USA > Indiana > A history of education in Indiana > Part 18
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By the Constitution of 1851 both these were regarded as contributing to the permanent funds in the interests of common schools, and were included in the enumeration in section 2. ¿ This disposition of both fines and forfeitures was reaffirmed by the school law of 1852. No official infor- mation is satisfactory touching the returns from these sources up to the inauguration of our present system.
Under the old seminary policy, aside from the tuition fees, fines constituted a large part of the resources. Indeed, a recent chronicler# of early incidents mentions a noted pugilist of Johnson County fifty years ago who boasted, so frequent were his combats, and so regular his fines, that "he carried one corner of the County Seminary." From what is known of the society of that day, there is every reason to believe that both the occasion for and the assessment of
* See Revised Statutes, 1843, p. 249.
+ Ibid., 1843, p. 1052.
# Section 2, Article VIII, Revised Statutes, 1852, p. 62.
# Sce Judge Banta in History of Johnson County, p. 359.
208
UNDER TIIE NEW CONSTITUTION, 1851-'91.
fines for disturbance of the peace were sufficiently numer- ous.
There seems to have been recognized the danger, how- ever, that these fines would be evaded or lost to the fund, for on the day of the passage of the free-school act another was approved " to regulate the remission of fines and forfeitures," requiring that " all applicants to the Governor for the remis- sion of fines and forfeitures should forward to him with their application the opinion of the propriety of doing so of a majority of the following officers in the county where the fines were assessed or forfeiture occurred, viz .: The Clerk of the Circuit Court, Auditor, Sheriff, County Treasurer, and such officers as shall from time to time have the care and custody of the Common School Fund within the county." A study of the records suggests that there was abundant need of this precaution.
Prof. Mills had, in his messages, inveighed against the waste of these moneys on their way to the school treasuries; and in 1861 Superintendent Fletcher very mildly, but plainly, suggested to the Governor great discretion in the exercise of his power, and "that those who have made fortunes by be- coming surety for scoundrels whom they have persuaded to run away will find that your Excellency is not engaged in the business of compounding felonies."
In 1868 the department reported additions to the common- school revenue of "about $2,000 per annum," through addi- tions to the fund from fines and forfeitures. Even these returns were small-out of all proportion to the means-lead- ing the Hon. Milton B. Hopkins to say: * "There is a wide- spread belief and a deep-felt conviction among school offi- cers and many others that the fines, forfeitures, and un- claimed witness fees that are parts of both fund and reve- nue are not faithfully reported by justices of the peace and clerks of courts to the county commissioners." Further, he
* Report of Superintendent of Public Instruction, 1872, p. 33.
ORIGIN AND HISTORY OF THE COMMON SCHOOL FUND. 209
continued, "the small amounts reported from this source from some counties would indicate either that the morals of the people are far in advance of the morals of other coun- ties, or justice is not so faithfully administered."
About the same time the Hon. Bayless W. Hanna, At- torney-General of the State, addressed a letter to the boards of commissioners in the several counties calling attention to the law concerning fines, forfeitures, and unclaimed fees, and suggesting that seventeen years (since the revised law of 1855) should have resulted in vast revenues, but adding that the actual results were astounding. In vigorous lan- guage he charges that "a vast sum of money either has not been taxed and collected according to law, or, if collected, has been appropriated to personal gain. Either is a viola- tion of law, and should be met with investigation and pun- ishment." He charged too, officially and upon information, " that divers justices of the peace in different counties have not paid in a dollar of fines collected during years of serv- ice, thus diverting moneys which belong to the Common School Fund, and that, too, in violation of a penal statute. · Such malfeasance, where so much is at stake, should be promptly corrected, to the fullest extent, in every county in the State."
A table was appended to the circular showing that thirty- one counties had not paid in to the State treasury anything from fees, and that the other sixty counties had reported but $7,826.55, an average annual yield from this source of $7.16 for each county of the State. What was true of unclaimed fees was equally true of fines and forfeitures. Remission of both or failure to report them was common. The table on the next page indicates the returns after 1867 of the latter. The former-" unclaimed fees"-being made a part of the school revenue, call for no treatment here.
It is impossible, because of imperfect records, errors in reports, and occasional diversion of the funds, to be accurate either as to averages or totals of fines and forfeitures. The aggregate addition from this source is about a million and a
210
UNDER THE NEW CONSTITUTION, 1851-'91.
