improvement, and purposes which the interests of the State may hereafter require, if not at our hands, at the hands of those who succeed us. * ** Let us not lose sight of those great objects to which the means of the State should, at some future day, be devoted the navigation of the falls of the Ohio -the improvement of the Wabash, the White river, and other streams-and the construction of the national and other roads through the State." Governor Ray, in a message delivered before the legislature, in December, 1826, said "On the construction of roads and canals, then, we must rely, as the safest and most certain State policy, to relieve our situation, place us among the first States in the Union, and change the cry of hard times' into an open acknowledgment of contentedness. at the internal improvement of the State, or form our minds to remain poor and unacquainted with each other." Again, in his annual message of December, 1827, Governor Ray said * * We must strike "Within the space of the last fifteen months public lands have been granted to the State of Indiana, through the instrumentality of her public functionaries, estimated to be worth about one million two hundred and fifty thousand dollars, free of cost, for special purposes.* The objects and terms of those immense grants may be seen by a reference to the two treaties, made in the fall of the year 1826, with the Miami and Pottawattamie nations of Indians, and two acts of the last congress of the United States. * * It is believed that the most * sanguine politician will be unable to point to any combination of circumstances which will again place under the control of the State, in the same time, and, perhaps, not for half a century -perhaps never-such extensive and valuable resources for prosecuting a grand system of internal improvement to a successful termination, and for the ultimate production of a revenue that shall relieve our fellow-citizens from taxation." In a message delivered to the legislature in 1829, Governor Ray said "This subject, [State internal improvement,] though more than once pressed upon the attention of the legislature, can * Governor Ray refers to the lands which were granted to aid in the construction of a canal to connect the waters of the Wabash and lake Erie, and in the making of a road from lake Michigan, through Indianapolis, to the Ohio river. never grow irksome, since it must be the source of mauy of the blessings of civilized life; to secure its benefits is a duty enjoined upon the legislature by the obligations of the social compact." Governor Noble, in his inaugural address before the general assembly, in 1831, said "It is obvious, then, that while the general government is preparing the great national thoroughfares, and creating consumption by fostering manufactures, it is our interest and duty, faithfully and economically, to apply the means placed at our control by the national government, to their legitimate objects, and to exert ourselves to call into requisition the latent resources and energies of the State to improve our rivers; and, by making lateral roads and canals, to facilitate the conveyance of the various commodities of our State." In a message addressed to the legislature, in 1834, Governor Noble said "Since the beneficial policy of engaging in public works for the advancement of the agricultural and commercial interests of the country has been so frequently and clearly demonstrated, and while our credit is justly such as to command any amount of capital, at an interest of five per cent. or less, no good reason can be assigned why we should longer hesitate to follow the successful examples of other States." The work of opening a road from lake Michigan, through Indianapolis, to Madison, on the river Ohio, was begun, under the authority of the State, in 1830; and the construction of that part of the Wabash and Erie canal, which lies within the borders of Indiana, was commenced in 1832. In 1836 the financial affairs of the country seemed to be in sound condition, and the minds. of the people of Indiana were fully prepared to regard, with favor, the commencement of an extensive system of State internal improvements. The adjustment of the details of the system was, however, a matter of great difficulty; and the legislature was, in some instances, forced to make special provisions for the construction of needless and costly works, in order to prevent the defeat of the general system. Ten millions of dollars were appropriated to carry on the system. In fixing the mode of organizing a State board of internal improvement, and in defining the duties and powers of this board, the general assembly of 1836 committed several material errors. On account of these errors, and for other reasons, the internal improvement law of 1836 encountered a strong opposition; and this opposition was most marked among the people of those counties through which the lines of the proposed public works did not pass. Governor Noble, in his last annual message, delivered to the legislature in December, 1837, said: "In the experience and events of the year, nothing has been witnessed of a character to discourage the progress or the ultimate success of the system [of internal improvements]. On the contrary we see much to strengthen our convictions of the wisdom of the policy, and to inspire us with increased confidence in the ability of the State, with wise and provident legislation, to accomplish the' whole undertaking." Governor Wallace, in his inaugural address, of December, 1837, spoke favorably of the progress of the State system of internal improvements, and recommended strict economy in the prosecution of the public works. The laws by which the system was controlled rendered the observance of economy impracticable; and the errors of legislation continued to produce their natural results, until the summer of the year 1839, a period of financial embarrassment throughout the United States, when the contractors on the public works of Indiana generally suspended their operations, and, soon afterward, abandoned their contracts. In December, 1839, Governor Wallace, in his annual message to the legislature said: "The failure to procure funds, as we had a right to expect from the extensive sale of State bonds effected in the early part of the season, has led to great and unusual embarrassments, not only among the contractors and laborers, but also among the people. The State has, in consequence, fallen largely in debt to the former, and is without the means in possession of discharging it. * * * What shall be done with the public works? Shall they be abandoned altogether? I hope not. In my opinion, the policy of the State, in the present emergency, should be, first, to provide against the dilapidation of those portions of the works left in an unfinished state; and, secondly, as means can be procured, to finish some entirely, and complete others, at least, to points where they may be rendered available or useful to the country." In order to provide means for the payment of the contractors and other public creditors, the legislature authorized an issue of State treasury notes, to the amount of one million five hundred thousand dollars. These notes formed a circulating medium, which, for a brief period, passed at its nominal value; but, early in the summer of 1842, when there was about one million of dollars of this currency in circulation among the people, it suddenly depreciated in value from 40 to 50 per cent. During the administration of Governor Bigger, in the course of the years 1841, 1842, and 1843, various remedial measures were adopted with a view to relieve the State from the burdens which had been imposed on it by the maintenance of an unwise policy in carrying on the internal improvement system. An attempt was made to classify the public improvements. The board of internal improvements was abolished; the public works were placed under the care of commissioners and agents, and provisions were made for the surrender of all, or any, of these works to private companies on certain conditions. At the close of the year 1841, the total length of the railroads, turnpike roads, and canals, embraced in the internal improvement system of 1836, amounted to twelve hundred and eightynine miles of which two hundred and eighty-one miles had been completed at an aggregate cost of $8,164,528 21; and it was estimated that the total cost of the completion of all the works would amount to the sum of $19,914,244. In 1841, the public debt of the State, including all its liabilities, amounted to $15,088,146*—namely: For bonds sold for internal improvement system, proper, of 1836,...$7,050,000 For the Wabash and Erie canal,.. 1,727,000 For the establishment of the State Bank,............ 1,390,000 For the enlargement of the capital of the State Bank..... 1,000,000 Advanced to the State Bank, in anticipation of the fourth instalment of the surplus revenue,.......... 294,000 For July, 1841, instalment of interest,......... 259,000 For bonds advanced to Lawrenceburg and Indianapolis railroad co., 221,000 Interest on outstanding treasury notes,.. Total,......... 85,000 .$15,088,146 * Governor Bigger's annual message to the legislature, December, 1841. For a period of several years Indiana was not prepared to pay the interest on her internal improvement debt. Her financial condition was, in this respect, similar to that of several other States of the Union. The general assembly, however, by acts of January 19, 1846, and January 27, 1847, during the administration of Governor Whitcomb, made provisions for the adjustment of the debt due to the holders of Indiana State bonds, and for the completion of the Wabash and Erie canal to Evansville. The official reports of the auditors of public accounts show that the amounts of interest and exchange paid, annually, on the State debt, from the year 1847 to the close of the fiscal year 1856, were— |