E 506 
 .1 
 385 
 
 Copy 1 
 
 Il.H- 
 
 ' y § ^'^ ■^"'^«- 
 
 AN APPEAL 
 
 STATE OF INDIANA 
 
 CONGRESS 
 
 TO MAKE PROVISION FOR THE PAYMENT OF CER- 
 TAIN OF HER WAR EXPENSES. 
 
■ r - 
 
THE CLAIM OF INDIANA 
 
 AS IT WAS 
 
 .PRESENTED BY THE STATE 
 
 TREASURY DEPARTMENT OF UNITED -STATES, 
 
 WITH THE 
 
 EVIDENCES IN SUPPORT OF THE SAME, AND WHICH 
 
 CLAIM IS NOW PRESENTED TO CONGRESS 
 
 FOR ITS ACTION THEREON. 
 
 THE UNITED STATES, 
 
 To The State of Indiana, Dr. 
 
 For amount of discount on $2,000,000 of Indiana War 
 
 Loan Bonds $243,107 51 
 
 For amount expended for printing said Bonds, and putting 
 tiiem on the market, including brokerage, and sala- 
 ries and expenses of Loan Commissioners 1,685 39 
 
 For amount of interest paid on said Bonds to May, 1868.. 362,186 51 
 
 Total per itemized statements herewith filed $606,979 41 
 
 DISCOUNT ACCOUNT. 
 
 INDIANA WAR LOAN BONDS. 
 
 Principal of the Loan $2,000,000 00 
 
 Less Discount , 243,107 51 
 
 Amount realized in cash from the Loan $1,756,892 49 
 
 EXPENSE ACCOUNT. 
 
 INDIANA WAR LOAN BONDS. 
 Voucher. 
 
 A. Ray, Brown and O'Boyle, Loan Commissioners $390 00 
 
 B. Jesse J. Brown, Loan Commissioner 108 00 
 
 C. Jesse J. Brown, Loan Commissioner 503 95 
 
 D. John II. O'Boyle, Loan Commissioner -. 88 50 
 
 E. James M. Ray, Loan Commissioner 228 17 
 
 F. James M. Ray, Loan Commissioner 64 32 
 
 G. James M. Ray, Loan Commissioner 96 00 
 
 H. .Jesse J. Brown, Loan Commissioner 77 45 
 
[2] 
 
 J. James M. Ray, Loan Coniniissioner 23 00 
 
 K. Jesse J. Brown, Ix)an Commissioner 56 50 
 
 L. J. II. O'Boyle, Loan Commissioner ■!*' ^0 
 
 Total ^^'^^^ ^^ 
 
 Original vouchor.s for above expenses filed with tlie Auditor of 
 
 State, are herewith forwarded. 
 
 P. S. The above vouchers are numbered in Auditor's office 2347, 
 
 and were paid out of Military Bond Expense Fund. 
 
 INTEREST ACCOUNT. 
 
 INDIANA WAR LOAN BONUS. 
 
 Paid interest May 1, 18G2 $33,645 00 
 
 Paid interest October 1, 1862 36,765 00 
 
 Paid interest May 1, 1863 36,765 00 
 
 Paid interest October 1, 1863 36,765 00 
 
 Paid interest May 1, 1864 36,000 00 
 
 Paid interest October 1, 1864 35,000 00 
 
 Paid interest May 1, 1865 27,480 00 
 
 PaidinterestOctober 1,1865.. 27,000 00 
 
 Paid interest May 1, 1866 25,972 42 
 
 Paid interest October 1, 1866 26,973 67 
 
 Paid interest May 1, 1867 25,440 00 
 
 Paid interest October 1, 1867 8,350 42 
 
 Paid interest May 1, 1868 G,030 00 
 
 Total $362,186 51 
 
 State of Indiana, ss.: 
 
 The undersigned, Governor, Auditor and Treasurer of State, cer- 
 tify that the foregoing account, amounting to six hundred and six 
 thousand nine hundred and .seventy-nine dollars and forty-one 
 cents, is correct and just; that the discount charges and interest 
 therein charged has been paid by the State of Indiana in pursuance 
 of an act of the Legislature, entitled " An Act to authorize the 
 Governor to issue Bonds; to appoint a Board of Loan Commis.sion- 
 crs, and defining their duties; requiring the Sinking Fund Com- 
 uiis.sioners to purchase Bonds; defining their duties in relation to 
 the interest received on the ,sune; and levying a tax to meet the 
 payment of the interest and i)rincipal of the J5onds to be sold," ap- 
 proved May 13, 181)1; that the Bonds of the State were issued in 
 pursuance of said act to the amount of two millions dollars, par 
 value, and that the same were sold, after due notice, at a discount of 
 two hundred and forty-three thousand one hundred and seven dol- 
 lars and fifty-one cents, as per report of the Loan Commissioners, a 
 printed copy of which is herewith filed and made part hereof; that 
 
[ 3 ] 
 
 the State incurred, and paid in and about the sale of said honds, 
 including printing, brokerage, salaries and expenses of Loan Com- 
 missioners, the sum of one thousand six hundred and eighty-tive 
 dollars and thirty-nine cents ; and that the State has paid, on account 
 of interest which has accrued on said Eonds up to the first day of May, 
 A. D., 1868, the sum of three hundred and sixty-two thousand one 
 hundred and eighty-six dollars and fifty-one cents. 
 
 We further certify that at the outbreaking of the late war, known 
 as the War of the Rebellion, the State Treasury was almost entirely 
 without funds, and that to enable the State to properly respond to 
 the calls of the President of the United States for troops for the 
 common defense of the United States, and to properly raise, organ- 
 ize, arm, equip, subsist, quarter, pay and transport, said troops, it 
 became, and was necessary, to raise money by loan upon the credit 
 of the State, and that, in consequence of said necessity, the Bonds 
 hereinbefore referred to, amounting at their par value to the sum of 
 two millions dollars, were issued and sold as aforesaid, under and by 
 authority of the act aforesaid. 
 
 And we further certify that the moneys realized from the sale of 
 said Bonds, amounting to the sum of one million seven hundred and 
 fifty-six thousand eight hundred and ninety-two dollars and fortv- 
 uine cents, were set apart as a Military Fund, and that the same 
 were paid out upon proper and duly authenticated vouchers for ex- 
 penses growing out of the said War' of the Rebellion, and incident 
 thereto, and properly chargeable to the United States, to-wit: in 
 raising, organizing, arming, equipping, subsisting, quartering, pay- 
 ing and transporting troops for the military service of the United 
 States. 
 
 Wherefore, we claim that the United States is justly indebted to 
 the State of Indiana in the said sum of six hundred and six thous- 
 and nine hundred and seventy-nine dollars and forty-one cents, for 
 discount, interest, charges, and expenses incurred and paid for the 
 benefit of the public service, as above set forth. 
 
 STATE I Witness our hands and the seal of the State, at Indian- 
 SEAL. ( apolis, this twenty-sixth day of May, A. D., 1868. 
 
 (Signed) Conrad Bakek, 
 
 Lieutenant Governor of Indiana, acting as Governor thereof. 
 (Signed) Nathan Kimbale, Treasurer of State. 
 
 (Signed) T. B. McCaety, Auditor of State. 
 
 Attest : 
 (Signed) Nelson Trusler, Secretary of State. 
 
[-t] 
 
 DECISION OF THIRD AUDITOR REJECTING SAID 
 
 >LAIM. 
 
 fM 
 
 INDIANA WAR CLAIMS, ^fSSWP INSTALLMENT — THIPxD AUDITOR'S 
 DIFFERENCE SHEEET. 
 