Fines and Forfeitures-Annual Additions.
1868
$32,904 59
1880
$43,910 48
1869
35,755 57
1881
43,262 65
1870
34,103 10
1882
53,591 59
1971 :
29,996 49
1883
54,470 93
1872
39,306 51
1884
58,220 46
1873
43,171 61
1885
49,860 77
1874
64,091 71
1886
57,907 91
1875
46,339 05
1887
68,423 30
1876
56,056 30
1888
70,617 08
1877
38,143 73
1889
44,094 58
1878
47.663 97
1890
68,208 16
1879
38,841 46
$506,373 69
$602,567 91
506,373 69
$1,108,941 60
quarter of dollars, representing an average annual contribu- tion from each county of twelve thousand dollars, or an average annual increase of the permanent fund by about $50,000.
(5) MICHIGAN ROAD LAND FUND.
Of this fund it may be said, as of certain others already noted, it is chiefly interesting because of the opportunity, not for the outcome.
Article II of the treaty with the Pottawattamie Indians, October 16, 1826, ceded lands from Lake Michigan to the Wabash River one hundred feet wide for a road; and one section of land additional for each mile of the road, and an- other section for each mile of a road from this Wabash ter- minus through Indianapolis to the Ohio River. The year following the State was authorized to locate and make the road and dispose of the lands. The total cession amounted (as estimated) to over 170,000 acres. To this the State's title. was confirmed by act of Congress, March 2, 1831. Some years later an act of the State Legislature provided than any excess of lands or proceeds, after specified surveys, opening, and improvement of the road, should, through the State treasury, be held for the benefit of the common schools. Nothing, however, is known to have been realized from this
ORIGIN AND HISTORY OF THE COMMON SCHOOL FUND. 211
source, the moneys having been absorbed in the construction of the road.
10. Analysis of the School Fund.
The subjoined outline will serve to exhibit the relations of the several parts of the general fund for education. The table is rather true historically than in fact, No. 5 of the fixed funds and 3, 4, 5, 6, and 7 of the contingent funds be- ing practically non-productive.
Table showing Sources of School Funds.
Congressional Township Fund.
1. Saline Fund.
2. Surplus revenue.
Fixed.
3. Bank tax.
4. Sinking Fund balance.
5. Swamp Land Fund.
6. County Seminary Fund.
PERMANENT FUNDS.
Common School Fund.
1. Fines. L
2. Forfeitures. 3. Escheats.
Contingent.
4. Estrays.
5. Corporation taxes.
6. Michigan road sales.
7. Delinquent taxes.
Below is given a table to exhibit more graphically the composition of what is now known in legal phrase as the Common School Fund. As has been elsewhere mentioned, the presentation can only be approximately correct. What with loose book-keeping, occasional confusion of funds, a few losses, and more careless reports, some of the amounts can only be estimated. It is suggestive, however, of the com- posite nature of the fund and its growth.
Table showing Analysis of the Common School Fund.
1. The surplus revenue $573,502 96
2. The County Seminary proceeds. 103,235 03
3. The bank tax. 80,000 00
4. The saline lands proceeds 85,000 00
5. The Sinking Fund. 4,255,731 87
6. Fines and forfeitures 1,108,941 60
7. From all other sources 1,083,653 75
$7,290,065 21
212
UNDER THE NEW CONSTITUTION, 1851-'91.
CHAPTER XVI.
PERMANENT FUNDS.
1. Management of Permanent Funds.
IT will thus be seen that the Indiana School Fund has been gathered from very diverse sources, is unequally pro- ductive, and variously managed. The preceding chapters have aimed, primarily, to present the question historically, tracing the moneys from their origin as State investments, deposits, or proceeds, through their more important modifi- cations, and chiefly for the first period. Some of the funds, as that derived, or supposed to be, from the sale of swamp lands, and certain of the contingent funds, resting upon more recent legislation, have been followed down to the present. This seemed necessary, to make the view com- plete.
