History of the Indiana democracy, 1816-1916, Part 6

Author: Stoll, John B., 1843-1926
Publication date: 1917
Publisher: Indianapolis : Indiana Democratic Pub. Co.
Number of Pages: 1104

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HISTORY INDIANA DEMOCRACY-1816-1916

ever, that under such circumstances Wal- ler Taylor could twice have been chosen to the exalted office of United States Senator.

GOVERNOR JAMES BROWN RAY.

As a result of the resignation of Lieu- tenant-Governor Ratliff Boon, January 30, 1824, James Brown Ray, a Senator from Franklin county, was chosen president pro tempore of the Indiana State Senate. He presided over that body to the close of the session, and was again chosen to that posi- tion at the beginning of the next session in January, 1825. Upon Governor. Hen- dricks' election to the U. S. Senate Mr. Ray became acting Governor. He was then an exceedingly popular young man. The following year he became a candidate for Governor and was, as already stated, triumphantly elected by a majority of 2,622 votes over the distinguished jurist, Isaac Blackford. Ray's administration must have given measurable satisfaction, for at the next election, in 1828-presi- dential year, when Andrew Jackson was triumphantly elected to the Presidency of the United States-Governor Ray was re- elected. He had two competitors-Dr. Israel T. Canby and Harbin H. Moore. Governor Ray received 15,141 votes; Dr. Canby, 12,315, and Mr. Moore, 10,904. He held the office until 1831, when he was suc- ceeded by Noah Noble.

The race for the Lieutenant-Governor- ship was a remarkably close one, as ap- pears from these figures :

Milton Stapp .17,895

Abel C. Pepper 17,262

The total vote for Governor exceeded this by 3,000, the three candidates being credited with 38,360.

Governor Ray became involved in a somewhat acrimonious controversy over the appointment of supreme judges. It appears that he had aspirations to go to the U. S. Senate and that two of the judges assumed to be justly entitled to reappoint-

ment were denied such recognition by the Governor on account of their refusal to aid him in his senatorial aspirations.

This greatly impaired his popularity. Prior thereto he had rendered himself un- popular by accepting an appointment as commissioner to negotiate a treaty with the Miami and Pottawatamie Indians. The constitution expressly forbade a State offi- cer holding a federal appointment of trust and profit. To get around this he request- ed that no formal commission be issued to him and that he be simply authorized by letter to serve on the aforesaid commission in conjunction with Generals Lewis Cass and John Tipton. This extraordinary procedure was sharply criticised by the Legislature. Formal action was taken, but the matter was permitted to drag along for a time. A final decision was evaded and Governor Ray was permitted to resume the functions of that office. It was a "close shave," this escape from a formal declaration that the office of Gov- ernor had been vacated by the acceptance of an appointment to effect a settlement with the Indians.

In view of the fact that Governor Ray instigated the gigantic internal improve- ment movement that subsequently proved so disastrous to the State, the subjoined characterization of the man by William Wesley Woollen will be adjudged as being of more than passing interest:

"In Governor Ray's messages to the Legislature he argued forcibly and elo- quently the great advantage that must accrue to Indiana by the construction and operation of railroads, and predicted much which, although at the time seemed chimerical, has really come to pass. Many considered him insane and his utterances those of a madman, but time has demon- strated that in the main he was correct. He saw more plainly than any other man of his day the future of the State in which he lived. After he left office he contin- ued to dilate upon his favorite subject, and to predict a great future for Indianapolis.

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HISTORY INDIANA DEMOCRACY-1816-1916

A writer, who seems to think the Governor was somewhat off his mental balance, thus speaks of him in a late article in an In- dianapolis paper :

