Indiana. General Assembly.

Documentary journal of Indiana 1856, part 1 (Volume 1856, pt.1) online

. (page 22 of 53)
Online LibraryIndiana. General AssemblyDocumentary journal of Indiana 1856, part 1 (Volume 1856, pt.1) → online text (page 22 of 53)
Font size
QR-code for this ebook

from its appropriate channel, and, in some manner, to control it
for the promotion of private interests. In anticipation of such ef-
forts, it is earnestly recommended that no sale, or transfer, of the
interest of the State in the Bank, shall be permitted, either to in-
dividuals or corporations.

The charter confers ample power, and defines the particular
mode in which the affairs of the Bank shall be closed. Its capital
is to be converted into cash, and the part belonging to the State,
paid to the Sinking Fund Commissioners — officers of your own
creation, selected from the whole people, and having no connec-
tion with the Bank, either as stockholders or borrowers, to be by
them invested, as the law may direct, for purposes of Common
School Education. A fund so sacred, and for purposes so benefi-
eial to the p3ople of the State, should be, forever, preserved in-
violate. It should not be peimitted to tempt the cupidity of indi-
viduals, or used to augment the powers, or swell the coffers of any
corporate monopoly.

The present mode of investment of the Sinking Fund, is, chief-
ly, in mortgages upon the real estate of our citizens. The facili-
ties thus afforded for borrowing money, create a spirit of specu-
lation, often terminating in bankruptcy and ruin to the borrower.
The long lists of lands forfeited to the Fund, for the non-payment
of principal and interest, admonishes us to seek for some other
mode of investment, which shall be equally safe and productive.
I have repeatedly suggested, and now renew the recommendation,
that the Sinking Fund Commissioners should be authorized to in-
vest this Fund, from time to time, as it may accumulate in their
hands, in the Bonds of the State, under appropriate limitations, as
to principal and market value; thus changing the character of our
obligations, from a foreign to a domestic debt ; the interest upon
which, when collected from our own people, shall be immediately
re-imbursed to them, in the accomplishment of that high and most
ennobling object of human government, the education of our youth.
It is a high trust, and will be most truly performed, when we shall
connect the education of our children with the character, integ-
rity, and honor of the State. In this manner, at least one-third
of our whole foreign indebtedness may be absorbed; thus lessen-
ing the burdens of the people, and elevating the financial charac-
ter of the State.

The entire amount of the Funded Debt of the State, outstand-
ing, is stated !>y the Auditor of State, as follows :


Of 5 per cent. State iStock, $5,156,500

Ot 2k per cent. State Stock, 1,812,577

Total, , $0,969,077

The market value of which, estimating the 5 per cent, at eighty-
four cents, and the 2£ per cent, at sixty cents, upon the dollar,
would be the sum of $5,419,006.

To show the practicability of converting this foreign debt into a
domestic one, ihe following table is compiled from the report ol
the Superintendent of Publfc Instruction, and from the communi-
cation of the President of the Slate Bank :


Amount of Special Fund, $1,862,574 90

Amount of Common Fund, 894,930 15

Bank Tax Fund, on loan from State Treasury,- • • • 6,626 85

Bank Tax Fund, on hand in State Treasury, 10,607 83

Saline Fund, on loan, 9,689 22

Saline Fund on hand in State Treasury, 10,5;>1 ;*8

Estimated value of unsold School Lands, 161,590 00

Estimated value of Sinking Fund in State Bank, to

date, • 1,955,461 59

Total, • $4,912,012 42

The Sinking Fund Commissioners should be directed, by law, to
invest these funds, as they may accumulate in their hands, in the
stocks of the State ; and they would, alone, be sufficient to absorb
nearly our entire indebtedness. The policy, however, of continu-
ing the annual Sinking Fund Tax, for the liquidation of our debt,
should not be abandoned. On the contrary, as every interest of
the State is buoyant and prosperous, it should, in my judgment,
bt; increased to five cents on the hundred dollars, per annum. If
practicable, the first investment, of either our Sinking Fu< d or
School Fund, should be made in the 2g per cent. Stocks. With
this annual dimunition of our indebtedness, and the investment of
the School Fund as indicated, in less than eight years we shall con-
vert our foreign debt into a home debt ; the interest upon which,
when drawn Irom our taxpayers, would immediately be returned
to them, in a thousand streams of intelligence, blessing, with their
benign influence, parent and child, and elevating to the highest
pinnacle of honor the character of our beloved State.

