USA > Michigan > Outlines of the political history of Michigan > Part 30
Note: The text from this book was generated using artificial intelligence so there may be some errors. The full pages can be found on Archive.org (link on the Part 1 page).
Part 1 | Part 2 | Part 3 | Part 4 | Part 5 | Part 6 | Part 7 | Part 8 | Part 9 | Part 10 | Part 11 | Part 12 | Part 13 | Part 14 | Part 15 | Part 16 | Part 17 | Part 18 | Part 19 | Part 20 | Part 21 | Part 22 | Part 23 | Part 24 | Part 25 | Part 26 | Part 27 | Part 28 | Part 29 | Part 30 | Part 31 | Part 32 | Part 33 | Part 34 | Part 35 | Part 36 | Part 37
tablished at Ann Arbor. Its board of regents consisted of the Governor, Lieutenant Governor, Chancellor, and Judges of the Supreme Court, as ex-officio members, and twelve regents appointed by the Governor and Senate. The University was ultimately to contain not only a literary department, but colleges of medicine and law. Branches of the University were established in various places as preparatory academies. These were at Detroit, Pontiac, Tecumseh, Niles, Kala- mazoo, Monroe and White Pigeon. The branches were first established, and in 1841 the first class was opened in the University at Ann Arbor, the first graduates leaving the college in 1845. The medical college was opened in 1848, and the law department in 1859.
The University and school lands previously set apart by the United States for University and school purposes were transferred in fee to the State, to dispose of them as might seem proper, and preserve the funds inviolate. The new organization, being identical with the old, obtained title to such property as had been directly vested in that corporation,-including buildings and lands in Detroit, and various other property. The Superintendent of Public Instruction was put in
31
482
SCHOOLS.
|CHAP. XV
charge of all the trust lands and funds, and retained their management until they were sub- sequently transferred to the State Land Office.
The Governor's message, in 1837, dwelt upon the necessity of a full system of education, and advocated what was also desired by Mr. Pierce, the ultimate completion of a uniform system, whereby any child could be educated. completely, from the earliest rudiments through all the branches of useful and elegant knowledge. This he urged as necessary to secure political and civil equality. Although it took many years to reach the desired end, it has been reached, and in most of our towns the schools carry up their pupils as far as they choose to go, and prepare them, if they desire it, for pursuing their scholas- tic work in the University, or elsewhere. Until union and high schools were established, the branches of the University had been the only public academies under State authority. Now there are not only multitudes of them, but they are very generally free schools throughout. The branches were not kept up very many years. They received female scholars as well as male.
In addition to school lands, the United States at various times gave to the State, for its own purposes, lands for State buildings, salt springs, and large grants to aid in public improvements. Five per cent. of the proceeds of government land sales was also given for internal improve- ments. Five hundred thousand acres of internal
483
INTERNAL IMPROVEMENTS.
CHAP. XV.]
improvement lands were asked for and subse- quently granted. Michigan also became entitled to a share of the surplus revenue of the United States. These large possessions were anticipated, and the hope of receiving them had, as already seen, been one of the inducements to submit to the unpleasant conditions imposed by Congress.
The Legislature of 1836, looking forward to these accessions, had meditated on the magnificent possibilities, and had, among other things, author- ized the Governor to invite proposals from every rail road company in the State for the transfer of their roads and franchises. The charters were numerous, but not very much had been done in road-building. In 1837, as soon as admission became certain, the young State launched out, like an heir just emancipated, into the most lavish display of her new freedom, and fancied opulence.
Although these times are not very remote, the present generation cannot, perhaps, quite compre- hend how people felt. There was as yet, no railway communication with the east. From Albany to Schenectady and Utica, the road was built very gradually. West of. Utica the travel was by stage or canal-boat. The Lake Erie steamboats were the finest and largest boats in America, and conveyed travellers with speed and comfort. From Detroit to Chicago there was no convenient land-passage, and all went by the lakes. From Chicago westward there were no
484
RAILROADS.
CHAP. XV.
railroads, and no travelling facilities beyond natural roads. It was more than fifteen years before any railroad crossed Canada. Telegraphs were not put in use for many years. There were no plank or gravel roads, and the best turnpikes were almost impassable, for several months in each year.