As has been seen, however, the new Constitution provided for the consolidation of all the endowments of elementary education into one "Common School Fund." In so far as this relates to the Congressional Township Fund, it had been repeatedly urged by Prof. Mills in his messages to the Legis- lature (1846-'50), and again in his letters to the convention. The experience of Michigan, admitted a State in 1835, almost twenty years after Indiana, but with a school system from 1837, emphasizes the unwisdom of the Indiana policy during that first generation of Statehood. It was advocated also in the convention by friends of a State-controlled system, and particularly by leading members of the Committee on Edu- cation. Hence the provision of the new Constitution.
Such policy, it was argued, would greatly simplify the management, the disbursement of revenues would be more economical, resources would be equalized for the State-the richer and the poorer localities sharing privileges and re- sponsibilities alike-and the standard of general intelligence uniformly elevated. The former management of the school funds had been a process of dissipation. By a stroke of cen-
213
PERMANENT FUNDS.
tralization it was meant to secure an authoritative control and avoid waste.
The sentiment was promptly incorporated into the general law enacted June, 1852, and appeared almost immediately in the action of at least a portion of the counties turning all of their school moneys into one fund, producing a common revenue. This meant, of course-could only mean-an equal sharing by all counties in the proceeds of the con- gressional grant of lands, the Federal deposit, the Saline and Swamp Land funds, the Bank Tax and Sinking funds, fines, forfeitures, and escheats, seminary properties, and taxes upon corporations. "The State tax," also, to be assessed for school purposes, "instead of being distributed in the counties in which it was collected, was paid into the common fund for distribution throughout the whole State."
The evident policy outlined by these constitutional and statutory provisions met with more or less opposition, and with other changes led to outspoken dissatisfaction. Prop- erty centers objected to paying a tax to assist in supporting schools in the poorer districts. Even the more dependent schools were willing to forego longer terms in order to have the management of their own funds. The privilege to ex- ercise local authority in school affairs was held dear by every class.
But even more serious were complaints against the diver- sion of the Congressional Township Fund, and the equaliza- tion of the proceeds by distribution, annually, to all the townships of the State. This fund, arising from the sale of the sixteenth section, varied greatly in amount in different townships, as has been seen, and it was claimed that "the Legislature had no right to divert it from the inhabitants of the particular townships to whom it had been supposed to belong and consolidate it with other funds for general dis- tribution."
Almost immediately the administration was obstructed by this class, including, as will be seen, representatives of the highest learning in the State, and unquestioned friends
15
214
UNDER THE NEW CONSTITUTION, 1851-'91.
of free, State-controlled education. Test cases were brought in a number of counties to restrain the payment of the in- terest on the Congressional Township Fund to others than citizens of the respective townships. Among these cases was one brought in the Franklin Circuit Court, and carried on appeal to the Supreme Court, entitled "The State of Indiana and others vs. Springfield Township, Franklin County (1854)." Counsel were provided by the State Board of Edu- cation to defend the law. The question at issue was the right of the State to divert the proceeds of the sixteenth section congressional grant from the township of its orig- inal location to any other or to a common State fund. The decision was rendered by Judge Stewart,* and held sub- stantially as follows:
"The sixteenth section in the several congressional townships in this State was granted by Congress to the in- habitants of such townships, respectively, for the use of schools therein, and not elsewhere; and the grant was ac- cepted by the State on the terms on which it was made.
"By the sale of the sixteenth section in the several con- gressional townships in the State, under the act of Congress of 1828, the proceeds became trust funds, to be applied to the use of schools in such townships, respectively, and not else- where .... A repeal by the Legislature of the act creat- ing congressional townshipst could not affect the validity of the grant by Congress of the sixteenth section in those townships to the inhabitants for the use of schools therein, nor give the State any better right than it otherwise would have had to divert the funds derived from the sale of such sections. The grant in question was a contract executed, and incapable of revocation by the Legislature. . .. The school law, so far as it diverts the proceeds of the sale of the sixteenth section in the several congressional townships from the use of the schools in such townships, respectively, to the use of the school system of the State at large, is in con-
* December 28, 1854.
+ Sce Township Organization, p. 145.
215
PERMANENT FUNDS.
travention of section 7 of Article VIII of the Constitution." * The section referred to is one of the educational provisions of the Constitution, requiring that " all trust funds held by the State shall remain inviolate, and be faithfully and exclusive- ly applied to the purposes for which the trust was created."
