Year: 1865

by the State Debt Sinking Fund Com
missioners as before described but at tho
extra session in the same year, an act
was passed divertinC this tax, and that
for the wears 1861 and lS62, from the
State Debt Sinking Fund, to the payment
OF the War Loan, which had Just been
authorized. with provision, however,
that if the holders of the War Loan
bonds would not sell them TO the State
at rates not exceeding their par value,
the proceeds OF the lax should he In.
vested in the stocks created by the BUtler
bill. according to the terms OF the oriEi-
nal act creating the State Debt Sinking
Fund


This legislative history, it must be ad-
mitted. Is rather curious and contradlc-
tory. and comes short of performing the
obligations which the State in lss6 en-
tered into with her creditors.


For thi. n-performance. up TO to0i.
4 wand eNc4~e n hardly be ouut. a.su
for what has happened elnce the excuse
is ample The contingencies and ne.
cessities of war override all other con
Siderations, and if they cause a failure
IN the strict performance of a contract,
It would not subject q State to the inn
putation Of being wanting in good faith.


IN view of the whole matter as | have
presented il, the just conclusion seems
to be this, that while the State Is not
bound 10 pay the principal of this debt
on the 10th of January, 1866, or be con
siderea in default, vet that she - not at
liberty to postpone the payment OF i
indefinitely; that to do so would be To
violate the fair construction of the Ger
titicate itself, and the explicit uu1tor-
standing that existed in the Legislatures
of 1916 and ls47, and in the Convention
of 1880, as shown by their several enact
ments and debates; but that she Is bound
to make provision To pay the dehf with
in such reasonable tirse after the twenty
years as may comport with the orig gtnaI
understanding of the parties. the ability
and condition of the State, as left by the
war, the faithful performance Of her cou.
tracts, and the preservation OF her good
name The whole subject is therefore
commended to your careful consideration
in the hope that Your conclusion.
whatever it shall be, may be announced
before your final adjournment, SO that
the State and her creditors may know
what they h we to depend upon.


As before shown, the amount OF those
stocks outstanding in the hands of oar
creditors, and to be provided for is SIX





dollars and thirty three cents S6.0ah
so 33.


The Auditor OF State has furnished
me a statement. in which he estimates
that there will be in the Treasury, on
account of State Debt Sinking Fund, on
the lst day of May next, the sum of one
million dollars { 100000.


The Board of Commissioners OF the
old sinking fund will probably have on
hand, in cash, on the 1st day of January.
1866, the sum of six hundred thousand
dollars 100000.


There is due also to the old. sinking
fund about nine hundred thousand dol
lars $500, 900. } on loans secured bv
mortgages on reAl estate, which, how
ever, could not be made available for
several years, owing to the extension OF
time made by the State to the mortgagers-
unless by the issue of a like amount ot
bonds bearing six per cent. interest whIcn
is one per cent less than that which the
State receives on the mortgages the bouae
to be paid out of the proceeds OF the
mortgages when collected These bonds
disposed of to our creditors or others,
at par value and the moneys referred
to, if promptly invested in our stocsS,
would procure some two millions slA
hundred and fifty thousand dollars -,
100000 } of our stocks, aud thus reduce
the amount in the hands Of our creditor
to three millions three hundred and
eighty six thousand and eighty dollrs
and thirty three cents { 3,3S6, ,Oso 81.
The cash on hand in the old sinking funo
draws no interest and has not tor inany
months, and without regard 70 the con
ciusion you may come 20 as to the tune
or mode of paying the public debt,
earnestly recommend that all the cash
and other assets belonging to the old
sinking fund be az speedily possible
invested in our State stocks, and the
somewhat formidable and costly ma
chinery by which that fund has been
managed abolished. The fund thus con
yerted into our stocks can be easily
managed by the Auditor of State wlth
equal advantage to our common schools,
and at saving OF no small expense. OF
course it will be understood that such
stocks as now belong to the old sinking
fund, or as may he purchased ~ H.
assets, must in some form be kept alive
for the benefit Of the school fund, SO
that that fund, which is made inviolable
by the Constitution, may not suffer by
the conversion.


The financial system OF Indiana i,
complicated, expensive aud anomalops
The State is a debtor, owing large sums
of money, upon which she pays interest
semi annually, and incurs all the g
penses thereto necessarily incident, such
as the keeping of an agency In New
York, the purchase of exchange, and
other. items of cost too numerous 10
mention. She is at the same time
lender Of money, and maintains an ex
pensive machinery TO carry on that
operation, and is subject, OF course, 70
occasional 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 ielt


Should the assets of the Sinking Funds