseph county a hundred miles distant on the headwaters of the river, as they are against those of the proximate or intermediate counties.
No proof of the posting or publication of the notice is reqired. Nobody is required to make an affidavit of it, and no public officer is required to supervise it, or take proofs. So it is a mere matter of discretion with the company whether they will give notice at all or not.
These acts do not require these elections to be held in any of the counties where the work is situate; nor even in the State. They may be held in Chicago, or New York, or New Orleans, or anywhere else, where it will be most certain that the resident land owners will never find them,and never be able to attend them. I am informed that the elections of the Kankakee Valley Draining Company have all actually been held out of the State. Just where is unknown, owing to the inability of the people to penetrate the swamps, in order to find the notices.
Again, these acts do not provide, as they should, that a majority, nor any other proportionate number, of members should be present at the elections. Nor do they provide that one-half, nor any other proportionate quantity of the land owned by members of the Company, much less the land to be affected by the work, shall be represented at the elections.
Neither are votes counted as they should be, according to the quantity or value of the interest of the members. The vote of a member owning one acre of land weighs as heavily as that of one owning a thousand acres.
See the unjust workings of this law. We will suppose the members of the Kankakee Valley Draining Company to own, collectively, one hundred thousand acres of land, of which we will suppose the three, or seven, enterprising directors to own but one hundred and fifty acres. We will suppose the Directors to live in Pittsburgh, Pennsylvania, as I believe some of them actually do. They call an election to take place in the private office of one of their own number. Of course it is out of the question to expect the humble land owners of the Kankakee Valley to attend this election. These three or seven sharpers, being probably the smallest land owners in the Company, gravely elect themselves Directors, and thus take and keep control of the entire interest of the honest men who are so deeply interested in the work. Add to this the further fact that the great body of the land owners who are to be so deeply affected by the work of the Company, are not members of the organization at all, and you have a combination of fraud and despotism which is startling to contemplate.
But let me examine a little further the mode of levying assessments upon the lands.
APPRAISERS.
The company may apply to the Court, or Judge, who most, "immediately upon such application, appoint three disinterested appraisers." Now, these appraisers are to assess the lands of a great number of persons; and are to be the sole judges of the amounts of the levies. In short, the people are absolutely at their mercy; and yet no notice whatever is to be given of the time and place, when and where the appointments are to be made, or applied for. When property is to be sold on execution, the law provides that the owner must be notified, and may choose one of the two men who are to appraise it. Not so here. The owner not only has no voice in selecting the men who are to appraise and assess his lands, but he must not even know when or where, or by whom the selectirn is to be made. The corporation who levies and collects, and uses the assessments has the whole matter in its own control.
But what are to be the necessary qualifications of these appraisers? Their duties are certainly important--their power for evil, should they be corrupt or ignorant, is certainly enormous.
Property levied upon by attachment must be appraised by the Sheriff, "with the assistance of a disinterested and credible householder of the county."
Property levied upon by execution must be appraised by "two disinterested householders of the neighborhood where the levy is made, one to be chosen by each of the parties." Why are not the same safeguards erected here, where the interests involved are almost incalculably greater than in the cases which I have mentioned?
page: 234[View Page 234]This law requires simply that the appraisers shall be "disinterested." The very thought of their being disinterested is annihilated instantly by the fact that they are to be employed and paid by the company for whose benefit the appraisements are to be made. They are not required to be credible citizens, nor householders, nor freeholders, nor residents of the county, nor even of the State. They have not the first single qualification of upright and impartial appraisers. They may be non residents of the State; they may be honest men, but totally ignorant of the lands they are to assess; they may be seedy vagabonds and professional dead beats, and, if I am not very seriously misinformed, this is the actual character of men who have appraised most of the lands in the Kankakee Valley.
These appraisers are not appointed in each county. Being appointed in one county, where part of the work lies, they make the appraisements in all the counties into which it extends. This is certainly wrong; for if the appraiser should be even an excellent judge of lands and values in the county where he resides, he might be no judge at all of different lands in a different and distant county.
Section nine requires that "Notice of the time and place when and where the appraisers will begin the examination of lands, and the assessments of benefits and injuries thereto" shall be given. No form of notice is prescribed, and no particular mode of publishing it is pointed out. The statute simply says: "It shall be sufficient it published three successive weeks in a newspaper in the county where the land is situate." It is at the option of the company to publish it in a newspaper or post it in the swamps.
