USA > Indiana > A history of Indiana from its exploration to 1850 > Part 31
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HISTORY OF INDIANA
§ 69 CONSTRUCTION OF CANALS AND ROADS
PURSUANT to the act, Governor Noble appointed Samuel Hall, of Gibson; Thomas H. Blake, of Vigo; David H. Max- well, of Monroe; John G. Clendennin, of Orange; John Woodburn, of Jefferson ; and Eliza Long, of Wayne county, as the six new members of the board of internal improve- ments. The board met at Indianapolis March 7, 1836, with all present but Judge Hall. Maxwell was chosen chairman unanimously. The board appointed Jesse L. Williams en- gineer, and requested the fund commissioners to place a loan of $2,000,000. After deciding what sections should be put under contract, the work was distributed so that each member had the work nearest his home under his supervision.29
The meeting was anything but harmonious. The scram- ble for the lion's share of the money began as soon as the first meeting was called to order. Each commissioner seemed to be interested alone in getting his work completed as soon as possible. An engineer in chief for canals and an engineer in chief for railroads were hired in addition to a resident engineer, and full corps of surveyors for each line.30 The total number of these latter, many of whose positions were sinecures, was about seventy-five, at an av- erage annual expense to the State of $54,000. This body of workmen was popularly known as the "Eating Brigade."31
After deciding on the general policy of putting only those lines under contract that would soonest yield a reve- nue, the board ordered work to be commenced as follows : Whitewater, from Lawrenceburg to Brookville, the home of Mr. Long; twenty-two miles of Madison railroad, out of
29 Annual Report, Documentary Journal, 1836.
30 They appointed as resident engineers: Chief, Jesse L. Williams; for roads, Henry M. Pettit; eastern end of Wabash and Erie, Stearns Fisher; central part of Wabash and Erie, L. B. Wilson; western part, Anderson Davis; Whitewater. Simpson Torbert; Indianapolis line, T. A. Morris; Evansville line, C. G. Voorhies; Cross Cut, W. I. Ball ; Fall Creek and Erie and Michigan, Solomon Holman; Jeffersonville and Crawfordsville, R. H. Fauntleroy; Madison railroad, E. M. Beckwith; New Albany, Vincennes line, John Fraser.
31 John Dumont, in Recollections of Early Settlements of Carroll County, 152.
SYSTEMATIC INTERNAL IMPROVEMENTS 367
Madison; the Wabash and Erie, west to Lafayette; the Cross-Cut Canal, from Terre Haute to Eel river; the Cen- tral Canal, along Pigeon creek to Evansville; bridges and grading on Vincennes-New Albany turnpike; Central Canal from the feeder above Indianapolis to Port Royal Bluffs; and twenty miles of the Jeffersonville and Craw- fordsville road. This policy had nothing to back it but the selfish greed of the members of the board.
Work had scarcely begun before a hampering criticism of everything connected with improvements was com- menced by the people and the legislature.32
A powerful party in the legislature insisted on "classi- fication"-building a single line at a time-but no two sec- tions could unite on what line to build first. The first an- nual report of the board prophesied plainly the final fail- ure of the system. After reciting that "The system sprung from the reciprocal confidence, harmonious understanding and cooperation of the different sections," the board re- ported that scarcity of labor had prevented them from plac- ing many contracts. The contractors in different sections were bidding against each other for laborers and attempt- ing to lure away by extra inducements the better hands.53 The people, once the digging was begun, and they saw the many weary years necessary to complete the work, soon awoke from the trance of the canal orator. The land policy of the State and nation, by allowing any one to buy land for a trifle on seventeen years' credit, drew the more enter- prising men away from labor on the works. Above all, the character of the improvements to be made on several lines was still unsettled. Should they build a pike or a railroad on the Madison line? If a railroad, a single or a double track? Should the New Albany-Greencastle line be a pike, railroad or macadam? A special surveyor was or- dered, who spent one year on the latter line, and still there was uncertainty. The same question hung over the Vin- cennes-New Albany line. A large party was at work in the woods and swamps of the northern part of the State