During a long period of mental disturbance in his old age, Governor Ray was fond of discussing his "grand scheme" of railroad concentration at Indianapolis. Here was to be the head of a score of radiating lines. At intervals of five miles were to be villages, of ten miles towns, and of twenty miles respectable cities. This crazy whim, as everybody regarded it, has been made a fact as solid as the everlasting hills. The only point of failure is the feature that possessed special in- terest to the Governor. The Union Depot and point of concentration of the radiating lines are not on his property, opposite the court house, where, by all the requirements of symmetry and consistency, they should have been. Oddly enough, one expedient in construction, which certainly looked silly, has been actually put in use success- fully in some one or another of our far Western lines. Where deep gorges were to be crossed, he thought that trestle-work might be replaced by cutting off the tops of growing trees level with the track and laying sills on these for the rails. It is not many months since the papers published a description of exactly that sort of expedients in crossing a deep and heavily timbered hollow on a Western railway-the Denver & Rio Grande prob- ably. So thoroughly has the great "hub" scheme and its connections and incidents been identified with Governor Ray and his hallucinations, that there are few who know anything of the matter at all who will not be surprised to learn that the origination of it is at least as likely to be the work of Governor Noble's deliberate reasoning as of Governor Ray's fantasies. In his annual mes- sage of 1833-4 he discusses the importance of the internal improvement system, then projected and widely debated, but not adopted by the State, and only partially pursued by the help of canal land grants by Congress, and he argues for the con- centration of artificial facilities for transporta- tion here. In other words, without saying it, he wants Indianapolis to be exactly the "hub" that Governor Ray predicted it would be. Whether the national Governor in office got his notions from the fancies of the deranged ex-Governor, or the latter only expanded in his fantastic projects the official suggestion of the other, we shall never know. But the probability is that the sane Gov- ernor profited by the hints he saw in the wild talk of the insane Governor. For Governor Noble was not a strikingly original genius, and Gov- ernor Ray, as eccentric and egotistical as he was, had more than an average allowance of brains.

"After Governor Ray ceased to be Gov- ernor he resumed the practice of law, but he did not succeed in getting much legal business. He seemed to have 'run down at the heel,' and, although he was in the

prime of life, the public appeared to think him superannuated, as having passed his day of usefulness. In 1835 he became a candidate for clerk of Marion county against Robert B. Duncan, Esq., and, for a time, seemed bent on making a lively can- vass. But, before the election came off, he had virtually abandoned the contest. Although he did not formally withdraw, he had no tickets printed, and when the ballots were counted it was found that few of them had been cast for him. In 1837 he ran for Congress, in the Indian- apolis district, against William Herrod, and was defeated, receiving but 5,888 votes to his competitor's 9,635. This want of appreciation by the public soured him, and made him more eccentric than ever.

"In the summer of 1848 Governor Ray made a trip to Wisconsin and returned home by way of the Ohio river. While on the river he became unwell and, on reach- ing Cincinnati, was taken to the house of a relative. The disease proved to be cholera, and terminated in his death Au- gust 4, 1848. He was buried in Spring Grove Cemetery, near Cincinnati, outside the State he had helped to found.

"In his latter days Governor Ray was so eccentric that most people thought his mind diseased. He always walked with a cane, and sometimes he would stop on the street and, with his cane, write words in the air. It is no wonder that those who saw him do this believed him insane. A short time before he died he advertised, in an Indianapolis paper, a farm and a tavern stand for sale, and for a proposi- tion to build a railroad from Charleston, S. C., through Indianapolis to the north- ern lakes, all in one advertisement.

"In person, Governor Ray, in his young- er days, was very prepossessing. He was tall and straight, with a body well-propor- tioned. He wore his hair long and tied in a queue. His forehead was broad and high, and his features denoted intelligence of a high order. For many years he was a leading man of Indiana, and no full his- tory of the State can be written without frequent mention of his name."

By birth he was a Kentuckian.

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[CHAPTER IV.]

INTERNAL IMPROVEMENT BUBBLE

UNDER WHIG RULE THE SLOW BUT SURE POLICY WAS DIS- CARDED AND A GIGANTIC SCHEME OF CANAL BUILDING DEVELOPED-DISASTER THE INEVITABLE CONSEQUENCE

N OAH NOBLE, the fourth elected Governor of Indiana, was a na- tive of Virginia, grew to man- hood in Kentucky, and located at Brookville about the time In- diana was admitted into the union. In 1820 he was elected sheriff of Franklin county and re-elected in 1822. Two years later he was chosen a member of the Legislature virtually without opposition, only twenty votes hav- ing been cast against him. In order to guard against his running for county clerk the friends of the incumbent of that office suggested that Noble be groomed for Governor. The suggestion met with high favor, and in due course of time he was put in training. He easily secured the nomination by the Whig party, and al- though Jackson Democracy was largely in the ascendancy in the State at that time, Mr. Noble was elected by a plurality of 2,791 over James G. Read, Democrat, and this in face of the fact that another Whig, Milton Stapp by name, was also a candi- date for that office and polled 4,422 votes.

The total vote for Governor cast at the election of 1831 reached 37,549, divided as follows :

FOR GOVERNOR.