The same section provides that "proof of the publication may be made by the affidavit of the editor of the newspaper, or of the secretary of the company." But this amounts to nothing, because there is no requirement that the proof is to be filed with, or made to any public officer. Nobody supervises or inspects it, and the company may give notice or not, just as they please, and nobody can object.
THE ASSESSMENT.
It would have been expected that so important a matter as making these assessments would have been guarded and controled by strict and clear regulations. But it is not so. The language of the statute is that "such appraisers shall examine all lands," etc.
Must this examination be by an actual view of the lands, or may it be an inspection of records and maps representing the lands?
The friends of this law, and the companies organized under it, contend that this provision does not contemplate an actual view of the lands, because, owing to the very nature of the lands themselves, being marshy swamps, it would be next to impossible to traverse them, or, in most cases, even to get in sight of them. Whatever may be the true construction of this statute, it is sufficient for my purpose to make the point that it is uncertain, when it ought to be clear, and that, being uncertain, it may be abused.
And indeed, it has been most shamefully abused. I am assured by a number of reliable gentlemen from the Kankakee valley counties that the appraisers of the Kankakee Valley Draining Company did not even pretend to make an actual view of the lands by them appraised. The whole work of the appraisements and assessments was done in an obscure room in one of the remote country towns, near the mouth of the river. Maps and copies of records served to represent the lands, and to assist the appraisers in guessing the assessments up to a figure sufficiently high to satisfy the company who paid them for their work. This is a grave charge, but I have still further proof of it. About a year ago General Geo. W. Cass, of Pittsburgh, Penn., the treasurer of the Kankakee Valley Draining Company, made a speech in the rooms of the Board of Trade at Indianapolis. The speech, after being carefully revised by him, was printed in the Indiapolis Journal. I hold a copy of it in my hand, and read from it the following words:
"Still another reason for delay has been the work of assessment. It is no small matter to assess so large a body of land. Notwithstanding the assertion that the assessment was made in an office, without an inspection of the property, it has taken nearly a year to do the work."
Here was a fair opportunity to have denied the charge if it had been false. He not only does not deny it, but in a carefully prepared and published speech impliedly admits its truth.
But let me call attention to the unlimited and dangerous discretion allowed these appraisers. The language of the statute (section six) is that they shall assess "all lands, the intrinsic or market value of which may be by them supposed to be liable to be affected by the proposed work." The Kankakee Valley Company propose to straighten the whole channel of a river. To what distance from the page: 235[View Page 235]river on either side may the assessments be pushed? Shall they be levied upon a strip of country three miles wide, or five miles wide, or twenty miles wide? The appraisers are the sole judges. What lands are to be assessed? Wet lands only, or dry lands also? "All lands the intrinsic or market value of which may be supposed by them (the appraisers) to be affected by the proposed work." The appraisers are the absolute judges.
What shall be the basis of the estimates? Shall each tract or each acre be assessed according to its value? This is the rule of taxation by the State government and the county and municipal organizations; but not so in this case. The appraisers may levy the assessment according to their own whims "without regard to the value of the lands or the costs of the proposed work." (Sec. 6.)
The value of the lands may be only three dollars per acre, and these appraisers may levy upon it a tax of ten dollars an acre. The cost of the work may be one hundred thousand dollars, but these appraisers may levy assessments to the amount of one million, or five million dollars. In short, their discretion is unrestrained, and their power unlimited. This is indeed, an alarming picture, but it is still short of the truth as I will show by actual facts.
RE-ASSESSMENTS.
But after the exercise of this fearful power will the corporation then be satisfied?
Section 6 provides further "that as often as it shall be desired by the company to make a reassessment of any tract or tracts of land for any purpose, said appraisers shall, upon request of the company, make such reassessments and so, from time to time, when, and as often as they shall be requested, and shall make and return full schedules of the same; and such schedules shall be filed for record, shall constitute liens, shall be collected, and shall in all respects be governed by the same rules and have the same force and effect as the original assessments above provided for."
The appraisers themselves without character or qualifications! Their power unlimited as to the lands which they shall assess, or the amount of their levies! And a soulless corporation with unrestrained power to repeat the assessments at their discretion and upon any pretext to suit their own purposes!
