USA > California > History of California, Volume VI > Part 69
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2 Crosby's Early Events, MS., 49; Comptroller's Rept, in Cal. Jour. Sen., 1851, 519, 532; Sac. Transcript, Feb. 28, 1851; Thomas, in Sac. Directory, 1871, 87-8; Cal. Jour. Sen., 1851, 753-4; Governor's Mess., in Cal. Jour. Sen., 1851, 32-3.
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lic property there was absolutely nothing to produce a revenue. The surveyor-general declared that he could hear of no land belonging to the state, except that which a recent act of congress granted to all the states, namely, the swamp and overflowed lands,3 which would not become available property until surveyed by the general government 4 Thus while the mines were yielding millions every month, the state was in a condition of deplorable poverty
To correct this, the mode of assessing and collecting public revenue was changed somewhat A poll-tax of three dollars was levied on every male inhabitant, Indians excepted, between the ages of twenty-one and fifty years, all property was liable to a tax of fifty cents on each $100 for state purposes, and an equal amount for county purposes. Lands sold by the state, though not granted or conveyed, were made assessable. All funds collected under the provisions of the act were to be in the legal currency of the United States, in foreign coin at its value fixed by law, in gold-dust at sixteen dollars per ounce, troy- weight, or in bonds of the state authorized by the legis- lature of 1850, with the interest due thereon. License taxes were required of billiard-tables and tenpin-
3 As a curiosity of legislation, Gwin relates that this act resulted from his consenting to allow a bill giving to the state of Arkansas its swamp and over- flowed lands, which had been passed in the lower house, to be brought up in the senate on one of the three days allowed for Cal. business before the end of the session. In a conversation with the Arkansas senator, Gwin agreed to give way if the act should be made general instead of special, and applicable to all the states and territories. The amendment was made, and the act passed and was approved, thus unexpectedly endowing Cal. with a consider- able addition to state lands. Memoirs, MS., 45.
+ Charles T. Whiting, sur .- gen., seems to have been a humorous character, though his humor appears rather grim. No reports having been received from assessors, he was unable to give any information concerning agricultural affairs. The grasshoppers had been destructive in some localities, and as a preventive he 'recommended the extensive introduction of turkeys.' He had no means of ascertaining the quantity of mineral lands in the state. The reports of the county surveyors were useless to him, being chiefly on old Spanish grants, and detached. The great drawback to agriculture was the uncertainty of land titles; otherwise Cal. would be the equal of any of the states, etc. No suggestions; no information; all negative. 'I know of but one method of planting and preserving forests of trees; viz., put the seeds in the ground and protect the shoots by a fence or ditch.' Cal. Jour. Sen., 1851, 576-7.
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WAYS AND MEANS.
alleys, for the state; and upon itinerant venders of merchandise, liquor-sellers, caravans, and shows of all kinds, for county purposes. A special act was passed to license gambling, which placed the impost on tables, every house in the limits of San Francisco, Sacramento, and Marysville containing over three gaming-tables to pay $1,500 quarterly, and every house having three or less tables $1,000 quarterly ; but in smaller towns the license should be thirty-five dollars a month, three fourths of all the money so collected to be paid into the state treasury, and the remainder into the treasury of the county granting the license.
Notwithstanding the admonitions of the governor, an act was passed authorizing a loan of $500,000 at twelve per cent per annum, for the purpose of defray- ing the expenses of Indian hostilities;5 and this debt it was expected the general government would pay. Lastly a funding act was passed, requiring the state treasurer to prepare bonds to the amount of $700,000, in sums of $500, bearing interest at the rate of seven per cent per annum; $350,000 to be made payable in New York on March 1, 1855, and the remaining half payable at the same place in March 1861, the interest to be paid half-yearly, either in New York or at the office of the treasurer. The creditors of the state, on presenting either the bonds of the temporary loan or state warrants, could have them exchanged, when not less than $500 in amount, for the new bonds; and from and after the 1st of May, 1851, all revenue of the state should be collected in the legal currency of the United States, or in gold-dust at $16 an ounce; except that in payment of the ordinary state tax the old bonds might be presented as before. A tax of fifteen cents on each $100 of taxable property in the state, to be paid in currency or gold-dust, was levied to pay the interest on this debt. It was made the duty of the
5 The accounts of Adjt-gen. Mckinstry make the expenses of the El Dorado and Gila expeditions amount to $149,199.82. Cal. Jour. Sen., 1851, 735. By June 1851, $225,000 had been drawn in warrants from the war-loan fund.
