USA > Rhode Island > Rhode Island : three centuries of democracy, Vol. I > Part 75
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and neglected. Furthermore, the permanent fund, like many other invested endowments, was subject to the criticism that it resembled mortmain, or the dead hand that tied up property for uses conceived of as valuable in bygone times, but scarcely consistent with more recent conditions.
The State Auditor in his report to the General Assembly in May, 1874, recommended amendment of state policy, and was prophetic of experience to follow, thus :
It is a question, or subject matter, deserving the attention of your honorable body, whether the best interests of the state, pecuniarily considered, would be enhanced by repealing all laws having reference to any further reservation of the sum annually received from auctioneers to be added to this fund. The sum now appropriated annually is nearly five times as large as the accumulated dividends on this fund, and no good reason seems to now exist for a continuance of this practice or policy. With our present state debt, good financial policy would seem to dictate that it would be prudent and economical to dispose of assets and invest- ments of this nature, reducing our indebtedness, and at the same time relieving our people of a seeming liability of being sufferers in a monetary crisis that may disturb our financial peace at some future date.
THE SPRAGUE FAILURE-The storm broke sooner, perhaps, than the Treasurer antici- pated. The nation-wide financial panic of 1873 precipitated failure of the A. & W. Sprague Company of Rhode Island, an outstanding textile corporation, whose creditors included the Globe Bank, of the captital stock of which Rhode Island held 2000 shares as investments for the permanent school fund. The Globe Bank, under direction of the Comptroller of the Treasury, reduced its capital stock fifty per cent. by reissuing one share for two; the General Treasurer reported thereafter 1000, instead of 2000, shares of Globe stock, without, however, reducing the value, still carried at the amount of the purchase price, neglecting either par value or market value as a more accurate index of the actual condition. In 1881 the Globe Bank assessed its stockholders $15 per share to offset the shrinkage of assets pursuant to the Comptroller's ruling that "Sprague paper" was worthless; the state paid an assessment of $15,000 on 1000 shares from money accumulated for the school fund that had not been invested. The assessment was added to the "value" of the Globe stock in the report of the Treasurer, which listed 1000 shares of stock as costing $15,000 more than the 2000 shares listed in 1876. The last purchase of bank stocks for the fund was made in 1884, 268 shares of national bank stocks for $17,820.50. The invested fund was listed as $273,330.36 in 1885, erroneously as $173,330.36 in 1886, and thereafter as $273,330.36 until 1896, when an unex- plained loss of fifty cents was indicated. High water mark before 1900 was reached in 1899, when the invested fund was reported as $293,262.36, including a town bond valued at $19,932.50. In that year the National Bank of Commerce reduced its capital stock fifty per cent., and thereafter 406, instead of 813, shares were carried on the published list without change in the "value." The fictitious nature of the report becomes clearer when it is consid- ered that 1407 shares of bank stock had been withdrawn without decreasing the Treasurer's report of the value of the investment, and that the value reported had been increased by $15,000 paid as an assessment to replace an actual loss in value.
So early as 1876 the General Assembly authorized the commissioners of sinking funds to sell stock held for the fund, and to reinvest the proceeds of sales. Had the policy indi- cated been followed, the fund might have been administered in accord with sound principles of finance, which counsel careful examination of securities and a program for reinvestment. Governor Littlefield in two messages to the General Assembly, 1881, 1882, recalling the his- tory of the Globe Bank, urged the General Assembly to authorize investments in other than bank stocks. With reference to national banks he pointed out that the state had no official representation on the boards of directors, and questioned holdings in such banks as a judicious investment. The General Assembly in 1882 authorized investment "in the capital stock of some safe and responsible bank or banks, or in the bonds of any town or city within this state." Governor Dyer, in his inaugural message, 1899, announced: "In view of the fluctua-
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tions in value of bank stocks, in which the larger portion of this fund is invested, both the Treasurer and myself have determined to dispose of these stocks at the earliest possible moment, and hold the proceeds for investment in such bonds as the law permits." The sale of 3364 shares of bank stock at auction brought in $191,364, involving a loss of $39,030.62 from the values listed in the Treasurer's report erroneously, and of $50,487.32 from the origi- nal expenditure. The heaviest loss was on shares of the Globe Bank, for reasons already explained ; otherwise losses on certain stocks were almost recouped by gains on others. Par value for cost was substituted in the Treasurer's report in 1907; the only bank stock held at the time was 406 shares of National Bank of Commerce, and the change recognized the reduc- tion of capital stock held by the state from 813 to 406 shares in 1899 .; The losses on invest- ments totalled more than $90,000, and were sufficient to offset the increase of the fund from auction fees for more than fifty years after 1860.