32 Western Sun, January 2, 1836.
33 Documentary Journal, 1837.
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trying to settle the question of canal or railroad from Fort Wayne to Lake Michigan. The same question was yet to be solved on the connecting line from Richmond to Muncie.34
Illinois and Michigan were engaged in similar systems and drawing heavily on the labor supply, as well as flood- ing eastern markets with bonds. The "System" orators had not only promised there would be no higher taxation, but that soon there would no need of a State levy at all, as tolls would pay all. Consequently the General Assembly made no provision for interest. During the first year ex- penses mounted up to millions ($3,827,000), and the inter- est had to be paid from loans. 35 But Governor Wallace as- sured everybody that the outlook was glorious, plenty of money among the people, although eastern banks were fail- ing. During the year 1837 over $1,500,000 was expended, not including $34,000 for surveyors, or $70,000 for officers' expenses. Ten separate routes had been surveyed and ninety-eight surveyors were continually in the woods. During the year 1838, $1,693,000 was spent for digging, with usual incidentals, not including $170,000 for interest, which put the total near $2,000,000.36 On January 24, 1839; Caleb Smith, the fund commissioner, reported that he had expended $5,000,000.
Governor Wallace, in his message of December 4, 1838, draws a distressing picture. The interest then due was $193,350, the revenue of the State was $45,000 from taxation, from total taxable property of $146,850,000. "If this condition," said the governor, "does not startle us, it should at least awaken us." The governor assured the General Assembly, though, that if it would borrow money and invest in bank stock, the State would realize enough to pay out.
The opponents of the improvement system gradually got the attention of the State. The question of reorganiza- tion and classification was raised in 1838, but without re- sult. The next General Assembly abolished the whole
34 Engineers' Report, Documentary Journal, 1837 (not paged)
35 Report of Board, Documentary Journal, 1837.
36 Documentary Journal, 1838, No. 22.
SYSTEMATIC INTERNAL IMPROVEMENTS 369
organization and placed the financial affairs in the hands of two men, each under $100,000 bond.37 The internal im- provement board was reduced to three members, with or- ders to classify works and build one at a time. But the act came too late. The State was a bankrupt beyond the power of any remedial law.
The system finally broke down in August, 1839, when the board ordered all work to cease. The State at this time seemed to recover consciousness, and began to take stock of its condition.
The work on the Whitewater Canal had commenced first. A big celebration at Brookville September 13, 1836, at which David Wallace, Governor Noble and Ex-Governor Ray were the orators, ushered in the undertaking.38 The work was always pushed more than any other, on account of the great bulk of the population of the State being in that valley. Nine hundred and seventy-five men were employed, and the manager was sure the same force would finish the work in two seasons. December 20, 1838, Superintendent Long reported the canal well-nigh complete to Brookville.39 This line was practically finished when the failure of the State required a cessation of work, notice of which was given by Noah Noble, president of the board, August 18, 1839.40 In June of this same year, boats had been run as far up as Brookville.
It will be noticed that the original appropriation for the 116 miles was $1,400,000, the original estimate $1,700,- 000, and the final estimates over $2,000,000. During its first six months of operation $670 in tolls was collected. During this same period the gross receipts on the Wabash and Erie were $4,284-enough to pay interest on about $70,000, and not nearly enough for repair expenses.
Pursuant to the law of 1834, J. L. Williams surveyed the route for the Central Canal in the summer of 1835. The plans called for a cut forty feet wide at the surface of the
37 Laws of Indiana, 1838, ch. 16.
38 History of Dearborn and Ohio Counties, index.
39 Senate Journal, 1838, 256.
40 Senate Journal, 1839, 144.
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water, twenty-six feet at the bottom, and four feet deep. Six different locations were made. The surveys show the hesitancy and lack of knowledge that hindered all the works. During all the summer of 1836 surveying contin- ued along the line. The Indianapolis division was laid off from the dam at Broad Ripple to Port Royal Bluff, twenty .. four miles. Also the southern division along Pigeon creek in Vanderburg county, and the Cross Cut at Eel river from Terre Haute to Point Commerce, were laid down.
During 1836-37, forty-five miles were put under con- tract at $611,336. Seven hundred and fifty men were at work on the Indianapolis division. When work was sus- pended by the State, eight miles of the section from In- dianapolis to Muncie were finished, sixteen miles immedi- ately south of the capital, and nineteen miles on Pigeon creek. These sections, together with the Cross Cut, no part of which was ready to have water turned in, had cost the State $1,820,026. A humorous predicament of the Pigeon Creek section was that, when it was finished, Pigeon creek, which was supposed to feed it, was dry.41
By the close of 1841 the State had expended $156,323 on the line from Fort Wayne to Lake Michigan, for which they had nothing to show but a wagon load of surveyors' field notes.
