Indiana American. [volume] (Brookville, Ind.) 1833-1861, 1857-06-12
From the N. Y. Tflhun
THE noNn HOLDERS CLAIM.

public at large. Some ten years
since. the State having embarked inn
prudently In internal improvement
schemes, was on the eve of bankrupt
cy, and, indeed, was bankrupt 10 tho
extent Of not paying the interest on
It's debts, or even the salaries of its
officers. All the good citizens Of the
time were apprehensive that IL might
be driven 10 follow the pernicious ex-
ample Of Mississippi, which was then
reaping a world OF excavations from
its creditors. In this dilemma, tho
bondholders ofthe State came forward
through their agent, Mr.. Charles But
Ter, and proposed prospective ar
rangement which, II was thought,
would save the honor Of the State.
and ultimately secure the rights Of
those to whom it was indebted. II
was proposed that the State debt be
divided into two equal parts, one Of
which should be based, in the form of
new stock, on the immediate rcve-
nues and responsibilities Of the State;
and the other on the properties, tolls
and income Of tho Wabash and Erie
Canal. The proposition was carried
into effect by an act Of the Legisla-
ture, passed in January, 1916, and
subsequently amended in ls47. An
instantaneous relief ofthe State and
revival Of its credit was the oonse-
quence of this proceeding.
In accepting the tolls and revenues
Of the Canal rs security for one half
Of their debt, tho creditors were influ-
eneed by several considerations first
that the Canal was then almost the
only work of internal Improvement
in the State; second, that all the rep.
reservations of the Governor of Indi-
ana and other officials, as we'll as of
private and competent individuals,
roncurred in theview of It's probable
value; and third, that the act creating
tho adjudgment guaranteed IL, in
the strongest manner, from every
kind of molcstation, interference or
detriment. A joint trust, consisting
OF three trustees, chosen respectively
by the State and its creditors, was
made for tho management and adj
ministration of the whole business
For some time after the transfer Of
the Canal TO these trustees, the ar
rangment promised the most satisfac-
tory results. The creditors having
advanced some 100000 additional,
to complete il, had caused the work
to be prosecuted with economy aud
vigor, and argued from the annual
increase of income from the parts al
ready finished, that there would DO
still larger increase whom the whole
was finished. This prosperous state
continued unto the year 1852, when
the revenues Of the canal began TO
take turn the other way. By 1854,
the decline Of the receipts amounted
TO the enormous sum Of s40,l35. OF
course they opened their eyes 10 such
a prospect. What was tho cause of
this iallY the creditors naturally in
quired. They saw that there was no
extravaganza or misconduct in the
management of the Canal; they saw
that no extra repairs had put them
to an unusual expense; they saw that
the land-funds belonging TO the canal
were as valuable rs they ever had
been; they saw that the competition of
the Wabash River had actually do
creased while the population and the
trade of the immense district drained
by the canal had largely augmented
in every direction. Yet they did not
have to go far to discover the real
cause Of the inadequacy of It's reve-
nues; for the State, itappears, had in
the meantime authorized an extensive
system Of railroad communication
which covered tho whole region of
the canal, and drew off its most lu-
crative commerce. In this view of the
case, the creditors turned on the State
and said that il had destroyed their
security, and that they must look TO
il for some remedy, or some measures
of redress. A memorial, addressed
TO the last Legislature, by n Commit
tee Of tho stockholders, from which
we get these facts, says:
"Atthe time our constituents accept
cd the Canal as a security, thereby
discharging the State, IL was the
great enterprise of tho State, without
competitor and without rival but
IL is now perfectly encompassed from
one end TO tho other, in q network Of
railroads. The whole region ofcoun-
try on which II depended is checker
cd them; every principle source Of
its trade Is tapped by them; It's local
business and is through business are
alike disturbed and yet, disastrous
as its moro recent fate has been, the
future threatens TO become still more
disastrous. In short, tho very basis
of security preferred TO us, in lieu of
the revenues Of the State, has been
essentially changed, and that by the
authorization Of tho State. The Ca
nal Is, virtually, no longer the same
work. It's banks and locks are the
same the Same waters continue 20
flow through IL; the Same men and
women perhaps live upon It's banks,
but that comprehensive and lucrative
trade, which was tho lifc Of it-that
trade which originally induced the
Legislature TO undertake its construc-
ton, and the expectation OF which
alone made IL security 10 your cred
itors--has been spirited away. II no
longer exists as il was, or as IL prom
Used TO be, and IL cannot be restored.
This IL the question: How far Is
the State-having by means Of It's
legislation sapped the security former
" pledged 10 the stockholders--lia-
bic TO make good the damage done |?
Between individuals there could be
no doubt rs TO tho answer. IL a
debtor should transfer TO his creditor
in part payment Of a debt valuable
prtent-rights. on condition that he
would do nothing TO impair the value
of the patent-right, and should then