 The claim for "interest" paid on "NYar Loan Bonds," anionnting 
 in the a,<i:gregate to §362,180.51, disallowed. 
 
 Interest can not he alloired by the executive branch of the government 
 in the settlement of any claims against the government, unless author- 
 ized by express enactment of the legislative pover. The following de- 
 cision was made by the Second Comptroller, dated October 11, 1867, 
 in reply to letter of the Third Anditor, dated October 2, 1867, as 
 follows : 
 
 Sir — A claim has been made by the State of Rhode Island for 
 the refunding of the interest paid by that State in raising money to 
 repay the costs, charges and expenses incui-red for enrolling, sub- 
 sisting, clothing, supplying, arming, e([uipping, paying and trans- 
 porting its troops employed in suj)pressing the recent rebellion, and 
 as similar claims are held by all the loyal States, it is deemed best 
 to submit it to you as an abstract question. 
 
 Several opinions of the Attorney General, Comptroller, etc., have 
 been referred to authorizing the allowance of such claims, a brief 
 abstract of which is here given : 
 
 1. In Opinions of Attorney (icneral, vol. l,page 723, Mr. Wirt 
 held that interest, when paid by a State, forms a just claim against 
 the United States. This opinion was given on the act of March 
 3, 1825, (vol. H, p. 132,) which authorizes the payment of interest, 
 and of course is not authority for such payments when not sjieci- 
 fically authorized by law. 
 
 2. Attorney General J. J. Crittenden, (vol. 3, p. 635,) held that 
 interest on claims for losses by troops is not allowable. 
 
 3. Attorney General Legare, (vol. H,p. 136,) states that the gov- 
 ernment in general refuses to jx\y interest in the absence of a special 
 contrat't. 
 
 4. Attorney (general Reverdy Johnson held (vol. 5, p. 228 and 
 231,) that interest has l)een paid when there was no express provision 
 in the law. This was Avith reference to the Galphin case, for the 
 payment of which an act was passed August 14, 1848, (vol. 9, p. 
 731),) but would be an unfortunate precedent to those who Avould be 
 guided by it in paying interest. 
 
 Hon. J. J. Crittenden (vol. 5, p. 455,) held that interest should 
 be allowed the State of Florida upon all expended and obligations 
 contracted for sup[)lies and services of local troops called into ser- 
 vice in 1841), by and under the authorities of said States, when it 
 shall ai)pear that said State has paid, lost, or incurred interest on 
 that account. *, 
 
 JON i:u • " 
 
Hon. E. J. Phelps, Second Coini)tro]ler, niuintained the same 
 doctrine, (vol. 15, p. 34,) but that Jrt^vwiif1<-'i' the clause of the act 
 of February 27, 1851, (vol. U, p. 57p^SV!^ provides for reimburs- 
 ing Florida for moneys advanced and patTf, and for expense.'^ incurred 
 and obligations contracted by said State for subsistence, sup})lies and 
 services of local troo])s, etc. The words underscored would seem to 
 sanction the construction given to this law by these gentlemen ; and 
 are different and much stronger than those used in the act of 1801, 
 Avhich we are now considering, and yet, in view of the uniform 
 action of Congress and the Executive on this subject, I would not 
 have recommended the payment of interest in this case without more 
 speciiic action by Congress on it. 
 
 In the case referred to in your "Digest," j)ages 32 and 33, the 
 allowance was made to the State of Maine, not under usage, but in 
 accordance with specific provisions of law. Sec act of February 9, 
 1859, (vol. 11, p. 382,) directing payment to State of Maine, pur- 
 suant to ])rovisions of act of June 2, 1848, (vol. 9, ]). 236,) the third, 
 section of which ])rovides that in refunding money under the act, 
 •etc., it shall be lawful to ])ay interest at the rate of 6 per cent, per 
 annum on all sums advanced by State, etc. The last reference is to 
 your " Digest," page 101, where it is stated that interest is not al- 
 lowed, except granted in express terms by act of Congress. • When 
 the condition of the country is considered at the time these expenses 
 were made, the heroic efforts of the loyal States to sustain our coun- 
 try in this the time of her greatest trial, it is clear, in my ojiinion, 
 that Congress should authorize the refunding not only of the inter- 
 est j)aid to raise money, but of all expenses, drawbacks, etc., in fact, 
 of every dollar paid by any such State, directly or indirectly, in 
 support of this holy cause, but I am clearly of the opinion that the 
 accounting officers of the Treasury have no power so to refund 
 Avithout the action of Congress. 
 
 Respectfully submitted, 
 
 John Wilson, 
 
 Auditor. 
 Hon. J. M. Brodhead,. 
 
 Second Comptroller. 
 
 APPROVAL OF THE SECOND COMPTROLLER OF THE 
 DECISION OF THIRD AUDITOR. 
 
 TREASURY DEPARTMENT, 
 
 Second Comptroller's Office, 
 
 October 11, 1867. 
 Sir — I have the honor to acknowledge the receipt of your report 
 of the 2d inst., in which it ai)pears that "a claim has been made by 
 the State of Rliode Island for the refunding of the interest ]niid by 
 that State in raising money to defray the costs, charges and expenses 
 incurred for enrolling, subsisting, arming, equipping, paying and 
 transporting its troops employed in suppressing the recent rebellion." 
 
The authorities you eite are clear and positive that interest can 
 not be allowed by the executive branch of the government in the 
 settlement of any claims against the government, unless authorized 
 by express enactment of the legisUitivo power or indubitable infer- 
 ences from the general terms of a statute. The conditions precedent 
 to the payment of interest in the claims presented are not found in 
 the acts of July 17 and 27, 1861, authorizing the payment of cer- 
 tain State claims, and I therefore concur with you in the reasons 
 adduced against the allowance of the above claim. 
 
 Very respectfully, your ol)edient servant, 
 (Signed) ' ' J. M. Brodhead, 
 
 Comptroller. 
 Hon. John Wilson, 
 
 Third Auditor. 
 The claim therefore for interest is disallowed — ^362,186.51. 
 
 APPLICATION OF THE STATE MADE TO THE SECRE- 
 TARY OF THE TREASURY TO AUTHORIZE THE 
 COMPTROLLER AND AUDITOR TO REVIEW AND RE- 
 STATE THE ACCOUNT, AND TO ALLOW THE INTER- 
 EST PAID ON HER WAR LOAN BONDS, AND REASONS 
 THEREFOR. 
 
 The claim of the State of Indiana for interest paid on her war 
 bonds, issued in 1861, amounting to S362,186.51, it will be seen^ 
 therefore, has been disallowed by the Treasury Department. 
 
 The bonds were issued under the authority of the act of the Le- 
 gislature of Indiana of ]May 13, 1861, which is as follows: 
 
 "AX ACT to authorize tlie Crovernor to issue Bonds; to apjioiiit a IJoard of Loan 
 Commissioners, and defining tlieir duties; requiring the Sinking Fund Commis- 
 sioners to purchase Bonds ; defining tlieir duties in relation to the interest received 
 on the same, and levying a tax to meet the payment of the interest and principal 
 of the Bon(f^ to be sold. 
 
 [AprRovi:D May 13, 1861.] 
 
 Section 1. Be it enacted hy the Genercd As.se)id)Ii/ of the State of 
 Indiana, That for the purpose of obtaining money for re])elling in- 
 vasion, and ))roviding for the public defense, the Governor is author- 
 ized to issue two million dollars of Bonds; of which said issue of 
 two million, the sum of two hinulred thousand dollars shall be in 
 bonds of the denomination of five hundred dollars each, and the 
 residue of the said issue of two million dollars shall be in bonds of 
 the denomination of one thousand dollars each ; all of said bonds 
 drawing interest at the rate of six per cent, per annum, ])ayable 
 semi-:innually, on the first days of ^Liy and November in each year; 
 said Ixtnds to have coupons, or interest warrants attached ; the first 
 
[7] 
 
 of which shall become due on the first day of May, 1862 ; the in- 
 terest which may fall due between the date of the sale and the first 
 day of November, 18G1, shall be paid in advance. The bonds shall 
 be made payal)le to bearer, twenty years after date, the interest pay- 
 al)le on presentation and surrender of coupons, as they become due ; 
 both bonds and coupons to be payable at the Indiana Agency, in the 
 city of New York. 
 