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FINANCES.
treasurer to set apart a sinking fund, to consist of all surplus interest, all money received from the general government on account of the civil fund, and all pro- ceeds of sales of state lands, except those reserved for school purposes, with whatever surplus should be remaining in the general treasury on the 1st of May, 1852, and every year thereafter, when not otherwise appropriated, until the fund should be sufficient for the payment of principal and interest of the bonds.
It will be seen that the civil fund of military gov- ernment days was still regarded as belonging right- fully to the state of California, and that its repayment was confidently expected. An effort toward creating a revenue was made by granting to. the city of San Francisco all the beach and water lots belonging to the state under the recent act of congress, upon con- dition that twenty-five per cent of the receipts arising from the disposition of these lots should be paid into the treasury of the state. Also, a section of over- flowed land, on an island in the Sacramento River, was conveyed to John F. Booth and David Calloway, upon condition that drains and levees should be con- structed to test the cultivable qualities of the land under improvement, and that the grantees should pay into the state treasury $1.25 per acre for the benefit of the school fund of the district. But as even this moiety of an income had to wait for the government survey, and might take three years thereafter for pay- ment to be made, it could not be regarded as a very present help. The study of the legislative proceedings and comptroller's reports of California might reason- ably deter any future chance community like that of 1849-50 from assuming the responsibilities of state- hood.
The civil debt of the state, December 31, 1851, was $796,963.95, and the war debt $1,445,375.79, or a total of $2,242,339.74. There had been paid into the treasury by the several counties $22,570.31 for 1850, and $245,359.97 for 1851, or a total of $267,930.28,
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DEBT.
an amount not equal to the temporary state loan of 1850, without the interest. Some counties, it was true, were delinquent; and the whole amount charged against the state was $333,138.79. To correct this condition of the public finances, the legislature of 1852 authorized the issuance of state bonds for $600,- 000 more, at seven per cent, payable in 1870, the ac- cruing interest to be paid semiannually, in January and July. This act, like the former, permitted the holders of state warrants to exchange them for the new bonds, in sums not less than $100, and to the extent of $1,000. A special tax of ten cents was levied on every $100 of taxable property in the state, which was to be applied to the payment of the interest accruing upon the bonds of 1852, any excess to be turned over to a sinking fund provided for the payment of interest and principal. This sinking fund consisted, besides this surplus, of all moneys received by the state from the United States on account of the civil fund after the redemption of the bonds of 1851, to which this fund had already been appropriated, with a reservation of $50,000 for the payment of claims against it. Next,. the proceeds of the sales of all lands thereafter to be acquired by the state, except those reserved for school purposes, and the swamp-lands, the moneys from which, after the redemption of the bonds of 1851, should be applied to the liquidation of the indebtedness of 1852.
The legislature of 1852 also repealed all the former revenue acts, and made the law for levying, assessing and collecting revenue much more complete and strin- gent than formerly. Much complaint had been made by the people of the southern counties, devoted prin- cipally to grazing, because they paid more taxes, having more real estate, cattle, and other property which an assessor could find, than the much more numerous population of the northern counties; and hence that they were compelled to bear an undue pro- portion of the burdens of government. This was what was feared when the Spanish delegates had sat
HIST. CAL., VOL. VI 39
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FINANCES.
in the constitutional convention, and what the native land-owners had always protested against. This pro- test became in 1851 a movement for a division of the state,6 and warned legislators to take measures to avoid a disaffection which might at any moment be taken advantage of by a political faction to cut off the best agricultural portion of the state. Some, indeed, were not warned, but carried the matter into the legislature, where they discussed the question of how to divide the state, instead of how to reconcile the disaffected portion.7 It was even put forward as a motive that each part would get 500,000 acres of school land.