Noah Noble, Whig. 17,959 James G. Read, Democrat. 15,168

Milton Stapp, Whig. 4,422

FOR LIEUTENANT-GOVERNOR.

David Wallace, Whig. 17,101

Ross Smiley, Democrat. 12,858

James Gregory 5,346

Three years later, in 1834, Governor Noble successfully aspired to a re-election.

He polled 27,676 votes, his Democratic an- tagonist, James G. Read, receiving 19,994.

For Lieutenant-Governor David Wal- lace, Whig, polled 29,415 votes, and David V. Culley, Democrat, 14,260.

Shortly after his retirement from the Governorship the Legislature elected him as a member of the Board of Public Im- provements. In 1841 he was chosen to fill another highly important position, that of Fund Commissioner. He was held in high esteem throughout his career. Born Jan- uary 15, 1794, he died in the very prime of life, February 8, 1844, near Indiana- polis.

What happened during Governor No- ble's two administrations is thus compre- hensively set forth in "A Century of In- diana," by Edward E. Moore:

"Vast System of Internal Improve- ments .- Governor Noble was an advocate of extensive public improvements, having been elected on a platform declaration to that effect. He early began the construc- tion of the Wabash and Erie Canal, for the promotion of which Congress had giv- en, in 1827, a large and valuable grant of land. This canal was to connect Lake Erie with the Wabash river, at a point be- low which the river would be navigable; and in 1836 a general system of internal improvements having been agreed upon, consisting of canals, railroads and turn- pikes, covering almost the entire State, bonds were issued and sold and contracts let. Then ensued an era of great prosper- ity. There was employment for every- body at profitable wages, money was plentiful and easy to get and a spirit of daring speculation and of general extrava- gance seized upon many of the people and helped to embitter the unfortunate experi-

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HISTORY INDIANA DEMOCRACY-1816-1916

ences so soon to follow. The future, with these great improvements completed, was pictured in exceedingly bright colors. It was thought by some that the revenues to be derived from the railroads and canals would not only pay for their construction, but would build up such a surplus in the treasury of the State as to relieve the peo- ple of all burdens of taxation.

"The improvements undertaken con- sisted of 1,289 miles of roads, railroads and canals at an estimated cost of $19,- 914,424. Bonds for many millions were issued and sold and the State's indebted- ness by 1841 had been pushed up to the appalling aggregate of $18,469,146. The total of roads and canals completed up to that time amounted to only 281 miles.

"The State Embarrassed .- Works Aban- doned and Compromise Made With Cred- itors-The First Railroad .- It very soon became apparent that the State had over- estimated its financial resources, and be- fore a halt could be called had involved itself beyond its ability to pay. And. to make matters worse, the pall of the great panic of 1837 descended upon the whole country, at the very time of the State's greatest embarrassment. All the works had to be abandoned, bringing bankruptcy to contractors and distress to thousands of citizens. Construction ceased entirely in 1839.

"The State found itself unable to pay even the interest on its indebtedness, much less to proceed further with the im- provements. It finally entered into com- promise agreements with its creditors, re- lieving itself of a part of the debt and re- ducing interest charges. The creditors were permitted to take over the unfinished improvements in part satisfaction of their claims, the balance being paid in new bonds, or treasury notes. As a rule, the improvements were not completed by the new owners, and the State's vast expendi- tures were practically for naught. Then the securities in the nature of bonds, and certificates of stock, to possession of which the State was entitled under the compro- mise settlements, were not all surren- dered, and afterwards attempts were made to exact payment of them. Claims were also preferred on the grounds that the State had rendered the canal prop- erties valueless by granting franchises to competing railroads. Finally, in 1873,

after years of agitation and bitterness, an amendment to the constitution was adopted prohibiting the Legislature for all time from paying any of these compro- mised debts, particularly that of the Wa- bash and Erie Canal.

"Of all the vast projects undertaken by the State, the Madison and Indianapolis Railroad alone was fully completed, its completion being accomplished by the as- signee company to which the State surren- dered it. It was the first railroad built to Indianapolis, its entrance into that city signalizing the year 1847. The Wabash and Erie Canal was completed as far as Lafayette, and was extensively patronized by the people having surplus products to transport, but the receipts from tolls were not sufficient to maintain it, much less produce dividends to apply on cost of con- struction. The White Water Canal was completed from Lawrenceburg, on the Ohio river, to Connersville, and its facil- ities for transportation purposes availed of by the people for many years.