On reference to the report of the Auditor of State, it will be seen
that, under the restrictions of the amended Statute, the currency
of the Free Banks is amply s cured, and fully entitled to public
confidence. If Banks of issue be necessary at all, they should be
as free as possible from the feature of monopoly; and, in this re-


spect, therefore, the system of Free Banking is entitled to our ap-
probation. To perfect the system, however, a Banking Depart-
ment should be created, separate and distinct from all others, but
subject to the inspection and supervision of the Executive Officers
and the Legislature. The concise and the able report of the Au-
ditor of State, and his valuable suggestions, in this department, are
commended to your consideration.

While to olher subjects we apply the rigid test of sound, prac-
tical, common sense, upon the subject of currency, we cherish the
shadow and reject the substance. Not content with such issues
as are tolerated by law, the solvency of which has been guaran-
tied by legal enactment, we have encouraged and fostered the
purious and fraudulent emissions of individuals, Plank Koads, and
Insurance Companies; all having an origin in our own State, and
existing in defiance of law, and sound public sentiment. In addi-
tion to this, Indiana has been the great field tor the circulation of
the worthless and fraudulent issues of other States, sent here by
unprincipled speculators, who amass fortunes at the expense of
the unwary and credulous. In all these cases, when the bubble
bursts, the worthless rags are found in the hands of the poor and
laboring classes. The result of a toleration of this policy, is, to
make the rich richer and the poor poorer.

It is in your power to apply the remedy, to protect your con-
stituents from imposition and loss, to prohibit the circulation of an
irresponsible currency, by severe penalties, and to prevent, as soon
as practicable, the diffusion among our people, of any currency
but that which is constitutional, or such as may be promptly con-
vertible into coin. It will be a most fortunate day, when we shall
have learned the simple truth, that we can never have steadiness,
and permanent prosperity, in the business of the country, so long
as we shall continue to encourage any system that converts
promises to pay, into money.

It was the intention of the framers of the Constitution, and they
expressed it in language too plain to be misunderstood, that there
should be but one State Bank in Indiana, at the same time; and
yet, in the face of this provision, four years before the expiration
of the legal existence of the State Bank of Indiana, the Legisla-
ture of 1855, chartered a new State Bank, under the name and
style of the Bank of the Siate of Indiana.

It is the spirit of our Constitution, that the people are the source
of all political power; and, therefore, all legislation affecting their
interests, or the character of the State, should emanate directly
from them. But, in the case of the charter of the Bank of the
State of Indiana, the subject was sprung upon the Legislature,
without previous discussion, without notice, without investigation,
without any expression of the popular will, and without any indi-
cation of public sentiment, in favor of the measure. If such
legislation were valid and constitutional, two years before the ex-
piration of the charter of the State Bank, what is there to prevent


the present or any succeeding Legislature, from extending the mon-
opoly of the business of banking for another period of twenty
years, to the same, or other more importunate corporators? If
such is to be the interpretation of our Constitution, and the prac-
tice under it, it is the she rest mockery to talk of a government of
the people. One mischievous, reckless, or ignorant Legislature,
in an age, might thus inflict upon the State a catalogue of evita
which would require the wisdom of an age for their removal ; in-
volving, among other evils, the destruction of one of the main
support* of public virtue, the supremacy of the voice of the people
at the ballot box.

