USA > Michigan > Outlines of the political history of Michigan > Part 31
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
States, by proper management. If they had been honestly dealt with, the State would probably have had no serious trouble. But Governor Mason, who was personally honest himself, was a novice in finance, and he fell into the hands of the Philistines. .
By some unfortunate mischance he was induced to select the Morris Canal and Banking Company of New Jersey to aid him in negotiating the bonds. How this was brought about has not been made public. He was unquestionably misled by his own inexperience into accepting strange counsels. He made more than one agreement, and each one was worse than the last. On the first day of June, 1838, an agreement was made substantially as fol- lows, except that some of its provisions are am- biguous and not very intelligible. The Governor agreed to make the Morris Canal and Banking Company agents irrevocable, to negotiate the $5,000,000 loan, and $200,000 of other bonds after- wards authorized for special purposes. The bonds were to be sold in Europe or America, at such times and in such quantities as the agents deter- mined, for which sales they were to have two and a half per cent. commission, and in addition half of any premiums received, up to five per cent., and all beyond that; and were to bear all expen- ses, and guarantee that the proceeds deposited in New York, added to their commission, should not be less than their par value. They were also to pay the amount of the bonds, less their commis-
499
TERMS OF CONTRACTS.
CHAP. XV.]
sions, in instalments, whether sold or not, but were always entitled to have in hand a million of bonds in excess of payments already advanced, if so much remained undisposed of. They were also at liberty, if they chose, on thirty days' notice, to take and pay for the bonds at par, less their commissions. The contract as to the time when in that case they should pay for them is very blind. $1,300,000 of the bonds were delivered over at once, and they were to pay for these $250,000 in cash, and $1,050,000 when called for, on order, less their commissions. The remainder of the entire loan was payable in quarterly instalments of $250,000 each, (or a million a year,) beginning July Ist, 1839, thus giving them about five years in all to close up the matter. A difficulty after- wards arose concerning the interest account, on which the contract is silent.
On the fourth of June, 1838, - (three days after the contract,) - Governor Mason, without any legal authority, made a further arrangement. The $1,300,000, instead of being paid in cash, he allowed to be put to his credit on the books of the Company, as a payment in full, and agreed to take the whole of it in the bank bills of the Company, and disburse them for State purposes. - receiving $250,000 on the first of August, and $100,000 a month thereafter. This gave the bank the benefit of a distant circulation for over a mil- lion and a quarter of bills, and the interest in ad- dition on this whole sum for an average of about
500
THE AGENTS OBTAIN ALL THE BONDS. [CHAP. XV.
six months. On the 14th of July, Mr. Norton, the Fiscal Agent, in equal absence of authority, made a still further arrangement. Instead of paying over their bills, they were to accept drafts for the same amounts, payable ninety days after each of these instalments of bills was to have been furnished ; and these ninety day drafts were taken as cash. As this transaction was between bankers of ex- perience, it needs no comment. It gave them directly ninety-three days of additional interest on the whole $1,300,000.
The next phase in this transaction was during the same year, in November, when the whole bonds were turned over to these honest agents, upon the sole corporate obligation of the Morris Canal and Banking Company, to pay one-fourth of the instalments originally provided for, and that of the United States Bank, (which was no longer a National bank, but a State corporation of the same name,) for the other three-fourths,- keeping a proper interest account. In this way the whole amount of the bonds got into the hands of the agents, without any security whatever. The Morris Canal Company made default in the pay- ments early in 1840. The State Treasurer, Robert Stuart, found that they had got rid of their share of the bonds in some way, and was glad to get securities for about two-thirds of their proportion of the unpaid and future instalments, but was hope- ful that they would be able to pay in full, with some delay. They were allowed an extension of
501
CHAP. XV.] DEFAULT OF AGENTS. STATE SCRIP.
four years, until January, 1844, but long before this they failed entirely. Their assets given as security were of a strangely miscellaneous charac- ter, and showed a very reckless course of banking.