The Vincennes-New Albany route was surveyed during the summer of 1834 by Collins & Watt.+ The length was 105 miles and the grading was estimated at $4,300 per mile; ballasting, $10,878; total cost of line, $1,590,747. Work commenced promptly and $654,411 was expended. The road was built as far west as Paoli, forty-one miles, and twenty-seven miles more were graded. This work proved of considerable local benefit, and under such super- intendents as John Frazier, 1844-47, Michael Riley, 1848, and Joel Vandeveer, 1850, enough tolls were collected to
41 Senate Journal, 1841, 13. See Documentary Journal, 1835, No. 8, Report of Engineer.
42 Documentary Journal, 1835, or Senate Journal, 1835, 213. The surveyors had just graduated that year from Indiana College.
SYSTEMATIC INTERNAL IMPROVEMENTS 371
keep it in tolerable condition. 43 It never paid a dollar of revenue to the State.
Among the routes ordered surveyed by the Assembly of 1834 was the New Albany-Crawfordsville route, and there- after the State confined its efforts in this section to this line-from New Albany, via Salem, Bedford, Bloomington and Greencastle, to Crawfordsville. Howard Stansbury was in charge of the preliminary survey.44 The actual work was done by Edward Watts, John P. Paul and Fitz- hugh Coyle. The line was 158 miles long and the total cost of "graduation" estimated at $628,581. This meant only an ordinary dirt road. During the summer of 1836, Surveyor Fontleroy was hired to survey the road with a view to building a railroad, which Commissioner Maxwell favored. The report was favorable, but the improvement board was not satisfied and ordered Jesse Williams, aided by expert railroad engineers, Forrer from Ohio and Welch from Kentucky, to resurvey.
These men reported that a macadam road would cost about $2,000,000, and a railroad about $7,000,000.45 The controversy was finally ended by an act of the General Assembly, January 25, 1838, which directed the board to build a macadam road.46 Work was not pushed on this line as on the others. Superintendent Maxwell seems to have had no faith in it. When work was suspended he had expended only $372,733 and had partly graded the sections from Salem south and from Greencastle north. Most of the money went to surveyors. Four different squads had spent as many seasons on it, and had agreed on nothing. The evidence seems to indicate that hunting and fishing were more congenial than surveying. Of all improvements of the State this line was conducted with least hopes of success.
As has been stated above, there was a great rush for railroad charters during the years 1831-'32-'33. The be-
43 Reports are found in Indiana Pamphlets, vol. 2, Nos. 4 to 14, inclusive.
44 Documentary Journal, 1835, No. 11, or Senate Journals, 1835. 115. 45 Documentary Journal, 1837, No. 19.
46 Revised Statutes, 1838, 354.
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lief was general that the problem of travel and transpor- tation had been solved. Long lines such as the Buffalo and Mississippi and the Charleston, Cincinnati and Chi- cago were projected. The plans were discussed in inter- state railroad conventions. At this time a charter was obtained for the road from Madison to Lafayette. During the years 1834-'35-'36 there was a reversal in public opin- ion, and a railroad came to be regarded as practicable only when a canal or pike was impossible.
During the summer of 1835 Mr. Gooding surveyed for the State a line for a canal from Indianapolis to Jefferson- ville.47 One object of this canal was to furnish a way around the Falls, since it was to have two outlets-one above and one below. There were many obstacles to the construction, but Mr. Gooding finally found a feasible route and estimated the cost at $3,580,000. The cost staggered even that credulous General Assembly and they gave up this line with the consolation, however, that it would soon be built.
In the meantime, Edwin Schenck had finished a survey for the Madison railroad. On this road he estimated that a four and one-half ton locomotive could draw thirty-six tons six miles per hour ; or one horse, three and one-half tons, five miles. It was not decided what motor power would be used. Covered wooden bridges were called for in the plans. Flat rails from Liverpool were estimated at $49 per ton, edge rails at $59. The bluff at Madison was to be climbed on an incline by means of a windlass. The length of the road was 144 miles, and the first estimates of cost were $1,666,797.
Mr. Williams, chief engineer for the State, during the seasons of 1836-'37 kept a squad of surveyors on the line from Madison to Lafayette, and on January 30, 1838, after the State had spent $445,000, advised the legislature to abandon the railroad and build a pike.48 When work was stopped on the road, twenty-eight and one-half miles were completed at a cost of $1,493,013. The northern end had
47 Senate Journal, 1835, 189. also Documentary Journal, 1835, No. 12. 48 Documentary Journal, 1837, No. 21.
SYSTEMATIC INTERNAL IMPROVEMENTS 373
been converted into a pike, and the section from Crawfords- ville to Lafayette was graded.