These details are so loose and reckless as to make it impossible to justify them and disgraceful to defend them. But if this is true of the provisions which I have been discussing, what will be said of section 15? It is as follows:
"No informality, irregularity or omission which shall have occurred, or which may occur in the organization or proceeding of any company, or in the appointment or proceedings of any of their officers, agents, or the appraisers, shall affect the rights and privileges of such company, or invalidate the assessments of the appraisers, nor any sale of land which may be made under any foreclosure of any lien for the aesessments thereon."
The effect of this is simply that the rules prescribed by law for the proceedings of the company may be followed by the company or not, just as they like. Whatever they may have done or may do, is here legalized, however unjust or oppressive. No defect in the organization of the company, no violation of private right or public justice, no omission or neglect of prescribed duty can possibly be imagined which is not cured by this section.
POWER TO ISSUE BONDS.
As we have seen the schedules of assessments, when filed in the offices of the Recorders, become liens upon the lands, in the nature of mortgages, and the company may enforce them by foreclosure.
Section 13 provides that the company may borrow money by issuing and selling their bonds. In order to secure the payment of these bonds and the interest on them at maturity, section 13 further provides that the company may mortgage or pledge the assessments to the bondholders, or, at their option, to Trustees,for the benefit of the bondholders. These bonds are invested with every attribute of negotiability, and indeed are protected in the hands of innocent holders with a care far more sacred than is extended to any instrument known to the law merchant. The last clause of section 12 provides:
"And after any such bond shall have been negotiated, no action or proceeding shall be instituted, nor any defense to any action interposed by the company, or any other person or persons, the object and tendency of wl ich shall be to impair the validity'or security, or to depress the value of such bonds, any provision of the law to the contrary notwithstanding."
Now, a note or bill of exchange, negotiable by the law merchant, passes into the hands of innocent third parties, free from all defenses which the maker may have had against the original holder. But if a mortgage is given by the maker to secure payment of the note, he may defend against the mortgage, in the hands of any page: 236[View Page 236]holder, however remote. The note can not impart the quality of negotiability to the mortgage, nor to any other instrument given to secure it.--14th Ohio State R. 423.
But this statute first invests the bonds of the company with the strict and exceptional attribute of negotiability, and, still further, extends the same quality to the mortgages given to secure them, and, still fnrther, to the assessments upon which the mortgages are given. It was justly thought when commercial paper was clothed with the quality of negotiability that it was a hardship, which nothing but the necessities of commercial business could justify; and courts and legislatures have steadily and properly refused to enlarge this class of instruments. Here then is a most startling and dangerous anomaly. First, the bonds made are sacred, and through them all remedies denied the people against both the mortgages and assessments upon their lands, no difference how unjust or fraudulent they may be.
RIGHT OF APPEAL.
But in this provision there is a covert fraud which renders the danger to the people more appalling still. Let us see:
The latter clause of section six provides that "Any person aggrieved by the assessments may at any time within thirty days thereafter appeal therefrom to the Circuit or Common Pleas Court of said county."
Now, here is a right of appeal which looks fair enough on its face, but it is completely destroyed by section thirteen, which we have just been considering.
To illustrate: We will suppose the assessments levied and the schedules filed in the Recorder's office on the first day of the month. On the same day, or the next day, the Company may issue and negotiate one or more bonds arid mortgage the assessments to secure them. The thirty days allowed for an appeal have not expired yet, nor even two days of the thirty; but section thirteen says, "after any such bonds shall have been negotiated, no action or proceeding shall be instituted, nor any defense to any action interposed, by the Company or any other person, the object or tendency of which shall be to impair the vitality or the security, or to depress the value of such bonds--any provision of the law to the contrary notwithstanding."
Now the institution of an appeal from the assessments mortgaged would very clearly be "the institution of a proceeding," and it would with equal clearness have a very decided "tendency to impair the security, and depress the value of the bonds."
Thus all questions concerning the assessments are put at rest, and end with the filing of the schedules with the Recorder, and the sacred right of of appeal, and the still more sacred right of trial by a jury of the country, are denied the people, at the will of a tyrannical corporation.
