Indiana State sentinel. [volume] (Indianapolis) 1841-1853, 1848-01-27
Veto of the White Water Canal Loan
HsiII
To the House Of Representatives. Of the General As
Serablv of the State Of Indiana

GENTLEMEN: The accompanying bill entitled San
act in relation 10 that portion IF the Northern Divi
sion of the Central Canal, which lies between Broad
Ripple in Marion county, and Waver.y in Morgan
county," passed at the last session of the Gene
raj Assembly; but not having been presented to me
until within .sve days. (ndeed less than twenty four
hOurs) Of the final adjournment of that session. and
the intermediate time not being sufficient fer such
consideration of the BILL some of lis provisions
seemed clearly to demand, i, held over author
lied by the constitution, and is now respectfully
turned To the house In which ii originated. with the
objections which have constrained me withhold INV
approval of the same.
Passing by the previous sections of the bill, few
remarks will first be submitted In relation 10 the Goth
section That section provides 'tha 1t shall be law
full for the treasurer of State to loan TO the White
Water Valley [Canal company, the State col
leced and TO be collected for the year 1916, in the
counties of Wayne Rush, Henry, Fayette and Frank
lin. for the term of five years. provided said company
shall give good and ample security, for the full pay
ment of said principal and per cent interest per
annum until pad."l
BY the act approved on the Doth of January 1872
entitled ian act to Incorporate the White water val
ley canal company" the State transferred to that
company, all lis rights to the line of the White waer
valley. canal, from the Ohio river TO the National
Road, all materials procured and privileges Obtained
therefor, and all expenditures which the State had
made thereon; provided the company should complete
the canal within five years from the first of March
1912, to Cambridge city. and that the State should
have the privilege of redeemng the canal after the
period of fifteen years from It's completion by paying
the company the full amount of their expenditures
in its construction. The company was also empow
cred 10 FIX and regulate the amount Of aud receive all
the tolls and charges the canal, make their
regulations and bylaws, and if broken to upon
them IN any competent court for their own use and
benefit. 1t appears further that the State had expend
ed upon the canal, before 1t was transferred TO the
present company, more than million of dollars,
(S1, 1O1 pa 22) appears by the Auditors Report
of tile 22d of November, 1912, communicated to the
ensuing legislature.
In return for all this, the State not to receive
any share Of the profits or any thing else for the
first fifteen years after the comp leUn of the canal,
and after that period, the company, first retaining
eight per cent clear of all expenses, the whole of
their stock in the canal were only to leave to the
State the overpus if any there should happen there
after to be. When it is further considered that the
sum expended upon the canal by the State before Its
transfer, was more than double the since
pended by the company IN lis completion, II will be
admitted that the State has, by the terms and condI
tons of their dlsposng of the canal, sewn no lack
of liberalty towards the company But in addition
to this, loan is sought from the State, by the
company under the present BILL for the term of five
years. of an amount IF State revenue, which (as COM
puted in the Auditors Report of Nov, 3, 1S46)
ceeds fifty thousand dollars.
By the 18th section of the company's charter the
president and directors of said any agent
by them lawfully authorized, empowered to ne
gotate loans, and for the payment thereof on such
should be agreed upon, the bonds of the
pany were 10 be given, which when duly issued were
to be valid lien upon all the stock and effects of said
company in the order of their ISSUE and all the effects
of the company both real and personal, were pledged
for the punctual payment of the interest said bonds
and their ultimate redemption. 1t thus appears that
by the of transfer, the company empowered to
contract debts which would be prior liens upon all
their property. At the time Of the passage of the
bill under consideration, bonds Of the company the
amount of more than $4,000, had been issued and
were outstanding and unpaid; and If the canal and
corporate property should be pledged to the State as
a security for the loan contemplated TO be made, un-
der this bill, it would become question, whether
such security would be satisfactory, ncumbered is
by SO large a debt which must first be paid. 1t APP
pears to me indeed, to be an Objectionable fea-
ture of the present BILL that it does prescribe in
definite manner, the kind of security that should
! be given.
Since the adjournment of the last legislature by
certain proceedings in chancery, instituted by one
Henry Vallete, the complainant in the circuit
court of the United States for OhiO against said
pany il appears that bonds (of those above mentioned
to the amount of Sll2, 0O0 dated January l, 1915
were held TO be liens preferable 10 any which the
company could subsequently give, and an Injunction
i
in CINCINNATI on the 25th of September last, prohibit
ing the company from doing certain acts preludicia
TO the claim of the comp amant and requiring them
to make report of thu receipts and expenditures tC
said court from time to time, until the whole of the
demand shall be discharged. Since that time it i:
understood That the works Of the company have beer
| again injured by flood, and while the losses thus
occasloned much to be regretted, due regard fol
the paramount interest of the State, requires thai
these losses should be considered seriously dimin
ishing the means Of The company, and as imparinp
the security which the canal itself might otherwise
have afforded for the repayment of the loan.
But another and still more serious objection to this
section of the bill from the fact that at the last
two sessions of the Legislature, acts passed pro-
viding for the final satisfaction of the State debt up
terms too requiring increase of taxes for thai
purpose. and for that very reason, making all the
available means in the treasury, necessary TO carry
the arrangement into effect. The means would have
been amply sufficient to meet the first instament o.
interest payable under this arrangement in July last
had it been for several extraordinary appropria
tIons made at the last session of the legislature
Owing TO this circumstance, the Agent of State was
compelled TO borrow temporarily, small balance, tC
enable him TO meet the interest under positive re-
quirements of law. Had the contemplated loan beer
made TO the White Water Valley canal company, i
is manifest from what has already been said, that i
would have been necessary for the State to have I'm
mediately turned round and borrowed the same
amount elsewhere, to make up the deficiency, occa
stoned by such loan. Would not such a loan, at tina
particular time, have been calculated shake the
hdence of the States creditors, in the faith of on
late legislation, and would not Its tendency have beer
TO prevent the surrender of any bonds after the lst
July last and of thereby throwing the half of then
upon the Wabash e. Erie canal for satisfaction
Enough bonds had been surrendered under that ar