1 T LUNOIS } SENATE. J 12th ASSEM. 
 
 LBQI8 ' * I 3d SESSION. 
 
 FEBRUARY 3, 184L 
 
 Read and laid on the table. 
 
 LETTER 
 
 V 
 
 FROM 
 
 THE GOVERNOR, 
 
 ^ENCLOSING A COMMUNICATION FROM RICHARD M. YOUNG, AS AGENT OF THE 
 
 STATE OF ILLINOIS, FOR NEGOTIATING LOANS FOR THE ILLINOIS 
 
 AND MICHIGAN CANAL. 
 
 EXECUTIVE DEPARTMENT, 
 
 Springfield, Feb. 3, 1841. 
 To the Honorable, 
 
 The SPEAKER of the Senate. 
 
 SIR : In compliance with a resolution of the Senate, I have the honor 
 herewith to enclose a report of the Hon. R. M. Young, Agent of the 
 State of Illinois, for negotiating loans for the benefit of the Illinois and 
 Michigan Canal. 
 
 I have the honor to be, sir, 
 
 Your obedient servant, 
 
 THO. CARLIN. 
 
 REPORT. 
 
 WASHINGTON CITY, Jan. 10, 1841. 
 His Excellency, THOMAS CARLIN, 
 
 Governor of Illinois. 
 
 SIR: Yours of December 12, 1840, communicating certain resolutions 
 of inquiry, adopted by the House of Representatives of the State of Illi- 
 nois, at its present session, and instructing me to pay the semi-annual 
 interest which became due on our canal Bonds at New York on the first 
 Monday in this month, has been received ; in reply to which I have the 
 honor to submit the following statement: 
 
 That, by the contract made with Messrs. John Wright & Co. in Lon- 
 
[350] 2 
 
 L 
 
 don, on the 30th day of October, 1839, by which they undertook to dis* 
 pose of 225,000 or $1,000,000, of the stock of the "Illinois and Michi- 
 gan Canal,' 1 at the rate of 91 to the 100, free from all charges and 
 commissions, it was stipulated, among other things, that 30,000 should 
 be advanced to the State; 10.000 of which was to be payable on the 
 15th of January, 1840, and 20,000 on the 15th of July following. Besides 
 these sums, 300 was paid by Messrs. Wright & Co. at the time of clos- 
 ing the agreement, and the delivery of the bonds, which was charged to 
 the State, and, also, taken into the account of advances: making, in thr 
 whole, the sum of 30,300 sterling. On my arrival in London, I had 
 deposited all the money I had with me, for the purpose of paying ex- 
 penses, with Samuel Jaudon, Esq. agent of the Bank of the United States, 
 and drew upon him for small sums as I had occasion to use them. These 
 30 / 1 also deposited; and after settlement with him at the time of leav- 
 ing London for the United Stales, and the proper allowance made for the 
 amount of checks drawn upon him, I took a draft for the residue oa the 
 Bank of the United States at New York. I at the same time made an 
 agreement with him, as agent of the Bank of the United States, for the 
 10,000 payable the 15th of January, for which I was to receive, on my 
 arrival, par funds in Philadelphia, with the difference of exchange between 
 New York and London, which was reckoned at 9 per cent., and which 
 together, would have been equal to the sum of $48,500 in specie. I ac- 
 cordingly drew an order on Messrs.Wright& Co. in favor of Mr. Jaudon, 
 for the amount; but the order not being negotiable, according to the cus- 
 tom of the bankers in London, and, consequently, unavailable until the 
 actual day of payment, I deferred, at his request, the drawing of a regular 
 bill of exchange until my arrival at Philadelphia. (See Mr. Jaudbn's let 
 ter, No. 1, in the appendix.) At this time neither myself nor Mr. Jaudon 
 knew of the suspension of specie payment by the Bank of the United 
 States; nor did I learn that such was the 'case until my arrival at New 
 York: it being the understanding that I was to receive funds equal in 
 value to specie. On reaching Philadelphia, about the 29th of November.. 
 1839, 1 found the Bank in a state of suspension, and its notes at a depre- 
 ciation of nine percent. On the next day Ihad an interview with the 
 president and cashier, and, after an explanation of the understanding be- 
 tween Mr. Jaudon and myself, they did not hesitate to allow nine per cent, 
 as the difference in exchange between New York and London, and a dis- 
 count of nine per cent, as the proper scale of depreciation upon their 
 notes, in which payment was made. The draft on Messrs. Wright & Co. 
 was dated the 30th November, 1839; and from that time the avails of 
 the 10,00 > may be considered as having been under my control, although 
 the draft was not payable in London until the 15th of January, 1840. 
 (See my letter to Messrs. Wright & Co. No. 2, and their reply to the 
 same, No. 3.) 
 
 The reason why this money was placed in deposite to my own credit, 
 and not to the credit of the State, is, that <he contract was in its nature 
 conditional, requiring legislative action, and your approval as Governor; 
 and that I did not consider it just towards Messrs. Wright & Co. to make 
 any application of the funds for State purposes, until it was known that 
 the contract would bit recognized and carried out in good faith 011 our 
 part, and some special instruction was received from you on the subject* 
 
3 [351] 
 