Specie payments were now generally suspended, and the State found difficulty in raising money for its current expenses. The United States Bank also made default in a part of the April instal- ment in 1840. The Treasurer managed to get more or less money out of this bank that year, and the delay of that corporation was also re- garded as temporary. In April, 1841, an issue of State scrip was provided for, in the form of bank- bills, and receivable for State dues, to anticipate the next four instalments coming from the loan. But they never came. The scrip depreciated con- siderably, but, being receivable for taxes, was about the only available currency to be had; and salaries and all other general liabilities were paid in it, and accepted as the only thing to be ob- tained. The Treasurer endeavored to get back the bonds for which nothing had been received, but they had been hypothecated by the failing banks and were beyond reach. As they were all where the equities still bound them, their further negotiation was checked by proper notices. The State arranged to pay on each what had been advanced upon it, and in the subsequent sale of the railroads these part paid bonds were received -remitting most of the damages to which the State was entitled by reason of the protest and
502
DISASTROUS LOSSES.
[CHAP, XV.
default, and the accounts were substantially closed. The loss to the State in interest caused by the peculiar arrangements made after the first con- tract, even if there had been no default, was $121,881.88 without reckoning the retention of the whole 21/2 per cent. commissions in advance. The damage by reason of losses in work sus- pended, and improvements rendered valueless, is not to be estimated. It brought the State to the verge of ruin, and its evil consequences lasted for many years.
It became necessary to pay internal improve- ment expenses with a different sort of paper from State scrip. Parties contracted to receive their pay in internal improvement warrants, payable in land, and not in money. Land being then a drug, and not in demand, these warrants ran down to forty cents on the dollar, and the contract prices were fixed accordingly. This soon deprived the State of many of the best lands, at a great sacri- fice. No further labor was done except on such works as were of immediate necessity and useful- ness, and the unfinished works were for the most part permanently abandoned, and their cost entire- ly wasted.
But the construction of one of the most im- portant works for the development of the country was prevented by a very gross outrage. One of the first measures of internal improvement adopted was the construction of a ship canal round the Falls of the St. Mary's River. An appropriation
503
SAULT CANAL STOPPED.
CHAP. XV.]
was made, in March, 1837, for the survey and commencement of the work, as soon as the Board of Internal Improvement approved the plans. Surveys and plans were made, and publicly known, and contracts were entered into in accordance with them, and the contractors proceeded to purchase materials and make all their preparations in the latter part of 1838 and beginning of 1839, to go on with their work on the opening of navigation. The State made them an advance in the early spring. On the 9th of May, they arrived on the ground, and, as they were preparing to proceed, they were served by a subaltern assistant quarter master of the United States with a letter of the War Department, addressed to himself, whereby it was directed that no interference must be al- lowed with the improvements made by the United States at that post, "among which the mill-race is regarded as one of the greatest importance ;" and he was notified to "apprise the contractor that he cannot be allowed, in the execution of his contract, to interfere, in any way, with that work." Accordingly the officer, on the day of serving this letter, gave the contractor notice that it would be his duty " to interfere with any work on the projected canal, that might injure the United States mill-race near that post." This notice was served on the 12th of May. The letter was dated on the 6th of March, 1839, more than two months before, and was an answer to one received by the War Department, written by this same officer in
504
ARBITRARY MILITARY INTERFERENCE. [CHAP. XV
January, 1839, containing information how the canal was laid out and to be constructed. No communication was made during this interval to the State of Michigan, nor to any one else. This mill-race, as shown to the Legislative Committee, was not on any ground that had been set apart as a military reserve, but the Town of Sault Ste. Marie intervened between the mill-race and the fort, which was a long way off. The mill is said by the committee who examined into the matter to have been dilapidated and useless, and General Whiting, the chief quarter master of this depart- ment, so stated. The State had not ceded juris- diction over any part of the land in question.
