Indiana. General Assembly.

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

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for the purposes of being loaned to stockholders to meet their in-
stallments in the Bank; the semi-annual payments of interest on
the State loans to stockholders, and the sums that shall be received
in payments of said loans; the dividends that shall be declared and
paid by the State Bank on the Slate stock, and the dividends
accruing on such portions of stock belonging to the other stock-
holders, as shall have been paid for by the loan on the part of


the State, and which shall not have been repaid by such stock-
holders." It is also provided, by the 114th section of that act,
" That the principal and interest shall be set apart for the purpose of
liquidating and paying offthe loan or loans, and the interest thereon,
which shall be negotiated on the part of the State, for the pay-
ment of its stock in the State Bank, &c, and shall not be expended
for any other purpose until the principal, interest, and expenses
shall be fully paid, and the residue shall be appropriated for com-
mon school education."

The faith of the State is pledged that no appropriation of said
fund shall be made until the bonds are all paid off; but that fact
augurs no evil, because it must be borne in mind that the Bank
stock is between it and danger, that is to say, the proceeds of the
Bank stock will be sufficient to pay off the bonds and leave the
sinking fund exclusive of that undiminished.

It will be a valuable bequest to educational purposes, notwith-
standing it must remain untouched for any other purpose whatever
till the bonds are taken in. Till that event it stands as security for
the bonds, however well grounded the hope is that the security
will not have to pay the debt, for on that pledge, contained in the
act and also in the bond, the money was borrowed.

To that end the sinking fund commissioners have been apply-
ing the means of the sinking fund proper (as authorized by the
19th section of an act of the General Assembly, approved January
13, 1845, entitled "an act to amend the several acts for loaning
and collecting the sinking fund, and for other purposes,") to the
purchasing of such of the bank bonds as were offered them at
reasonable rates, and it is still their purpose so to do.

The fund, however, will be reimbursed by the bank stock on its
conversion into money, so that no diminution in the end, it is
believed, will result from the temporary appropriation ; and if
within the two years allowed the Bank for winding up her affairs,
the sinking fund commissioners shall have paid off or bought in the
bank bonds, it will be for the first Legislature, after that is accom-
plished, to adopt such legislation as is contemplated under the
114th section of the charter.

The bonds issued for bank capital under the 113th section of the
charter were issued in the years 1834, 1S35, and 1836, payable at
the pleasure of the State after twenty and within thirty years;
they will consequently fall due absolutely in 1864, 1865, and 1866.
The commissioners will feel it their duty, if not instructed other-
wise by legislation, to buy in those bonds as rapidly as means will
allow if offered at reasonable rates. It would not be good policy
to compel the commissioners by law to take them up, regardless
of the rates that might be charged, as the holders of the bonds
would take advantage of such an act and put them up to exor-
bitant prices, which they cannot now do, as none of them fall due
until 1864. As the law now stands the commissioners have ample
power to do so.


By the section of the bank charter heretofore quoted, it will be
seen that the State furnished a part of the means with which a
portion of the individual stockholders paid the second and third
installment of their stock, taking from such stockholders mortgages
on real estate to secure a return of the money. Those mortgages
have mostly been paid off, so that of all the money advanced by
the State there remains only the sum of $2,851 41 unpaid, and
that is amply secured.

It is believed that the interests of the fund would be promoted
if suits found necessary to be brought on the bonds given by pur-
chasers of land or borrowers of the money from the fund could
be brought in the circuit or common pleas courts of Marion county,
where access could be easily had to the records and documents
necessary to the maintainance of the suit. The remedy is now
enforced by a sale of the land at Indianapolis ; and when a bor-
rower or purchaser has rendered it necessary to have suit brought
(by procuring a false appraisement or any other fraud), on his
bond, he cannot complain that it is brought where the debt was
contracted, where the money is due and the fraud committed. The
inconvenience and loss of valuable papers arising from their with'
drawal from the files, and sending them to different parts of the
State, need only be named to be fully comprehended.