The per cent was not increased under the law of 1852. For every $100, thirty cents was exacted from all property, except public and United States holdings, and charitable institutions for state pur-
6 Meetings were held in San Diego and Los Angeles to consider the subject of a division of the state, and a convention appointed to meet at Santa Bar- bara in Oct. Accordingly, on the 20th of that month delegates were present at Santa Barbara as follows: from San Diego, W. C. Ferrell, A. Haraszthy, Tibbets, C. I. Cants, T. W. Sutherland, Joaquin Artego, Pedro Camillo; from Los Angeles, B. D. Wilson, J. L. Brent, J. K. S. Ogier, Ignacio Valle, Cor- nell, J. A. Carrillo, L. Hoover, J. Hunt, J. M. Sanchez, Hugo Reid, and others; from Santa Bárbara, H. S. Carnes, S. Barnes, S. Hern, C. V. R. Lee, A. M. de la Guerra, Joaquin Carrillo, Detarviana Gotherez, S. Anderson, Marsh, Anastacia Carrillo; from Monterey, Frederick Russell, the 3 other delegates elected not being in attendance. Delegates from counties north of Monterey declined to participate, although admitted to seats in the conven- tion. The whole number present were 31. Carrillo was chosen pres., Brent chairman of the com. on resolutions, and Ferrell chairman of the com. to pre- pare an address. The resolutions set forth, among other things, that laws coul l not be framed to bear equally upon sections so diversified. A central committee of 5 was appointed to supervise a continued movement to effect the result aimed at after the adjournment of the convention. The boundary line was much discussed. A motion to fix the northern boundary 'along the northern line of Monterey county, south-east to a point opposite the head of Tulare Lake, thence east,' was voted down. The convention held for 3 days. The desire was to be remanded to the condition of a territory. S. F. Alta, Sept. 12 and 28, and Oct. 6, 13, and 26, 1851; Hayes' Scraps, Angeles, ii. 11; Hayes' Constit. Law, i. 1-37; Taylor, Cal. Notes, 4.
" The S. F. Alta attacked the 'clique in legislature to divide the state at all hazards' without gloves, showing the folly of the proposition, and that it would lead to the expense of a convention costing $100,000 or $150,000, and finally to the old quarrel over slavery, could congress be brought to consider the project of a territory being inade out of a state. Those who favored it, excepting the native population who did not understand the drift of their American supporters, were southern pro-slavery men, and had no other object than this, to open the country to slavery. Cal. Political Scraps, 51-3. They might have gone a step further and asked the question if congress had the power to transform a state into a territory.
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TAXATION
poses, and fifty cents for county purposes. The for- eign owners of consigned goods were taxed eighty cents on every $100. The poll-tax was reduced to $3, and was required of every adult male inhabitant not exempted by law. Payment was received in pure gold-dust at $17.50 per ounce, in foreign gold coin of fixed value, and United States legal currency, or in the three per cent state bonds of 1850. One object of the funding acts of 1851 and 1852 was to cancel the bonds of 1850, bearing the enormous interest of 36 per cent; but the holders, as they gradually appre- ciated in value, were in no haste to exchange them for seven per cent bonds, and there were still $241,- 291.11 outstanding at the close of 1851, while of the second issue only about half had been taken. At the close of 1852, however, the former class of bonds outstanding had been reduced $63,750, on which there remained to be paid an equal amount of interest, and the legislature of 1853 passed an act levying an addi- tional tax of ten cents on each $100 of real or personal property for the purpose of cancelling the remainder of these bonds, paying the interest on the funded debt of 1852, and providing a sinking fund for the same.
With regard to the beach and water lots granted to San Francisco, from which considerable returns were expected, only $1,000 had reached the treasury from that source, owing to a neglect of the conditions of the grant, and to litigation in which the property had become involved.8 The tax imposed on con- signed goods had also met with much resistance in San Francisco, and had been found unproductive.9
These measures failing, the legislature of 1852 had
8 Cal. Statutes, 1853, 197; Governor's Mess., in Cal. Jour. Assem., 1853, 20-1. See chapters on birth of towns and history S. F., this vol.
9 The dist atty of S. F. co. submitted to the grand jury 200 indictments against persons violating the act, which were ignored, and the 'evident hos- tility ' to the act manifested by that body made it advisable to refrain from instituting civil proceedings before the matter should be brought to the at- tention of the legislature. Governor's Mess., in Cal. Jour., 1853, 21; S. F. Alta, Jan. 4 and Feb. 14, 1853; S. F. Bulletin, April 4, 1856.