The contractors informed the officer who notified them, " that they were bound by the State of Michigan, to excavate the canal within the lines run and laid out by the chief engineer, and that they should proceed with the work, and could not allow water to flow through the race, where the canal crosses the same, as it would entirely frustrate the object that the State of Michigan had in view." The commanding officer at the fort, Captain Johnson, responded that, under his instructions, " the proposed work could not go on peaceably ;" and that he was bound to carry them out to their full extent. The contractors went upon the ground, nevertheless, and began work, when they were met, not by the mandate or injunction of the civil authority, but by Captain Johnson in his military capacity at the head of a
505
STATE PROTEST
CHAP. XV.]
company of soldiers. They had their implements taken from them by actual violence, and the party was driven off the ground at the point of the bayonet.
This unjustifiable outrage put an end to the work, and postponed the building of the canal nearly fifteen years. It was brought before the Legislature repeatedly by the State Executive, and in 1840, when it was first presented, with a very indignant message, by Governor Woodbridge, and the facts fully investigated and reported on by a committee, the Legislature, by a joint resolution, declared their opinion that the course of the gov- ernment authorities was "unwarranted by the Constitution of the United States, and a violation of the rights and sovereignty of the State of Michigan," and that as an act of justice, the gov- ernment was bound to repay the State its advan- ces and damages ; and directed that the State del- egation in Congress be requested to take proper action in the premises. In 1841, Governor Wood- bridge felt it his duty "again to ask the attention of the Legislature to the unauthorized and forcible interruption, by the troops of the United States, of the public works of the State, during the year before the last, at the Sault de Ste. Marie. The pecuniary loss to the State, resulting from that reprehensible interposition, remains unsatisfied, and the injury to its honor unatoned for."
The bitter political contests which at this time absorbed the attention of the American people
506
REPREHENSIBLE ACTION.
[CHAP. XV.
may have rendered this affair less important in the sight of Congress than it was in fact. The use of military force, as a substitute for civil re- medies, is intolerable in any country governed by law. The official insolence which paid no attention to notifying the State authorities, and gave them no opportunity to delay their appropriations, or deal with the matter in a legal way and obtain a removal of the difficulties, was offensive and dis- graceful. The damage to the State was very serious. The Upper Peninsula had been forced upon her acceptance, and the duty was at once as- sumed of providing for making it available. The explorations had already shown the immediate value of its fisheries, and the ultimate value of its great deposits of metal. The expense of trans- shipment caused by the land portage at the Sault, could not be borne without multiplying the cost of all work done in that region, and adequate ship- ping could not be built on Lake Superior without better means of getting there, and assurance of immediate remunerative employment. No large vessels have to this day been built there, and the first, and for many years the only, vessels of any magnitude that were used upon that lake, were carried across the portage by the expensive and perilous process of dragging them overland.
The Reserve at the Sault, even within the limits which were adopted for military purposes, has been a source of trouble in the way of im- provements. The carelessness of our legislation,
507
NEEDLESS GOVERNMENT RESERVES.
CHAP. XV.]
without proper investigation, not only in allowing government reserves to be created, for purposes where exclusive jurisdiction is entirely unnecessary for the uses of the United States, but in permit- ting them to be much larger than is necessary, is very much to be regretted. The propriety of giving the government exclusive jurisdiction over forts and navy-yards, and other similar places, where no one has any right to go except on public business, is evident enough. But places which it is not dangerous to the United States to leave open to access at all times, ought never to be removed from State jurisdiction. No difficulty ever arose from having courts, or custom houses, or post offices, or roads, or canals, continued on ground not subject to the exclusive jurisdictiction of Congress. The United States can lawfully legislate to punish interferences with any of its institutions or property, wherever they may be. But the consequences of exclusive jurisdiction are very serious. Residents may lose their rights of voting and citizenship,-they may cause difficulty in determining the validity of wills and contracts, in the rights of husband and wife in their per- sonal property, and in the laws of distribution, so that if different reserves in the same State are created at different times, there may be as many different codes of law applicable. Many crimes are punished differently by the United States and State laws, and some acts which are penal under one system are exempt from penalty under the
508
LEGISLATIVE EXPRESSION ON RESERVES. |CHAP. XV.
