USA > Pennsylvania > Pennsylvania, colonial and federal : a history, 1608-1903, Volume Two > Part 17
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Another subject worthy of attention was the attempt made at the session of 1825 to tax money loaned on bonds and mortgages. The committee who reported against the measure remarked that the tax could only be considered in the light of a property tax, and, as bonds and mortgages were not property in the full sense of the term, but merely evidences of a right to property, it could hardly be considered equitable to charge people for the property which they did not possess and which in many cases they might be absolutely unable to recover. All property taxes were, of course, ad valorem. The real value of a bond depended not alto- gether upon the amount for which it had been given, but on the
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credit and condition of the obligor and on the stipulations with which it might happen to be encumbered. The committee ven- tured also on the remark that "if a tax could be levied, in an unobjectionable manner, directly and virtually upon those holders of bonds and mortgages who yearly receive interest upon their
Chew House, Germantown
Home of Benjamin Chew. It was occupied by the British during the battle of Germantown and was damaged to a considerable extent. Still standing. Engraved for this work from a negative by J. F. Sachse
advances, it could hardly be obnoxious to the complainants of any class." These views prevailed for a time, but this conception of bonds and mortgages, obviously correct, was disregarded, and they were put into the drag net of taxation. They were, as the committee said, merely the evidences of property, the right to demand it, and, while the State might have the right to tax almost
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anything if it pleased, it surely was worse than absurd to tax these under the delusion that they were property themselves.
As no attempts had been made at impeachment for several years, it was quite time to strike at somebody. Findlay's admin- istration had been free from such performances, but the time had come for impeaching three more judges for misdemeanors: Seth Chapman, Robert Porter and Walter Franklin. Elaborate articles were filed against them and they were tried and acquitted. Only one had been convicted of ten or eleven cases that had come before the Senate.
During Hiester's term one of the boldest and most interesting figures in Pennsylvania politics, Duane, gave up and went to South America. He was ambitious to serve as his party's leader in Pennsylvania, yet never was a man less fitted for such a peculiar place, for he was utterly lacking in the facile, adaptive, accommo- dating quality which is needful to harmonize men of varying in- terests and passions. Such a quality was still more needful to preserve the harmony and strength of a party, like his own, made up of men of varied motives and to whom no extraneous force could be applied. No political leader in the country set out in 1790 under fairer skies-editor of the leading newspaper, with a strong,incisive style, with Jefferson and the entire influence of the national administration to support him, yet in a few years he had greatly weakened his party, injured his newspaper, and wrecked himself. No politician of his time arose so quickly or fell to earth with less regret of those who watched his descent and departure.
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CHAPTER XI.
SHULZE'S AND WOLF'S ADMINISTRATIONS-1823-1835
H IESTER was succeeded by another German Governor, John Andrew Shulze, of Lebanon county. Mr. Shulze was born July 19, 1775, in Tulpehocken township, Berks county, Pennsylvania. His father was a clergyman in the Lutheran church, and, appreciating the value of a classical education, placed the son in a preparatory school at York, after which he studied theology with his uncle, Dr. Kunze. Following the vocation of his father, young Shulze was, in 1796, ordained as a minister in the Lutheran church. For six years, he was pastor of several congre- gations in Berks county, but in 1802 he was compelled to abandon the ministry on account of ill-health. He then entered upon a business career in which he accumulated a small fortune. In 1806 he was elected to the legislature, serving three terms, and proving an active member, as the records show. In 1813 he declined the appointment of Surveyor-General of the State, but accepted the office of prothonotary of Lebanon county, holding that position eight years. In 1821 he was again elected to the legislature, and the following year he was chosen State Senator for Dauphin and Lebanon counties. The following year he was nominated for Governor and elected by a majority of twenty-five thousand over Andrew Gregg, who had been secretary of the Commonwealth during Hiester's administration.
During Governor Shulze's administration internal improve- ments became the most important subject of general interest.