Not an inconsiderable item in the assets of the sinking fund is a
debt against the State advanced by the sinking fund commis-
sioners under legislative enactment. By the act of LS41, the faith
of the State is pledged that this money, with six per cent, interest
thereon, shall be returned to the sinking fund, so soon as the Bank
is wound up and the bonds liquidated. There can be no doubt
that the Legislature will, at the proper time, redeem this promise
faithfully and to the letter, for otherwise a fund dedicated to educa-
tional purposes, by the most solemn compact, would be swept
away for other purposes, and the hopes of the people blasted.
That part of the fund now in the hands of the people on mortgage,
the amount of which will be seen by the following exhibit, and
which is exclusively under the control of the sinking fund commis-
sioners, has been loaned with great care ; it is secured by loan on
real estate, valued, exclusive of perishable improvements, at double
the amount of the loan; the interest has been usually punctually
and promptly paid, whilst the mortgaged premises have been as
constantly increasing in value. Some trifling losses have occurred
on mortgages taken a great many years ago, but these losses it is
thought do not and will not exceed the damages realized to the
State on the sale of forfeited land; so it is hard to conceive how a
fund would be more secure.

The sinking fund commissioners, in discharge of their duty, have
two leading duties conferred upon them : the one is, to receive
from the State Bank of Indiana, every six months, the dividends
due to the State on account of her stock in that Bank, and with it
to pay the interest on the outstanding bank bonds, which bonds


originally amounted to $1,390,000. This they have regularly done
ever since the organization of said Bank, and they are also charged
with the ultimate redemption of these bonds. The other duty is,
to take charge of the sinking fund not needed or used for paying
interest on the bonds, and to loan it out to the people on mortgage
of real estate, again to receive the principal and interest of these
funds as they become due, and to reloan them from time to time.

The nucleus of this latter fund is the surplus of dividends received
from the State Bank on the State stock in that institution, over
and above what has been required to pay the interest on the out-
standing bonds, with the other resources mentioned in the 103d
section of the Bank charter. It has been so judiciously and profit-
ably managed that it amounts now to the sum of $1,955,461 59.
Hence it follows that to redeem the bonds, which, if all were out-
standing, would amount to $1,390,000, the Sinking Fund Commis-
sioners have within their control two funds, neither of which can
be touched for any other purpose till the Bonds are taken up,
to-wit: the stock of the State in the State Bank, amounting to
$1,013,754 27, and the above named sum, which may be called
Sinking Fund proper, of $1,955,401 59.

The undersigned have taken some pains to ascertain whether the
Bank stock, when converted into money during the time allowed
the Bank by her Charter, which is two years 1'rom January 1st,
1857, will probably yield a sum sufficient to take in the bonds at
their market value, — and their conclusion is that it will, if pru-
dently and honestly converted. Should the stock yield $69 to the
share, it will produce a sum slightly exceeding the par value of the
bonds; t'se bonds are now worth in market some 90 cents to the
dollar, which affords a sufficient margin, it is thought, for any
diminution m the product of the Bank stock below the sum named.
Since the end of the present fiscal year, the Sinking Fund Com-
missioners have purchased in of the Bank bonds at their market
value, the sum of $67,000; which, with $93,000, as shown in the
following tabular statement, make the sum of $160,000 Bank
bonds purchased in, and on hand.

It has been deemed advisable by them to purchase in such as
were offered them at reasonable rates, as far as they could with
funds in their control. They have been bought at various prices,
according to the market — none having cost to exceed 90 cents to
the dollar.