A detailed study of the permanent school fund printed in 1918,* with recommendation that the fund might be vitalized by legislation directing investment for school purposes, and expenditure of the income for a definite project instead of as an offset to appropriations for general purposes, was brought to the attention of a commission that investigated school admin- istration and finance in 1921-1922. The commission report suggested changes in the law, particularly with reference to expenditure of the income. The law permits new investment or reinvestment only in bonds issued by Rhode Island towns or cities, or bonds of the United States. The holdings of 406 shares of bank stock, and a small amount erroneously invested in Rhode Island state bonds, were to be replaced when opportunity afforded. The income in 1922 was placed at the disposition of the State Board of Education and the Commissioner of Education as an emergency fund, the amount unexpended in any year to be added to the capi- tal fund. Later legislation permitted use of the income to pay the expenses of surveys, and the department of research and surveys, including among its functions the examination and auditing of financial and other statistical accounts and records of school officers and school committees, and town officers dealing with school money, established by the State Board of Education in 1929, is supported from the income of the permanent fund. The fund amounted to $343,261.45, as reported by the General Treasurer at the opening of the fiscal year July I, 1930. The fund has been vitalized, and interest in it has been renewed, because the recent uses have reestablished a relation to the public schools of Rhode Island that for practical pur- poses ended otherwise in 1845.
BROWN UNIVERSITY-The chartering of Rhode Island College, in 1764, was essentially a public enterprise, and the early history of the college was so closely related to the colony that it belongs properly in a chapter dealing with public education. The movement to estab- lish the college originated with Baptists, who planned an institution to be controlled by that denomination. The first draft of the charter, written by Rev. Ezra Stiles, almost defeated that purpose as it, while conceding control of the board of trustees to Baptists by majority representation, reversed control in the board of fellows, eight of twelve of whom were to be Congregationalists or Presbyterians. The board of fellows, as the directing house of the bicameral corporation, was vital to control thereof. The error or "treachery" in the drafting was disclosed or penetrated by Daniel Jenckes, a member of the General Assembly, who requested an opportunity for examination of the "charter." The "charter," delivered to him, was mysteriously "lost." A revised draft for the charter was approved by the General Assem- bly, which incorporated the college in 1764. The charter provided for a board of fellows of twelve, eight of whom should be Baptists, and a board of trustees, consisting of twenty-two Baptists, five Friends, five Episcopalians and four Congregationalists. The President was to
+In 1930 the surplus and undivided profits of this bank were reduced nearly $250,000 by embezzlement ; the bank claimed unimpaired capital.
*In Carroll's "Public Education in Rhode Island."
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be a Baptist. This apportionment of representation in the corporation to several denomina- tions, while still assuring Baptist control, marked the charter of Rhode Island College as the most liberal of colonial college charters and as an exemplification of Rhode Island democracy in action. In this provision of the charter there was no change until 1928, when the General Assem- bly, on request by the college, amended the charter to permit election of trustees from other reli- gious denominations than those named in the charter, and the election of other than a Baptist as President. The charter carried also a unique and sweeping exemption of "the college estate, the estates, persons and families of the president and professors, for the time being, lying and being within this colony, with the persons of the tutors and students during their residence at the college," from all taxes, jury service and military service except in case of invasion. The charter provided that "this charter shall be construed, reputed and adjudged in all things most favorable in the benefit, behoof and for the best benefit and behoof of the said trustees and fellows and their successors, so as most effectually to answer the valuable ends of this most useful institution." The state of Rhode Island, through its courts has given full effect to the exemption by interpreting it in such manner as to include not only land and buildings actually used as part of the college plant, but also property of the college held for any purpose whatso- ever, including real estate rented for general business purposes .¿ The exemption covered also the property of teachers and students without limit, until in 1863 Brown University§ consented to an amendment limiting this exemption to $10,000 each for the president and pro- fessors and their families. Students at Brown University are exempted from poll and other taxes under the charter.