Under the law of 1831 a board of three fund commis- sioners was appointed, whose duty was to borrow money to build the Wabash and Erie Canal.49 This board continued under the law of 1836. The business of the board was very poorly managed from the start and finally bankrupted the State. During the summer of 1832, $100,000 worth of State bonds were delivered to J. D. Beers & Company, Merchants' Bank of New York, on an unfair bid.5º One- half of these were sold on credit, thus twice violating the law. This is only an example of how all the loans were placed. No books were kept, although the board kept an office in New York. The annual reports of the board of fund commissioners are not complete or consistent, and little reliance can be placed on them. The State gov- ernment paid little attention to the board until money be- gan to fail. It seems that bonds were signed and delivered to the several members of the board to sell as best each could.
When work was stopped on the State's improvements in August, 1839, the people at first refused to believe that the State had failed. The business of the State had come to depend so heavily on the money furnished by the fund commissioners that it was paralyzed.51 Hundreds of con- tractors had put all their money into the work and now found themselves unable to pay the laborers whose living depended on their daily wages. The fund commissioners reported that money would soon be plentiful, but once the work was stopped the people soon came to recognize their condition.52 It was useless to propose any plan for com- pleting the system. When it was learned that State bonds to exceed $3,000,000 had been delivered, for which the State received nothing, and that the fund commissioners were charged with making immense sums of money by
49 Laws of Indiana, 1831, ch. 1, sec. 3.
50 Documentary Journal. 1835, No. 10.
51 Indianapolis JJournal, March 12, 1840.
52 Western Sun, August 31. 1839.
(25)
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dealing in State securities, the people began to demand an investigation.
The election of 1839 was over before the panic struck the State, and the General Assembly stood as undecided under the conditions as did the people. But, taking up the murmur of the people, the General Assembly, one of very limited ability, and well suited to the clique then rob- bing the State, attempted an inquest on the defunct sys- tem.53 The House called for no less than seventeen formal reports and was completely bewildered by them. Eighteen reports were made to the Senate by the internal improve- ment officials. The members, through a long session of eighty-five days, discussed petty politics while the stealing- continued under their eyes. The patience of the outraged people was exhausted. Before this deadlock Assembly had adjourned both parties were fencing for position for the contest of 1840. This was the most desperately contested political campaign ever waged in Indiana. Both parties were well supplied with good speakers. For near six weeks these men went up and down the State.
Meanwhile the financial outlook of the State grew darker.54 Rothschields were demanding interest on their bonds, and contractors with claims, for work done, of over $1,000,000 were petitioning for relief. There was a strong party demanding that State scrip be issued to complete the system.55 The General Assembly finally passed an act, January 13, 1840, for their relief, which provided for an issue of $1,200,000 in treasury notes to pay contractors. Ex-Governor Noble had been placed on the reorganized board of improvements and was vainly trying to disen- tangle its business. The State debt was reported by the State Treasurer, Mr. Palmer, as over $13,000,000.56
During the summer of 1839 a plausible plan was hit
53 Western Sun, January 28 and April 1, 1843. A letter from Dr. Coe, in Indianapolis Journal, January 28, 1842. Letters from foreign creditors in the Indianapolis Sentinel, June 17, 1842.
54 Western Sun, November 23, 1839.
55 Indianapolis Journal, December 11, 1839.
56 Documentary Journal, 1839, pt. I, Nos. 1 and 8.
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upon by the Whigs for relieving the State.57 This consisted in having the national government assume the State debts, at least to the extent of the sales of land made in the State. This plan was proposed in Congress and supported by Sen- ator O. H. Smith, but it was killed by an adverse report of Felix Grundy.58 The same plan was advocated by Gover- nor Bigger in his inaugural address in 1840, in which he still clung to the hope that the State might, some way, com- plete its system.
The legislative session of 1840-'41 was spent consid- ering plans of classification. From the outset there had been a strong party insisting on building one line at a time. Necessity had now brought the majority to that opinion. The majority of the people were still in hopes that the State could finish the works; and in this faith the classification bill of February 12, 1841, was framed. It divided all the lines into two classes, of which the White- water Canal and the Madison and Indianapolis railroad formed the first, and were to be completed at once. Noth- ing was done under this act, and a year later, the State, in a long, disjointed act of its legislature, finally brought to an end this nightmare of State canals.59 The act pro- vided a superintendent for each line, who might make a contract, if possible, with private companies to complete the work. To any such company, the Governor, Treasurer, and Auditor of State, were empowered to transfer the property of the State.