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FINANCES.
resort to the 500,000 acres belonging to the state, and which the constitution devoted to the support of common schools, authorizing the governor to issue land warrants for quarter and half sections, at $2 an acre, to the full amount of the grant. The state treasurer was authorized to sell these warrants, either for money, state scrip, or three per cent bonds, the revenue received under this act to constitute the school fund of the state.1º The revenue derived from the sale of these lands was set aside for a general fund to meet the liabilities of the state, the interest on which was to be appropriated to the support of schools.
At the close of 1852, the civil debt of the state amounted to $1,388,213.78, and the war debt to $771,190.05, or a total of $2,159,403.83, besides a debt to the school fund of $190,080. During all this tinkering with the state finances, no member of the legislature seemed to think of retrenchment as one means of reducing indebtedness. Such a sentiment was not in accord with the temper of the times. The public journals sometimes hinted at it, and John Big- ler, governor in 1853, attempted to point out how half a million annually might be saved,11 by a reduc- tion in salaries and the abolishment of unnecessary offices. The legislatures had all passed salary acts, but it was only to redistribute or increase the amount. 12
10 Cal. Statutes, 1852, 41-3. The state supreme court having declared such locations and entries legal, a very large amount of such lands was then pur- chased and paid for. The sec. of the interior having declared all such sales and entries nullities, and the sup. court in a subsequent decision having overruled the former decision, much difficulty arose as to title, and many conflicts ensued. In order as far as practicable to relieve the state, as well as the purchasers of such lands, from the difficulty thus produced, congress passed the act entitled 'an act to quiet land titles in Cal.,' approved July 23, 1866. All such lands as had been thus sold by the state, and which had not been settled upon, occupied, and improved by preemptors and homestead applicants, were subject to the operation of the law of 1852. Zabriskie, Land Laws, 560, 567-72.
11 Cal. Jour. Assem., 1853, 20. In 1866, when Gov. Bigler had become more or less corrupted by custom, he made a 'favorable' comparison of Cal. with the states of Ind. and Ill., which had large debts-contracted for quite other purposes than paying salaries, or unnecessary appropriations. Cal. Jour. Sen., 1856, 22.
12 Compare the acts of 1850, 1851, and 1852. In the year last named the
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SALARIES.
The legislature of 1853 raised the property tax for the support of the state government to sixty cents on each $100, levied a tax of fifteen cents on the same amount for the payment of the interest on the debt of 1851, twenty cents for the payment of the interest on the debt of 1852 and the school bonds, and four cents to pay interest on state prison bonds, authorized by a law enacted at the same session. For county pur- poses, fifty cents might be levied on property, besides the special taxes upon trades, professions, occupations, bankers, merchants, tavern-keepers, liquor-dealers, auctioneers, consigned goods, gaming, and every form of business except mining, agriculture, and day labor. The poll-tax remained at $3.
At the end of 1853, the three per cent bonds had been so far redeemed that only about $10,000 of prin- cipal and interest13 remained to be paid; but the state indebtedness, exclusive of the school fund, had in- creased to $3,001,455.70. Nearly $1,000,000 was a
aggregate amount was considerably increased, although some important changes were made. The governor's salary in 1850 was $10,000, in 1851 $6,- 000, in 1852 $10,000. Sup. judges received in 1850 $10,000, in 1851 $7,000, in 1852 $8,000. A public translator received $8,000. The salary of state treasurer was first $9,000, then $5,000, then $4,000; of comptroller, first $8, - 000, then $5,000, then $4,500, and other offices in proportion. Of the 11 district judges in 1832, 8 received $5,000, 2 received $3,000, and 1 $4,000. District attorneys received $1,800. The supt of pub. instruction was paid $4,000 for not very arduous services. The atty-gen. was cut down from $7,000 to $1,000, and advanced again to $2,000. A supt of public building received $4,000, though he was not needed; a prison inspector $6,000, and large appropriations were made to hospital and other purposes, far beyond the ability of the state to pay. The pay of legislators the first and second sessions was $16 per diem. This was reduced to $10 and then to $8, and mileage to $8 per every 20 miles. Gov. Bigler advised doing away for a year or two with several of the high-salaried supernumeraries, reducing per diem and mileage, making sessions biennial, and limiting them to 90 days, placing the salaries of governor and supreme judges at $7,000, and reducing the number of district judges to 8. Cal. Statutes, 1850, 83; 1851, 444-5; and 1852, 49; Hayes' Constit. Law, i. 41.