 The bonds shall be signed by the Governor, and countersigned by 
 the Auditor, numbered and registered in the office of the Auditor and 
 Secretary of State, and shall be in the following form in substance : 
 
 INDIANA SIX PER CENT. BOND. 
 
 No. 
 500 Five Hundred Dollars. 500. 
 
 1000 One Thousand Dollars. 1000. 
 
 Know all Men by thc^e Presents: That there is due from the State 
 
 of Indiana, unto the bearer, the sum of dollars, with 
 
 interest at the rate of six per cent, per annum, payable semi-an- 
 nually, on the first days of May and November of each year, at the 
 Indiana Agency, in the city of New York, on presentation and de- 
 livery of the proper coupons, which appear on the margin hereof. 
 The principal of this bond is to be paid in twenty years from the 
 date hereof, at the Indiana Agency in the city of New York, and is 
 one of an issue of two millions of dollars of bonds issued by the 
 State of Indiana, in denominations of five hundred dollars and one 
 thousand dollars each, jnirsuant to an act of the General Assembly, 
 approved , 1861, entitled "An act to authorize the Gov- 
 ernor to issue bonds ; to appoint a Board of Loan Commissioners, 
 and defining their duties; requiring the Sinking Fund Commis- 
 sioners to purchase bonds; defining their duties in relation to the 
 interest received on the- same ; and levying a tax to meet the payment 
 of the interest and principal of the bonds to be sold." 
 
 FORM OF COUPON. 
 
 The State of Indiana will pay the bearer, on the day of 
 
 , at the Indiana Agency in the city of New York, 
 
 dollars, it being the semi-annual interest on her bond, No. — . 
 
 Sec. 2. For the purpose of negotiating said bonds, Hugh Mc- 
 Culloch, James M. Ray and John H. O'Boyle are hereby apjwinted 
 a Board of Loan Commissioners, who shall each receive as a com- 
 pensation for their services as such commissioners, five dollars per 
 diem, fi)r each day they, or each of them, may be actually engaged in 
 negotiating said loan, together with their expenses ; and the Gov- 
 ernor shall deliver said bonds, when prepared, signed, and registered 
 as aforesaid, to said commissioners, taking their receipt therefor, 
 
with the number antl denomination of each bond, and shall file said 
 receipt with the Auditor of State ; which said commissioners shall 
 disi)ose of said bonds, as the wants of the treasury may require, or 
 as, in their judgment, will promote the best interests of the State; 
 and the money arising therefrom, together with all exchange, and 
 any premium which may acei-ue, or may be received l)y said com- 
 missioners, except so much thereof as the Treasurer of State may 
 require for payments in the city of Xew York, shall be paid by said 
 commissioners into the State treasury as soon as received by them, 
 taking the receipt of the Treasurer of State therefor, and file said 
 receipt with the Auditor of State, who shall charge said Treasurer 
 therewith; and the said Board of Loan Commissioners shall, on the 
 first days of August, November, February, and May, of each year, 
 file with the said Auditor of State a report containing the number 
 and denomination of bonds sold and the price received therefor, and 
 the time -when sold ; and that said Loan Commissioners shall each 
 file with the Auditor of State a bond in the penalty of two hundred 
 thousand dollars, to be approved by the Governor, for the faithful 
 discharge of their duties, and the prom]:>t ]iayment to the proper offi- 
 cer of all moneys that may come into their hands as such commis- 
 sioners ; and the Treasurer of State shall file his receipt for the 
 amount with the Auditor of State, designating therein the amount 
 of each denomination of bonds sold, and the amount obtained for 
 the same, Avho shall charge the Treasurer therewith. 
 
 Sec. 3. The ]>oard of Sinking Fund Commissioners are hereby 
 directed to purchase of said Loan Commissioners said bonds, at ]wr, 
 to the extent of the money they may have on hand subject to dis- 
 tribution for the ])urpose of being loaned, and the interest, when 
 ])aid by the State upon said bonds so purchased, shall be disposed of 
 in the same manner as the interest arising from loans of the Sinking 
 Fund to individuals. 
 
 Sec. 4. In case a vacancy or vacancies shall occur in said Board 
 of Loan Commissioners, l)efore said bonds are disposed of, or in case 
 any of said commissioners shall refuse to serve as such, it shall be 
 the duty of the (Governor to appoint some suitable })erson or persons 
 to fill such vacancy or vacancies, and said apj)ointee or appointees 
 sluiU hold his or their office until the next meeting of the Legisla- 
 ture, either in general or special session, and such appointee or ap- 
 pointees shall give bond with the original commissioners. 
 
 Sec. 5. For the purpose of paying the interest semi-annually, 
 and the final payment of the ])riueipal at maturity, on the bonds in 
 the first section mentioned, an annual tax of five cents on each one 
 hundred dollars in value of the taxable })roperty of this State is 
 hereby levied, commencing in the year 18(jl, and the excess of 
 money collected by said tax, each year, after paying the interest as 
 it becomes due, shall be ))aid to the Sinking Fund Connnissioners, 
 who shall purchase these bonds if they can procure them on reason- 
 able terms, and if not, then to invest the same in other Indiana State 
 stocks; said commissioners keeping a record of the number and 
 
amount, and price paid for such hond.s, and ironi whom purchased ; 
 at the first session of the Lejjislature thereafter, said commissioners 
 shall report the amount and number of such l)onds or stocks, the 
 price paid for the same, and from whom ])urchased, and rendering 
 an account of such funds received since their last report; and im- 
 mediately thereafter it shall be the duty of the Committee on Fi- 
 nance in the Senate, and Committee of Ways and Means in the 
 House of Representatives, to count said bonds and examine the 
 same, and said Sinkinsi; Fund Commissioners shall, then and there, 
 in the presence of said committees, destroy said bonds and stocks, 
 keeping a record and description of such destroyed bonds and stocks ; 
 and for the final payment of said bonds, with the interest tliereon, 
 the faith of the State is irrevocably pledged. 
 
 Sec. 6. In case it becomes unnecessary to sell all of said bonds, 
 such unsold bonds shall be returned to the Auditor of State, wdio 
 shall register their number and denomination, and they shall then 
 be destroyed in the ])resence of the Auditor, Treasurer and Secre- 
 tary of State, and the fact shall be recorded by the Auditor, and 
 signed by him, the Secretary and Treasurer of State. 
 
 Sec. 7. The tax herein provided for the payment of the inter- 
 est and the gradual liquidation of the principal, shall not be dimin- 
 ished, but the same shall be levied and collected annually, until the 
 bonds herein authorized to be issued shall have been paid or re- 
 deemed. 
 
 Sec. 8. Nothing in this act shall be so construed as to require 
 the continuance of the existing office of Agent of State, but the Le- 
 gislature may at any time hereafter, in its discretion, select any 
 person as Agent of State, and any place in the city of New York 
 as tlie office of the Agency, under the provisions of this act: Pro- 
 vided, That notice of the person and place in said city be given by 
 the Governor of the State of Indiana immediately, in one or more 
 daily papers in the city of New York, by thirty days' publication 
 thereof. 
 