It will not relieve this view in the least regard for me to say that at best I gravely doubt the validity of this section providing for appeals. It prescribes no mode by which the appeal shall be taken. It gives barely the naked right of appeal without providing any manner in which it may be enforced. I seriously doubt if it is not a nullity.
When the bonds of the Company are once issued and sold to innocent purchasers and the assessments are mortgaged to secure them, but one thing is left for the land owners to do, and that is to pay their assessments in full, and they can make no defense whatever against them.
And this they are compelled to do, although not one stroke of work has ever been or shall ever be done upon the proposed improvements. Could any people be more completely at the mercy of despotism?
THE CORPORATION REQUIRED TO GIVE BONDS.
But I am admonished that the law requires these Companies to enter into bonds with sufficient sureties for the security of the people whose interests are thus jeopardized.
Mr. Speaker, in every section of this law we find a snare.
Section ten of the act of 1869 does provide "that unless the main line of the company's proposed work shall exceed twenty miles in length, no part of the assessments shall be collected by the company until the company shall have given bond."
This provision is only applicable to small companies whose main line is less than twenty miles long, If the proposed work is over twenty miles in length no bond is required. This is on the principle that the greater the risk the smaller shall be the security. A company collecting two or three thousand dollars shall give bonds, while a company collecting two or three millions shall give none. This enactment was clearly for the purpose of strangling small honest associations in the interest of mammoth speculations.
I know that section two of the supplemental act requires a bond of the large companies; but such a bond as it is! It page: 237[View Page 237]has but one condition, and that is, "for the faithful application of any and all moneys which shall come into its hands to the legitimate purposes of the corporation."
Now what protection does this afford to the honest land owner who pays his assessment to the company? Just none at all. The same section declares that "any person aggrieved may have his, her or their action on this bond for damages sustained."
But what action can the land owner bring? He has paid his money, and it is lost. He brings his action to recover it. In order to recover upon this bond he must show, by a preponderance of the testimony, that the identical money which he paid has been misapplied by the company, and he must show just how each and every dollar has been misapplied, and he can recover no more than he can thus trace out and locate. It is not enough for him to show that a large amount of money generally has been misapplied, but each dollar which he locates he must recognize as the identical dollar which he paid, or he can not recover it. A recovery on this bond is thus plainly impossible.
There is no condition in this bond binding the company to anything. There is no condition that they shall prosecute their work faithfully and without delay. There is no stipulation when they shall commence it nor when they shall complete it. There is not even a requirement that they shall ever commence it, or ever complete it. Here again, as at every point, the whole matter is in the discretion of the company. But this bond obligates the company to apply all money coming into their hands to "the legitimate purposes of the corporation."
What are its "legitimate purposes?" We know what they ought to be; but can we surmise how the corporation, with its unbounded powers and its soulless body will interpret them?
Section three of the original act declares that "such company shall be a body corporate, with full power to buy, receive donations of, and hold, and sell, and convey any lands benefited, or to be benefited by the proposed work." And here, Mr. Speaker, is the great secret underlying the whole of this mighty fabric. When the land owner sues to recover his money, the company answers that they have it invested, or possibly have lost it in real estate speculations, and there is an end of it.
The securities required by this act were never intended for the benefit of the persons who bear the burthens. I hold in my hand a prospectus issued by the Kankakee Valley Draining Company in 1871, about one year ago. On page ten I find the understanding of that company upon this subject very clearly expressed in these words:
"Ample bonds and security has been given by the corporation to the State of Indiana, for the benefit of the bondholders, as well as all other parties in interest, that all moneys advanced by the purchasers of bonds, or paid by land owners upon assessments, shall go into the security pledged to secure the bonds." The principal purpose in giving security then, is to make the company's bonds sell. And here is a clear declaration that these securities are for the benefit of the bondholders, while the poor land owners are indefinitely referred to as being "other persons in interest."
MEMBERSHIPS.
I know the law permits any person owning lands to be affected by the proposed work to become a member of the company by signing the articles of association; and it is urged with an appearance of fairness that the resident landowners can by this means not only protect themselves, but have it in their power to take entire control of any company.
In the speech to which I have once referred, Gen. Cass, the Treasurer of the Kankakee Valley Draining Company, used these words :
"The law provides that every man owning an acre of ground can become a stockholder, and it is the wish of the company that they would."