The means and appliances brought to bear to secure the passage
of this charter, would, if exposed to the public gaze, exhibit the
darkest page of fraud and corruption that ever disgraced the
Legislature of any State. While m»n of pure and honorable sen-
timent were led into its support, in the belief that the approaching
close of the existing Bank, required them, thus early, to provide a
.successor; others supported it upon promise of stock, equivalents
in money, or pledges as to the location of particular branches.
To make up the constitutional vote in its favor, the names of mem-
bers were recorded in its passage, who were, at that moment,
absent, and many miles distant from the Capital. But, if fraud and
corruption marked the passage of the bill, the enormities practiced
in the location of the branches, and the distribution of the stock,
were still more glaring, and, if possible, more deserving of public
condemnation. The location of the branches, the privileges of
subscribing to its stock, in short, the franchises of the Bank, were
bought and sold, like other marketable commodities. In some of
the branches, the books for the subscription of stock were kept
open but a few minutes, and were then only accessible to parties
to the fraud; in other instances, they were opened in out-of-the-
way places, known only to a few ; and, in scarcely any instance,
was lull and free opportunity given, for citizens generally, to sub-
scribe. In two or three cases, suits were brought by those who
felt aggrieved; but their complaints were stifled by the potent
agency of money. In this manner, a majority of the stock, in the
seventeen branches first organized, was subscribed by twenty-eight
individuals, the largest portion of whom have never been engaged
in the business of banking, and have, already, disposed of their
stock, to others, at enormous premiums.

It would be interesting and instructive, to have, for comparison,
the names of the original, and the present, stockholders. The sud-
den transfer of stock, would convince the most incredulous, that
the charter was procured, not for purposes of banking, but for
speculations; for the benefit of the few to the exclusion of the
many. The premiums thus realized by the original stockholders,
are believed to be not less than one quarter of a million of dollars;
all of which must be re-imbursed by the laboring and producing
classes. Had the State exacted such a bonus from the corporators,


to be paid into her treasury, it might, at least, have been said, that,
in this respect, the whole people were benefitted.

Having a knowledge of these facts, and regarding the charter as
a direct violation of the Constitution, I caused two suits to be
brought — one in my own name, and one in the name of the State —
for the purpose of testing its validity. The first has been decided,
without touching any of the great points involved in the issue.
The second is still pending, and will, in its progress, fully test the
rights of the corporators. The Supreme Court have already inti-
mated such an opinion, in regard to the adoption of amendments
to bills upon the passage, as must, inevitably, render the charter
a nullity

In view of all these facts, it is my solemn conviction, that public
credit and confidence can never be given to an institution of this
character. I recommend, therefore, that the charter be expunged
from the statute books; or, failing in this effort, that all connection
between the Bank and the State, either by deposit of funds or oth-
wise, be prohibited, and that it be prevented from re-issuing the
notes of the present State Bank, by the penalty of a forfeiture of
the securities received therefor.

The charter should be promptly and absolutely repealed, so that
no sanction, whatever, to its legal existence shall appear upon your
statute books. The safety of the public funds should also admon-
ish you to prohibit the reception of its issues for public dues

The Legislature owe it to themselves, to the cause of honesty
and justice, to the credit of the State, and to the constituents
they represent, to take prompt and decisive action in the premises.
When the present State Bank shall have been entirely wound up,
and all its affairs liquidated, should the people then desire another
institution to succeed it, their representatives will come instructed
to that end, and can frame a charter which, guarding the rights of
all, shall not be subservient to the purposes of private speculation.
If it be good, the whole people should be permitted to participate
in its benefits; if it be otherwise, it should be promptly sup-

It may be said that the new institution is now in the hands of
safe and responsible men, and that their rights of property should
noi be disturbed. In answer, it may be stated that they purchased
the stock, with full knowledge of the frauds ; that the stock, instead
of passing into the hands of our citizens, our farmers, merchants, and
mechanics, as in the former Bank, is being transferred to men be-
yond our limits, who have no other interest in the prosperity of
our State, than to make it the theatre of their speculations. Nor
have we any guaranty, or assurance, that, however solvent the
present stockholders, the stock may not, in the first moment of
disaster, be transferred to others, without character, or responsi-

With the extended powers and privileges conferred on this insti-
tution — its right to issue post notes, to discount upon deposits, and

to defy the scrutiny, or control of the Legislature — it is believed
that no prudent capitalist would ever invest his money in it.

