The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1902-04-18

animation of the records and other evidence
on file in the Treasury Department, IT is
shown that on May !, 1868, the state mao
redeemed bonds in the amount of H,I16,0O.
The remainder of the &,O0,OW issue or
S224.O0 upon which the State claims in
terest from May l., S6S, TO May l, 1881, Is
shown to have been offset by the United
States through the direct tax which by
the decision of the Court of Claims was
due and payable on June 80, lS62.
The amount Of the direct tax TO be paid
by Indiana was, in addition TO what had
been paid by the State, 70O,442.4S which
eliminated the principal of $4,000 on that
Under the principle announced in the
opinion of the Court OF Claims IN the
claims of the following States: Maine; New
Hampshire, Pennsylvania and Rhode
Island, the payment of interest by the
State of Indiana after May 1. 1858. is held
to be an unreasonable expense as con-
templated by the act of July q, 1861, and
March s, 1862"
A SUCCESSFUL APPEAL.
From this action of The auditor the
State of Indiana appealed to the controller
for revision on the said 10th day of April,
1902. In his decision the controller states:
In order tina the entire claim of In
diana for reimbursement on account or IN
terest paid on its war bonds, discounts sur
fered on the negotiations of the same, ex-
penses incurred In negotiating the same,
and exchange, eXpressage, printing and all
other expenses properly incurred on ac-
count of said bond issue, may be consid-
cred and adjusted at one time-the only way
in which an intelligent understanding OF
the claim can be had-I have consolidated
said two claims and will consider them as
one claim, but certify my action therein
separately as to each of said claims.
These claims, as directed by Congress,
are to be allowed under the principles an
nOunced in the New York case (supraD. as
laid down by the Supreme Court in that
decision.
las l understand this decision it an
not be misunderstood that the govern
ment of the United States is under legal
obligations TO reimburse TO the States every
dollar that said States properly paid out
upon obligations incurred by them for
any of the purposes expressed in the reim-
bursement acts of 1861.
''Tha interest paid by the States in pro-
curing means will which to raise and equip
troops is not considered as interest. but
as part of the costs, charges, and expenses
properly incurred in raising and equipping
since the LIST day of May, 1868. the State
paid and was compelled 10 pay as interest
on the bonds that were outstanding at that
date the sum OF $121, 1918.
THAT the State had paid and taken up
these bonds as rapidly as it had the money
with which to redeem them. as raised by
taxation or otherwise procured, as soon as
the holders thereof would allow them 30 be
redeemed under the terms of said contract.
That all of said bonds were redeemed with
ii twenty years from the date of their is
sue
In his hiding of fact the controller of
the treasury sets out the following:
That from time to time commencing the
18th day of May. 1861. and extending 10 and
including the 14th day of August. 1862, the
said loan commissioners negotiated and
sold all of said bonds: that none of said
bonds sold at a premium; that said bonds
sold all the way from 5 to Il per cent. dis
count. That of said bonds the sum of $l25,-
600 were sold on May Is, 1851, TO the COM
missioners of the sinking fund of Indiana
at mar That the further sum of SlOS 5M of
said bonds were sold on the 14th day of
August, 1862, 10 the State debt sinking fund
at a discount of 5 per cent. That said sum
OF $125, 600 par value of bonds so sold TO the
commissioners of the sinking fund at par
were redeemed by the State on the 10th
day of January, 1867, and the accrued in
terest thereon at that time and paid by the
said State amounting to $40, 1880.
These bonds so sold to the commissioners
of the sinking fund, and upon which the
above amount of interest was paid, was "A
borrowing of funds by the State from one
of its trust funds set apart by the Con-
stitution and laws of the State OF Indiana.
lature of the State of Indiana, nor subject
TO be used by the State TO defray its current
expenses, or to the payment of the principal
or interest on said war bonds.
That the said Sos. 500 par value of bonds
sold to the State debt sinking fund on
Aug. IA, 1862. at 5 per cent. discount. was
on the same day redeemed by the State at
the same rate OF discount for which they
were sold.
These two transactions represent all
the transactions had with the States sink
ing funds relative TO sales of these bonds.
The remainder Of said issue OF 2,O00.000
were sold to individuals and corporations
at discounts varying, from 5 to IL per cent.
The State suffered an apparent discount
on account of the sale of said bonds in the
sum of S243, 603. 40. This was only an ap-
parent discount. however. The facts show
that the State received on account of the
sinking fund and other purchasers of
bonds allowing the State to redeem bonds
sold at a discount at the same price for
which they were sold, the sum OF $9l, 156. 90;
net discount. $l51. $3.50.
The State paid on account of salaries
and expenses of negotiating the sale of said
bonds by said bond sale commissioners the
sum of s1,635. SO; the State paid on account
of printing, commissions and expenses made
necessary on account OF said bond issue
the sum of $421. 40; the State paid on ac-
count of exchange i'm paying the semi-an-
nual interest on said bonds in the city of
New York the sum of $609.4: the State
paid out in semi-annual interest on said
bonds up to and including the LIST day of
May. 1861, the sum of 1867 154. 9S; the State
received on account of rebate of interest
que on bonds when sold the sum Of $685.. 70.
Deducting this latter amount from the sum
of the above fixed amounts. showing the
items in favor of the State, leaves the sum
of 1914. 6S4.02, being the sum of the amounts
going to make up the correct amount of the
discounts, charges, expenses and interest
paid and suffered by the State OF Indiana
on account Of the sale of said bonds up TO
and including the LIST day OF May, 1858"
1t appears, therefore, from the decision
of the controller that in the calculations
of the accounting officers Of the treasury
the original claim of the State filed i'm May.
1868. amounting to S6O6. 979. Al, has been scaled
down to the amount allowed, namely, S5l4,-
6S4O2, and the item OF interest from the LIST
day of May, 1868, TO the present time
amounts 10 1921. 175.1S These two amounts
aggregate the sum of $685.. 1892 the total
amount of the claim allowed.
But for the authority OF the act Of Con-
gress of Feb. IL, 1902. the controller of the
treasury would have had no power to
further consider this claim. This con-
gressional authority, however, authorized
the reoDening of the claim, and nothing
was then necessary except the proof by the
State of the payment of the bonds, the in
terest and discount suffered and the ex-
penses incident 10 the loans. The rest OF
the labor was merely calculations of ex-
perts upon the sums proved TO nave been
paid by the State.
The allowance Of this claim by the con-
troller closes this long-pending claim. and
no further action is necessary except an
appropriation by Congress. Steps have al
ready been taken by Mr.. Hemenway. who
will. as in the former case. take the lead
in the payment Of this claim 1t is conf
/ IDENTIFY expected that one OF the appropria-
ton bills now under consideration by Con
gress will contain upon its passage an item
authorizing the immediate payment OF the
S635. $50. 20, which the state treasury OF In
diana will at once receive in final settle
ment Of this claim.