 Sec. 9. Inasmuch as the ordinary revenue of the State is insuf- 
 ficient to meet the necessary expenses growing out of the present 
 insurrectionary acts of certain States in the Union, it is hereby de- 
 clared that an emergency exists; therefore this act shall take eft'ect 
 and be in force from and after its passage." 
 
 The act of Congress to indemnify the States is as follows: 
 (12th U. S. Statutes, 276.) 
 AN ACT to indemnify the States for expenses incurred by them in 
 defense of the United States. 
 
 Be it enacted by the Senate and House of Representatives of tlie 
 United States of America in Congress assembled, That the Secretary 
 of the Treasury be, and he is hereby, directed, out of any money in 
 the Treasury not otherwise appropriated, to ])ay to the Governor of 
 anv State, or his duly authorized agents, the costs, charges and ex- 
 ])enses "properly incurred by such State for enrolling, subsisting, 
 
[10] 
 
 clothing, .supplying, arming, eciuipping, paying and transporting its 
 troops employed in aiding to suppress the present insurrection against 
 the United States, to be settled upon ])ropcr vouchers, to be filed 
 and passed uj)on by the proper accounting officers ot the Treasury. 
 Approved July 27, 1861. 
 
 Congress, in passing the act of July 27, 1801, passed it with 
 reference to the liabili-ty of the States incurred at that time. To 
 put at rest the question as to whether the law covered expenses pay- 
 able in the future, the explanatory Joint Resolution of March 8, 
 1862, was passed : ''That the said act shall be construed to apply to 
 expenses incurred as well after as before the date of approval there- 
 of." (12 U. S. St. Glo.) This advance was made to the United States 
 under a statute passed before the passage of the act of 1861, but in 
 view of the well known law of the case as declared l)v statute, by 
 the courts and by the opinions of the Attorney General of the 
 United States, who had given opini(»ns on similar claims, the State 
 of Indiana understood full indemnity of [)riiuM[)al and interest would 
 be made. The facts and circumstances existing at the time, and laws 
 previously jiassed in relation to the subject-matter, may be referred 
 to, to determine tlie meaning of the law. We call attention to the 
 following statutes: 
 
 The ordinance for settling the accounts between the United States 
 and individual States of May 7, 1787 (1 Laws U. S. ed. 1815, p. 
 662,) j)roved that interest on such accounts, at the rate of o per 
 cent, per annum, should be allowed. (See McKee vs. the United 
 States, 91 U. S. Reports, 442, 10 Court of Claims, p. 234.) A large 
 number of private acts were passed, settling voluntary claims, in 
 Avhich interest was allowed the claimants. States, and Cities were 
 allowed interest for advances made i)v them for the United States 
 A\here they jv.iid or lost intcivst. 
 
 Interest was allowed the State of Delaware on war claims by the 
 act of May 20, 1826. (4 U. S. Stat. 175.) 
 
 Also to':Maryland, by the act of May 13, 1826. (4 U.S. St. 161.) 
 Also to New York. Act of May 22, 1826. (4 U. S. St. 192.) 
 Also to Pennsylvania. Act of March 3, 1827. (4 U. S. St. 241.) 
 Also to South Carolina. Act of March 22, 1832. (4 U. S. St. 499.) 
 Also t.> Virginia. Act of March 3, 1825. (4 U. S. St. 132.) 
 Also to city of Baltimore. Act of >ray 20, 1826. (4 U.S. St. 177.) 
 Also to Mayor and ( "ity Council of Baltimore. Act of April 2, 
 1830. (St. 411.) 
 
 I)y the act of April l-S, 1(S14, the Secretary of State was author- 
 ized to li(|uidate according to the jirinciph's of justice and equity 
 
[11] 
 
 all the claims of the inhabitants of the late province of West Flo- 
 rida '^ * * for advances by them made for the use and benefit 
 of the United States. (6 U. S. St. 139.) 
 
 By the act of April 9, 1818, an appropriation was made for the 
 discharging of the above claims, " including principal and interest," 
 showing that the State Department considered interest equitably due 
 under the statutes. (See 3 U. S. St. 422.) 
 
 Advances were made by individuals and the Territory of Florida 
 in 1839 and 1840 to the United States, which were authorized to be 
 settled by the acts of August 23, 1842 (5 St. 522), August 31, 1842 
 (5 St. 518), March 3, 1843 (5 St. 628). By the last statute the 
 claims were to be settled "upon principles of jnstice and equity," 
 under the direction of the Secretary of War. By joint resolution^ 
 March, 1845, (5 St. 797) the statutes were held to include "advances 
 on loans of money made to provide for the defense of the inhab- 
 itants." 
 
 Under these statutes, §12,000 was paid to the Territory of Florida^ 
 September 9, 1842. 
 
 Bonds weref issued, under the territorial act of March 4, 1839, in 
 the sum of $100,000, to procure supplies, and holders of the bonds 
 presented them to the Treasury Department and received principal 
 and interest out of the appropriation. The Florida bonds to the 
 full amount of principal and interest, which were paid at the Treas- 
 ury, could not have been paid until examined and allowed by the 
 accounting officers and directed by the Secretary of War to be paid. 
 5i< ;i< :^ They were paid as the proper debts of the United States. 
 (5 Opinions of Attorney General, 401.) In the opinion the right of 
 the State of Florida, to reimbursement of interest paid out by her for 
 military services in 1849, was sustained as lawful under the terms of 
 the act of February 27, 1851, which provided for reimbursing the 
 State of Florida " under such rules and regulations as have heretofore 
 governed the readjustment of similar claims of the several States for 
 moneys advanced and paid." (See opinion of John J. Crittenden, 
 Attorney General, 5 Opinions, 463-4.) 
 
 Alabama furnished supplies, etc., for the United States in 1 836-7, 
 which the Secretary of War was authorized to re-adjust " under 
 such laws and regulations as have heretofore governed the settle- 
 ment in auditing and allowing the claims of the States on the United 
 States for moneys advanced," etc. (Act Aug. 16, 1842, 5 U. S. St., 
 506.) By the statute of January 26, 1849, the Secretary of War 
 was direojted to pay six per cent, interest on such advances. (9 U. 
 S.. St., 344.) 
 
[12] 
 
 By the statute of June 30, 1834 (4 U. S. St., 721), full indemnity 
 to citizens of Georgia for losses by the Creeic Nation of Indians 
 prior to 1802, included six per cent, interest from the origin of the 
 claim to date of adjustment. 
 
 By the act of March 3, 1851, six per cent, interest was allowed 
 to the State of Georgia on all advances made by her to the United 
 States for the suppression of Indian hostilities in 1835-6-7-8, from 
 the date of the advances to the date of the payment of the principal 
 sum by the United States. (9 U. S. St., 626.) 
 
 At the same date the accounting officers of the Treasury were 
 authorized and directed to liquidate and settle the claim of the State 
 of Maine against the United States for interest upon the money bor- 
 rowed and actually expended by her for the protection of the North- 
 eastern frontier in 1839, 1840, and 1841. (9 U. S. St., 626.) 
 
 The same rule was established by the joint resolution of March 3, 
 1847, to refund to States and persons the expenses incurred by them 
 for the United States. (9 U. S. St., 206.) By the amendatory act 
 of June 2, 1848, this was extended to cover all expenses, and the 
 third section enacted that "in refunding moneys under this act and 
 tlie resolution which it amends, it shall be lawful to pay interest at 
 tlie rate of six per centum i)er annum on all sums advanced by 
 ♦States, corporations, or individuals in all cases where a State, corpo- 
 ration, or individual paid or lost the interest, or is liable to pav it." 
 (9 U. S. St., 236.) 
 