Little was done for two years after 1764; in 1766 President Manning undertook the instruction of a dozen students at Warren, where he was minister of the Baptist Church. The first commencement exercises were at Warren, September 7, 1769. Early in 1767 Reverend Morgan Edwards went to Europe to solicit subscriptions for the college, and was successful in the British Isles, including Ireland. In competition for choice as the permanent location of the college, Providence was more generous in pledges than was Newport. The Brown family, in memory of a member of which the college was later to be called Brown University, was influential in promoting subscriptions, and John Brown laid the cornerstone of University Hall in May, 1770. A year later the building, of brick, four stories high, 150x46 feet, with a transept at the middle extending fifteen feet on each side, and giving it the shape of a cross. was ready for occupancy. The building as used originally housed a chapel and dining room in the transept on the lower floor; a library and apparatus room on the second floor; class- rooms, and fifty-two chambers, with accommodations for one hundred students. The colony and state granted several lotteries to assist Rhode Island College in raising money for various purposes, and in the early history of the college received the capital endowment funds of the college as a deposit in the general treasury, paying the college an income as interest.
A bill proposing a charter for a rival college at Newport failed to meet the approval of the General Assembly in 1770, though passed by the House of Deputies. The graduates of the college, including among the first James Mitchell Varnum, became active and prominent in the affairs of the colony and state. The charter named as incorporators the outstanding men of Rhode Island of the period, most of them, like Stephen Hopkins, who became Chancellor of the college, not themselves college graduates, but keenly appreciative of the value of edu- cation for the rising generation, and earnest in promoting the success of a distinctly Rhode Island college. The apportionment of the corporation to religious denominations, though liberal beyond the experience of America at the time, was the most illiberal provision of this unusual college charter, which declared that all the members of the college shall "forever
#Brown University v8. Granger, 19 R. I. 704. The college was held responsible for a levy under the "bet- terment act," however, because of improvement to its property, in the matter of College Street, 8 R. I. 474 §Name changed in 1804.
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enjoy full, free, absolute and uninterrupted liberty of conscience"; opened the college to "youth of all religious denominations" with guaranty of "equal advantages, emoluments and honors of the college or university"; and ordered that the "public teaching shall, in general, respect the sciences; and that the sectarian differences of opinion shall not make any part of the public and classical instruction."
