Knoxville daily chronicle. [volume] (Knoxville, Tenn.) 1870-1882, 1874-08-13
THE LOUISVILLE CANAL.

that duty, nor even let it alone. The State
of Kentucky chartered company to con-
struct that canal and to toll the commerce
of the Ohio. The United States aspired to
the dignity of stockholder in that COM
pany, and achieved it. The Government
took and paid for 2, 1902 shares, at one hun
dred dollars each. Private parties took y
098 shares. The canal was built, the tolls
were fixed, commerce bled, and the COM
pany's treasury filed. The revenues were
so large it seemed a pity the Government
should share them. But rs a stockholder,
the Government was entitled TO nearly one
third of the net revenues. The Govern
ment was not represented in the manage
ment of the company. That was governed
by five directors, each, of whom was a stock
holder. Those directors concluded they
could make better use of the revenues
than to divide them with the Government.
To that end they resolved the canal ought
to be made free In order that it might be-
come free it was resolved that the net rev
enues should be applied to the purchase Of
the DriU0te stock. Having found a market
for the stock, there was nothing left but to
fix the price of it, That was modestly set
by the directors at only fifty per cent. pre-
MUM.
Kentucky sanctioned the arrangement;
the [ nited States was not consulted. But
it WAS evident that if the earnings which
belonged to the United States were appro-
priated to purchase private stock, the
United States would soon own a majority
of the stock. To avoid such a catastrophe,
Kentucky required the directors to pay for
the stock with Govern ment funds, but to
have the stock transferred to the directors,
who should hold it in trust for the United
hut ho 1acri-l LOT Of
Kentucky required.
In pursuance of these directions, the
directors proceeded toFapply the surplus
earnings to the purchase ofthe private stock.
Between 1912 and 1855 they paid for such
stock, of the par value of 500, 800, the sum
of S1,709262. Then the directors admit
ted they had received enough, and notified
the Secretary of the Treasury they were
ready to trasfer the canal TO the custody of
the General Government so soon AS the
Department may be prepared TO receive it.
But it happened that at that time the Sec
retarv was also kentuckian He evil
IDENTIFY felt that he could take some liberties
with his friends. He according replied that
Congress had not authorized the accep-
tance, but reQusted the president and
directors each TO retain one share (fOr eli
gibility and to manage it under the charter
until authority might by law De conferred
on the Department to receive it, The
president and directors very promptly ac-
ceded to that request. 1t should be noticed
that the conduct of the Secretary exhibits
an instance of Difference TO Legislative au.
thority on the part Of q high executive
officer which is believed to be quite unique.
He could not feel free to take charge Of the
canal himself, because Congress had not
told him to do so:0ccOrdingly he gaze it to
his friends Such exhibitions of scrupu-
lous regard for the limits of jurisdiction are
seldom witnessed. 1t is gratifying to know
that this one was duly rewarded. When
the distinguis he'd Secretary retired from the
Treasury he aUos made president Of the
canal company.
Of the subsequent management.it is only
necessary to state that the directors at
once reduced the rate Of tolls fifty per cent.
But as the canal was only two miles long
and there were only five directors, they
could manage to spend for their own sal
aries and that of their assistants but Sill
Ol2 per annum, to which they added S22,-
900 for contingencies, consequently the
revenues accumulated in the treasury of
the company. To make that money useful
the directors organized themselves into y
savings bank, and then the canal company
ocpOollSo luSi1 Plus Will LIc UduhIuS
company. If the latter received as much
for the use of revenues as the former did for
collecting, they ought to have been content,
But avarice rarely is content. This ano-
malous corporation, with one body, one
head, but two faces, was not content. When
it was ascertained how profitable they
could make money derived from the work
they did not own, they desired to get more
money.
They hit upon the expedient of hypothe-
eating the canal and raising money under
pretense Of enlsrging it. In 1860 Congress
authorized the directors, "with the reven-
ues and credits of the company, to enlarge
the said canal" Under that act the COM
pany mortgaged the work for some two mil
| lions of dollars; and it is not yet known
whether the Government will be able to
recover it or not.
OTHER SPECIMENS OF DEMOCRATIC RULE.
That party did not overturn our land
system, Notwithstanding it was very good
one. During the year 1e4l the system was
much improved; that must be confessed.
But the Democratic party was not in power
that year. We ought also gratefully to
remember that the grants of land made for
educational purposes were not repealed.
The fact furnishes striking illustration
VI SpdCInS mercy DuL Ine phenomenon IS
not difficult to explain. Such grants were
made only to States in which the lands
were. Such lands were found for the most
part only in new States. The new States
were very unanimously Democratic in poll
tics. The States receiving the grants could
alone administer them, and the party seems
to have felt confident that grants so admin
istered would not promote the cause of ed
ucation more than grants of money had
promoted the cause of commerce. All who
are familiar with the early experience of
the school funds in the Southern and some
of the Western States, will need no other
assurance that confidence was not mis-
placed.
The Capitol was not transplanted But
when the Democratic party retired from
control, in 1861, scarcely building be.
longing to the Government was finished.
Perhaps, however, the party would have
avoided that cause of reproach if they had
earlier formed the design Of transferring
those buildings to the use of another gov
ernment.
Armies were then maintained Their
ranks were thin, but they were sumptuously
oficered-oficeredf far too largely by those
who had been educated in every soldierly