Year: 1865




raise money to def!ay the osdinary expenses of the
State Government, and TO supply the deficiencies in
revenue growing cut of the failure TO levy and co.,
lect taxes for the preceding two years. This oct
eing held void for want of title, the Board of
Commissioners Of the Sinking Fund refused to act
upon it. but the Auditor of State treating it as an
instruction, sold the stocks in open market and
put the money into the Treasury. At the regular
session in 1851 it was enacted, that for the year
1853, and every year thereafter, five cents be
levied on each Cne hundred dollars worth Of
property for the reduction and ultimate extinction
of the public debt, 10 be used by the State Debt
Sinking Fund Commissioners as before described,
but at the extra session in the same year, an act
was passed divcr:iDg this tax, and that for the
years lc6l and lS62 from the State Debt Sinking
Fund.- to the payment OF the War Loan, which
had just been authorized, with provision, howev-
er, that if the holders of the War Loan Bonds
would not sell them to the State at rates not Cx-
ceedinS their par value, the proceeds 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.


This legislative history. it must be admitted, is
rather curious and contradictory, and comes short
of performing the obligations which the Stale in
1916 entered into with her creditors.


For this non performance, up to 1851, valid
excuse can hardl, be found, but for what has hap
pened since, the excuse is ample. The contngcn-
cies and necessities of war override oil other
siderations, and il they cause failure in the
strict performance OF contract, it would not sub
jcct State to the mputaton OF being wanting in
good faith.


In view Of the whole matter as ] have presented
it, the just conclusion seems 10 be this, that while
the State is not bound TO pay the principal OF this
debt on the 10Th Of January. 1866, or be consider
cd in default, yet that she is not at liberty to post
pone the payment OF it indefinitely; that to do so
would be to viola ie the fair construction of the
certificate ITSELF and the explicit understanding that
existed in the Legislatures OF ls46 and le4i, and
in the Convention of 1850, as shown by their
several enactments 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 ihe original understanding Of
the parties, the ability and condition OF the State
as left by the war, the faithful performance Of her
contracts, and the preservation OF her good name
The whole subject is therefore commended 20 your
careful consideration, in the hope that your con
clusion, wha tever il shall be, may be announced
before your final ad djournment, so that the State
and her creditors may know what they have to
depend upon.


As before shown the amount of these stocks
outstanding in the hands of our credtos and to DC
provided for is s6,O36.O8O SO.


The Auditor Ct State has furnished me state
mcnt in which he estimates that there will be in
the Treasury. on account of State Debt Sinking





ST 600 900.


The Board OF Commissioners of the Old Sink
ing Fund will probably have on hard, in cash. on
the lst day OF January, 1866, the sum of $685. ,000


There is due also to The Old Sinking Fund
about $900, 600 on loans secured by mortgages
real estate, which, however, could not be made
available for several years, owing 10 the extension
Of time made by the State to the mortgagers, un-
esu by the issue of like amount of bonds bearing
six per cent interest, which is per cent. less
than that which the State receives ON the mort
cages, the bonds to be paid out OF the proceeds OF
the mortgages when collected. These bonds dis
posed Of to our creditors or others, at par value
and the moneys referred to if promptly invested in
our stocks would procure some s., $50 900 of our
stocks, and thus reduce the am unt III the hands
of OF. creditors to S3,3e6,0s0 33.


The cash on hand in the or Sinking Fund
draws no interest, and has not for many months
ard without regard TO the conclusion you may
come to as TO the time mode Of pa wing the pub
lie debt, earnestly recommend that all the cash
and other assets belonging to the Old Sinking
Fund, be as speedily as possible invested in our
State stocks, and the somewhat formidable and
costly machinery by which that fund has been
managed, abolished. he fund thus converted
into our stocks can be easily managed by the
Auditor OF State with equal advantage to our COM
mon schools, and at a saving o! no small expense.
OF course it will be understood that such stocks as





purchased by its assets, must in some form be kept
alive for the benefit Of ,hc School Fund, so that
that fund which is made invioable BY the Ccnsti-
tuton may not suffer by the conversion.
The financial system of Indiana is complicated,
expensive and anomalous. The State is debtor,
owing large sums of money. upon which she pays
interest semi annually, and incurs all the expenses
thereto necessarily incident, such az the keeping
of an agency in New York, the purchase Of
v md Ofl, ton of too TO
mention. She is at the same time lender OF
money, and maintains an expensive machinery 10
carry that operation, and is subject, Of course
to casional losses incident to all money lenders


If, therefore, the trust funds OF the State could
be invested in her own stocks it would greatly
cheaper and simplify her financial system, and
restore to its administration that public confidence,
the absence of which has long been felt.


Should the assets of the sinking funds be con-
verted into our public debt, rs | have suggested,
the whole debt Of the State left outstanding in tie
hands OF her creditors be provided for might be
thus stated:


Two and half and FIVE per cent


stock NEUTRALITY-SUSPICIOUS.. S3,36S,0o0 33
War loan bonds. .................. 43e, ,0O0 00
Vipcennes University bonds. .......... 66,6e5 90
Floating debt, estimated at. ......... 100000 90


Total debt. $1,000 ,765 80


The conversation suggested can be made within
the next six months, and there isspo propriety in
the State appearing to the world rs being indebted
in the sum of seven or eight millions of dollars
when she has the means in her own hands OF redu-
cling it to less than four millions.


ENUMERATION AND ArroRTIoSMESr.


# is not creditablc to the State that any provs-
ion of its Constitution, mandatory in its character
and not in conflict with the National Constitution,
should remain a dead letter because of the MONACO
ton Of the Legislative department. IL the law ma
kers would have their enactments Obeyed BY the
masses they should set the example of obedience
by prompt and faithful performance of those du-
ties enjoined upon them by the higher law contain
ed in the Constitution itself. More than fourteen
years have elapsed sincc the adoption Of the pre-
sent Constitution Of the State and 70 this day there
are two subjects on Which its language is that of
positive command where there has been no cores
ponding obcdience-one ofthese subjects being al
most vital TO the existence OF the Legislature itself
The first OF these is the periodical enumeration of
the white male inhabitants above twenty years
of age, and the periodical apportionment of Sena-
tors and Representatives, based upon this enumcr
ation Tie other is the providing Of Houses Of
Correction and Reformation for juvenile offenders.
Allow me earnestly to call your attention TO both
of these constitutional mandates in the order above
stated. The Constitution of 1851 provides that
the first and second elections OF members OF the
General Assembly after its taking effect shall be
according to the apportonmcnt last made by the
General Assembly before the adoption Of said Con-
sttution. This provision gave ample time for ma :
king the enumeration and apportionment required
by the organic Law Of the State. The Constitution