 This amendatory act is a legislative declaration that ("expenses") 
 includes the item of interest, and the general rule which had gov- 
 erned these contracts between the States and the United States, to 
 pay interest paid or lost, was thus expressly reaffirmed. 
 
 Tlicse statutes show that where interest was paid or lost by a 
 State, it was held to l)c an expense incurred and justly and equitably 
 due the State. 
 
 The United States enforces the payment of interest on money 
 l)aid after it is due, as a matter of equity. (See United States vs. 
 Gurney, 4 Cranch, 131.) 
 
 " The United States have no prerogative to claim one law upon 
 their own contracts as creditors, and another as d(;btors. If, as 
 creditors, they are entitled to interest; as debtors, thev are bound 
 also, to pay it." {>^fory, J., in Thomdike vs. Vnited States, 2 Mass., 
 20; Charles Hirer Bridge vs. Waner Bridge, 11 JVter, 611.) 
 
 Where the government guarantees state bonds, and pavs interest 
 ibr the State, it provides ior reinbursement. (Sec. 481, Rev. St., p. 
 694.) 
 
[13] 
 
 As held by the Supreme Court of the United States in United 
 States vs. 3IcKee, et al., 1 Otto, 450, the rule of refusing interest on 
 unliquidated claims is not uniform, and the case was held to be 
 within the rules of the claims covered by the act of 1791, where in- 
 terest was to be paid. The court also held the adjudication as to 
 the State of Virginia to be binding upon the United States as to 
 the allowance of interest, and as there was no dispute about the 
 amount due if the claim was legal, it was a liquidated sum, and the 
 government was bound to pay it in full, '' with all its legal incidents 
 as the State of Virginia should and would have paid it, had not 
 the liability been assumed by the United States when she received 
 the cession of that immense country." {Ibid 451.) 
 
 Our case is like this case. The legal interest to be paid was a 
 liquidated sum before the passage of the act of 1861. It was paid 
 by the State as agreed. It was a legitimate expense, and is covered 
 by the amendatory act of 1862, which covers expenses to be paid 
 after the date of the act of 1861. Having been paid, the United 
 States dares not dispute the amount, but the comptroller wrongfully 
 applies to this liquidated sum the rule which applies to unliquidated 
 demands. 
 
 The Attorney Generals of United States have held as follows : 
 Attorney General Wirt — " The principle is this : the United States 
 are bound by the relation which subsists between the general and 
 State governments to provide the means of carrying on war, and it is 
 a part of the business of war to provide for the defence of the sev- 
 eral States Avhen the United States failed to make such provisions, 
 and the States have to defend themselves by means of their own 
 resources; the expenditure thus incurred forms a debt against the 
 United States which they aro bound to reimburse. If the expend- 
 itures made for such purpose are supplied from the treasury of the 
 State, the United States reimburse the principal without interest, but 
 if, being itself unable, from the condition of its own finances, to meet 
 the emergency, such State has been obliged to borrow money for 
 the purpose, thus to incur a debt on which she herself has had to pay 
 interest, such debt is essentially a debt due by the United States, 
 and both the principal and interest are to be paid by the United 
 States." (1 Opinions Atty. Genl., 721, June 25, 1825.) He also 
 held, (2 Opinions, 33,) that "the interest, according to the nsage of 
 nations, i&a necessary part of the just indemnification by the Emperor 
 of Russia." Attorney (General J. McBarien, in refusing the allowance 
 of interest on commutations, held the case to be within the class of or- 
 
[14] 
 
 dinuiy claims against the governineiit — " whieli, however undoubt- 
 t'd, are not payable until demanded, and then without interest 
 unless the claimant shall have paid interest, in which case, indeed, inter- 
 est becomes a portion of the principal of his claim." (2 Op., 392.) 
 Attorney General B. F. Butler held that a private law for the relief 
 of James Thomas according to equity and JHstice includes the allow- 
 ance of interest, because it was not inconsistent with the terms of 
 the law, although not expressly named, because the decision of the 
 oourt referred to in the act gave interest, and also because in look 
 ing into the original contract and all the papers, he found "the 
 I'laim to interest is agreeable to equity and justice." (3 Opinions Atty. 
 Gen., 295.) Attorney General H. L. Legare held that when an ac- 
 count was adjusted by the comptroller under a s^jccial act, and no 
 allowance was made for interest, under the imjM'ession that interest 
 ought not to be allowed, and the present comptroller and his prede- 
 cessor who made the mistake, admit that the act did not allow in- 
 terest ; tiiat the claimant on proof that he was not allowed interest, 
 was entitled to have the case reopened and interest allowed up to 
 the adverse decision. That the claimant has had incurred heavy losses 
 for the public good, " and would not have been indemnified for his 
 sacrifice by repayment of the principal. Fortunately, however, for 
 his representative, he was not left to stand upon the equity, just and 
 and manifest as it was, of the case. The statute expressly proy/Jed 
 for the alloirance of interest, and if it was not taken into considera- 
 tion in the adjustment finally made, the statute law has not been 
 executed according to its ti"ue meaning and intent," (4 Op., 80.) 
 Attorney General Nelson — That the United States was liable for 
 interest on a protested draft of its minister on the ground that 
 ^'when the United States, by its authorized officer, became a ])arty 
 to negotiable pa])er, tiiey have all the rights and incur all the re- 
 sponsibilities of individuals M'ho are parties to such instruments." 
 (4 Op., 299.) Congress having authorized the second Auditor of the 
 Treasury to examine and adjust the claims of the legal representatives 
 of Geo. Fisher deceased " on principles of equity and justice " under 
 the act of April 12, 1848, for losses in 1813, the second Auditor held 
 the value of the property t:d<en or destroyed with interest ui)on it 
 was to be paid "as a full and fair indemnity." Attorney General 
 Isaac Taney held that interest at the rate of 6 })er cent, per year 
 should l)e allowed from the date of taking or destruction. (5 Op. 
 
 71.) 
 
 An act authorizing the Secretary of State to adjust the claim of 
 
[15] 
 
 Jos. I). Ijca. Friinciu, lor sii])[)lic'S furn itched in Wci.st Floridas, ":ic- 
 conling to princij)los of cHjuity and justice/' passed August 14, 1848, 
 Secretary Jno. M. Clayton referred the case to Attorney-General 
 Reverdy Johnson, who decided that "the propriety and obligation 
 therefor of allowing interest upon them are not to he esteemed 
 open questions." (5 Op. 109.) Also, that interest at the rate of six 
 per cent, should be allowed from the date of the claim to August 
 14, 1848, on the ground that it would be unjust to deny interest 
 during the interval when the accounting officers refused to allow the 
 claim. 
 
 That "every principle of equity and justice jirescribes a different 
 rule, and the act requires those principles to govern the liquida- 
 tion." {Ibid 1]0.) 
 
 Commutation ])ay, but not interest, was allowed the heirs of Arm- 
 .stead, on the ground that Virginia did not allow interest. (Ibid 164.) 
 
 Interest was allowed the estate of Commodore Barron, as in ac- 
 cordance with Virginia decisions and former decisions of Attorney 
 General. {Ibid 227.) 
 
 In the Galphin claim, the law for auditing the account made no 
 reference to interest, but the Attorney General held that it was of 
 the same character as the Virginia commutation cases, and that in- 
 terest up to the date of the passage of the act should be allowed. 
 {Ibid 231.) 
 
 The opinions of Attorney General Gushing, on the allowance of 
 interest on the postal contract, conforms to the law in such cases, 
 but is not a guide for the case in question, as it refers to ordinary 
 and unliquidated claims. (7 Opinions 523.) 
 