In retrospect and summary-a movement that had as its purpose the establishment of a system of schools, managed, controlled and supported by public agencies was already underway in Rhode Island before the Revolution, following the conviction reached by some who were concerned with the welfare of the rising generation and the future of the colony that any sys- tem of private education must fail to provide for all the children of the community. Much the same group of men who had thus become interested in public education were influential in chartering and building a college in Rhode Island that was remarkable for the broad catholicity of its foundation. The movement was abated while Rhode Island bore its part courageously through the Revolution, but was revived immediately afterward. In Provi- dence the movement was positively toward the establishment of a system of free public schools; elsewhere, although there appeared not to be so clear a perception of the ultimate purpose, there was a remarkable exemplification of democracy in action in the building up of a quasi-public school system. The Providence movement, under John Howland's leadership, resulted in the enactment of the first state-wide free public school law in America, and the establishment under it of the oldest existing free public school system in existence, both in 1800. For the state as a whole the definite, tangible results of the educational movement fol- lowing the Revolution were 193 schoolhouses and 294 schools and 16 academies, practically all the work of a half-century among a people numbering less than 100,000 at the end of the period. Grasping an opportunity presented by abundant state revenues in 1828, Rhode Island acted by making provision for state support of public schools, as the means whereby quasi-public education, already well organized, might be fashioned into a system under public control. The project involved taking over most of the schoolhouses and schools already exist- ing and placing the administration of the system under municipal school committees. The immediate effect of the legislation of 1828 was to double the number of schools and to increase the number of pupils enrolled for public instruction tenfold. The Providence system of free schools, already a quarter-century old, was surveyed and reorganized. Following a short period in which the wisdom of the act of 1828 was demonstrated by most remarkable prog- ress, the effects of the legislation spent themselves, and the public schools advanced little, though there were scarcely any appreciable losses. A fresh revival followed an increase in money made available for school support through the United States deposit fund. Again the schools of Providence were reorganized, new schoolhouses, including a public high school, were constructed, and the first superintendent of schools was appointed. Dorr, who had been instrumental in promoting improvements, proposed a state-wide free public school system along with other measures advocated by him for the political reorganization of Rhode Island, and the constitutional movement that produced a new Constitution in 1842 made the General Assembly a state school committee. The vicissitudes attending two public school funds, the United States deposit money and the permanent school fund, fortunately had little deterrent effect upon public school progress; because the administration of both had been disassociated from the school organization ; and there was too little of a common interest. This chapter carries the public school story to the adoption of the Constitution, and the opening of a new political era in Rhode Island, with a fresh movement soon to be started, and so transcendental in its conception and results as to warrant separate treatment .*
*Chapter XX.
CHAPTER XVII. SECOND WAR WITH ENGLAND.
RINCES raise their soldiers by conscription, their sailors by impressment."; Con- scription may proceed in an orderly manner, as did the selective draft during the World War; or it may degenerate into raiding communities and carrying off men of military age for service with the army. Impressment, according to the old custom of procuring sailors for the navy, was forcible kidnapping as practiced ashore; as one of the causes of the second war with England, 1812-1815, it was seizing sailors from vessels at sea, with utter disregard of national flags, on the pretext that the sailors were "deserters." Along with the asserted right to impress went the enforced right of search. One of the earliest instances of American resistance to England in pre-revolutionary history occurred at Newport in the affair of the "Maidstone," and the issue was impressment .¿ The "Maidstone," British war vessel, lay in Narragansett Bay; her officers undertook to recruit the crew to complement by raiding water-front resorts frequented by sailors, and also vessels entering the harbor. So serious was the interference with the latter that Newport commerce suffered, and the town was threatened with shortage of food and fuel, as captains, warned of the pernicious activity of the "Maidstone," avoided Narragansett Bay. Newport vessels lay idle at the docks, because sailors could not be persuaded to venture on them the risk of the press. In June, 1765, a brig returning from Africa and not warned, was boarded as it sailed into Newport harbor, and the entire crew was impressed. The people of Newport were aroused to fury at the outrage; in the evening a boat from the "Maidstone," lying at a wharf, was seized, dragged to the Common and publicly burned. Governor Ward, in the cor- respondence that followed, declared that "the impressing of Englishmen is, in my opinion, an arbitrary action, contrary to law, inconsistent with liberty, and to be justified only by very urgent necessity." He was arguing against the law at the time, however ; a sailor impressed who refused to serve faced merciless punishment ; no civil court could issue effective process to obtain his release.
