The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1888-01-05
ACTED CONTRARY TO ADVICE
Inside Facts About the Interest Vouch-
ers Of Insane Hospital Contractors.
General Kitchener that They Had No Au-
thority to Issue Such Obligations.

In the matter of allowing interest on differen
payments due the contractors for the construe-
ton of the additional insane hospitals, the COM
missioners have apparently taken choice of
authorities on the subject. In 1885, when GER
tain payments became due for the construction
of the hospital at Evansville, there were no
funds in the State Treasury to meet them.
The contractor was induced to continue the
work on the promise of tho commissioners to
make good the loss caused him by
paying interest ON the money which
he would necessarily have to borrow.
Attorney general Hord. in an opinion
concerning the powers of the commissioners to
pay interest in that particular case, sad at is
lawful to pay the contractor the loss incurred by
him in the payment Of necessary interest on
funds borrowed by him 70 do the work exacted
by the board during the time the State is un-
able to comply with its contract, if such loss is
incurred upon promise of the board to make
restoration chereof; provided that such loss does
not exceed 6 per cent. upon the funds borrowed.
nor greater amount than that due to the con-
tractor OF the State and remaining unpaid"
Upon this authority the commissioners gave
vouchers for the interest, and it was paid.
In April. 1887, after the Republican State Of
fcers came into power. the commissioner ad-
dressed letter to Attorney general Kitchener.
stating that payments aeeregating 1853, 1871,
and due on Nov. l, 1886, had to De deferred.
Vouchers for 500. $50 Is were not to be present
ed until Jan. /, 1887. and vouchers for the re-
naming $53. 906 sc. on Feb 20, 1887, and the
letter further stated "The contractors desire
interest on the deferred payments or reimburse
ments for the interest which they were com
peiied TO pay because payments were not made
as the work progressed. The letter concludes
by asking, .What are the powers of the COM
missioners in this respect2n
Atrorney-general Michener in answer. said
that In the statute authorizing the construction
of the additional hospitals and defining the
powers OF the commissioners, there is nothing
expressly authorizing the payment of interest.
The commissioners ''obtain their sole power to
act and contract from the statute, and cannot
60 beyond its provisions" He further stated.
of interest on contracts, the State, debtor,
does not come within the purview of the statute
authorizing the construction of the hospitals.
and is not chargeable with the payment of inter-
est upon any claim against it, in the absence of
an authorized provision, expressed or implied, to
do SO, and the opinion concludes by stating that
'sthe commissioners have no implied power to
bad the State by an agreement to pay interest,
and any such contract or agreement, if made,
would be absolutely void"
Notwithstanding this advice, the commits
sioners, after the construction of the three hos
pitfalls had been completed and the work accept
ed by them. Endorsed the settlement vouchers of
the contractors for 6 per cent interest," relying
for their authority upon the opinion by Attor-
ney general Hord, rather than the later opinion
by Attorney-eeneral Kitchener. However, the
reasons which existed for allowing interest
in the first case were not urged by
the commissioners in the second. It APP
pears rather from Governor Gray's message
TO the last General Assembly that "the contrac-
tors desired to continue their work. and
quested and agreed to take their estimates ap-
proved and allowed for payment on future dates.
rather than discharge their organized force of
employees, and, in pursuance of such request and
agreement allowances were made" as STATED in
the letter of the commissioner.
When, on Tuesday, contractor Campfeld, con-
tractor of the hospital at Richmond, presented
voucher for 1856 So. for accrued interest, the
auditor refused to issue warrant for its pay
menI. The contractors have threatened to enter
the courts with mandamus proceedings