The Indianapolis daily herald., 1865-12-20
For the indianapolis Daily Herald
Nfnfe Debt.

state Debt.
TERRE HAUTE, Oct. l.. 1855.
Mr.. EprIoR-lSir: Your favor Of the first
instant Is before me. and embrace leisure
hour or two TO reply. Engagements Of press
ing nature have prevented an earlier consid-
GRAFTON Of your letter.
You ask me TO state what was the under
standing Of the General Assembly OF Indiana.
on the one side, and the representative Of our
bond-holders, on the other, as n the time Of
payment Of the principal ofthe Funded Debt
under the acts passed In 1916 AMI 1872
/ Twas, as you say, a member of the llousc
from Nigo county, Mt the memorable session Of
1885, when the first act was passed. and
may add, q constant attendant on the DELHI
erati0ns Of the General Assembly at the next
session Of isi6-7. from it, beginning to It's
close I think know the history of that
Funded Debt arrangement being in daily con-
sultation with the friends Of the measure from
the first moment OF its inception to it, dnal
! passage through the Senate and House.
Perhaps an explanation Is due to you and
/ those similarly ii uated IN regard to those fre
/ and ttr0-Gnd-d-hdU per cent. certificates.
I Their history may be briefly stated: In lSli,
/ on the first day Of January, Indiana found her
self involved in a large debt. consi,tiu. a fol-
I lows:
Principal Of old bonds. according
| 10 Auditors report SiL09o.n0o
/ Interest unpaid on same. from July
/. 1911. to July /. 1917 9.a23,OOO
Total bonded debt and interest Sii,5i7,O0O
Besides this bonded debt. tho State had n
bonded debt, consisting Of Treasury notes.
money borrowed from the banks of the state,
OF some $4,000. This gave Indiana an actual
| debt of more than fifteen millions. KS the
| Treasury notes were receivable for taxes, but
| little actual money came 10 the Golfers Of the
| state, and IL WAS with extreme difficulty that
the credit Of the local Government was main
/ tsined nj home. On more than one occasion,
there was not cash enough In the Treasury 10
pay the per diem allowance to the members of
the senate aud House. and many Of them were
compelled 10 draw on their means at home 10
pay their current expenses at indianapolis.
| The State WIS very poor.
This large debt, let IL be remembered, was
created by her own Legislature. ~ early -
1856, aud the proceeds expended for her own
purposes. ltw0uld be neither profitable nor Just
At this long interval. 10 discuss the wisdom of
that legislation. he II wise or unwise. II was
the act Of the state herself, and the result has
passed into history. The debt l. 4 reality. and
We must meet it rs such.
The condition of Indiana on the first day Of
January. 1917. was ~ Indicated In the figures
l
men, ut that time. was 10 cNtricair the state
from these embarraSsments. How was that Ia
bc Accomplishment
A proposition came from the holders of the
old bonds-her first bonds the session of
1856, to divide the interest on the State debt
between the cash revenues OF Indiana after
paving the State expenses, then estimated AZ
$4,000 annually and the net earnings of the
wabash and Erie Canal. after the same should
have been completed to Evansville. This
ala fol Ia
municatiou of Charles Butler, Esc., on behalf
/ Of the bond-hOldcr-) to Governor Whitcomb,
and by the Governor transmitted 20 the
General Assembly. The Joint Commit.
tee % which that communication was referred.
after long III ussiOn rejected the proposition.
aud invited other Offers from the agent OF the
bond-holders. During the various discussions
on that and other communications, there wa
a nearer approach made to settlement. 10
was finally arranged by the committed. and
agreed 10 by Mr.. Butler. that bill should be-
| reported 20 both branches containing provisions
substantially ~ the present laws settle the
| Funded Debt. IL WAS amended in many par
tculsrs, Ia be sure; but the great leading idea
| of the original bill has been preserved In cX-
istiug laws.
rho state assumed the payment Of
0Re-Adif the oil bonds, which
makes of principal. ..t... s5.5iS, 900
One-halfof unpaid interest on same. lG63OOO
s7,2oS 200
The State being unable 10 discharge TIL, sum
IN cash. she asr-ed 90 issue her certificates for
one-half the principal Of the debt, bearing an
interest Of i've per cent, aud Tor one-half Of
the interest, bearing An interest Of two aud a
half per cent. tho whole being redeem l,le In
twenty year.. II the pleasure OF the State. For
the other b dt Of the debt and accrued interest,
the Wabash 4 Erie Canal. it, lands and rcve-
nues were assigned ia trust aud security for
the other moieiy Of The surrendered bonds OF
the old issue. and under certain guarantees on
the part ~ the state. This i the condition Of
the debt to-day. These five aud two aad a half
per cent certificates. now about ~ fall due.
are part OF the old Internal Improvement
Debt In new shape.
Those who participated in this arrangement
will remember that the plsn adopted wa.
measured entirely 10y the ability II ne State.
and not by what Indiana should d0. II her con
ditiOn was more prosperous. There vas not
one memhcr Of either House who regarded the
arrangement a. fnllN coming UP !" The ob!igd-
tons u the state. The Chairman Of the JOINT
Committee appointed hy The House and senate.
HENRY srcRisT. Esq. .of Putnam county. In hi
able exposition Of Tho hul reported 10y him.
says:
at has been manifest Tor wears past that the
state cannot nay IN ftsil interest GA tls debt
BY the revenues derived nom taxation alone
Ii therefore hesomc> obvious T. every
re- iecting mind that any plan II relief % b.
practicable. must look. 30 part Il some
other source of revenue which should come
90 the aid OF the tax-plyers aud relieve
them from a considerable share ~ The hurthen
4 annual interest. Tukln. this last
proposition II the agent ~ Tao hnndh 1ldrrs.
With the modification 81 Va. hr.i proposition
'mhodted ia 10. A. the result q c8nfT~ opsis-
- opinion on hi part. and 81 The settled opin-
ton entertained on the other part. 10 may be- rc-
gsriei a. forming 'ht-basi> 81 sn arrangement.
and the undersigned has no hesitation in re-
commencing IL n >uch u Tue favorable con.
sidcTifion ~ the House"
Mr. Butler. tn agent ~ the bondholdrrs. in
his letter % General Whitcomb. under date 81
pecember 40. ISIS. asking Tor some arrange
Incnt II the public deb; 81 the stat. ~ays.
= n the state can not make immediate pro
yisiOn lnr tn payment of the iHtsre,t On her
l.ond-, lea ft.H. without lsRpaesae to- great
hurthen q taxation upon her citizcu-. then u
i desirable that same arrangement b made
cor the payment Of the interest ~ part, accord
Rx Ia the prsseAf ABILITY u the slate-thc
amount hereafter O. De- increased according g.
IL grotrfgu ublfifu NrNt o. the paN.
nent in fall II all arrears. - tie friHg ~ ths
Time trheR az lriH De pad. La other wor,is Ger
'ainfy j. the thing desired. ID l. the uncertainty
N which the whole subject j. involved. aud
ne consequent inability ~ needy holders - /
make any certain calculations, that adds 10 !
heir uuhsppiness-.s In the case between
man anu man"
Prom al that appears q rcvord AMI from
y hat y rscollectedo ~ the opinions " M nibcrs.
= = ltffsssd la debate and otherwlse. there F
- - no doubt that IL Vas the intention of
y no sotesi Cor the bilb-As 10 was the eN- !
=, - .a - the bond-holdrrs aud their agent I
discharged IN iseS, Al the end Of twenty resr..