The Lansing state Republican. [volume] (Lansing, Mich.) 1855-1874, 1860-01-24
The Canal Loan.


Treasurer failed TO comply with the law, in nego-
taring the Saqt Canal Bonds. To day it will en-
deavor to indicate the motives and causes which
led thereto.
The motive, in the first place, which impeled
the Treasurer, has been widely canvassed by
the press of both political parties, in the various
forms Of opinion, conjecture, theory and sus-
picien, bu, there has prevailed little harmony
upon il in the end.
IL is out Of the question to suppose tina.
Mr.. Mckinney intended that the State should
lose $50, 900 or any other sum-hence some
other motive than mere corruption must be re-
sorted to. This motive, and the facts which
made it operative, have been carefully inquired
into, and closely scrutinized by tho Governor
and Attorney General OF the State, and were
found to be briefly ard substantially as follows:
During the month OF May, 1859, Gov. Wis
ner, accompanied by Mr.. Mckinney, went to the
City Of New York, and entered into written
contract with Hazleton * Co., to purchase the
Canal Loan Of SlO0, gOj for that sum and SO, 900
premium, to be paid for so soon a. the Bonds
was drawn up by Gov. Wisner, in the penal
sum of 5000 90 Cliquidsted damages) in case of
failure to comply.
la the month of June, the Treasurer proceed
ed to New York city, taking with him this Bond
and also the Bonds OF the State. The Governor
did not accompany him. 1t was the declared in
tention Of the Treasurer, and without doubt his
expectation TO deliver the bonds and with the
money arising from their SALE TO pay the interest
coupons upon the State bonds of the old issue
amounting to 10000, in order to save the ex-
pense of RENTING from home, and to credit
ike amount TO the canal flnd-thus making
saving TO the State of three quarters Of one per
cent upon the amount so transferred amounting
t. some $500.
The Treasurer waited upon H,zletOn & Co,
upon his arrival in New York, and requested a
compliance with the terms Of their bond They
replied that they had relied upon the bonds them
selves TO reimburse the outlay, and that the
bonds had been thrown into discredt, through
'i.o agency vi Detroit men, who had indusrrlous-
ly circulated the opinion among money men, that
the law authorizing the Canal Loan, was unc0n-
sttutional and that the bonds were consequently
void.
There Is no doubt that rumors TO the discrcdit
of these bonds had been put in circulation, for
sinister ends, and that these bonds were in dis
credit on that account, and it is probable, that
had the loan been re-oiered, it would have been
taken, il at all, at a deprecated figure. How
far, if at all, liazeton 4 Co. were privy to this,
perhaps will never he known.
The time now fast approaching when the
interest coupons were to tall due, July lsp and
Nj. Mckinney had made no provisions by trans
fer of funds TO pay them, confidently RELYING
upon the avails Of the Canal Bonds Here, in
general opinion, he erred. He might have tele-
graphed to Detroit and drawn from anv good
bank the requisite amount, or he might have
drawn without telegraphing, and have received
means from home, before any material inconven-
fence could have occur. cd. The failure to take
one of these obviously prudent courses promptly,
was the first wrong step. Having some other |
means in the city of New York, he found he |
could pay the coupons provided he could realize |
nan the 'aia' Loan hazleton 4 Co. offered /
hall the amount, and the whole of the premium,
amounting to S53, 200, if Mr.. Mckinney would |
give them fifteen or thirty days, in which to
ra'se the balance 10 tins we are assured, Mr. |
hehihney objected, but upon Their Offering to
pay Tue amount, Win snreties, he hnally con-
sented, and drew the bond
Upon the execution and delivery OF the bond,
last mentioned, Mr. Mckinney went to the Arti-
lans Bank, and delivered the whole Of the
bonds, tSiOo.ooo, to the cashier, at the counter,
or hazeiton and Co and received from the
cashier certificate oi deposit for sos, 900 and
hen turned about, and gave to Haz!e;on x Co.
MS check Tor $4,000 upon the Artizan's Bank,
eceiVing Tor 1t from hrzieton X Co., the certiti-
ate OF deposit OF that firm, together with the
bond to pay the amount as above mentioned.
From this plain, and as We sincerely believe
r"'hia' statement OF TINS transaction, 1t vii be
perceived, as has been often and elsewhere sta
ed that the treasurer committed a hult-a seri-
'us iauit' which consisted IN this, viz in suffer-
ne the bonds to go out OF has hands, upon
my pre'eNI Whatever, without getting the mon
" IN iui!. Ihis he must be aware of, as well
$ any person III the world, and this liability
e must meet anu answer, 10 those who cleo
ed MN; oat he Is ent';ied on the other hand,
iul publication OF all the facts which in.
uced him 10 ito as he did. Mr.. Mckinney
committed q third grave mistake in this transac-