So soon as the Bank shall have converted her assets into money,
and paid her other debts, which she must do within the coming
two years, it will be her duty to pay to the Sinking Fund Com-
missioners from time to time, what may be coming to the State on
account of her stock. Ample means will thus be at the command
of the Board of Sinking Fund Commissioners to eaable them to
buy the bonds as rapidly as good policy will demand, for as none
of "the bonds fall due till 1864, and some of them not until 1867,
it will not be in the power of the holders of these bonds to en-


hance them above their intrinsic value if no injudicious policy is

Whilst six per cent. Bonds are under par, the intrinsic value of
five per cent, bonds must necessarily be so, until they absolutely
fall due. The statements A and B, herewith filed, are those re-
ferred to in the body hereof, and are a part of this Report, to be
inserted immediately following the signatures of the undersigned.
Respectfully submitted,

E. DUMONT, President.

john f. carr,
beattie McClelland,





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Doc. No. 8.] [Part I.









IS 51.
1. D. J.— 2S.



Office of the Secretary of State,
Indianapolis, Oct. 31, 1856.

To the Legislature of the State of Indiana :

In obedience to the requirements of Section 1, of Chapter 102
of Session Acts of 1853, I submit the following report for the
year 1856 :

Contracts were entered into with the persons hereinafter named,
for the distribution of the Acts, House and Senate, and Documen-
tary Journals, of the session of the Legislature of 1855, and Indi-
ana Reports, as soon after the close of the session as they were
ready for distribution, by Circuits, and at the rate named below,
to-wit :

In the 1st Judicial Circuit, with Daniel B. Culley, at- • $16,00

In the 2nd Judicial Circuit, with G. W. Richardson, at 35,00

In the 3d Judicial Circuit, with John H. Ohr, at 50,00

In the 4th Judicial Circuit, with S. S. Bloom, at 20,00

In the 5th Judicial Circuit, with William M. Munroe, at 10,00

In the 6th Judicial Circuit, with Charles Woodward, at 25,00

In the 7th Judicial Circuit, with Henry S. Rockey, at- 9,00

In the 8th Judicial Circuit, with Edward Seaman, at- • 33,00

In the 9th Judicial Circuit, with T. J. Williams, at 73,00

In the 10th Judicial Circuit, with R. K. May, at 93,00

In the 11th Judicial Circuit, with David Braden, at • • • 34,00

In the 12th Judicial Circuit, with Wra. Braden, at 19,00

In the 13th Judicial Circuit, with David Strickland, at- 17,00

Total $434,00


Which contracts were all performed within the time specified
in the bond of each contractor. A large number of the law in
relation to Common Schools, in pamphlet form, together with ex-
planations, instructions, and forms of proceeding, as prepared by
the State Superintendent of Public Instruction, and 3 copies, vol.
4, of Indiana Reports to each county, was put up in each box of
laws, &c, for distribution, which was not named in the advertise-
ment for the distribution of said laws, and was consequently a
matter for which an extra amount had to be allowed, amounting
to one third of the whole amount for distributing the laws, and
which has been allowed by the State Board of Officers.

A law was passed at the Session of 1855, ordering the printing
of 15,000 copies of acts. There were but 8,000 copies printed, for
the reason that I was of opinion that it was a needless expense, as
a great number would lay and rot, and that the law was not fully
examined before it was passed. And while on this subject I would
suggest the propriety of passing at the present session a law for
making general distribution of the laws, as there is none now in ex-
istence. Great complaint has been made by the Clerks of the sev-
eral Circuit Courts, as well as by private citizens, that there has
not been a sufficient number sent to each county, for the officers
of the county, who are, or at least should be entitled a copy. I
would suggest that the law to be passed define the number $f Acts
and Journals of each house, each county is to receive; and also
what officers are entitled to a copy of acts; and that provision
be made for allowing the Secretary of State a suitable compensa-
tion for superintending the printing, binding and distribution of the
Laws, Journals, &c. ; the labor being so much that it requires the
services of one person to read the proof of the laws with the
printer, making contracts, attending to preparing boxes for the
packing of the laws, &c, for distribution, and receipts to accom-
pany for the Clerks of the several counties to sign, in order to en-
able the Governor to make proclamation as to date of taking effect
of the laws.

