Evansville daily journal. (Evansville, Ind.) 1863-1866, 1865-11-17

this guarantee should be specifically in
corporated into the Constitution. -
If the levy and continuancelA cf a
specified 'tax- for the payment VI the
principal and interest of the debt was
guaranteed in the original arrangement
made by the Legislature with the credit
ors, it would be conclusive evidence that
the State and the creditors were looking
to the payment Of the principal sum as
well as the interest, and that the State
could not, In good faith, indefinitely
postpone the payment Of the principal
sum. sii9 Ia h. ls.1sl....l'. raaGI811 y
But it is equally clear, from Mr..
Buffers, calculations, that he did not
expect that the taxes which were guar
anteed would be sufficient to pay the
debt by the 10Th day of January, 1866,
for, in fact, by his tables, the principal
of the debt could not be paid before
1872 or 1874, and when we take his
tables in connection with the language
of the Certificate "redeemable at any
time after twenty years at the pleasure
of the State" it is manifest that Mr..
Butler had no assurance that the prin.
cipal of the debt would be paid promptly
at the end Of the twenty years - - d
1t turned out, however, that the basis
of taxation was far more. favorable to
the speedy payment of the dabtthen was
contemplated by Mr., Butler and the
Legislature of 1916, for the average
increase of the taxable property, from
that time until the present, has been, as
before stated, nearly twenty -one millions
of dollars per annum, instead of six
millions And a calculation which I
have caused to be made, will show that
| if the guaranteed rates of taxation had
been maintained, there would be in the
| Treasury, on the first day of January,
1866, surplus o. four millions eight
hundred and ten thoia and - ecu Lundred
and four dollars and thirty-one. cents
($4,6I0,704 81, after .defraying the
ordinary expenses of the State Govern
ment, and the interest on the State debt
from year to year; and it is easy to show
that if this surplus had been applied
from time to time, as it accrued, 10 the
purchase of our stocks at their market
value, the whole debt would have been
paid by the 18th day of January, 1855
/ II was we'll understood by Mr.. Butler
and the bondholders, in 1916, that these
rates of taxation were all that the State
was able to hear at that time, or would
4 be able 70 bear for many years, and the
language of the certificates, making the
| principal payable latter the end of TWEEN
ty years at the pleasure ofIthe State,
shows that the Legislature. entertained
doubts whether the State would be able
to spay promptly at the end Of twenty
years, and that they did not intend to
place her in a situation where, if they fail
ed to make such payment she would
violate her contract, and stand before
the world as repudiating or bankrupt.
In 1852 the Legislature departed from
these rates of .taxation, and reduced the
levy to twenty cents on each one hun
dred dollars worth of property, and fifty
cents on each POLL This rate upon polls
was continued until 1865, but The levy
upon taxable property huetuated from
fifteen to twenty cents on the one hun
dred dollars from 1851 to lS6l.sO awoaA-
II In 1852 the Legislature passed an act
creating the State Debt Sinking Fund,
and levying a tax Of two cents on the
one hundred dollars "for the reduction
and ultimate extinction of the public
debt" .'.'.'''...... -
This fund was placed under the con-
troll of three Commissioners, consisting
. of the Auditor, Treasurer and Agent of
State; who were directed to invest the
proceeds of the tax frem.time to time in
the purchase of the two and half and
FIVE per cent. stocks. The interest on
the stocks thus purchased was to be paid
: semi,annually to the Commissioners,
! who were to invest the same in similar
stocks, and thus. create Sinking Fund
for the ultimate redemption OF the stocks
created by the Butler bill -. IS
In1S17 the Legislature failed to levy
any tax for State purposes for the years
1857 and 1858, aud for those two years
no revenue was collected. In 1859 an
act was passed instructing the Auditor
of State to sell the. stocks which had
been purchased by the State Debt Sink
ling Fund to the Board of Commission
ers of the Sinking Fund, in order to
raise money to defray the ordinary ex-
penses Of the State Government, and
to supply. the deficiencies in revenue
growing out of the. failure to levy and
collect taxes for the preceding two
years, This act being held void for
want of a title, the Board of Commits
sioners of the Sinking Fund refused to
act upon it, but the Auditor of State,
treating il as an instruction., sold the
stocks in open market and put the mon
ey into the Treasury. AT the regular
session in 1861 it was enacted; that for
the year 1858, and every year thereaf-
ter, five cents be levied on each one
hundred dollars worth of property for
the reduction and ultimate extinction
of the public debt, to be used by the
State Debt Sinking Fund Commission
ers as before described, but at the extra
session in the same year, an act was
passed diYerting this tax; md that for
the years 1861 and 1852, from the State
Debt Sinking Fund, to the payment of
the War Loaa, which had Just been au-
thorized, with q provision, however, that
if the holders Of. the War Loan Bonds
would not sell them to the State at rates
not, exceeding their par value, the pro
ceeds of the tax should be invested in
the stocks created by the Butler Bill,
according to the terms of the original
act creating the State, Debt Sinking
Fund. - Il -.-...''---' '----'''-'7 'n'e -
This legislative .history,.it must be ad-
mitted, is rathercurious and contradict
DRY, and comes short of performing the
obligations which the State in 1916 en-.
tered into with her creditors. Is
For this non-performanee. up to 1861,
a valid excuse can hardly be found, but
for what has happened since the excuse
is ample The Contingencies and neces-
stiles of war override all other consider
atoms, and if they cause a failure in the
strict performance of contract, it would
not subject q State to the imputation of
being wanting in gUod faith .........sslg -
In view of theiwhole matter as / have.
I. presented i, the just conclusion seems.
to be this, thatwhile the State is not
bound to pay the principal of this debt
on the 18th Of January, 1855, or be con-
sidered in default, yet that she is not at
liberty to postpone the payment of it in
definitely; that to do SO would be to
violate the fair construction of the GER
tifeate itself, and She explicit under
standing that existed in the Legisla-
lures of 1846 aud 1S47, and in the Con-
vention of 1850, as shown by their sew,
eral enaetments and debates; but that
she is bound to make provision to pay
the debt within such reasonable time
after the twenty years as may comport
with the original understanding of the
parties, the ability and condition of the
State, as lefs by the war, lie Gaii'sfnl
performance of her contracts, and .Ee
. 80 4 4