I have no doubt General Cass earnestly wished so: for the Articles of Association of his company stipulate that any landowner may become a member by signing the Articles and "paying to the company fifty cents for each acre of land owned by him." So that the initiation fee to membership in this company is from $20 to $1,000 more or less owing to the wealth of the individual. "You pays your money and takes your choice."
There is no pretense that this initiation fee is required either by the letter or spirit of the law. But it is part of the articles of association which the applicant must sign in order to become a member, and when he does sign the articles he is as much bound by this stipulation as any other part of the contract.
Another one of these stipulations is that "if he fails to pay any due or assessment, he shall have no right to hold any office or vote at any election of the company." So, at last, we see it costs dearly indeed to get control of one of these companies. To page: 238[View Page 238]the modest landowner it is simply out of the question.
CONSTITUTIONAL VIEW OF THE SUBJECT.
So far, Mr. Speaker, I have considered only the inheritant defects and consequent injustice of these laws. Let us now take a higher view of them.
Upon what constitutional ground can they be justified?
THE TAXING POWER.
One of the highest attributes of sovereignty is the power of taxation. The Constitution vests this great and sacred power solely in the Legislature, with no authority to delegate it to any other hands, except within certain well defined limits.
County organizations and municipal corporations may possess this great power by delegation from the Legislature, but beyond these it should not go. Only in cases of clear public convenience and necessity has the transgression of these limits ever been countenanced, and then only under the strongest safeguards and most stringent regulations. If this great power is to be delegated ad libitum to private corporations what protection are the people to have in their rights of property? Take, for instance, the real estate in Indianapolis. It is taxed, first, by the State; next, by the city; next, by each one of the ten or twelve railroad corporations; next, by five or six manufacturing associations; and so on without limit, until it is literally taxed out of existence.
Now, by these acts this great power of taxation, under the guise of assessments, has been delegated, in its widest and most unrestricted form to mere private corporations. If it is to be extended to one class, there can be no justice in withholding it from others. I tell you, Mr. Speaker, in the enactment of these laws you have gone beyond the constitutional limit, and I demand, in the name of the suffering people of Northern Indiana, that this body instantly take the backward step into the province of just and legitimate legislation.
EMINENT DOMAIN.
Another one of the highest attributes of sovereignty is the right of eminent domain.
This is defined to be "the right of the sovereign government to appropriate and control individual property for the benefit of the whole State."
Before any law can be justified as an exercise of this great department of legislative power it must clearly appear that the destruction of individual rights, and the appropriation of individual property which it contemplates are "for the benefit of the whole State." If the benefits to arise from its operation are to be confined to any part of the community less than the general public, the act can not be referable to the right of Eminent Domain.
The purpose of the acts under discussion is to authorize the draining and protecting of wet lands. In the very nature of things their operation and their benefits must be confined to a few localities, comparatively small both in population and territory. In what department of legislative power, then, must we seek for a justification for these laws? Clearly not in Eminent Domain, because, both in their operation and benefits, they are local and not general.
POLICE POWER.
There is a branch of legislative authority known as the Police Power. It has been justly termed "a power without a definition." It is not accurately bounded or defined by any judicial authority, but "embraces among its prominent objects the preservation of peace and order, of health and morals, and the regulation of rights and duties of neighborhood." Cooley's Con. Lim. p. 572, Its principal maxim is "enjoy your own property so as not to interfere with the rights of your neighbor." It contemplates no mammoth combinations, nor general public enterprises. It subjects the property of the individual to the rights of his neighborhood, and its distinctive feature is that it is applicable only to individual intercourse in the smallest local sense. As contradistinguished from the right of eminent domain, an able counselor has said that "it subjects the citizen, in respect of his property, to the rights of his neighbor, while the eminent domain subjects him in respect to his property, to the exigencies of the State."
Obviously, these drainage acts are not referable to this department of legislative power, for while their operation may, in a few exceptional instances be confined to small neighborhoods, they may be extended to the whole of a great watercourse with all its adjacent territory, or to a great region of wet lands, with its thousands of owners.
Where, then, I ask again, shall these laws be ranged? To what department of constitutional legislative power shall they be referred? As they grant to private corporations an unbounded power of taxation, they transgress the just limit of legislative authority.