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The two most important projects were the uniting of the waters of the Delaware and Chesapeake bays and those of the Schuylkill and Susquehanna. The American Philosophical Society, in 1769 and 1770, appointed committees to explore and survey the country between the Delaware and Chesapeake, and the legislature ordered a similar exploration not long afterward of the country between the Susquehanna and the Delaware. The enterprises seemed to be too large for that early day, too novel and difficult, while the coming on of the Revolutionary war delayed any movement look- ing to their beginning.
After the close of the war, when the people had resumed the ways of peace and recovered somewhat from its effects, the sub- ject was revived and charters were procured for undertaking the improvements. They were at first defeated, partly through the want of public spirit among the capitalists of Pennsylvania, "but chiefly by the vile spirit of speculation." They were put before the public not long after the enormous speculations that had taken place in the public securities, in the stock of the United States, in the public lands of the national government. In the first two of these, princely fortunes were realized. It was believed that canal stock would rise in the same manner as other stocks had done, so there was a great struggle for an opportunity to subscribe. Con- sequently a large portion of the shares were taken by persons who never intended to pay for them, nor had they the means to do so if having the intention. Their object was to sell out immediately at whatever advance might take place. But there were no pur- chasers, and they forfeited the first installment they had paid. Attempts were made to enforce the payment of the others, but were soon abandoned. Thus failed the first attempt to raise the money to build these enterprises.
The companies were kept alive by Charles Paleski by con- vening meetings of the members and electing officers until 1821, when they were united under the title of the Union Canal com- pany. After many delays the canal between Reading and Middle-
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town, seventy-one miles, was opened in May, 1827. Individuals subscribed $425,000 for the Delaware and Chesapeake canal, the State of Pennsylvania $100,000, a bonus was given by the Phila- delphia bank for the renewal of its charter, Maryland $50,000, and the United States $450,000. The first spade was put into the earth April 15, 1824, and the canal was finished October 17, 1829. It cost $2,201,864, or $158,000 per mile; the original estimate was $1,354,364.
The spirit for building canals spread and in 1824 a society was organized in Philadelphia for promoting internal improve- ments. Nearly fifty citizens gave $100 apiece, and Mr. Strick- land was employed to visit Europe and investigate the subject of railroads and canals and procure all the information respecting transportation, building of canals, etc., that could be obtained. To strengthen this spirit a canal convention was held at Harris- burg in 1825, of which B. Chace, jr., was one of the leaders. One hundred and thirteen persons assembled, representing forty- six counties. An address was made and resolutions in favor of internal improvements were adopted.
Nevertheless the opposition to the plan was strong, including some of the ablest men in the State. "It was confidently asserted that the measure was impracticable, that the resources of the State were inadequate for the purpose, that it would require an enormous and oppressive taxation, to which our citizens would not submit, that independent of these reasons, it would, if accom- plished, be extremely partial in its operation, as its benefits would be confined to certain parts of the State, while large and impor- tant sections would be debarred from them, whereas the burdens would be borne by the whole." That sectional considerations were the motives that produced this opposition cannot be doubted. The representatives of those counties not likely to be immediately benefited strenuously opposed the measure with all the powers of eloquence. Among the opposition were found all the representa- tives of Bedford, Cumberland, Franklin, Lancaster, Northamp-
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No.
Forty Dollars.
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XXL DOLLARS.
This BILL entitles the Bearer to re- ceive Forty Spanish milled Dollars, org the Value thereof in Gold or ,After, ac- cording to a Refola- tion paffed by Con- prefs, as yorktown, I Itf April, 1778.
THE UNITEDSTATES
No.
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MINORIBUS
EIGHT DOLLARS. THIS BILL entitles the BEARER to re- ceive EIGHT Spanifh mitted DOLLARS, or the Value thereof in CONSON Gold or Silver, accord- ing to a Refolution paf- fed by CONGRESS, att York-Trun, 11th April, x778.
IFIGHT DOLLARS.
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STATES
No.
Thirty Dollars. Fils BILL entitles the Bearer to receive! THIRTY Spanifh m.iled DOLLARS or the Value thereof in Gold or Silver, ac- cording'to a Refrla- tion hafed by Con- grejs, at Forkiwn,
XXX DOLLARS. If. April, 1778.
