The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-09-01
THOSE UNIVERSITY BONDS.
Facts That VIII Prove Interesting
Reading to Indiana Taxpayers.
Editor Of the Indiananolis Iournal:


To the Editor of the Indianapolis Journal:
That was good joke on Governor Mount
In his commendable zeal to reduce the
States Indebtedness he announced his pur-
pose to pay off the university bonds, as
they were eating up the States revenue
at per cent, while other bonds demanded
only percent; but when he set out to find
a payee he could find none, and he and the
attorney general gravely concluded they
never can be paid without a special act of
the Legislature. The reason is the State
never borrowed a cent from the State Uni
versity and owes it nothing at all. How
can it pay?
The unwritten history Of these bonds
would be good reading to the taxpayers
of the State. 1t would reveal what not
one taxpayer in ten thousand ever knew
and which it was intended he never should
know; as-d if this incident shall cause such
a chapter to be written the Governor and
attorney general need not blush at their
ignorance of the facts which lie behind
them and explain their real character. Let
me barely outline it here. Some competent
person will write it more in full before an
other legislature is elected, and, instead of
it's providing for their payment, it will
more likely declare them void for want
of consideration and not only order that
no more interest be paid on them but that
they be Cancelled outright.
To understand even this chapter it is
necessary to premise that the constitutional
convention of 1857 as emphatically in
hibited all state aid to academic, collegiate
and professional education rs if it had for
mulated a section so decreeing The old
~ e.
ty seminaries had been built and State
University had been fostered by state aid,
but the people, in convention assembled, al
most unanimously voted to exclude all
these from the Constitution of the future.
So well understood was this decree that
the county seminarieS were all sold inn
meditely, and for sixteen years the State
University never thought of asking state
aid. So radical was the removal of
versity at Bloomington that it was deemed
advisable for the Legislature of 1852 to pass
a special act providing that the instltu-
ton Incorporated Jan. g. 1928 (meaning the
institution at Bloomington), is hereby
recognized as the University of the State
of Indiana" so as to confirm to 1t the
proceeds of certain lands which Congress
had granted to the State for university pur-
poses. That it meant nothing more than
this is obvious from what followed. The
institution itself so understood it, and
began to adjust itself to the situation by
selling perpetual scholarships, as Asbury
and by procuring from the Supreme Court a
decision that it was "a private corporation
with all the rights OF any other private
corporation and for sixteen years 1t never
whimpered that it was entitled to any
more.
But for reasons not pertinent to this
paper it did not keep pace with several of
it's younger sister colleges. Notwithstanding
the princely endowment by Congress and
that act Of the Legislature which gave 1t
the exclusive benefit of it, To remedy this
condition the State Board of Education, one
cold day in 1867, in an inner room Of the
old Statehouse, gravely resolved that the
State University was the head of our COM
mon school system and therefore 1t should
receive the same fostering care as any
most formidable lobby that any Legislature
in any State ever had to wrestle with was
delegated to carry the news to the Legis-
lature. What has followed is history but
II is unwritten and not one taxpayer in
ten thousand knows word about 1t. That
lobby found a Legislature absorbed in the
thousand and one new and difficult ques-
tions state and national which had grown
out of the war, with little time and less
ton as education, and as they asked for
only $1,000 to meet "a pressing need" the
cemel's nose was admitted into the tent.
Evidently it's body is not all in yet, but
these $li4O0O of 5-per-cent bonds tell, in
part the story, but not the half of it.
Skipping thirty years, what do we find?
that day to this which has not been in
the hands of that lobby as clay in the
hands of the potter Beginning with $4,000
q year 1t is now about $138,000. But that is
not all. Our Caesar has grown so great
that it not only asked last winter for an
additional approprlatlon OF Sz5oVOO Tor some
special betterments Of the university plant,
but it came forward with bill which was
to grant a preference to it's graduates over
the graduates OF other colleges In the mat
ter of teachers licenses.
But how about these $144,0 900 of 5-per-cent.
bonds? That is an interesting chapter In
this phenomenal business. For sixteen
years the Legislature had never failed to
respond literally to the demands OF this
head of the common school system BY
1883 II found the Legislature so completely
at its mercy that 1t conceived the idea of
asking for permanent endowment or
81 100000 and the hegstatture ie III, mo on the
once but in twelve instruments. and very
innocent-looking little addition TO the state
levy was made expecting to realize the mill
lion in the twelve years, but the hard
times coming on, the aggregate wealth of
the State was not quite sufficient to make
only s6is. 527. a3 BY 1887 the state officers.
who had to go into the money market to
borrow money to make good TO this en-
dowment fund the amount II claimed un-
der the special tax, conceived the idea of
giving state bonds, bearing per cent to
the university direct, rather than 10 New
York bankers for funds to put into the
auditor of states hands to be loaned as
university endowment funds, seeing that
the entire income from taxes was INSULT
cient to meet the current expenses, and
that Is how these bonds came to exist.
They were given under q false conception
of facts and without consideration. The
State Board Of Education had no more right
TO designate the institution at Blooming
school education than to designate Butler
or Moores Hill or Earlham or any other
private corporation That is why they can
not be paid and II is why, also. the interest
on them should no longer be paid, and
why the bonds themselves should be can
celed
But this is not half the taxpayers should
know and know thoroughly and minutely.
IL was an eye-opener when the state audi
tor last winter reported to the Senate that
in thirty years the State University, includ-
ing its branches, the State Normal and
Purdue had drawn s.. 40S. $50 Ga from the
state treasury, not including the S643,527.93
raised by taxation and given 10 the uni
versity as endowment. But these S4.052-
114.57 do not tell the whole story. They do
not tell half The Legislature of 1895 pro-