 The uniform construction of an act of Congress by the Treasury 
 Department is entitled to respect in the courts, but being ex parte, 
 can not conclude them. This was the rule in United Stcdes v. Dickson, 
 15 Pet., 162, relating to the bond of a receiver of public money, 
 the court held that the act must be construed "upon the same prin- 
 ciples by which we ascertain the interpretation of all other laws; by 
 the intention of the legislature as it is to be deduced from the lan- 
 guage and the apparent object of the enactment." {Ibid 162.) 
 
 The contracts of the sovereign are subject to the same rule as those 
 of private persons. United States vs. Wilder, 3 Sumner, 316; 
 United States vs. Barker, 12 Wheat., 561. 
 
 This claim under the statute in question must be construed, with 
 reference to the rule of construction, that "What is implied in a 
 statute is as much a part of it as what is expressed." United States 
 
[ 1^> J 
 
 vs. Rabbit, 1 Black., 61 ; Gelpcke vs. City of Dubuque, 1 Wall.. 221 ; 
 Mayor vs. City of Muscatine, 1 Wall., 393; Groxall vs. Shererd, 5 
 Wall., 283; Kennedy vs. Gibson et al., 8 Wall., 507; Butz vs. City 
 of Muscatine, 8 Wall., 581 ; United States vs. Hudson, 10 Wall., 406 ; 
 Stewart vs. Kahn, 11 Wall., 507; Lynde vs. 77*6 County, 16 Wall., 
 13; Z>ar/.s vs. Gra^/, 16 AVall., 223; 7Ju//% vs. United States, 19 
 Wall., 40; Telegraph Co. vs. £'(/.se/-, 19 Wall., 427; Cornett vs. I17A 
 Hams, 20 AVall. 251. 
 
 Another rule of construction should be followed in this case: 
 "Courts, in the construction of contracts, look to the language em- 
 pl9yed, the subject matter, and the surrounding circumstances; they 
 are never shut out from the same light which the parties enjoyed 
 when the contract was executed, and in that view they are entitled 
 to place themselves in the same situation as the parties who made 
 the contract so as to view the circumstances as they viewed them, 
 and so to judge of the meanings of the words and of the correct 
 application of the language to the things described." Nash vs. 
 Towne, 5 Wall., 699. And we insist that Congress, in construing the 
 act of July 27, 1861, should be governed by the same rule. 
 
 Indiana claims that there is due to her from the United States 
 8362,186.51 for interest paid on her '' War I^oan Bonds." 
 
 She claims this because the act of July 27, 18()1, authorizes and 
 requires the accounting otticers of the Treasury Department to pay it. 
 
 She claims it because it was a legitimate and proper expenditure 
 under the circumstan<'es. 
 
 She claims it because the United States had no money, and to 
 raise, arm and equip the troops, money was necessary; the State did 
 not have this money, and was, therefore, compelled to borrow it to 
 pay these expenses, and, as a consequence, was compelled to pay in- 
 terest on the money borrowed. 
 
 She claims that to refuse to pay back the money thus expended 
 by her is unjust, and is not carrying out the true sjiirit and intent of 
 the law. 
 
 She insists that the principle on which the claim here made is 
 based, has been repeatedly recognized by the government in similar 
 cases prior and subsequent to the passage of the act of July 27, 
 1861, as will appear from the precedents cited above. 
 
 She claims that when Congress passed this act, it did so in the 
 light of all previous rulings of the government in like cases. 
 
 She claims that rulings and decisions made prior to the act of 
 July 27, 1861, were necessarily considered by Congress when this 
 
[17] 
 
 law was passed, and that the interpretation given by the accounting 
 officers, by Congress and the courts, to like provisions in similar 
 cases, would be given in interpreting this law. 
 
 We now call attention to what we deem a })roper interpretation of 
 the act of July 27, 1861, without reference to any precedents. 
 
 The act of July 27, 1861, is as follows: "Be it enacted, etc., 
 That the Secretary of the Treasury be, and he is hereby, directed 
 out of any money in the Treasury not otherwise appropriated, to 
 pay to the governor of any State, or to his duly authorized agents, 
 the cost, charyes and expenses properly incurred by such State for 
 enrolling, subsisting, clothing, supplying, arming, equipping, paying 
 and transporting its troops employed in aiding to suppress the pres- 
 ent insurrection against the United States, to be settled," etc. 
 
 Does not the claim here presented fall within the provisions of 
 this act ? Was not the interest paid by the State a part of the " cost, 
 charges and expenses" intended to be covered by this act? How 
 could the purpose have been accomplished without this expenditure? 
 In order to raise it she was compelled to issue bonds, and to pay in- 
 terest on the bonds; the interest suffered and paid by the State 
 formed a })art of the debt. 
 
 Should there be any two opinions on this question ? Can there be ? 
 
 If the State had not raised the money by issuing bonds, the 
 United States would have been compelled to raise it in the same 
 way. She would have had to borrow money and pay interest. The 
 State then issued her bonds and raised the money instead of and in 
 the room and place of the United States. The State paid the interest 
 the United States would have been compelled to pay if she had is- 
 sued the bonds. We then ask, upon what principle of justice or 
 equity can the government refuse to pay a debt she would have been 
 required and compelled to pay if the State had not paid it. Can it 
 be said that because the State came forward and loaned her credit, 
 borrowed money for the United States, and paid her debts, and in 
 doing so, and in order to raise the money, j)aid the same interest the 
 United States would have been compelled to pay if it had borrowed 
 the money, can the government in common honesty say this is inter- 
 est, and the government does not pay interest? And this because 
 of the presumption that the government is always ready to pay all 
 her just obligations. While this is true as a rule, it is not true in 
 p dnt of fact. We do know that when the war began there was 
 an empty treasury, the bonds of the United States were being sold 
 
[18] 
 
 at a discount, and with all these facts staring us in the face, we are 
 met with this rule as an answer to our just demand. 
 
 When it is shown that the United States did not have the money, 
 but was com])elled to resort to loans to furnish any money, the rule 
 is not applicable. 
 
 This is not interest in the light contemplated by the rule, that the 
 government will not pay interest. It is as much a part of the debt 
 as the bonds themselves were. If the money had been in the State 
 treasurv, then the State would not have been compelled to borrow 
 monev, but she Avas in the same condition financially that the United 
 States Mas — she did not have it. 
 
 These then being the facts in the case, was not this expenditure a 
 part of the " cost, charges and expenses properly incurred by the 
 State?' There can be no question but that it cost the State the 
 amount claimed to raise the money. There can be no question but 
 that these sums expended were expended on account of " enrolling, 
 subsisting, clothing, supplying, arming, equipping, paying and trans- 
 porting its troops employed in aiding to su})j)ress the rebellion." 
 Were they properly expended? This is matter of evidence — the 
 proofs show it was. If the sums so expended were properly ex- 
 pended, and formed part of the necessary "cost, charges and ex- 
 penses," etc., is the State not entitled to recover the money thus 
 expended? If not, for what reason? Can any valid reason be 
 assigned? We submit that there can be none, for none exists. 
 
 What do the various Avords of the act of July '21, 1861, mean? 
 The language is " cost, charges and expenses." Webster says the 
 word "cost" means "amount paid, charges, expenses, loss of any 
 kind, detriment, to require to be given or expended for, to require 
 to be borne or suffered." 
 
 The word "expense" he says nu-ans, first, " The act of expend- 
 ing, disbursement, that which is expended.' The word "expended" 
 he says means "To employ in any way; to consume by use." 
 