TINENTAL GURKEN
7
NO.
SEVEN DOLLARS.
SERENAB
THIS Bill entitles the Bearer to receive SE. VEN SPANIA milled DOLLARS, or the Vale thereof in Gold or Silver, according to a Refolution pafed by CONGRESS, af YORK. TOWN, IIIL APRIL, 1778.
SEVEN DOLLARS.
CONTINENTAL CURREN
THEUNITED STATES!
Specimens of Continental Currency, Obverse
EIGHT DOLLARS.
SEVEN DOLLARS.
PRINTED BY HALL AND SELLERS. 1778.
Printed by HALL and SELLERS. . 1773.
II Forty DOLLARS.
Thirty DOLLARS.
Proved by HALL ENSEL. LERS. 1773.
9 in d by Hall and SeWery. 1778.
Specimens of Continental Currency, Reverse
Pennsylvania Colonial and Federal
ton, Tioga and York counties. Berks, Chester, Lebanon and Le- high were divided.
It was resolved that "the improvement of the Commonwealth would be best promoted by opening complete communication from the Susquehanna to the Allegheny and Ohio, and from the Allegheny to Lake Erie by the nearest and best practicable route; that the application of the resources of the State to this under- taking ought not to be regarded as an expenditure, but as a most beneficial investment; for its successful execution will increase the public wealth, improve the revenue and greatly enlarge the ability of the State to extend her aid to every quarter where it may be wanted; and at the same time will encourage industry, create circulation, extend trade and commerce, enhance the value of land and of agricultural and mineral products, and thereby augment the means of the citizen to promote his own and the public welfare, by contributions to similar work." The senti- ments expressed in the resolutions doubtless had the general approval of the people.
At the following session of the legislature, in 1826, a board of commissioners for internal improvements was established. The legislature authorized the commissioners to contract for a canal from Middletown extending up the river as far as the mouth of the Juniata, and from Pittsburg to the mouth of the Kiskiminitas, a navigable feeder of a canal from French creek to the summit level of Conneaut lake, and to survey and locate a canal from thence to Lake Erie. These enterprises were started with the modest appropriation of $300,000, which was to be bor- rowed. The board made two contracts, one for twenty-two and one-half miles along the Susquehanna and twenty-four miles along the Allegheny. Thus the State at last had made the be- ginning. It caused no alarm, for at the next session the canals authorized were to be extended farther up the Susquehanna, the Juniata, and up the valley of the Kiskiminitas and the Cone- maugh, another between Bristol and Easton, and still others of
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lesser importance were added to the number. The legislature grew bolder and appropriated this year $1,000,000, a pretty large advance. But then, it was State money, no one was to pay im- mediately, and mankind have been cheated and deluded with the future from the beginning. The tolls would be sufficient, or other individuals and not those then living would pay the bills.
During Shulze's administration there was widespread dis- content concerning the constitution. As the trial of it was pro- longed the dissatisfaction increased. Duane's attempt to secure revision failed, but now another attempt to authorize the holding of a convention was made. Those who could not control the Governor wished to cut down his power, and thus leave more within their own possible grasp. This was the idea floating before Duane's vision in the day of his ascendency. Other poli- ticians since his time were disappointed with the small returns from nominating and electing governors. Something must be done to redress the balance and preserve the interest of the wire- pulling, scheming class. The consciousness of having put a good man in office was not enough ; he must still continue to turn to his makers for assistance, otherwise their power to make others would be gone and they would sink to the common level. So, in 1825, the question was again submitted to the people. If favor- ably considered, the leading feature of the new constitution was to endow the people with more power ; or, in other words, reserve more for the manipulation of their leaders. The people were not impressed with the need for a change, and by a large majority returned to the proposal a negative answer.