13 The state credit became seriously endangered through the state treasurer having placed in the hands of Palmer, Cook, & Co., bankers, the interest money due at the American Exchange Bank in New York, in Jan. 1854, amounting to $61,750, who failed to pay the coupons as demanded. At this juncture, the banking firm of Duncan, Sherman, & Co., of that city, volun- tarily paid the interest from their own funds, thus saving the credit of the state from ruin. Palmer, Cook, & Co. claimed to have the money in the New York bank to meet the interest when due, which the latter denied. The debt to Duncan, Sherman, & Co. remained unpaid for several months. Cal. Jour. Assem., 1855, 629-30; S. F. Alta, March 19, 1854.
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FINANCES.
war debt, which it was expected the general govern- ment would some time assume, but the interest on which the state was compelled to discharge until it was finally ascertained that congress would come to its relief. The school warrants sold at this time aggregated $463,360, which had been converted into bonds at seven per cent. Property in the state was increasing rapidly, having reached nearly $100,000,000, the tax on which, at sixty cents, would bring in $600,000, while the other special14 and poll taxes, it was estimated, deducting the expenses of collection and delinquencies, would furnish a sum total of $780,000, the estimated expenditures for the same period amounting to $960,000.
Again the governor urged retrenchment as neces- sary. "The enormous sum of $182,427.43 has been paid for clerk hire, and to the officers of the two houses during the sessions of 1852 and 1853. The amount paid last session," he said, "to officers and clerks alone, was $106,093.70." An attempt had been made, he added, to hold the executive responsible for every expenditure of public money ; hence he might be permitted to direct attention to the subject, and invite cooperation in reform, and a revision of the revenue laws, of which complaint was made on account of inequality and excess.
The legislature of 1854 followed the example of its predecessors. It made the revenue bill a subject of much painstaking, but it succeeded in reducing the property tax only six cents. It found in the treasury sufficient funds to liquidate the principal and interest
1+ The revenue law of 1853, taxing consigned goods, met with disapproval. A large meeting convened in S. F. in Jan. 1854 to remonstrate against the law as not only unjust, but in conflict with the U. S. constitution; being in fact a duty upon imports from other states. It was estimated that the tax, if collected, wonld amount to $274,122, at 60 cents on the $100, which the law called for 'a sum equal to the ordinary revenue of perhaps a majority of the states of the union.' It was contested in the courts, and pronounced right and constitutional by the sup. bench. The trades also remonstrated against being taxed upon their means of getting bread. S. F. Alta, Jan. 10, 1854. No change was effected in the law. Cal. Revenue and Taxation Scraps, 10-12.
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LEGISLATION.
of the three per cent bonds of 1850, and a surplus of nearly $40,000, after paying the half-yearly interest of the bonds of 1851, which could be applied to can- celling the principal still outstanding of $360,500 due in March 1855. To meet any deficit, calculations were made upon the income from the sale of the state's interest in the beach and water lots of San Francisco. Of the bonds issued under the act of 1852 there still remained $1,394,500, exclusive of the interest, which could be met only by appropriating the fund set apart for the redemption of the state prison bonds. ' The total liabilities of the state, notwithstanding the partial payment of the funded debt, was at the end of 1854 $3,394,928.84.
Again the legislature resorted to funding the comp- troller's warrants, drawn between June 1853 and July 1855, and authorized the issuance of $700,000 in bonds, in denominations of $100, $500, and $1,000, bearing interest at seven per cent, to run until 1870, the interest made payable annually, January. A tax of six cents on each $100 of all the taxable property in the state was levied to pay the interest on these bonds. By the end of this year the civil and war debt together amounted to $4,461,716.38, while the city and county indebtedness in the state footed up as much more. The same body passed an act providing for the sale of all swamp and overflowed lands at one dollar an acre, so eager were they to rid the state of its dower. They paid $10,000 to pages to add to their dignity, and neglected to appropriate a dollar for the surveyor-general's office, rendering it practically nugatory. The receipts into the state treasury down to June 30, 1855, amounted to $3,333,947.66; the expenditures by the government, not including ap- propriations for public buildings, but paid out chiefly in salaries, was $5,670,966.38. It is true that this had not been in cash, and that state scrip was never at par; nor was it possible it ever should be under the system pursued by the legislatures. Jobs and crookedness
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