, 1860-07-25
STATE FINANCES.
Speech Of Lon. 4. ". Mack,
Delivered before the 1s,co1n and III am.
ltu Club Of Chicago, J uly l3sh, loBU.


Delivered before Tho LIZ, coin and Ham.
llu Club Of Chicago, uly 13sh, lsBU.
Since the organization OF tho Republican par
y IN this State in 1856, the public mind has
been 70 completely absorbed BY the one great
and important political issue Of the day; the
slavery question; that comparatively little at.
tention hus been given to those matters Of mere
u local Interest connected with the administra-
sion OF our State government, upon tbs correct
understanding and -judicious management Of
which the weAlth and prosperity Of the country
20 largely depend. >.
Tho burden Of heavy taxation now pressing
upon Us, at time when our Agricultural, Com
ing under the embarrassments. supeTvening
upon the financial crisis Of 1867, and increased
By the partial failure of our crops at that time,
admonish MS Of the necessity Of directing our
attention to the local affairs and interests OF the
State, in order that We may, if possible, devise
lion may be lessened, andt The administration OF
cur State government placed upon more eco.
nomlcal basis; while the occasional accidental
Development Of startling frauds and peculattons
lmperatlrely demand the most searching inves-
tigat'on into the past history Of our State finan,
ces, that existing wrongs may be remedied and
future frauds prevented.
In 1887 the Legislature of this, then new aud
sparcelv settled State, With IN extravaganza
that passes all comprehension, appropriated
orer $10, 900 900 for the establishment OF rls-
ionary, chimerical, and wholly impractleable
system Of internal improvement.
To carry on this gigantic system and provide
the money so lavish!y appropriated, the issue Of
State " Internal improvement Nonds' WAS an.
thorized, and that financial policy inauzufated
that IN q few years reduced our Stste 70 aoso'
lutte bankruptcy, destroyed our credit AZ nome
aud abroad, and imposed upon rs large ana
burdeusome indebtednes tor which Me naSe
ueveF received any valuao's eonsaaa asou, ns $ue
entire system Of 1nteseai !mpsosemsnn, n"d uru1
which these appsoprlatlons WIZ en?Iu' tI;t,,ra
haV1ng plo'ea An u1te' ouo eoa!p s'.;ni.
In ls4l II became neSEssal! tot .us =. ;nta
ture to provfde 'anos su1nclcot ~, .-s .u.S
rest upon the dent "hico Aau pesn % Vs." 4ssa
created; anu ~! su.s pes1 ..I,ah .-,r;d"t
that MThe Governor shall. fiom time to time,
tissue such au amount OF State t9onds as mo5
"be absolutely necessary 70 tlse luaus toI
payment o1 interea. On 'ne oaa;s ueuti tlns a'an
thets Is no otner meaus =. Pay.uk' nuu Iaeo hos
:. suincieat 70 1eoeem HI o'A'e oonos ao" ns-
"po1necateo; r.c
Inc ponos snall 9e sou ny ~ runu .I, oon'
=. missioner !or tae oes. ps'Gs sus? VII CON
=, ,, 9ena, aau tle Pso:ecuI ~ ~ ~ 4n''n'a'ty "P'
Plleu " .ne ioi Eog o"tss
~ ~ accofa H aau.s "'u ~ u ta,,a.sn 1 ~ .aS
ss9o99o Of interna! H., t@prosemens H m Gooas'
ana osMseteo 1nem ~ lug su"u Eon'nssiDnel; .,
zen. nuneslots, 'ol sas' Muea the 1uno
commissioner arrived IN new ! ofS LOT the pnr-
pose o. neeonaung tne oonos, ne touho ioe
1aguest pEles tasy "oui4 eo.nolacu was aoout
~ cents On tne ooa1ar: IN s,e" o' Tue e1lstlng
large Indebtedness OF the otate. = SAFE OF me
oonos at 80 great sacrl9ee "aa oee"ea 'oo
fntnous 10 oe tolerated. ana atter adslang WIN
the Governor, members OF congress from THIS
So. 60 and many Of the leading business men,
the Fund commissioner oec'aea 70 make an
effort to borrow the money for tbe pa, ,ment OF
the July interest on the State debt upon
pledge. as security, OF the bonds in bis hands,
hoping that the increase in the value OF cur secu-
rites, and the longer time g1ven him for their
negotiation would enable him to realize better
pre-, aua 11us lsss save 'ne o'"'o 11' A1o
| v.c.,,s-,, a.-x,n,,,s ,o.x
,,.., ,... A~s 7'AsD' .,se":
| WIN thls object IN view Gen. Whitesides ne
gotiated loan with the firm Of Machllster d;
| otebbins upon q hypothecatton Of the bonds de.