The binding of the Documentary Journal of 1856 for township
and school libraries has been let and bond filed, to be bound in Li-
brary binding, something of the style of transactions of the State
Board of Agriculture, 1854-5. I would also suggest the propriety
of embodying a section in the law above referred to, authorizing
the binding of the Documentary Journal and Laws for township


school libraries in the manner for which the contract above named
has been let.

Before closing this report I would remark that the rooms in
which the State Officers have their offices are rented from individ-
uals or corporations, and are entirely to small, unsafe, not fire-
proof, and too far from each other, and should a fire occur in the
buildings in which they are located, it would prove an injury that
the State of Indiana never could repair. I would also, as the
State has property of her own convenient to the State House, sug-
gest the propriety of taking some measures to build a house that
would accommodate all the officers of State at the seat of govern-

All of which is respectfully submitted,


Secretary of State.


Doc. No. 9.] [Part I.










1 D. J.— 3>.


Office of Treasurer of State, (
Indianapolis, Jan. 12, 1S57. \

Hon. Ballard Smith,

Speaker of the House of Representatives :

Sir: — I have r< ceived the following resolution of the House, to-
wit :

" Resolved, That the Treasurer of State be requested to fur-
nish this House with the precise amount of the State's Indebted-
ness; the amount of outstanding Bonds of the different kinds and
descriptions ; the length of time that it will take to liquidate this
debt by a reasonable levy upon the taxable property of the State."

In regard to the amount of our public debt, and the different
kinds of stocks of which it consists, I beg leave, respectfully, to re-
fer the House to the Report of the Auditor of State, which, doubt-
less, is, or will be in a very few days upon the desk of each mem-
ber. But in relation the last part of the resolution, " the length of
time that it will take to liquidate this debt by a reasonable levy
upon the taxable property of the State," the answer must depend
entirely upon what the Legislature may construe to be a " reason-
able levy." If the Legislature considers the present sinking fund
tax a reasonable levy, then it will take over one hundred years to
pay off the public debt. But if they conclude that one mill to the
dollar is reasonable, which I sincerely trust they may, then about
ten years will be sufficient to wipe out our public debt. In order
to demonstrate this assertion, we make the following estimate,
which is deemed sufficiently accurate to show the operation of a
one mill tax in paying our public debt in the next ten years, to-
wit :


1S57. Outstanding 2h per cent. State Bonds, $1,847,000

One mill tax will produce $407,000 — this sum,
at 60 cents to the dollar, will purchase of 2i
per cent Stocks 678,333

4 . i ■ ■

1858. Leaves outstanding or unretired $1,168,667

Tax law of 1858 produces $407,000

Add interest on Retired Bonds 22,208

This sum $429,208

At 65 cents will buy of 2^- per cents 660,320

1859. Amount of 2| per cents outstanding $508,34'

Tax of 1859 produces $407,000

Add interest on Retired Bonds 38,721

$355,842 of this sum $445,721

At 70 cents will purchase 508,347

Which retires all the 2? per cents, and leaves
the sum of $89,879 for the purchase of Indi-
ana 5 per cent. Stocks, which, at S5 cents per
dollar, will buy $105,740