other. Instances have already arisen in more than one State exemplifying these evils. The dangers to public peace, where offences commit- ted on one side of a street are governed by dif- ferent laws from those committed across the way, or on adjacent lands, are not theoretical nor small. The disfranchisement of the Asylum in Ohio, and its results, exemplified what every one who has examined the subject has found strong reason to deprecate. There is no higher act of sovereignty than that which transfers sovereignty, and yet it is easier under our laws (assuming them to be valid) to cede away State jurisdiction, than to lay out a highway, and it is done with much less ceremony, and for purposes in no way requiring it. In 1855 the Legislature passed a joint resolu- tion, complaining of the needless extent of the reserves, and urging their correction ; but subse- quent legislation seems to have lost sight of this mischief.
The general discontent with the management of the State finances led to political changes. The singular character of the loan negotiation, and its more singular sequels, led to serious charges against the integrity of the whole trans- action ; and the loss of some moneys never fully explained did not tend to remove the public dis- content. The Governor incurred heavy censure for his imprudence and credulity. The charges of personal dishonesty were not generally accepted as just. When he died, in 1843, both houses of
509
CHAP. XV . | REVISED STATUTES.
the Legislature passed resolutions of respect to his memory, and sympathy for his relatives, and in this they followed the general sentiment. His deficiencies were those of inexperience, and were not mean or selfish. His abilities were much beyond his years.
Chief Justice Fletcher had been appointed in 1836 to prepare a revised code of laws. It was expected that this would be merely a compilation of existing statutes, with such changes as might be needed by the change of government. Instead of this he reported a volume of revised statutes, in the shape of a single act, divided and subdivided into parts, titles and chapters, and introducing some novelties and much confusion. Among other unexpected changes he substituted a board of county commissioners for the board of supervisors, and omitted to do away with imprisonment for debt, which he had been expressly required to do. The statutes were hastily prepared, and, as usual when an entirely new arrangement is adopted, they omitted many things, and were quite imper- fect, abolishing most of the existing general laws, and not providing adequately for the matters they had regulated. This code introduced no import- ant reforms in the law of property or of proced- ure, and had no influence in that direction. It
was, however, well arranged, and perspicuous. In 1839, the year after it took effect, a great many amendments were adopted to supply its deficien- cies. One very important subject had been en-
510
REVISED STATUTES.
[CHAP. XV
tirely left out. Although preparations had been made some years before for the erection of a penitentiary or State prison, and it had been lo- cated in 1837 and partly completed, the revised statutes did not attempt to regulate it. A non- imprisonment act was also passed in 1839, as well as laws giving power to the Court of Chancery to wind up insolvent corporations. In 1842, the board of supervisors was restored as before. The repeat- ed amendments had produced so much confusion that in March, 1844, provision was again made for the appointment of a commissioner to consolidate and revise the general laws. This duty was per- formed by Sanford M. Green, who has since filled the highest judicial offices in the State, and was reported to the Legislature in 1846. Judge Green had incorporated all the important amend- atory legislation, and introduced some valuable new features tending towards liberality. His work was somewhat mangled by the zeal of certain so-called reformers, whose impartial ignorance of law enabled them to proceed with a degree of confidence not usually shown by competent legislators. But in many particulars, and perhaps in most of the more important respects, his work furnished the greater part of the code as adopted, and has ever since remained as the groundwork of our legal system. The Constitution of 1850 prohibited any further revisions.
The removal of the Detroit garrison in 1826 had been regarded as entirely safe, because there
511
PATRIOT WAR.