The Whitewater Canal was turned over in 1842 to a company organized to complete it.60 It was finished to Brookville in 1843, to Connersville in 1845, and to Cam- bridge City in 1846. The valley was too steep, and it was found impossible to hold the canal. A flood in 1847 did $100,000 damage, and the repairs for a single flood in the
57 Indianapolis Journal, August 11, 1840.
58 See speech of Grundy, Congressional Globe, 1839-40, Appendix, 223 and 110.
59 Laws of Indiana, 1841, ch. 1.
60 History of Dearborn and Ohio Counties.
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next year cost $80,000. The Whitewater Valley railroad paralleled it in 1865 and forever put it out of business.
The Madison railroad was leased in 1840 to Branham & Company for one year, the State to get sixty per cent of the gross earnings. 61 An independent company took con- trol in 1843. There followed an era of great prosperity for it. Its total receipts in 1850 were $687,619, but poor management and manipulation for control, together with the construction of the Indianapolis and Jeffersonville Railroad, ruined it.62 Although the State had expended near $2,000,000, it agreed to accept $200,000, to be paid in four years. As no part of this had been paid in 1855, a committee of the General Assembly was appointed to in- vestigate. It reported in favor of compromising for not less than $75,000, to be paid in State five per cent stocks, then worth about thirty cents on the dollar.
The State sold the Central Canal in 1859 to Shoup, Raridan & Newman for $2,425.63 This company claimed valuable lands lying near the canal in Indianapolis, and there followed long and expensive litigation.64 The com- pany later sold out to the Indianapolis Water Company.
In addition to this the act of 1841 provided for a State agent to take charge of the State property in litigation in the East. The first of these agents was Michael G. Bright, of Madison. The claims due the State on "hypothecated" bonds (sold on credit or given as security) aggregated $3,000,000.65 Although the State agent worked on these claims many years he realized little more than enough to pay his expenses. His report shows that bonds had been issued to the amount of $15,000,000.66 From these the State had realized $8,593,000 in cash, while $4,000,000 was represented by worthless securities. There remained a
61 Ohio Falls Cities, vol. II, p. 460.
62 Documentary Journal, 1856, pt. I, No. 5, 1853
63 Laws of Indiana, 1859, ch. 110.
64 Fifty-third Indiana Reports, p. 575.
65 Governor's Message, Documentary Journal, 1841, No. 7.
66 Documentary Journal, 1842, pt. I, No. 2.
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balance of over $2,000,000 embezzled by various state offi- cers and agents.67
67 Committee report by J. C. Eggleston, Senate Journal, 1841, 29, or Documentary Journal, 1841, pt. I, No. 6. See also House Journal, 1841, 33, and Documentary Journal, 1841, 15, for report of House Committee, composed of Edward A. Hannegan, John D. Defrees, William J. Brown, Joseph Ritchey, John S. Davis, Ethan A. Brown, Joseph G. Marshall, and John S. Simonson. They recommended that suit be filed against Stapp and Coe at once for malversation.
See also Documentary Journal, 1842, 1; Stapp's Report, Documentary Journal, 1841; Noble's Report in the same; also Report of Internal Im- provement Board, Documentary Journal, 1837, No. 12, for an instance of the board's method of doing business. The State Agent's first re- port to the Governor, December, 1842, is sufficient commentary on the dealings of the fund commissioners: The Cohen Brothers failing, owed the State $312,000. In payment of this, they gave the Fund Commis- sioners their personal notes for $65,000; cash, $14,715; bonds for Win- chester and Pontiac Railroad for $46,644; 751 shares of stock in the Baltimore and Ohio Railroad for $26,000; 1,000 shares in American Life and Trust Company : 500 shares in the General Insurance Com- pany, and 230 shares in the Canton Company, all for $50,000; a sec- ond mortgage on 52 lots in the city of Brooklyn, with a sperm and candle factory, at $65,000; second mortgage on 565 lots in the second ward of New York City and 14 acres of land in Poughkeepsie for $60,- 000; an interest in some mining stock for $1,000. It is unnecessary to say this was all worthless property.
INDIANA'S BONDED DEBT IN 1841
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