The railroads themselves were imperfect, and their ultimate perfection was not foreseen. Their passenger cars were small vehicles, holding no more than from eighteen to twenty-four passen- gers, and not much, if any, heavier than the large stage-coaches. The iron was flat bar-iron, from half to three-fourths of an inch thick, spiked on wooden sleepers which were lightly tied, and on tracks not perfectly graded or heavily ballasted. The locomotives weighed from two to six or seven tons, and drew corresponding loads. Great weight and high speed would have de- stroyed the tracks. One of the dangers of travel was from "snake-heads," caused by the loosening of the ends of the thin rails, which, bending up, were caught between the wheels, and driven through the bottom of the car, wounding or impaling any one who sat over the point of entrance. Instead of grading up or down steep declivities, cars were passed over the incline by counter weights of box-cars, loaded with stone, which balanced them like window weights, and made it easy to pass one up as the other went down. As there were no long railways, there was
485
RAILROADS.
CHAP. XV.]
no freighting unless of light articles, except for short distances. In a level country well supplied with wood, the cost of building and ironing a railroad was very trifling, and its rolling stock was also cheap and scanty. The original capital stock of the Detroit and St. Joseph Railroad Company, (the corporation which began the Michigan Central Railroad) was a million and a half of dollars. The entire cost of building and stocking the Central Railroad to Marshall, was reckoned in 1846 as having been two millions of dollars. In private hands it would probably have been less ; and the capital stock of $1,500,000, aided by the earnings, properly managed, would have been adequate according to the plans first devised, to build the road; although the subse- quent improvements in track and stock would have made new arrangements necessary, if the road had been built as slowly as was then customary. Twenty miles a year was in those days rapid railroad building.
It is not strange that with the experience of such a rapid growth, the people of Michigan were very sanguine. The times were what Judge Baldwin very aptly named them, "flush times," when money was turned out as fast as engravers could make it, and nearly every good engraving passed current somewhere. Property was bought and sold at fabulous prices. Land which could be purchased by any one at government price for a dollar and a quarter an acre, would sell as
486
SANGUINE EXPECTATIONS.
[CHAP. XV.
town lots on an engraved village or city plat, for fifty times that price, with no reason in the world for the advance.
The idea seemed current that the mere activ- ity of immigration, and the enthusiastic visions of the immigrants, actually created wealth. Usually a large population means prosperity, because it has grown up slowly, and improved the country and accumulated savings for many years. But when population from a mere handful grows up in ten years to five or six times its original number, there have been no savings; and there is no pro- gress beyond beginnings, where the outlay usually exceeds the income. Of the settlers who came to Michigan, most were of that intelligent and enter- prising class that advance the material interest of a region as fast as they can, and in the end build up strong communities. But they were also usually of the class whose wealth is in the future and not in possession, and who do more borrow- ing than lending. They were also very hopeful, and selected their homes and lands with sagacity, so far as fertility of soil and fitness for farming, lumbering and milling, were concerned. But they very often reckoned wildly, by overlooking difficul- ties of access. The garden of Eden would not pay for raising articles which could not be marketed, and the completest mill or factory that ever was built could not flourish without customers.
It was fortunate that the enterprising settlers had correct notions concerning education. There
487
CHAP. XV.] ADVANCED LEGISLATION.
never was in any country a more liberal and en- lightened view of the value of generous culture. The early founders of Michigan were not only in- telligent, but many of them were highly cultivated and intellectual; and through good and evil fortunes, while they lost wealth and suffered pri- vations, they adhered with dogged tenacity to the system of schools, which had been planned liber- ally, and has been the safeguard and glory of the State. As prosperity has increased it has fallen upon men who generally have known its relative value, and there are few towns in the common- wealth whose schools are not fully up in complete- ness to the means of the people.
The first State legislation was chiefly directed to the development of the resources of the country. Roads were laid out in every direction, and placed under local supervision, so that the people most nearly interested might have means of preventing neglect and dishonesty. Railroads were chartered whenever asked for. The University and school lands were put in market on long time. The State prepared as soon as possible to enter upon a general system of internal improvement, where- by all parts of its jurisdiction would be made readily accessible, and be brought within easy reach of markets and business facilities.