"State's Undertaking not Wholly Unad- vised .- It would be very unfair for the people of this day, enjoying all of their wonderful facilities for travel and com- merce and trade, to say that the vast un- dertakings of 1836 were wholly unadvised. The question of 'internal improvements' was one of the great issues of the day, not only in Indiana, but in other States, and in the country at large. The Erie Canal · in New York, constructed at a cost of $7,- 000,000, had proved itself a paying invest- ment and of vast benefit in facilitating travel, in reducing freight rates and in settling up the country. And there were many other examples of profitable canal construction to be held up before the peo- ple by the early '30's. The work was not taken up hastily in Indiana, or without discussion. The need was great, and the people, thoroughly in earnest, thought they were prepared for whatever sacrifice was necessary to meet it. The issue had been before them for a decade or more. They could not foresee the panic condi- tions which set in in 1837, nor the early development of the modern railroad. In spite of the panic and the financial break- down on the part of the State, most of the system of improvements planned would have been completed eventually, and to the incalculable benefit of the State, had

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HISTORY INDIANA DEMOCRACY-1816-1916

it not been for the coming of the railroads. These early made the canals useless, or practically so, as their competition was impotent against the more rapid means of transit, and their construction ceased, or rather was not resumed.

"The Surplus Revenue Fund .- In 1836 the United States treasury found itself overburdened with a large surplus fund, for which there was no immediate or pros- pective need. The national debt had been extinguished and there was no other de- mand to be met outside of the ordinary running expenses of the Government. Hence, the question arose as to what should be done with the surplus. After much discussion, Congress decided, by an act approved June 23, 1836, to deposit all the fund but $5,000,000 with the several States, proportioning it among them on the basis of their representation in Con- gress. The total amount to be thus dis- tributed, in four equal installments, was $37,468,859. Three of the installments were paid to the various States, but be- fore the fourth was due the panic of 1837 had paralyzed the Government revenues and no further distribution was ever made. Indiana's share of the fund actual- ly distributed amounted to $806,254.44 .*

"It was clearly the intention of the Gov- ernment that this transaction should be considered merely in the nature of a de- posit of funds with the States, and that repayment would be required, but three- quarters of a century have passed without any demand being made. And although the distribution was not an equitable one, when all sections of the country are con- sidered, it is unlikely, after such a lapse of time, that Congress will ever exact re- payment.

"By an act of the Legislature of 1837 it was directed that one-half of Indiana's

*D. H. Montgomery, in his "Student's American History," says of the transaction: "It was styled a 'deposit.' but it was practically a gift. . Some States divided their share of the money among the whole population, each person getting a few shillings; others used the money to begin great systems of roads, canals, and similar public improvements. These works were seldom carried to completion, and generally ended by piling up a heavy State debt. A few States still hold and use the income of the money." All of which would indicate that Indiana, by investing her share for the benefit of her schools, is one among the very few States making wise use of a Government bounty so unwisely bestowed.

portion of this 'surplus revenue fund' be distributed among the counties, in pro- portion to the enumeration of male citi- zens twenty-one years of age and over, in amounts not to exceed $400 to any one in- dividual, at 8 per cent. interest, and the other half invested in stock of the State Bank. The interest on the loans and the dividends on the bank stock were to be turned into the common school fund.

"Owing to the fact that the first two in- stallments went to the counties and the fourth was never paid, the fund was not equally divided, the counties receiving $537,502.96 and the bank $268,751.48. Of the latter sum $40,000 was used to pay in- terest on internal improvement bonds, and of the portion distributed to the counties a large percentage was lost through bad loans, carelessness in enforcing collections and depression in values of mortgages and other securities resulting from the panic of 1837. The portion recovered was turned over to the State Bank in 1841, and this, and the original investment in stock of the bank proved so fortunate, yielding large and certain dividends, that the fund more than restored itself. With the clos- ing of the State Bank in 1859, the money was transferred to the State treasury and reinvested through the counties for the benefit of the schools. It now constitutes a very important item of the State's mag- nificent common school endowment.