CHAP. XV.|
was no likelihood of further complications with the Indians, and the relations with Great Britain were satisfactory. It had not then occurred to any one that there might be occasion to protect the fron- tier from lawless violations of neutrality. The United States Arsenal had been removed to Dearborn, so as to be less exposed. In 1837, the Canadian insurrection, known as the Patriot War, broke out, and for a time kept the lines in tur- moil. Secret lodges of sympathizers, under the name of Hunter's Lodges, held meetings in sev- eral of the lake cities. During the fall and winter of 1837-8, it became necessary to employ the mil- itary forces of the State to prevent the seizure of the Arsenal, and to patrol the frontier, until they could be relieved by the regular army. The move- ments on the Detroit River were not at this time very important. The invading forces managed to get upon Fighting Island, where they remained until dislodged by artillery, without serious casu- alties beyond the occasion they gave for the des- truction of the fine forest on Bois-blanc Island. In 1838, after a temporary lull, and when nothing was suspected, they' crossed from Detroit to Windsor, where a steamboat was burned, and blood was shed on both sides. The leaders were captured, and several of them were banished.
Some questions arising concerning the condi- tion of naturalized citizens, the Michigan Legisla- ture, in 1839, memorialized Congress to have measures taken to secure international recognition
512
NATURALIZATION FREE SCHOOLS.
[CHAP. XV.
of the right of expatriation and naturalization. This has been done within a few years, but has left the subject in painful uncertainty, without pro- viding adequately for furnishing evidence of a change of country, and apparently without having given any heed to the effect of such legislation on inheritances and escheats. Few subjects require more careful handling ; and while, under modern practice, treason is not much considered in deter- mining the policy of shifting allegiance, the inter- ests of minors have been disregarded also ; and, without more careful action, the seeds have been sown for some of the most vexatiou's litigation. There are so many American children born or educated abroad, that their interests need special protection. It is not desirable, on grounds of un- iversal brotherhood, to destroy the sentiment of patriotism.
In 1842, the first system of absolutely free education was authorized to be established in Detroit. Samuel Barstow and Dr. Zina Pitcher, and Douglass Houghton, were the most efficient movers in this matter, although sustained and aided by many worthy coadjutors. The schools were organized and advanced with much effort, until the removal of the Capital to Lansing en- abled the Board of Education to establish a union school in the building which had been vacated, and which never belonged to the State. The other towns in the State had been equally anxious to advance their schools, and did so as fast as
513
SCHOOLS. RETRENCHMENT.
CHAP. XV.]
possible. The superintendents of public instruc- tion were zealous and energetic, and John D. Pierce, the first in time and not second in en- lightened wisdom, has lived to see the system which he did so much to shape, carried out to completeness. He was followed by Franklin Saw- yer, who was afterwards selected to organize the schools of Louisiana. The superintendents who have succeeded them have been faithful and val- uable officers. The lands were early transferred to the keeping of the State Land Office, and the superintendents remitted to their more appro- priate functions.
The collapse of the banking system, and the misfortunes attending the State management of internal improvement; led of necessity to a re- linquishment of the latter, and a return to a specie basis. In 1842, the State reached a point where there was nothing left but to begin over again. The State scrip was called in, the suspen- sion of specie payments rescinded, shinplasters prohibited, and economy introduced in all things- beginning notably with public printing, which was reduced to its narrowest compass, and included no documents not of permanent importance,-per- haps erring in this somewhat. A donation of 500,000 acres of lands for internal improvements was received from the United States, and aided more in saving past investments than in future expenditures. It has been doubted, however, whether, apart from the school and University , 33
514
LOANS RESTRICTED. POLITICAL CHANGES. [CHAP. XV.
funds, the State has, on the whole, been a great gainer by the donations of land received from the United States. In some places they have no doubt hastened improvements. But, justly or un- justly, there have been several periods when the integrity of the management of many of the schemes which have absorbed them has been very much doubted, and in some instances their dis- posal has been fraudulent in the extreme.
In order to prevent any further extravagance, the Legislature of 1842 submitted, and the next Legislature and the people ratified, an amendment to the Constitution, requiring every law authoriz- ing the borrowing of money on State stocks to be confined to a single and specified object, for which alone it should be lawful to use the money, and to be approved by a popular vote at a general election. A judicious exception to this (which if continued under the Constitution of 1850 would have saved much trouble) exempted from this necessity loans obtained to pay the actual executive, legislative, and judicial government ex- penses, and for suppressing insurrection, repelling invasion, and defending the State in war.
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.