One of the first and best schemes devised to further the development of the State resources, was the organization of a complete geological survey. In February, 1837, an act was passed
488
GEOLOGICAL SURVEY.
[CHAP. XV.
for the appointment of a State Geologist to con- duct such a survey, and annual sums, increasing from $3,000 the first year to $12,000 the fourth, were appropriated. Doctor Douglass Houghton was selected to fill the office. He was already known throughout the State for his thorough qualities as a sagacious and close observer, a laborious and patient student, and a man of integrity, whose love of science, and devotion to its interests, had not impaired his cool-headed shrewdness and habits of business. Short as was the remainder of his useful life, the best observa- tions and discoveries in the fields which he tra- versed have proved his accuracy and judgment, and have shown no course safer than to follow his suggestions. Within the first year his views had become so favorably accepted that, in 1838, the survey was re-organized on a larger basis. Three principal assistants were required to be appointed by the Governor, on his nomination, to wit, a zoologist, a botanist and a topographer ; and four minor assistants to be nominated by the Governor on the nomination of their chiefs,-two for the zoologist, one for the geologist, and one for the botanist. Twelve thousand dollars a year was appropriated for the service. Maps, reports, and specimens were to be furnished to the State, and as far as possible to the University. Dr. Abram Sager was appointed zoologist, Dr. John Wright botanist, and Sylvester W. Higgins topo- grapher. Bela Hubbard and Columbus C. Doug-
489
CHAP. XV.] GEOLOGICAL SURVEY.
lass acted as assistant geologists, and Mr. George H. Bull assistant botanist. . Several important reports and considerable collections were made, and valuable maps and drawings were prepared and some of them engraved. The general finan- cial depression prevented any extensive work after 1841, and in the careless management of some of the State property, after Dr. Houghton's death, all of his engravings, which were numerous and very beautiful, and many of his collections which had been left in the State offices before their removal to Lansing, disappeared. Dr. Houghton had before his death secured the ser- vices of Mr. Beneworth, a wood-engraver, whose marvellous skill had obtained him honorable tes- timonials in Holland, Sweden and Germany, and who executed some of those minute gems of engraving which beautify Harper's Bible. This artist had become desirous of seeing the New World, and was disposed to set out for the un- defined western regions of which he had very vague notions, when Dr. Houghton found him in New York, and being mutually interested, he was induced to enter upon the work of engraving the illustrations which would be needed for the final report. The blocks were engraved and left with uncut margins to prevent abrasion, and in this condition deposited for safe keeping with one of the State officers. Besides these, Mr. Higgins had drawn carefully, on stone, a large number of fossils and other specimens, and several maps
490
BANKING.
[CHAP. XV.
were engraved. All have been lost. Their mon- ey value was not. less than many thousand dollars. Their artistic as well as scientific value cannot be reckoned.
Another scheme for the development of re- sources was unlimited banking. To this the Governor was not favorable, unless upon careful security. But the ideas of banking were very ill-adapted to such times. It has hardly become an exact science yet, but those times furnished some valuable, though costly experience. At that era the nation was out of debt, and all the State debts combined were less than some ambitious cities now pile up in a twelvemonth. Banking on stock security was unheard of. But banking had thus far been reasonably well conducted generally. The favorite New York system then was the " safety fund," by which each bank subject to it contributed a small percentage of its capital to a general fund, which was relied on to make up such deficiencies as might arise when single corporations were wound up. Large insolvencies with no assets were not imaginable. In 1836, the Michigan Legislature provided for a fund to be made up of three per cent. on the capital of every bank, payable in annual portions of one- half of one per cent. Many banks were chartered, and some of them came under this rule. But in the large dealings with which this freely issued paper had made men familiar, it was thought there was not currency enough afloat, and specie was
491
WILD CAT BANKING LAW.