The opinion of Judge Stewart, quoted here in part only, elsewhere cites the significant fact that, while in Indiana the grant was vested in "the inhabitants of such township for the use of schools," similar donations to Illinois in 1818, and Missouri in 1820, were made to "the State for the use of the inhabitants for the use of schools." In Indiana and Illinois only, of the States of the Northwest, the fund is under local -i. e., township-control. In Ohio, Michigan, and Wisconsin the proceeds form a constituent part of the State common fund.
In consequence of the Supreme Court's decision the law was, touching this point, revised in 1855, the income of the township lands and funds being secured to the townships as before, leaving the Common School Fund to include moneys from all other sources. Indiana has, therefore, in legal phrase, two permanent funds.
2. Table showing Increase in Permanent Funds, 1853-1890.
YEAR.
Total fund.
YEAR.
Total fund.
1853.
$2,278,588 14
1877
$8,924,570 34
1854.
2,559,308 12
1878.
8,974,455 55
1856.
2,785,358 87
1879.
9,013,061 75
1853.
2,860,609 72
1880.
9,065,254 73
1860.
3,293,426 70
1881.
9,133,577 09
1862.
7,193,154 91
1882.
9,207,411 51
1864.
7,778,355 94
1883.
9,271,748 79
1866.
7,611,337 44
1884.
9,339,205 58
1868.
8,259,341 34
1885
9,458,085 71
1870.
8,575,047 49
1886.
9,518,887 83
1872.
8,437,593 47
1887.
9,617,250 49
1873.
8,590,239 00
1888.
9,654,552 05
1874.
8,711,319 60
1889.
9,765,598 25
1875.
8,799,191 64
1890.
9,784,170 56
1876.
8,870,872 43
* See 6 Indiana Report, 83. Also the Sixth Annual Report of the Superintendent of Public Instruction (1857), p. 8.
216
UNDER THE NEW CONSTITUTION, 1851-'91.
3. The Investment of School Funds.
Concerning the State's school funds, it only remains to summarize briefly, by way of enumeration, the kinds and character of their investment.
To do this now is a simple matter. Since the Legisla- ture of 1889 all school moneys are intrusted to the coun- ties.
The surplus revenue deposit, it will be remembered, was distributed immediately upon its receipt in 1837; the Bank Tax Fund also was apportioned among the counties in part as received, but finally, and in full, upon the closing of the bank (1857); the Saline Fund was deposited as the proceeds accrued, and the sums realized from the sale of the seminary properties under the act of 1852. Besides these, a considera- ble part of the Sinking Fund had been turned over to the counties prior to 1865; the remainder, for which bonds had been issued to the amout of $3,904,783.22, was held by the State. By the Legislature of 1889 it was proposed to refund these bonds, which were bearing six per cent, at a lower rate, pay them off, and complete the transfer of school moneys to the charge of the counties. The money realized from the sale of these bonds was ordered to be distributed to the sev- eral counties " in the ratio of the vote cast for Secretary of State in the general election of the year 1888."
By this act the entire sum of nearly four million dollars has been added to the county holdings of the school fund. This is not an addition to the original aggregate fund, but a simple transfer of its management from the State to the county.
The money is held and loaned upon the same conditions as apply to the other school funds held by the counties, and for the preservation of the principal, and for the payment of the annual interest upon which the holders are severally held liable. To the county also is intrusted the manage- ment of the Congressional Township Fund, now over two and a half million dollars. These moneys include the pro-
217
TWENTY YEARS UNDER THE NEW LAW.
ceeds both from sales and rents, the lands being managed by the trustees of the townships.
The principal of all school moneys, of whatever fund, received into the county treasury is loaned by the Auditor for not more than five years, in sums not exceeding one thousand dollars, on freehold security, whose value is double the loan, and bearing six per cent interest, payable annually in advance. The expense of managing the fund is met by appropriations from the general resources of the county, or is included in the regular salary of the official-never from the school moneys. And, furthermore, all deficits, whether of losses from the principal or uncollected interest, or un- loaned moneys, must be made up by the county-appropria- tions being made by the commissioners from the treasury.
CHAPTER XVII.
TWENTY YEARS UNDER THE NEW LAW.