"The State Bank of Indiana .- The State Bank of Indiana, which proved to be a most successful and stable institution, was chartered in 1834. The charter provided for the establishment of twelve branches and the thirteenth was later added. The capital stock authorized was $1,600,000, of which the State agreed to subscribe one-half. It had a complete monopoly, as no other banks were permitted to operate in the State. During the panic of 1837 it was compelled to suspend specie payment temporarily, but resumed in 1842, and from that date until its charter expired in 1859 it never failed to meet all demands upon it, and enjoyed the reputation of be- ing one of the best managed and most re- liable banking institutions in the West.

"Issue of State Scrip-'Red Dog' and 'Blue Pup' Currency-Days of 'Wildcat' Money .- During the stress of its difficul- ties attendant upon the collapse of the in- ternal improvement system, and the gen-

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HISTORY INDIANA DEMOCRACY-1816-1916

eral panic which enveloped the whole country, Indiana was compelled in 1839 to resort to the expedient of issuing State scrip. The entire extent of such issue amounted to $1,500,000. It bore 6 per cent. interest and was receivable for taxes, but rapidly depreciated until its market value was only 40 to 50 cents on the dollar. It was printed on red paper, and the peo- ple desrisively called it 'red dog' currency. It was finally redeemed and was worth a large premium at the last, due partly to the restoration of confidence in the finan- cial integrity of the State and partly to the accumulated interest.

"Before the panic was over merchants, plank-road contractors and others resorted to the issuance of private scrip. It is needless to say that its circulating value also quickly fell below par, and taking their cue from the fact that it was printed mostly on blue paper, the people called it 'blue pup' currency, as distinguished from the State's 'red dog' currency. Much of the private scrip was redeemable only in trade, or merchandise, or toll on the plank roads. The State was flooded with 'wildcat' currency in the form of de- preciated paper put out by 'banks of issue' in surrounding States, which drove good money out of circulation."

GOVERNOR DAVID WALLACE.

Sons of Pennsylvania seem to have been in favor with the voters of the young Com- monwealth of Indiana, as made manifest in the choice of Governors. David Wal- lace, who succeeded Noah Noble in the gubernatorial chair, 1837, was born in Mifflin county, Pennsylvania, April 24, 1799. General Harrison was instrumental in having young Wallace made a cadet at West Point. Graduated in 1821, he be- came a tutor in that institution, serving as such a short time, then enlisting in the army as lieutenant of artillery. His father having located in Brookville, that pictur- esque Indiana town became his place of residence. He studied law, and several years after his admission to the bar was elected to the Legislature three times in succession-1828, 1829 and 1830. In 1831 he was elected Lieutenant-Governor and

re-elected in 1834. It is said that as pre- siding officer of the State he had few equals and no superior. In recognition of his demonstrated ability, his party (Whig) nominated him for Governor. His Democratic competitor was John Du- mont, an able and distinguished lawyer residing at Vevay, on the southern border of the State. The vote stood: Wallace, 45,240 ; Dumont, 36,197. For Lieutenant- Governor, David Willis, Whig, had 48,823 ; Alexander S. Burnett, Democrat, 22,311.

Elected as a champion of the internal improvement policy, inaugurated by his predecessors, Governor Wallace did his ut- most to make that undertaking a success. With all the ability and resourcefulness at his command, he found himself unable to save from wreckage the stupendous en- terprises into which the State had been lured by enthusiasts and visionaries- well-meaning, it is true, but woefully un- mindful of that cautionary admonition, "look before you leap." Having done his best, his party turned him the cold shoul- der when he sought a renomination in 1840. With characteristic ingrati- tude for service well rendered, the Whig convention of 1840 nominated for Governor Samuel Bigger, a gen- tleman who had been prominently identified with the internal improve- ment scheme of that decade. Without a murmur of complaint, Governor Wallace accepted defeat, and at the completion of his term of office resumed the practice of law. A year after he was elected to Con- gress from the Indianapolis district, de- feating the popular Colonel Nathan B. Palmer. Seeking a re-election in 1843, he met with defeat at the hands of William J. Brown, who beat him by 1,085 votes. The demoralization of the Whig party by the political defection of President John Tyler doubtless had much to do with bringing about this result. Undaunted by political adversity, he pursued assidu- ously the practice of his profession. In

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History of the Indiana democracy, 1816-1916, Part 6

Author: Stoll, John B., 1843-1926 Publication date: 1917 Publisher: Indianapolis : Indiana Democratic Pub. Co. Number of Pages: 1104

Author: Stoll, John B., 1843-1926
Publication date: 1917
Publisher: Indianapolis : Indiana Democratic Pub. Co.
Number of Pages: 1104