CHAP XV.]
rarely seen. One motive for forming new banks was the desire to secure a share of the govern- ment deposits, as well as the surplus revenue, which had also been sometimes deposited by the States, to be ready if required to be refunded, this being one of the conditions of the distribution. In 1837, a general banking law was passed, which was supposed to contain better securities than any other similar scheme, and included the safety fund plan in addition. Any persons residing in a county of the State, (including among them at least twelve free-holders,) could organize banks of from $50,000 to $300,000 capital, and care was taken that at least one-third of the stock should always belong to county residents, in good faith and for their own use; and on executing the preliminaries and paying in 30 per cent. in specie, they could pro- ceed to business. Ten per cent. was payable on the stock every six months, until all the capital was paid in. Before beginning banking business, bonds and mortgages, or the personal bonds of resident free-holders, satisfactory to the County Treasurer and County Clerk, were to be filed with the Auditor General, to the full amount of the circulation and indebtedness. Neither the circula- tion nor the loans and discounts were to exceed twice and a half the amount of the capital stock. A rigid system of bank examiners and examina- tions was provided, to prevent any banks, char- tered or general, from committing frauds.
492
FRAUDULENT BANKING.
[CHAP. XV.
This statute was held invalid, because the Con- stitution prohibited any corporations which had not been approved by two-thirds of the Legislature. But many banks were organized. The county clerks and treasurers had as liberal ideas on the value of lands and the solvency of free-holders as could be desired; and while in the older towns some of these institutions were carried on as pru- dently and honestly as any others, the general tendency of most of the smaller, and some of the larger, banks was towards reckless discounting and wild speculation. Competent cashiers and officers were rare. Men assumed to be bankers who had no business knowledge, and could hardly cast accounts. Many went into the business as an easy method of swindling. The Bank Com- missioners, who were compelled to travel without the facilities of railroads and telegraphs, discovered all manner of devices to deceive them as to assets. Base metals were packed in coin boxes, and cov- ered over with thin spreadings of coin ; and some- times the same coin was kept in transit from bank to bank through by-ways in advance of the Com- missioners, until its familiar appearance, or a re- trograde visitation, exposed the trick. Few and evil were the days of this banking, and the history of the system of wildcat banks would be humili- ating but perhaps profitable reading now ; although the sharpers and rascals of 1876 are undoubtedly more adept in knavery than their ruder predeces- sors, and would not be proud of such small
493
BAD INVESTMENTS.
CHAP. XV .]
swindling. The crash came as soon as the general business panic began to spread through the Union ; and within five years after the State was formed, the financial ruin of its people was complete. The best improved property in the best towns shrunk to less than half, and sometimes less than a fourth, of its previously estimated value, while unimproved property not paid for bankrupted its luckless mortgagor, and if paid for was often too burdensome to support its quota of taxes.
But young States, like children, do not always look beyond the year, and Michigan was no more prudent than others. It allowed the school funds to be lent out to private borrowers as well as to banks and corporations, and made loans of its own bonds and money to various railroads and other schemes. Railroad mortgages of the mod- ern kind were then unknown, and those early loans would be regarded if made now, as safer than the majority of advances made in these days on such securities. They were generally secured by private mortgages or guarantees, and they were all on promising roads as first encum- brances. Yet in most cases the State lost a large percentage. The surplus revenue was lent to banks on deposit, and most of this was repaid or collected ultimately, but some of it after long waiting. Bounties were offered, and some loans made, to encourage, among other things, the man- ufacture of beet-sugar. This speculation failed, but the State met no serious injury.
494
BOUNTIES AND REWARDS.
[CHAP. XV.
The bounties and loans to encourage new branches of industry were not extravagant, and were probably well invested, even where the object did not succeed. Attention was drawn to the difficulty as well as to the supposed merits of the schemes, and it is a matter of congratula- tion, partly due to this, that few large enterprises have ever been abandoned as impracticable. The early experiments prevented heavier subsequent losses. Among other things, tried on a small scale and abandoned, was silk-raising. There was at one time an epidemic mania for raising the morus multicaulis, (a mulberry adapted to the silk-worm,) and this State, while somewhat excited, was not much hurt by it. A gift of $3,000, in 1837, to the Reverend Martin Kundig, was an investment more hopeful. It was given to that excellent man in recognition of his faithful and unwearied labors and outlays during the cholera visitation. While it is the solitary private reward or pension found in our history for philanthropic services, it was creditable to giver and receiver. Mr. Kundig is remembered by the older inhabit- ants of Detroit as one of the few persons who ever made a poor-house a charming place of resort for visitors, entertained only by his pleas- ant conversation and the sight of his well-kept gardens; and who, with strict economy, secured to his unfortunate wards comfort and self-respect.