They are too narrow to be referred to the right of Eminent Domain, and too broad to be referred to the Police Power.
page: 239[View Page 239]They are without legitimate parentage; they are the bastard offsprings of fraud and arbitrary power.
THE LAW A JOB.
These laws were enacted, not for public benefit, but at the instance and by the procuration of the Kankakee Valley Draining Company, and while the Legislature doubtless acted in good faith, the Company had no object in view except its own profit. I know I have made a broad assertion, but I believe I can prove it to be true.
I hold in my hand the record in the case of O'Riley vs. the Kankakee Valley Draining Company, appealed to the Supreme Court from the Newton Circuit Court. In the answer of the Company to the complaint in that case, I find these words: "Thereupon said Company authorized and directed its President to apply to the General Assembly of the State for an amendment of said law, (the law of 1867,) and at his instance and request, and chiefly by his procuration, in the interests of said Company, the said act of May 22, 1869, was passed."
Again, in the Prospectus issued by the Company, to which I referred a while ago, on page seven I find these words: "Further legislation being desired, the Company applied to the Legislature at its session in January, 1871, for the enactment of a supplemental law, which was passed by the unanimous vote of the Senate, and a large majority of the Lower House, and was approved by the Governor on the 23rd day of February, 1871."
Again, in General Cass' speech in Indianapolis, to which I have before referred, he used these words: "The Company was represented before the Legislature by its President, and that body in 1871 passed a supplemental act in many respects superior to the first one, and which was generally satisfactory to the Company."
My statement was that these laws were enacted in the interest of the corporation, and I believe I have sufficiently proved it, although but a small part of the available proof has been adduced.
HOW THE LAW HAS BEEN ABUSED.
This corporation was organized, as its Articles of Association show, for the purpose of straightening the channel of the Kankakee river and draining the swamp lands lying in the Kankakee Valley. The river rises in the extreme north part of the State, in the county of St. Joseph, and flows in a south-westerly direction through eight counties, crossing the western line of the State into Illinois, where it turns north-ward and empties into the Illinois river. Its whole course in Indiana lies through marshy swamps where much of the rich soil is most of each year covered with water, and is therefore in its present condition generally worthless, although a great part of the lands are dry and very productive.
To carry out its purposes, the company has levied assssments upon all lands bordering upon the river from the State line to the headwaters of the river, a distance of nearly a hundred miles. The strip of country assessed varies in width from eight to twenty miles. By reference to page 7 of its Prospectus I find this statement: "The surveys have been made, and the cost of the entire wrork estimated at $1,500,000. Six hundred and twenty-four thousand eight hundred and seventy-two acres of land have been assessed as liable to be affected by this work, the present value of which is appraised at $3,798,321, and the benefits exceeding injuries bv $4,644,010."
Let me recapitulate: It has assessed 624,872 acres of land.
| Amount of assessments above injuries........ | $4,644,010 |
| Value of the lands..................................... | 3,798,321 |
| Excess of assessments above the value of the land............... | $845,689 |
I referred some time ago to the fact that the assessments might be made without regard to the value of the lands, and here is the sequel. They are actually assessed for nearly a million of dollars more than they are worth, although a great deal of the land is dry and under cultivation.
But another fact:
| The assessments are.................................... | $4,644,010 |
| The estimated cost of the work................... | 1,500,090 |
| Leaving a surplus of................................. | $3,144,010 |
Why have they levied more than three times the amount required to do the work? And what disposition is to be made of this immense balance? It must be paid, and there is no provision in the law that any part of it shall be returned by the Company to the people. It is simply that much clear profit. "The court awards it and the law doth give it" It is sheer flat robbery, and deserves no better name.
Of course it is absolutely impossible for the humble farmers of that region to pay these terrible assessments, for the simple reason that they have not the money to pay with. The result will be, of course, that their lands will be sold, and bought in by the corporation, or by the adventurers who compose it. Scarcely a single individual will escape. And almost the whole of that wide valley will pass into the page: 240[View Page 240]hands of these unprincipled sharpers. And this is exactly what they foresaw and intended from the beginning. Every single man I believe who was in the original organization of that Company was a non-resident capitalist. A few residents afterwards became members, but have withdrawn from it, and their names are now here on this petition, together with twelve hundred others, praying for the repeal of the law. In General Cass' speech in Indianapolis he used these words: "I have said to land owners I will take your lands, pay for the drainage, and when reclaimed sell them and share the profits with you."Here is the coolest impudence I have ever met with. He extends this invitation to the poor land owner: "Go away and leave your homestead; I will take charge of it; I will pay the assessments on it to myself; that is, I will take the money out of my right pocket and put it into my left pocket; you will lose your land; but I will get it for nothing you know, and that will make it all right." And this is exactly what I charged his purpose to be.