 In the connection in which the words are used, the Mords cost, 
 charges and expenses mean substantially the same tiling. These 
 several words were used to make the act bi'oad and comprehensive, 
 to prevent a narrow, s)aaU or teeJmical construction. Congress was 
 then legislating upon a great and important subject, one that was 
 more important than money. It was one that was more important 
 than life. It was the life of this nation that Congress was leaisla- 
 ting for. And Congress did not intend that any narrow or techni- 
 cal construction should be given to the words used, therefore all the 
 
[19] 
 
 Avords wore used flint wore nocossary to cover all the proper expon- 
 diturcs that wore to ho. made by the States in purchasing arms, 
 equipments, etc., for the troops. Under the circumstances, could 
 the purposes of the act have been accomplished without borrowing 
 the money? The State did not have it — she could only get it by 
 issuing her bonds and selling them. Then, if the money could be 
 obtained in no other way, was not this interest paid " projyerly'^ ex- 
 l>ended"? Was it not a necessary part of the "costs, charges and 
 ex])enses" provided for in this act? We think there can be no 
 question but that this expenditure by the State is a legal and legiti- 
 mate claim to be allowed and paid under this act. 
 
 But it is said by the Comptroller, that the act under which this 
 opinion was given, authorizes the payment of interest, a)id of course 
 is not authority for such payment, when not specifically authorized 
 by law. We attempted to show that the claim here made was sjje- 
 cificaUy mdhorized by law ; it is authorized by the act of July 27, 
 18G1, because it was a part of the "cost, charges and expenses" ol 
 • raising, arming and equiping the troops, etc. It was speeificaUij 
 aiUhorized, because the interest paid was a part of the amount neces- 
 sarily \>\\\i{ by the State for the purpose of enabling the State to per- 
 form the object contemplated by the act, and is as fully embraced 
 by the act as was done, in the act of 1825, referred to in the opinion 
 of the Attorney General. 
 
 AVe only claim for money actually expended actually auth(^ized 
 by the act of ]8()1. 
 
 We do not claim interest on our claim for expenditures. We 
 only claim for money paid out to raise the money to pay the ex- 
 penses authorized by the act of 1861. This claim is so clearly dis- 
 tingui.shable from a claim for interest, within the rule established by 
 the government, that it would seem to argue it would be a waste of 
 time. The distinction has been recognized by all, adopted and acted 
 upon by the Second Com])troller. It is said that it was done under the 
 act of twenty-seventh of February, 1851, vol. 9, p. 573, because it 
 provides for reimbursing Florida for moneys advanced and paid, and 
 for expenses incurred and ohlUjidions contracted by said State for sub- 
 sistence, sujjplies and services of local troops, etc. He thinks this lan- 
 guage is much stronger and more comprehensive than the language 
 used in the act now under consideration. Is it? The act of 18(il re- 
 quires that the States shall be reimbursed for all '*cost, charges and 
 expenses proj)erly incurred by such State for enrolling, subsisting, 
 clothing, supplying, arming, equipping, paying, and transporting its 
 
[20] 
 
 troops, oniploycs," etc. Is not this language nmch stronger and 
 more comprehensive than that used in the Fh)rida act? In that act 
 tl)(' words "obligations contracted" are used. Do these words 
 cover more than those used in the act of 1861? Under this act the 
 government is required to pay the "cost, charges and expenses 
 properly incurred," etc. Could any other conceivable matter be 
 covered? If so, what is it? 
 
 Attention was called to the definition of the words used in the 
 act of July 27, 1861, to show their broad and comprehensive mean- 
 ing; further comment would seem unnecessary. The money was 
 paid out by the States; it was em])loyed and expended in order to 
 get the money that paid for the arms, equipments, etc. It was a 
 })art of tiie amount paid — a part of the charges incurred by the 
 State; it was a loss to the State, because it was paid out; it was dis- 
 bursed by the State ; it was required to be borne and suffered by 
 the State; therefore we submit that it was much broader language 
 than that used in the act to reimburse Florida. There is no ques- 
 tion but that Congress intended to reimburse the State for such ex- 
 penditures. It was contemplated at the time that the States should 
 furnish the money to pay these expenditures by lending their credit, 
 by borrowing the money. Will or can any one presume that those 
 members who voted for this bill in Congress, were so narrow, so 
 small that they intended to induce the States to borrow this money, 
 pay yiterest for it, and tiien, after they had done so, say we did not 
 intend to pay you back this interest? The government never pays 
 interest; it is contrary to her policy to pay interest. Oh, it will 
 never do to pay you the interest you were compelled to pay, though 
 it w^as a part of the cost, charges and expenses incurred. Interest 
 can not be paid. Can any honest man say this and look his neighbor 
 square in the face? Is it honest so to act; is it obeying the law? If 
 I should say to my neighbor, lam in trouble, am in danger of losing 
 all I possess; come to my aid, do all you can to save me from de- 
 struction, from ruin ; pay the cost, charges and expenses, and I will 
 reimburse you ; I will pay all the cost, charges and expenses you' 
 may properly incur in saving me, and I say to him 1 have no money, 
 (this is what the United States said in effect — she did not have it,^ 
 you raise the money, and I will j)ay you the cost, charges, etc. ; and 
 after I am saved, and all is secure, I turn upon my neighbor and say 
 1 will pay you all except the interest you paid on the money you bor- 
 rowed, can't jVay that ; I have a rule that no interest is to be paid ; 
 I am wealthy, and the presiinipti(^n is I have the money to pay all 
 
[21] 
 
 my (lel)ts ; T can not ])ay you interest, though. If I Imd honest 
 neighbors, how long woukl I be permitted to remain in that locality 
 and enjoy the society of honest men (on the assumption that I could 
 not be sued without my consent.) 
 
 If the government refuses to pay this interest, suffered and paid 
 by the States, she assumes the position above indicated. A great 
 government should not put herself in such a position, and I can not 
 think, when this question is carefully considered, she will do so. 
 
 IIUI.ING OF SECRETARY OF THE TREASURY ON 
 APPEICATION TO ALLOW ACCOUNT. 
 
 TREASURY DEPARTMENT, 
 
 Office of the Secretary, 
 Washington, D. C, June 27, 1878. 
 
 To the Secretary : Application of the State of Indiana that the 
 Comptroller of the Treasury be directed to review and restate the 
 account of that State against the United States, and allow |362,- 
 186.51-100, being the amount of interest paid on her war loan bonds 
 as " expenses" incurred under the act of Congress of July 27, 1861. 
 
 This claim was presented to the Treasury by the authorities of the 
 State of Indiana, on May 26, 1868, and was disallowed by the ac- 
 counting officers. The facts were then stated substantially as now, 
 to-wit : That the State, at the breaking out of the rebellion, was 
 Avitliout funds, and that she issued in good faith, and at fair rate of 
 interest, bonds to the amount of $2,000,000, for the sole purpose of 
 aiding in suppressing the rebellion, and that the money thus raised 
 was properly expended in good faith for that purpose, and the amount 
 claimed was actually paid as interest on said bonds. 
 
 It is alleged that the Comptroller made a mistake in matter of 
 fact in this : That he treated the claim as interest upon an account 
 as if the money had been on hand in the State treasury and ad- 
 vanced for the purposes named, instead of being an actual payment 
 of interest upon bonds issued solely for such war purposes. It is 
 true that the Comptroller based his opinion on the report of the 
 Auditor on the claim of the State of the Rhode Island for interest 
 on money advanced by her for similar purposes, but that he misap- 
 prehended the fact in that regard in the Indiana case, can not be 
 possible, because, as before stated, the first application of the State 
 of Indiana distinctly states the facts as now stated, that the claim 
 was not for interest upon money which the State had in its treasury, 
 
[ 22 ] 
 
 mid advancotl, but it Mas for iutorost actually paid out upon bonds 
 siK'cialiy issued for the ])urposo of suppressing the rebellion, and 
 kept entirely separate from her other funds. It is claimed, also, that 
 the Comptroller made a mistake of law in this, that he decided that 
 the interest tiuis paid on said bonds was not an ''expense" under 
 the act of Congress of July 27, 1801, whereas he should have held 
 it to have been legally a ])art of such "ex])enses." AVithout dis- 
 cussing the question whether, after the lajise of ten years, the pres- 
 ent Comptroller can legally overrule, upon his own opinion of the 
 law, the opinion of his predecessor, I think the application must be 
 rejected for reasons which I will proceed to state. 
 