On the 3d of July last a proclamation was issued by the Ex-
ecutive, upon the subject of the apportionment ol Senators and
Representatives, and their election. The Constitution, which is the
paramount law of 'he land, provides for, and establishes, a General
Assembly, to be composed of the members of a Senate ad House
of Representatives, who are required to hold biennial sessions, at
the capital of the State, on the Thursday next after the rirst
Monday of January, 1S53, and on the same day of every second
year theieafter. Under this Constitution, a legislature enacted and
established an apportionment law, dividing the State into senatori-
al and representative districts. In accordance with that law, the
General Assembly of 1854 was elected.

The Legislature, thus elected, tailed to comply with the require-
ments of the Constitution, in regard to the making of proper laws
to provide for the organization of a future Legislature. This
neglect of the General Assembly does not, in any manner, impair,
or lessen, the power of the Constitution, as to the necessity of
having and sustaining a State Legislature. Surely, the neglect of
«ne branch of the government to perform its duty, will not, of
itself, work a revolution, or destroy the functions of government.
It is, in forming Constitutions, an essential principle that the gov-
ernment should contain, within itself, the power of self-preserva-

The Executive Department is invested with no authority to exer-
cise the legislative powers of government ; and, in this instance,
no legislative power was exercised. The Proclamation, from the
necessity of the case, took the existing apportionment, as it stood
at the last election under the law, and recommended the election
of members to fill the number necessary to make a constitutional
Senate and House of Representatives, upon precisely the same
ratio and apportionment which existed when the General Assembly
adjourned. In the same number, representing the same territory
.and population as when you adjourned, you have assembled at the
.present time.

Convened under the Constitution, clothed, by the people, wiih
»the sovereign power that belongs to a General Assembly, it is your
duty to fix, by law, the number of Senators and Representatives
that shall compose the future Legislatures, and to apportion such
Senators and Representatives among the several counties, accord-
ing to the number of white male inhabitants, above twenty-one
years of age, in each.

The cause of Education is second to no other claiming legislative
attention and action. Mental development invariably precedes
physical improvement. Enlightened mind is the real source of ail
advancement in agricultural science, mechanical invention, and
political progress; and, therefore, the educational interests of the
State will merit and receive a share of your attention.


The report of the Superintendent of Public Instruction, for the
?ast year, which has been laid on your table, will present the results
of the operation of the school system, during the first year after
its latest revision The wisdom of many of the changes, intro-
duced by your predecessors into our Educational Code, has devel-
oped itself more and more, during the two years which have trans-
pired since the revision. Though not perfect, it has fully justified
all reasonable expectation, and confirms the belief that it rests on
a basis of sound principles, and reliable experience. Suggestions
contained in the aforesaid document and the forthcoming report,
will, doubtless, receive due consideration. The Library system has
more than realized the expectations of its friends, and fully re-
deemed the pledges of its most earnest advocates. The extent to
which it has been used in many townships in various parts of the
State, seems almost without a parallel, demonstrating its power
and usefulness as an educational instrumentality. I would, most
earnestly, recommend that it be made a permanent feature of the
system. A reduction of the present tax for its support, of at least
three-fifths, would be no detriment to its healthy progress.

The peculiar requisitions of the Constitution, as defined by the
Supreme Judiciary of the State, compel the Legislature to con-
sider the claims of our youth to a period of tuition, adequate to
their wants, and equal to their necessities. The townships have,
to a great extent, nobly entered on the discharge of their duty, by
the erection of school houses; having levied, within two years,
more than three qnarters of a million of dollars on the property
and polls, for that purpose. Being deprived of the statutory au-
thority to assess a tax for tuition, they look to the Legislature, and
demand a redemption of the Constitutional pledge to furnish the
requisite amount of funds for this purpose. Is not this claim rea-
sonable? Is it not unquestionable? Is it not just? Then, it
should be promptly, and fully met. No consideration of economy
should induce the Legislature to postpone the redemption ol the
educational pledge of the Constitution. Such claims are paramount
to all others, and should be so regarded. Of equal urgency and
necessity, is the want of competent instructors. Teachers' Insti-
tutes, or Normal Schools, are the appropriate remedies for this
evil. As the State has not appropriated a dollar to this purpose,
heretofore, ihe questions naturally occur — What does economy
demand? What does justice claim ? When the townships erect
school houses, the State cannot honorably evade, postpone, or re-
pudiate, the obligation to provide the appropriate means for a six
months tuition annually for her five hundred thousand children.