But, Mr. Speaker, the work proposed by this Company will never be accomplished. I don't believe they ever intended to do what they pretend. They were first organized under the old law of 1868. They have now been a corporate body four years, and not one stroke of work has yet been done; not a single inch of earth has yet been turned. They have done nothing except harrass the people, and hawk their bonds about the streets of eastern cities for sale. It is uncertain whether any of them have yet been sold or not. For the sake of the people I hope not. But I warn them that their days of grace are at an end, and in one hour from this moment this disgraceful law will be a thing of the past.
THE PROPOSED WORK IMPRACTICABLE.
But, Mr. Speaker, the work which they propose is impracticable. It is their purpose, as shown in their surveys, to straighten the Kankakee river by running an immense ditch its whole length within this State. About midway in its course through the State the river bends to the south, and then back again to the north, making a grand curve some twenty miles in length. This curve it is proposed to straighten by running a ditch directly from one of its points to another. The ditch will be about an average of four miles north of the present bed of the river, in the curve, and will occupy, to the river, exactly the same position that the string occupies to a tightly strung bow. Now, water will naturally seek the lowest level. So, as might have been expected, tbe ground where the ditch will run at this point is about eight feet higher than at the river. If they should dig their ditch eight feet deep the bottom of it would be precisely on a level with the surface of the river. To add to this folly, they propose to cnt a lateral ditch for the purpose of draining off the water which now lies south of the river. This lateral ditch is to cross the present channel of the river, in the curve, and carry the water up-hill to the main ditch.
QUICKSAND.
But such ditches as they propose can not be dug along the course of that river. A few feet from the surface, I am told, they will strike quicksand, and there they must stop.
THE DAM AT MOMENCE.
But the Kankakee Valley can never be drained by any scheme of this kind. At the town of Momence, in Illinois, nine miles from the Indiana line, the river falls, and beyond this point its course is between sufficient banks and through a fine country.
At Momence there is an immense natural dam of stone, and over this the river rushes in foaming rapids for some ten or fifteen miles. The valley ahove the Indiana line is a low basin, and the river moves through it with slow and sluggish current. The river may in course of time cut a deep channel through this stone dam, and when it does the lands on itsupper waters will drain themselves. No company can get the water out of this basin by cutting ditches. You might as well try to drain Lake Michigan by cutting a trench across its basin. The way to drain the valley is to blast out the stone dam at Momence. This dam being in lllinois, is beyond the control of a corporation formed in Indiana. It can only be removed by compact between the two States, or by the General Government.
Mr. Speaker, it is clear that this company is powerless for good, but it is terribly powerful for evil. Already dismay has seized the people of that unfortunate valley. I hold in my hand the printed calendar of the September Term, 1872, of the Porter Circuit Court. It shows two hundred and fifty-nine lawsuits now pending in that court against the company. As many more are upon the docket of the Common Pleas. Four thousand lawsuits are burthening the courts and distracting the people of the Kankakee Valley. We can relieve them all in twenty minutes from this instant, and I solemnly believe the hour of their deliverance is at hand. page: 241[View Page 241]Gentlemen say we can not destroy vested rights by repealing the laws. It is true that no legislation can destroy vested rights, but the people say, "Save us for the future, and our courts will protect us so far as they can in the present."
In the language of the gentleman from Wayne, "We will hreak the back of this monster and let it sink in the swamps of the Kankakee."
When he had concluded the bill was finally passed the House--yeas 89, nays 1, with an amendment to the title, "saving the operations of those whose works are ten miles in length or under."
Mr. SHIRLEY submitted a resolution (which was adopted) instructing the Committee on the Judiciary to report to the House, by bill or otherwise, whether any legislation is necessary, with regard to redistricting the State for judicial purposes, so as to equalize the labor of the judges and increase their salaries.
The House then adjourned.