lisered to him by the Governor, to which there
| we're subsequently added other state securities,
| making Il SUN total Of 1918 2l5.44, upon which
an advance was obtained from Macalisser i
Stebbins Of $26l ,5G0.S3. That the act Of the
Fund Commissioner, in thus borrowing money
| upon hypothecation Of bonds he was only au
thorized 10 sell, was wholly illegal, and without
doubt; and the bonds illegally disposed of bJ
him, were absolutely void IN the hands of par
ties schaEgeable With notice."
The Legislature, for the purpose Of protectin.
the State against any illegal demands growing
out Of this transaction, at the earliest opportu
nifty, distinctly repudiated the act Of the Funt
Commissioner aud made provision By law, TO-
tue payment Of the money actually received b.
the State, upon asurrender Of the hypothecates
BONDS.
uan, ~ ,b;a r5s;u, t. wb;ct, 7 dssiTe to cal
1870 ssta,.;a, ~ 10 ,rrnosa ~ uhorinr tim
- aansea.,an.s ~ H. ;1np-snca ~ nan1s,anc
- mr. Tah,;c offIcers ths State ,ros detra1ded
~ ths Ifatttament made nnder the nror;s;ons
,h;s ar 9Th Macaiister / Stehhips in 1s5o'
asum amounting in ali to over sl0O, 900.
,,.o
ANALYSIS OF THE LAW ~ 1eas'
The law of 1s49. though in ADEQUATE aud somt
r what ambiguous in its language. is nevertheless
capable Of being easily anaiy zed, 30 Us to reduc
| it 10 certain distinct and unmistakable propt
sitions,
, For the purpose Of correct aualyzation and i,
terpretat,op. tue law NAV be divided into 81
parts,
4 The first nroyides for surrender of The b,
i, pothecated bonds and scrip, bv Macalister
: Stebb,ns, or persons authorised by thsm II
t the place Of the old bonds suerendered; Il
f third for credit to the State at a6 cents on IL
- | do.lar for bonds nreriounlv returned the four
nroy1des that no new bonds shall be issued e.
! -..t upon pro ,dta surrender Of the hypoth
d ested bonds and scrip; the fifth, for the filit
+ of an affidavit By Mscalister Steobins settii
= forth the amonnt gus tue noiuels u tne
6onos. otner tnan 1t.t IIs!s.a. aHa ."I = -
fer hnat settlemea. WIN as a. oit ,,;.
; otns IN case !ae ooao7 a. A'' all NC" "
IN spee'aea '1me'
AMOUNT OF LIQUIDATION BONDS TO BE ISSUED.
Tba 6,e+ mint i, +,a 1a,- ~ \. .;..a
n the sscond nrov;ann IN anr class;t;cat;on ,sh;
J. freq the amnunf of iioridat;on honds ~ t,a
sued. The language Of this provision is as
lows:
1.-The amount Of bonds to be issued by t
ance remaining due the said Maca ister 4 ST.
bins PRINCIPAL and interest at tie rate al sey
. ! per cent, per aupurn las per contract1 upou
:" advance Of Sa6l, 500 So from the date OF said
lg vance up to the time Of settlement u1der
u. nroyisions Of this act
:, Hr = reference to the account of Maca1iste
- Stebbins. on Gle in the Auditor and Fund Co
rh missiouers' Offices. it will be seen that The
st, auce due MacaIister l. Slebbins at The time
n settlement referred to 10 the act {Januarv
- 1s5o1 was &o90,765,ll. OF the ofieinal s9]
81 q15 IL of h, pothecated bonds md scrin. III
n O0o had been surrendered to the State in i
and 1874. and credited at &c cents on the {
-. lar. leaving balance outstanding of $50o. .ol s.
w unon which there was due the abore named Ia
Gu ot $500, IS II, aud for this amount aud no m
Ter By the expressions Of the law the Governor
~
ae -,
les "fFor1dfd, TINT no boeoS shail be 1ssned
sn "the Governor as aforesaid, except upon :
:. "render to the State OF the bonds OF 1865
~ "of the interest Improvement bonds, or OF
Or scrip AFORESAID 10 IN amount which
at, whole amount OF oonaa ana scrip nor
IL standing, pear 10 me "no1e amoai OF
~ "bonds when may oe issueo upon Tue SET
ras "ment Of the account Of Macallster and 81