The establishment and successful operation of a Slate Teachers'
Association, for the last two years, is an encouraging sign of pro-
gress ; and the publication of a monthly Educational Journal, by
the same Association, is, also, a significant sign, of the same gen-
eral character.


The important service that this Educational periodical might ren-
der the State, suggests the propriety of enlisting it, as an auxilia-
ry to the department of Public Instruction, in communicating with
the township boards, and county Auditors.

You will perceive, from the report of the Superintendent, that
our Colleges are in a flourishing condition ; nobly competing with
each other, in the race of usefulness in the higher departments of
education. A condensed report of their history and progress, will
be found in the report for this year — showing what our citizens
have done in their associate capacity, for collegiate education.

Patents have been received for the additional grants of lands ti»
the State University, at Bloomington. In disposing of these lands
I recommend that the proceeds be >et apart for the endowment of
an Agricultural Professorship, in connection with the purchase of
a farm, for practical test of labor, and agricultural improvement.

The question of providing, by the operation of judicious and ef-
fective laws, for the prevention or mitigation of those vices and
evils, public and domestic, which have their origin in the intem-
perate use of intoxicating liquors, requires, from you, the most
profound and serious consideration. The judicious legislator will
look with more care to the prevention of crime, than to the pun-
ishment of its results.

In former communications, addressed to the General Assembly,
on the subject ol making laws to regulate the traffic in intoxicating
drinks, and to check and restrain the vice of drunkenness, I referred
to the danger of arousing a re-action in popular sentiment, by the
enactment of laws so stringent that they could not be carried into
effect. Subsequent events have developed nothing to induce me
to change the views which were then expressed.

The constitutional right of the Legislature to make laws for reg-
ulating the traffic in intoxicating drinks, and for restraining and
punishing the vice of drunkenness, has existed, sanctioned by judi-
cial authority, from the organization of the government to the
present time. The making of such laws, however, requires the
exercise of a great degree of prudence. If the laws be too weak,
they will become worthless, and fall into contempt, before the suc-
cessful resistance of those who may undertake to violate them with
a strong arm. On the other hand, if they are too severe, they
cannot be enforced in communities where they may be regarded,
by the prevailing popular sentiment, as oppressive interferences
with personal rights and domestic privileges. The unwise policy
of making laws which, owing to the state of public opinion, can-
not be carried into effect, will always afford grounds of justifica-
tion, or excuse, for an inefficient or weak administration of the
best laws. There should be no dead-letter laws among our stat-

A great increase of the number of places at which intoxicating
liquors are sold, and a lamentable increase of the evils which
grow out of the vice of drunkenness, are matter* which you who


are charged with the duty of guarding the interests and promoting
the welfare of the State, cannot overlook or neglect. Although
we may, in many places, see the evidences of a re-action in public
sentiment, apparently unfavorable to the cause of temperance, yet
we will tall into a most injurious error, with respect to public opin-
ion in Indiana, if we concluded, from these evidences, that the
people of the State do not require some sound and effectual legis-
lation to check and restrain the growth of those numerous and
destructive evils, vices, and crimes, which afflict every community
where the laws impose neither punishments nor restraints upon
drunkards, nor upon those who constantly hold out inducements
which tempt their fellow men to become drunkards. The agitation
;md discussion of this subject, by the people of the several coun-
ties, if neces-arily connected with the selection of county com-
missioners clothed with ample power to restrain and regulate ihe
traffic in intoxicating liquors, is worthy of your special considera-
tion. Whatever differences of opinion may have been, heretofore,
entertained on this subject, no man can shut his eyes to the fact,

Online LibraryIndiana. General AssemblyDocumentary journal of Indiana 1856, part 1 (Volume 1856, pt.1) → online text (page 22 of 53)