In 1826 Shulze was renominated and in the election received 72,000 votes, or within 1,000 of all the votes cast. Such unan- imity was never known before or since. It was an era of good feeling ; all had confidence in him, his fine character and intelli- gence. On the great question of the time-internal improve- ments-all then were nearly agreed. Canal building was going on rapidly, furnishing work and offices for large numbers. But
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in 1828 the State essayed a still costlier enterprise. It deter- mined to engage in railroad building. The canal extending through the center of the State was to be connected by a railroad crossing the Alleghany mountains and with Philadelphia by a railroad extending to Columbia. Thus by railroad and canal a system of highly improved communication would extend from the Delaware to the Ohio.
In making these internal improvements, expenditures went on at an ever-increasing rate. With a modest appropriation of $300,000 in 1820 the first loan was made, while the next year a second loan was made for $1,000,000. In nine years the amount of loans had rolled up to $8,286,000, besides $1,398,790 of unpaid debts, and contracts calling for $2,060,742 more. The expendi- tures were now so rapid that the credit of the State began to suffer. It had easily obtained large sums from the banks, for so long as there were no limitations on their issues of notes nothing was easier than to keep the printing press in operation. As the banks were eager to find customers for their notes, they strongly encour- aged the work of the State. But expenditures grew so fast and inefficiency and corruption became so apparent, with no returns scarcely in the way of tolls, that the borrowing power of the State was impaired. Governor Shulze then convened the Assembly in November, shortly before retiring, and explained the situation. The funds had given out, the work was stopped and something must be done. Said Governor Shulze in January, 1830: "The situation of the contractors on the.several divisions of the canal, and of those employed by them, was represented as being in the highest degree distressing ; and immediate relief was indispensable, as well for the comfort of the individuals concerned as for the honor of the Commonwealth itself." But as he was soon to retire, he smoothed over the situation, leaving his successor to wrestle with the problem. The money borrowed by authority of a law passed that year would have been sufficient to have kept things going if the canal commissioners 'in their expenditures
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"had not greatly exceeded what had been usual or was expected." A loan had been attempted and failed. The Governor was puzzled to know why, when the canal stock of a neighboring State com- manded a premium, that of this no less wealthy Commonwealth was in no demand and would not sell at par. Had the provision that the amount of the loan not subscribed for at a given time should be put up at public auction, and the fact that it had been put up and did not obtain even a bid, had any, and if any, what extent of influence on the credit of the State. Yet the Governor's confidence in the success and profitableness of these enterprises if they were only kept going did not wane. Nor was there any doubt of getting the needful funds on the most favorable terms, if the resources of the Commonwealth could be made to flow into the treasury in such abundance as to inspire perfect confidence in the lender that his interest would at all times be punctually paid at the time for that purpose regularly fixed. Of course not, but the Governor did not know from whence these resources were to come. The Governor. did remark that it "would be unjust, as well as impolitic, not to acknowledge the friendly disposition of so many of our moneyed institutions in their efforts to obtain the sums wanted to enable the board of canal commissioners to prose- cute the work entrusted to their care so successfully as to have now one hundred and seventy-seven miles of canal in actual opera- tion." When we remember that the managers of most of these banks had acquired corporate existence for the purpose of lending their credit to the State, which had been created by the State, at a good rate of interest, it is difficult to perceive wherein any public obligation had been incurred by their action. The banks had indeed flourished in consequence of the public needs, but the credit of the State at all times was quite as good as that of these institu- tions, and it could as readily have borrowed the money elsewhere.
Governor Shulze's confidence in these enterprises had not in the least been destroyed by what had happened. He admitted that "it must be apparent to all that economy has rarely entered
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into the system of expenditure, but that prodigality and profusion had, on the contrary, been its distinguishing characteristics." Notwithstanding these conditions there was "every reason to be-
Charles Thomson
Schoolmaster; author; secretary Continental Congress, 1774-1789. Reproduced for
this work from an old engraving
lieve" that by completing the work the wealth and prosperity of the State and of its citizens would eventually be greatly in- creased, and the members of the legislature thought the same way. Only go on with the improvements and in the end they
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would pay. There had "been no accountability on the part of those entrusted with the disbursement of the public funds ensuring a faithful application of them" to the proper objects, and the Governor recommended the adoption of some effective measures for guarding the treasury.