IN the two decades of Indiana history just following the adoption of the second Constitution the State passed through a process of reorganization-for the most part a period of disorder and faction. The experience of the first years has already been recounted. Throughout the period legislation was tentative. The attitude of the Supreme Court was any- thing but assuring. Within three years (1854-'57) what seemed to its friends the most fundamental points in the law of 1852 had been declared unconstitutional by the highest judicial authority. Besides the consolidation of funds and the general tax for building, the appropriation of local taxes, whether township or city, for tuition purposes was forbidden, and the foundation of the system seemed destroyed. The system of 1857 was not greatly better than that of 1847; cer- tainly the obstructions to its administration made it not more effective. Even the township organization could not vitalize
218
UNDER THE NEW CONSTITUTION, 1851-'91.
the people's schools without funds. "The system was prac- tically crushed," said one recently, who had himself passed through the struggle-"a fine system, with officers, houses, appliances, etc., but with no money to pay the teachers. Schools in cities that were running nine months in the year dropped down to five, four, or three. Many of the best teachers left the State, others quit the profession, some going to farming or merchandise, others to book agencies, etc. In the words of the brilliant and scholarly Prof. Hinkle, while they found that 'it was unconstitutional to educate in In- diana, it was not unconstitutional to emigrate,' and so they went. This was the condition, and this condition gave In- diana, through a decade of years, a reputation that required another decade to wipe out." *
However disheartening was the experience, two facts were definitely established by these decisions: (1) The township, and the township only, had the authority and could furnish the means to build; and (2) the State, and the State only, might provide tuition. The prospect was not encouraging. The Legislature was not disposed to make or take needless risks with the Indiana judiciary, and the localities hesitated to invest money in houses that must stand idle for five sixths of the time. The Superintendent of Public Instruction had said, in the third report of the department, "if two months and a half of free schools are not a mockery of hopes, and a just cause of complaint, we can hardly conceive of an occa- sion for dissatisfaction," and intimated that the "state of things could not be endured much longer." Yet his succes- sor, three years afterward, reported the income from both the Common and the Congressional Township Funds to be suffi- cient for from two thirds to three fourths of a month only of. school, and the State taxes for about six weeks, or a total schooling in the year from all available public revenues of about forty-five days. For every "additional month of schooling in each district there would be required an addi-
* Prof. G. W. Hoss, in Indiana School Journal, June, 1885.
219
TWENTY YEARS UNDER THE NEW LAW.
tional State tax of seven cents on each one hundred dollars' worth of property." During the year 1859 the entire school revenue of every kind-State and local-distributed to the schools averaged but ninety-four cents per child-only $68 to each of the sixty-five hundred schools.
Nevertheless, people were hopeful. Within the first five years of the new law (1852-'57) there were built throughout the State more than 2,700 school-houses, at a cost of $1,100,- 000. The State had a productive fund of three million dol- lars, but, prohibited from using local funds and with meager revenues, with a meddlesome Legislature and a querulous judiciary, the course of education, when not turbulent, was obstructed. Schools were closed, houses begun were left un- finished, contracts were broken, teachers left the State or opened private schools, and the State had but an apology for a system.
Scarcely had the force of these unfavorable decisions been fully apprehended by the people when the administration was found to have brought itself to even greater embarrass- ment. The inadequacy of funds mentioned, coupled with the ambition to make the most of even the scanty privileges left to the people, led, in a large number of districts, between 1858 and 1860, to trustees anticipating their revenue-i. e., having in one year, and for the schools of that year, expended in advance the revenue that would accrue to their townships from the next year's distribution. Because of which misap- propriation of the State's moneys the Legislature enacted * that revenues derived from the Common School Fund, or from the State school tax, might not be anticipated, or used in advance of their apportionment. Immediately the State Superintendent, with the advice and legal counsel of the Attorney-General, directed that trustees who had so used the funds should employ the next apportionment to cancel the indebtedness. As a result, not less than one fourth of the districts of the State were without free schools during the
* March 11, 1861; see also 30 Ind. 178, 180; 75 Ind. 368.
220
UNDER THE NEW CONSTITUTION, 1851-'91.
year 1861. The schools were, however, maintained by sub- scription and donation of funds by local education societies and the co-operation of the churches. Two thousand dis_ tricts had for a year only such schools as private interest might temporize. There were schools, however, and fre- quently better taught and supported than the public schools.
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