The necessity of internal communication led to a measure which for many years kept down the
495
FIVE MILLION LOAN.
CHAP. XV.]
credit of the State, and crippled its resources, thereby driving away some of its own citizens, and effectually preventing the growth of its popu- lation by increase from abroad.
In addition to some smaller debts, it was de- termined to borrow five millions of dollars, to ex- pend in various public works. It was expected that by the aid of this sum, and such other dona- tions as might be received from the United States, three trunk railroads could be built across the State, two canals made, several rivers improved so as to be navigable, some small railroads finished, and a ship-canal opened round the Falls of the St. Mary's River.
A Board of Commissioners of Internal Improve- ment had already been appointed. On the 20th of March, 1837, this Board was directed to survey three railroad routes across the peninsula. The first was the Michigan Central, from Detroit to the mouth of the St. Joseph River in Berrien County. The second was the Southern, to run from the mouth of the River Raisin, through Monroe, to New Buffalo. The third was the Northern, to run from Palmer or Port Huron to Grand Rapids or Grand Haven. A purchase was to be made of the Detroit and St. Joseph Rail- road, which had gone partly through Washtenaw County. Five hundred and fifty thousand dollars was appropriated to these roads at once, four hundred thousand for the Central, one hundred thousand for the Southern, (both of which included
496
RAILROADS AND CANALS.
[CHAP. XV.
private railroads to be purchased,) and fifty thou- sand for the Northern road. Twenty thousand dollars was appropriated for surveys of a canal, or combined canal and railway, from Mt. Clemens to the mouth of the Kalamazoo River, a canal from Saginaw River to Maple or Grand River, and river surveys on the St. Joseph, Kalamazoo and Grand Rivers, for slackwater navigation. Seventy-five thousand dollars more was to be ex- pended on some of these and other works.
Of these works it may be enough to say that the Michigan Central was pushed by degrees as far as Marshall, and built in good part from its earnings, and the Southern was also extended into Hillsdale County. Both of these were sold in 1846, and the purchase extinguished a large proportion of the State debt. The Northern Road was graded beyond Lapeer, and its bed was con- verted into a wagon-road, at the expense of a large amount of internal improvement lands, which paid a great price for a very little work. The Clinton Canal was completed a few miles, and rented for water power. Very little, if anything, came of the other schemes.
On the 21st of March, 1837, a law was passed authorizing the Governor to negotiate for a loan of five millions of dollars, at not more than five and a half per cent. interest, and redeemable after twenty-five years. At first it was required to be payable in the United States, but afterwards allowed to bear six per cent., and be made pay-
497
CHAP. XV.] CONDITION OF EXCHANGES.
able in Europe, in pounds sterling at four dollars and forty-four cents, or in Holland guilders at forty cents.
The Cashier of the Michigan State Bank (at this time John Norton, Jr.) was Fiscal Agent of the State, having . no large discretionary powers, but keeping the State deposits in his bank. A this time demand exchange on New York was purchased by the banks in large sums at six per cent. premium, and sold at much higher rates,- from ten per cent. upward in some cases. Eastern bills had a fictitious reputation, and were re- garded-good and bad alike-as better than home currency. Why this estimate was put on them was not manifest except that persons sometimes bought them as cheaper than exchange, to use in eastern purchases. Michigan money was of differ- ent values. City money was at par,-country money in a few cases was at a slight discount, but usually at a considerable one. A difference was made between "chartered" banks and ordinary "safety fund" which were chiefly "wild-cat," although the difference was purely imaginary, or quite as often as not in favor of the wild-cats. No worse frauds were ever detected in banking than among several of the chartered banks.
In this condition of affairs, the credit of the State was first tried in the money market, on what was then a reasonably large scale. There is no doubt Michigan bonds could have been placed in Europe, and probably in the United
32
498
DISPOSAL OF STATE BONDS.
ĮCHAP. XV.
Need help finding more records? Try our genealogical records directory which has more than 1 million sources to help you more easily locate the available records.