THE IMPRESSMENT ISSUE-Thirty years after the "Maidstone" affair impressment was once more an issue at Newport. In the interval independence had been declared and acknowl- edged, and the issue was international rather than between colony and empire. The "Nauti- lus," British sloop-of-war, Captain Boynton, arrived at Newport, May 8, 1794, carrying French prisoners from St. Lucie, who had surrendered under an agreement that they should be landed in Rhode Island. While Captain Boynton was ashore, seeking permission to buy fresh provisions, it was reported that the "Nautilus" had thirteen Americans aboard, three of whom had been impressed in the West Indies. The General Assembly, then in session at Newport, did not wait, in a matter affecting the liberty of American citizens, for an adjust- ment through diplomacy; it acted immediately. Captain Boynton was summoned by the Assembly to appear before the justices of the Superior Court of Rhode Island and the justice of the District Court of the United States. The British captain at first denied the charge that he had Americans aboard the "Nautilus," and maintained his negation sturdily. As he started to leave the State House, however, and came face to face with the crowd of Newporters who had assembled, he turned back for further conference. By agreement the captain, who remained in the chamber, sent an order to the "Nautilus" to muster the crew for examination
+Everett "Orations."
#Chapter XI.
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by a committee. Six of the crew, who proved American citizenship, were discharged and paid accrued wages, and the incident was closed. Great Britain made no diplomatic repre- sentation, in spite of the plain fact that Captain Boynton had been intimidated by the people of Newport.
SILAS TALBOT BUILDS THE "CONSTITUTION"-The new republic was beset with difficul- ties; unfortunately the navy that had been maintained during the Revolution had been dis- banded. European nations in their wars disregarded the rights of neutral nations, and Ameri- can trade and commerce suffered from interference, including searching of vessels at sea for contraband, seizure on slight pretext, searching for deserters and impressment of sailors, besides the depredations of privateers and pirates. America was helpless without a navy, and Congress, in March, 1794, was aroused to action. Silas Talbot, amphibian hero of the Revo- lution, was a member of Congress at the time, as Representative from New York, and influ- ential in the councils of the nation. Congress voted to construct six frigates, the "Constitu- tion," "President," "United States," "Chesapeake," "Constellation," and "Congress." Silas Talbot was commissioned as one of six Captains chosen for the new navy, and resigned from Congress to become superintendent in charge of construction of the "Constitution." Shortly thereafter a treaty with Algiers purchased, ingloriously, immunity from Algerian pirates, three frigates were sold, and completion of the others was delayed until French depredations on American commerce spurred Congress to further action. Meanwhile the impressment issue remained, to become, with England's orders in council, a cause for war. International law, or the want of it, for the time being sanctioned searching merchant vessels for contraband; the finding of a "deserter" unquestionably justified retaking him. America did not deny a right to retake deserters; it did object to impressing American citizens as sailors in the British navy. In the background loomed the issue of naturalization, recognized by America, denied by Great Britain.
THE EDUCATION OF OLIVER HAZARD PERRY-Oliver Hazard Perry, midshipman on the "General Greene," United States warship, Captain Christopher Raymond Perry, as a mere lad sailing with his father, had seen the "right of search" in practice. The "General Greene" was escorting an American brig. Near Gibraltar a British man-of-war sighted the convoy and made sail to intercept it. Captain Perry cleared ship for action, but kept his gun ports covered, and signalled to the brig to disregard the English vessel. Meanwhile he ordered the American flag displayed on both vessels, and paid no attention to a shot fired by the British ship across the bow of the convoy. Then the wind failed, and the three vessels lay becalmed within cannon range. The British captain sent a boat toward the American brig; and Perry ordered a shot fired close to the boat, which then approached the "General Greene." The British officer in charge of the boat was received on board by Captain Perry, and claimed the right to board the American brig by virtue of the right of search. "I deny the existence of any right, on the part of British vessels, to search any American vessel, except with the con- sent of the American commander," responded Perry; "and my shot was intended to warn you that you had received no such permission." Perry shouted the same answer to the captain of the man-of-war, who hailed the "General Greene" and demanded the reason for firing on his boat. "It's a most surprising thing," said the Englishman, "if a British seventy-four-gun ship cannot search a pitiful little Yankee merchantman." "By Heaven !" responded Perry. "If you were a ship of the first rate, you should not do it, to the dishonor of my flag." Perry then ordered his gun ports opened, thus disclosing his readiness for battle. The English cap- tain recalled his boat, and in a courteous letter requested permission to search the brig for deserters. Perry, with equal courtesy, acceded to the request.
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