The Richmond palladium. [volume] (Richmond, Ind.) 1855-1875, 1865-11-23

StructlOn Snould be put upno tne lang
uage The naked legal effect of the in
strument, If not modified by history or
provisions of the statute creating 1t, |
take TO be this: that until the end Of the
twenty years the State had no right to
require the creditors to take their money,
and thus stop the payment of interest,
but that the money was to be paid at
some time after the end of the twenty
years according to the pleasure and con-
venience of the State. But this pleasure
of the State must he reasonably exer-
cised, so as not to defeat the payment
of the paincipal sum absolutely. The
construction | heard contended for, that
the State may defer the payment Of the
principal twenty-five, fifty, Or one hun
dred years, or in fact forever, provided
the interest is promptly paid, cannot be
maintained; for that would be 10 defeat
the operation of the concluding sentence
Of the instrument above quoted, which
solemnly pledges the good faith of the
State for the payment of the principal as
well as the interest This solemn pledge
would be a nullity if the State was at
liberty to defer the payment Of the prln-
cipal forever, or indefinitely, by the pay
ment of the interest.
The next question to be considered is
whether there is anything in the statutes
creating this stock, or in the history of
the whole transaction, showing the in
tention of the parties as to the time when
the principal should be paid, or pointing
to a period beyond which the State would
have no right to defer its payment.
On the lst of July, 1916, the State was
indebted upon bonds issued and sold for
purposes of internal Improvement in the
sum of eleven millions and ninety thou
sand dollars (s11,090.0o0) On these
bonds the interest had not been paid
since 1871. The interest due and in ar
rears amounted to three millions fifty five
thousand four hundred and thirty dollars
(S3.055, ,430.
These bonds were issued between the
years 1892 and 1912, were of different
denominations, and were to run for
twenty-five and thirty five years, and
bore interest at the rate of five, six, and
seven per centum per annum, payable
semi annually, for which there were cou-
pons signed and attached to the bonds.
The State finding herself urable to pay
the interest on her Indebtedness, accept
ed of a proposition made by her credi-
tors. the details of which will be found
embodied in the act of January, 1916,
lS4T, which, taken together, constitutes
what is generally known as the 'Butier
Bill" BY the compromise and settle
ment as finally concluded in the supple
mental act of 1s47, the Wabash and
Erie Canal, together with the lands which
had been granted to the State to aid in its
construction, were transferred, the canal in
and the lands in fee simple, to
contain trustees in trust for the bond
holders, in absolute payment and dis
charge of one half the principal and
accured interest of the debt, which half
and forever ceased to be
a liability against the State or u charge
upon her revenues. The bondholders
upon their part agree to make such :d-
ditional subscription rs might be neces-
sary to complete the canal to Evansville,
estimated at eight hundred thousand dol
lars (SS00, 900, which condition was
complied with on their part, and the ca
nal so completed. For the other half of
the debt, principal and interest, the State
was to issue to the bondholders certif-
Gates of Indebtedness or stock. Upon
such stock issued for the principal sum,
the State was to pay interest at the rate
Of five per cent. per annum, annually. -
The interest in arrears from ISL to 1S47
l. 49,
gate thus funded was calculated at the
rate two and half per cent. per annum
from January l, 1S4I, to January l, 1868,
and added to it, and for the whole amount
stock were issued bearing interest at the
rate of two and a half per cent. per an
mum from the lst day of January, 1898,
PAYABLE semi annually. The arrange
ment was n complicated one, involving
many details which it was not necessary
to give here, and | shall only present n
very brief outline.
The act of >46 was, in many impor-
tant respects. modified and amended by
the Supplementary Act of lS41, and the
two together constitute the basis and
consideration upon which the creditors
released the State from all liability for
one-half the principal and interest OF the
debt
The first section of the act of 1916
concludes in these words,
And provided further: That If the
revenues of the State, up to the lst day
of January. 1S53.-to be derived from a
property tax of tweuty five cents ~on
every hundred dollars of value, and a
poll tax of seventy five cents. by reason
OF the taxes being paid in six per centum
Treasury notes. or from other causes
sufficient. after defraying the current eX-
penses of the Government To pay saI'i
rate Of interest of two per centum, then
and in that case the State SHAH
only he required 10 pay, up to the first
hav of January. 1888, such rate of IN
terest as the par funds in her Treasury
derived from the taxation aforesaid, shall
enable her TO do: which shall be paid and
distributed. pro rata, on the principle
specified in such certificate of stock
and the deficit with six per cent inter
est per anuum from the time II became
due. the State shall and will make up anG
pay to the holders of such certificates
On or before the 1st day of January
1858
1t will be perceived that this section
does not in direct terms. make levy o.
twenty five cents on every one hundred
dollars of value. and of seventy fir,
cents on each poll, but it evidently pro
+ ceeds upon the hypothesis that such s
tax shall be levied and continued for s