 The claimant's attorneys have cited authorities to show that in- 
 terest upon claims of similar character for money expended by 
 States iu aid of the United States government in other wars, has 
 l)een allowed, and some cases are cited showing that the Attorney 
 General and other officers have, in some cases, made the distinction 
 between iutei'est u})on money merely advanced by such States, 
 and interest paid upon money borrowed for the specific purpose. 
 The authorities on this point are numerous and som(!what conflict- 
 ing. Most of those now cited by the claimant are cited in the 
 opinion of the Third Auditor upon the Rhode Island claim, to 
 which ex})ress reference is made by the Comjitroller in his first re- 
 jection of this claim. It is difficult, upon equitable principles, to 
 maintain the distinction suggested, because it would seem that money 
 advanced out of its general funds by a State largely in debt for gen- 
 eral purposes, is as much entitled to bear interest as money borrowed 
 for the specific purpose. Payment of interest, in either case, is a 
 burden upon the State borne for tiie same cause. It is unnecessary 
 to look at the authorities upon the subject further than the case of 
 the Ignited States vs. McKee et ciL, (91 U. S. Reports, j). 442,) which 
 has been cited by the claimant, and is the latest, as well as the high- 
 est, authority upon the point. In that case the court, with two dis- 
 senting voices, decided that the claim of the heirs of Francis Yigo, 
 on account of supplies furnished by him in 1778, to a Virginia reg- 
 iment, was entitled to bear interest. The claim was allowed under 
 an act of Congress, which referred it to the Court of Claims, with 
 power to adjust it, "and in making such adjustment and settlement 
 the said court shall be governed by the rules and regulations hereto- 
 fore ado])ted by the United Stat(\s in the settlement of like cases," etc. 
 
 A long list of similar cases was cited in which Congress had ex- 
 pressly allow(!d interest. The Court of Claims allowed interest upon 
 
[23] 
 
 the claim and found that "no rules and regulations have heretofore 
 been adopted by the United States in the settlement of like cases, 
 except what may be inferred from the policy of Congress in passing 
 private acts for the relief of various persons." When. passing such 
 private acts " Congress has allo\yed interest upon the claim up to 
 the time when the relief was granted." And it was upon the 
 ground that this statute intended to award interest upon this partic- 
 ular claim, that the Supreme Court affirmed the allowance by the 
 Court of Claims. 
 
 The rule that the United States does not pay interest, except in 
 cases where Congress expressly authorizes it, seems to be generally 
 admitted. Justice CliiFord, who dissented in the McKee case, states 
 the general principle no doubt correctly, as follows : 
 
 " Unless where the contract is expressed to that effect, the United 
 States are not liable to pay interest. Interest should never be al- 
 lowed on old claims when payment has been deferred because the 
 accounting officers of the Treasury were of the opinion that further 
 legislation was necessary to authorize their allowance, unless the 
 new law clearly provides for the payment of interest as well as 
 principal." 
 
 In the case before us, the claimant contends that the act of Congress 
 did provide for the payment of this claim as part of the " expenses" 
 claimed to be paid. The accounting officers in 1868 thought other- 
 wise, and I think this department should regard the question as res 
 adjiidicata. 
 
 It is clearly an equitable claim, but not more so than the claims 
 of several other States for interest on money borrowed or advanced 
 for the same patriotic purpose, and which Congress alone has power 
 to allow. 
 
 This brings me to my last proposition, which is, that this claim 
 and others like it, have already been presented to Congress and 
 there received some consideration. 
 
 December 6, 1872, Mr. Morton in the Senate of the United States, 
 by unanimous consent had leave to bring in a bill "to refund to the 
 States the interest on money borrowed to equip, pay, supply, and 
 transport troops for the service of the United States in the recent 
 war." 
 
 The bill was read twice and referred to the committee on military 
 affiairs and ordered to be printed, and a copy of it is with the papers. 
 
 We have in many cases acted upon the principle which is found 
 in FuUar's case (4 Opinions of Atty. Genl., 429), to-wit : 
 
[24] 
 
 A claimant who appeals to Congress after an unsuccessful appli- 
 cation at the department, must abide by his election whether the 
 result be favorable or otherwise. 
 
 I think this principle can be wisely applied to a case like this, 
 which is a representative of a large class, involving very large 
 amounts and affecting several of the States. Such cases are peculiarly 
 entitled to the consideration of Congress. 
 
 For these reasons I think the direction to the comptroller to open 
 and restate the account should not be given. 
 Very Respectfully, 
 
 Endorsed as follows: 
 
 Approved, 
 
 H. F. French, 
 
 Asst. Secretary. 
 
 John Sherman, 
 
 Secretary. 
 
 The State of Indiana is now compelled to come to Congress and 
 ask that provision be made for the payment of a claim that is Ad- 
 mitted by the department to be just and equitable, but one that can 
 not be paid by the executive branch of the government. The Second 
 Auditor says in his decision on this claim, "When the condition of 
 the country is considered at the time these expenses were made, the 
 heroic efforts of the loyal States to sustain our country in this the 
 time of her greatest trial, it is clear, in my opinion, that Congress 
 should authorize the refunding not only of the interest paid to raise 
 money, but of all expenses, drawbacks, etc.; in fact, of every dollar 
 paid by any such State, directly orindirectly, in support of this holy 
 cause ; but I am clearly of the ojiinion that the accounting officers 
 of the Treasury have no power so to refund without the action of 
 Congress." 
 
 Secretary Sherman, in ruling on the a})prication of the State to 
 open and allow tliis account, uses the following language : " If is 
 clearly an equitable claim, but not more so than the claims of several 
 other States for interest on money borrowed or advanced for the 
 same patriotic purpose, and which Congress alone has power to 
 allow." 
 
 AVe ask Congress to make provision for the payment of this claim, 
 because it is just, and because it is honestly due. 
 
 In the brief presented to the Secretary Ave called attention to the 
 several acts of Congress, the rulings of the Attorney General, the 
 
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 decisions of the Court of Claims and the Supreme Court, and thus 
 show that chiims of the same nature of this have been paid by the 
 government without a single exception. No claim of this character 
 has ever been rejected, and we think no such claim should ever be. 
 
 In the case of United States vs. McKee et al., (91 U. S. Supreme 
 Court Reports, from page 445 to 447, inclusive,) in the argument of 
 counsel reference is made to the several acts of Congress allowing 
 interest on war claims. The position assumed by counsel is fully 
 approved by the Court. 
 
 This claim is not for interest claimed to have accrued on an un- 
 liquidated claim in favor of the State against the United States, but 
 it is a claim for interest paid by the State for the use and benefit of 
 the United States — money expended for her. 
 
 Therefore, the claim here made is much stronger, and more equit- 
 able, than any of the cases referred to in the McKee case. 
 
 The bill only provides for the payment of the claim for interest 
 paid on her War Loan Bonds. She abandons the claim for dis- 
 count suffered, etc. 
 
 T. W. Woollen, 
 Attorney General of Indiana. 
 
 C. A. BUSKIIIK, J. & M. TlUiMBLE, R. G. c't E. C. IiNGERSOLL, 
 
 J. C. Denny, of Counsel. 
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