Add amount bought heretofore 75,000

Deduct this sum from $180,740

Whole amount of outstanding 5 per cents 5,301,500

1860. Amount outstanding $5,120,760

Tax of 1860 $488,000

Add interest on Retired Bonds 59,962

This sum $549,962

At S5 cents will purchase 644,661

1861. Leaves outstanding $4,476,099

Tax of 1861 $4SS,000

Interest on Retired Bonds 92,195

This sum $580,195

At 87 cents will purchase 666,890

1862. Leaves outstanding $3,809,209

Tax of 1862 $4SS,000

Interest on Retired Bonds L26,039

This sum $614,039

At 90 cents will purchase • • 682,222


1863. Leaves outstanding $3,126,987

Tax of 1863 $488,000

Interest on Retired Bonds 158,539

This sum $646,539

At 92 cents will purchase 702,759

1864. Leaves outstanding $2,424,228

Tax of 1864 $488,000

Interest on Retired Bonds 193,677

This sum $681,677

At 94 cents will purchase • • • 725,188

1865. Leaves outstanding $1,699,040

Tax of 1865 $488,000

Interest on Retired Bonds 229,936

This sum $717,936

At 96 cents will purchase • 747,850

1866. Leaves outstanding $951,190

Tax of 1866 $488,000

Interest on Retired Bonds 267,328

This sum $755,328

At 98 cents will purchase 770,742

In commencing the above estimate the Bonds
bought last two vears were overlooked,
which deduct • 105,000

Leaves outstanding in 1867 only $75,448

The above estimate is predicated upon the supposition that the
Legislature will authorize a new assessment of real estate both in
1857 and in I860.

Take the State at large and the average amount of State, coun-
ty, school and other taxes is about 105 cents to the hundred dol-
lars — of this 105 cents only 22 of it is paid for State purposes, in-
cluding the State Debt Sinking Fund Tax. We think that a
wholesome system of retrenchment in State, and especially in
county expenditures, would cut off as much or more of this 105
cents than we propose to increase by the one mill tax on account
of the State Debt Sinking Fund. But in any event 8 cents ad-
ditional tax on the hundred dullars, could not be considered as very
onerous ; especially when we take into consideration the fact that
it will take our present sinking fund tax over one hundred years

to pay off the State debt ; and that during this period, we would
have to pay for interest alone on this debt over ($32,000,000) thir-
ty-two millions of dollars. Why burden ourselves and our pos-
terity with this enormous sum, when we can discharge the whole
of our public debt in the next ten years, by simply paying during
that time the small sum of 8 cents additional tax on each one hun-
dred dollars ? Does not the credit of the State, as well as every
consideration of duty, economy and patriotism urge us to do it ?
Besides, in less than ten years, the entire amount of our public
debt falls due. At that time, in order to preserve the credit of
the State, we will be forced to issue new certificates of Stock draw-
ing six per cent, for all the outstanding five and two and a half per
cent. Stocks, which will materially increase the annual amount
of interest. There can be no good excuse for this ; the State is
able to pay off her public debt in the time proposed, and she ought
to do it. There could be no act passed by the Legislature which
would meet with more general approbation among the intelligent
citizens of the State, than an act providing the means to discharge
the entire public debt in the next ten years.

The above views are respectfully submitted, in compliance with
the request of the House.

Very respectfully yours,


Treasurer of State.


Doc. No. 10.] [Part I.








18 5 7.

1 D. J.— 30.

Office of the Bank- of the State of Indiana, y
Indianapolis, January 14, 1857. \

Hon. Ballard Smith,

Speaker of the House of Representatives:

Sir — Herewith I submit the annual Report of this Bank for the
15th of November last, as required by its Charter, together with
a report from each of the Branches of the Bank which has been
organized; and also a statement of the condition of the Bank on
the 2d day of January instant, the date of the commencement of
its business; all of which you are respectfully requested to lay
before the House of Representatives.

Your obedient servant,

H. McCULLOCH, President,


Office of the Bank of the State of Indiana, }
Indianapolis, November 25, 1856. $

The Hon. the Speaker of the House of Rejjresentatives:

Herewith, on behalf of the Board of Directors of this Bank,
and as required by its Charter, I submit the Annual Report for the
third Saturday of November, 1856.

All the Branches of the Bank, with the exception of the one
located at Evansville, have been duly organized.

As no notes are to be issued until after the 1st of January next.
and as it was not deemed advisable by the State Board that the
Branches should commence business until that time, the Branch
Boards have not generally made any further requisitions upon their
stockholders than were necessary for an organization.

The Charter requires that an installment of two dollars per share
shall be paid to the sub-commissioners by whom the books were
opened, and that the residue of the stock shall be paid in such in-
stallments as the Directors of the Branches shall require ; the in-

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