The construction of canals and railroads had overshadowed the more modest building of highways. Many had been built, as we have seen, with the money contributed by individuals and the State. But the funds in many cases had proved inadequate and debts had been created. Though of great value to the coun- try, they had rarely proved profitable to their shareholders. The tolls had been diverted, by the urgent demands of creditors, from their legitimate object of keeping the roads in good condition. Governor Shulze submitted to the wisdom of the legislature "whether means could be devised by which the State might con- tribute, not only with justice, but advantage, something towards the relief of those who have employed their money or their labor in the construction of these roads, and who have been compelled to look in vain to the profit to be derived from them when com- pleted for a recompense." In other words, the State having gone into the business of building canals and railroads for the people, why should it not take off the hands of the people those unprofit- able road enterprises in which they had thoughtlessly embarked ? Without question such a contribution might be made with advan- tage to them, though where or how the State could contribute by helping out one class and taking it from another, is difficult to understand. The loss might indeed by State action be distributed through taxation more equally, but would be quite as great.
Governor Shulze was followed by George Wolf, who was born in Northampton county on August 12, 1777. His father was a native of Germany, settling in Pennsylvania about the middle of the eighteenth century. George Wolf was educated in a classical school in Northampton county presided over by Robert Andrews, a graduate of Trinity college, Dublin. Leaving school,
2 -- 16
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Wolf became a teacher, and soon began to study law. Entering politics, he followed the principles of Jefferson. He was ap- pointed postmaster of Easton in Jefferson's administration ; afterward he was made clerk of the Orphan's court of North- ampton county, which position he held until 1809. In 1814, he was elected to the lower House of the legislature, while in 1824 his district sent him to Congress by a large majority. He was a member of Congress for three terms, and developed great abilities in debate and in committee work.
In 1829, Mr. Wolf was nominated as a candidate for Governor and was elected by a large majority. He sacrificed a valuable law practice in Northampton county when he became chief magis- trate of the State, and was inaugurated only to be confronted with many serious problems. Vast schemes of internal improve- ment had been projected; the State was burdened with an immense debt and the revenues were not equal to the demands upon the treasury. Besides these problems, Wolf's administration was to be rendered memorable by the great agitation of a popular system of education.
Mr. Wolf on becoming Governor plainly told the people that the true way to improve the credit of the State was to establish a system of taxation for paying the interest on the State loan. Hitherto not a word of this kind had been uttered; bonds, mort- gages, judgments and other evidences of debt, certificates of stock, and even money had never yet been taxed in Pennsylvania, and Governor Wolf asserted that the time had come for imposing a light tax on them. Articles of luxury that could not be re- garded as necessaries were also proper subjects of taxation. He also suggested a tax on State loans and another on coal.
In his message at the close of 1835 the Governor remarked that the system of public works in which the State had been en- gaged for eight years had been so far completed as to admit of transportation throughout the State, except the second track of railroad over the Alleghany mountains, which was nearly finished.
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The State now had seven hundred and twenty miles in actual or prospective operation. Of this amount six hundred and one miles consisted of canals and slack-water navigation and one hundred and nineteen miles of railways. The entire cost was estimated at $22, 114,915. The Governor's glowing words are now reproduced for the sake of what is to be told hereafter : "Upon most of the loans negotiated for the construction of the public works the State received premiums to an amount, in the main, sufficient in connection with the other revenues set apart for that purpose, to meet the payment of interest upon the whole amount of the State debt at the respective periods when the same became due. The increase of tolls upon the public works will, it is not doubted, supply the place of premiums hereafter; and it is confidently believed that the people of no State in the Union, in which public works have been constructed at the public expense, have been less burdened with the payment of taxes in proportion to the extent and magnitude of the respective improvements than the people of this State have been. And such are the flattering prospects in regard to the future revenues which the Pennsylvania canals and railways will produce that it is more than probable that after the 25th of March, 1836, taxation for these objects will not be required."
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