 The propriety of this course will be seen by reference to the action of our 
 Legislature, which convened soon after, and the subsequent correspon- 
 dence which took place in regard to it, to be found in the appendix, 
 bein" at the time of thisdeposite a want of public confidence in the Bank 
 of the United States, and supposing that these funds, in the event of 
 the approval of the contract with Messrs. Wright & Co. (which, under the 
 then existing circumstances, I confidently anticipated,) would be wanted 
 for disbursement on the line of the canal at home; and believing that 
 some advantage would accrue to the State by converting them into such 
 western funds as were current in Illinois, and generally received at par 
 in all business transactions, by reason of a difference of exchange varying 
 from one and a half to two and a half per cent, in favor of the notes of the 
 United States Bank, I proceeded, as fast as was practicable, and had suc- 
 ceeded in converting the greater portion of the amount into notes and 
 certificates of deposite on the banks of Illinois and Indiana, when 1 re- 
 ceived your letter of February 3, 1840, informing me that the Legislature 
 had adjourned on that day; that a resolution had passed the House of 
 Representatives, requiring the Secretary of State to transmit the same 
 to Messrs Wright & Co. in London, declaring that no law existed in Illi- 
 nois authorizing the sale of bonds at 91 to the 100, and requesting a 
 return of the bonds, &c.: but that il had been defeated in the Senate; 
 and that, in consequence of the Legislature having declined to approbate 
 the arrangement made by me in London, you did not feel at liberty to 
 confirm it: and that you were not then prepared to say how the business' 
 could be adjusted in relation to the 10,000, &c. but would write to me 
 again on your return to.Quincy. (See extracts from your letter, No. b.) 
 According to your promise, you wrote to me from Qumcy on the 1 Jtb 
 of February, 1840, and advised, as the better course, the cancelling of the 
 contract with Messrs. Wright & Co. for reasons mentioned in your letter, 
 to which I heg leave to refer, as there is no necessity for comment, (bee 
 
 letter No. 7.) 
 
 In the mean time, some person had sent to Messrs. Wright <fc Oo. a 
 copy of the resolution referre;] to, although it was not authorized by the 
 concurrent vote of the Senate; which at once put a stop to their opera- 
 tions in London, and prevented them from carrying out some advantage- 
 ous arrangements which had been made for regular sales of our bonds in 
 that market. (See his letter, No. 4, and Mr. Jaudon's, No. 5.) 
 
 I also refer 10 the letter of Mr. Jaudon to show that, shortly after 
 made this contract for 91 to the 100, our bonds were selling for a much 
 less price in the market; and that he had purchased to the amount oi 
 $50,000, for a house on the continent, of Illinois six per cent, dollar bonds 
 payable in 1860 and 1870, at from 78 to 87* cents on the dollar; that, ac- 
 cording t.o this estimate, our sterling six per cents, would have been 
 worth but from 88 to 8Si pounds sterling in the hundred; that the i 
 made under our contract were considerably above the current market 
 price; and that we deserved great credit "for having sold the bonds so 
 
 well, &.c. 
 
 As soon as your letters of the 3d and 19th of February were received, 
 I saw the necessity of converting all the funds I had, of every descrip- 
 tion, into such as were at specie par in New York, for the purpose of re- 
 funding the amount advanced by Messrs. Wright & Co. as soon as prac- 
 
[352] 
 
 
 ticable, ifinthe mean time you should not perceive sufficient reasons for 
 changing your opinion as to the propriety of approving the contract. Illi- 
 nois and Indiana bank notes and certificates of deposite were at this pe- 
 riod fluctuating at a discount of from 8 to 11 per cent, in New York and 
 Philadelphia, where I effected most of the exchanges; that is, the brokers 
 would purchase at from 9 to 11 discount, and sell at 8 to 84; so fhat, with 
 few exceptions, I lost as much as I had gained by the original exchanges; 
 and, taking it altogether, including necessary expenses, saved but little, if 
 any, excess. 
 
 A short time after I received yours of the 19th of February, I received 
 a letter from W. B. Ogden, Esq. of the 7th of March, 1840, as one of a 
 committee appointed by the contractors on the canal; in which he in- 
 formed me that you had consented to permit the contractors to avail 
 themselves of the contract with Me?srs. Wright & Co. and urging me to 
 retain for their benefit all money drawn on that account, &c. (See his 
 letter to me, No. 8, with your note at the bottom; my reply, No. 9; and 
 your letter, No. 10.) 
 
 In the same letter you requested Governor Reynolds and myself to pro- 
 ceed to some ofthe eastern cities, and sell bonds, ifpossible,to the amount 
 of $1,200,000, (for canal purposes, and for the completion of the State- 
 house,) provided sales could be effected at par. We according!^ proceeded 
 ^o New York; but, so far from being able to effect sales at par, we could 
 not at that time have sold our bonds at 75 cents to the dollar. See, also, 
 your letter of March 26, 1840, (No. 11.) on the same subject, and request- 
 ing us, in the event of our not succeeding in making sales as instructed, 
 to deposite $1,200,000 ofthe bonds in my possession in New York or Phi- 
 ladelphia, subject to the order of the Board of canal commissioners. These 
 bonds were deposited with Messrs. Nevins, Townsend & Co. in New 
 York, and subsequently passed into the hands of General Thornton. I 
 beg leave, also, to refer to my letter to you of May 15, 1840, (No. 12.) 
 and especially to the latter part of it, in which you were urged, as a last 
 resort, to approve the contract made with Wright & Co. and the reasons 
 assigned why such a course had become necessary to save the credit of 
 the State. The next letter I received was jours of the 1st of May, 1840, 
 (No. 13,) in which you say that you have concluded to confirm my con- 
 tract with Messrs. Wright & Co. for $1,000,000 of canal bonds, provided* 
 they will agree to promise all the money within the current year, &c.; 
 and that, although you cannot persuade yourself that it is a par sale ac- 
 cording to the letter ofthe law, yet still you believe it is at par according 
 to the meaning and intention of the Legislature by which the law was 
 enacted. I will only remark, that such was my own opinion and under- 
 standing when I accepted the agency to sell, and that in conformity with 
 that belief I acted. I communicated the new terms proposed to Messrs. 
 Wright &L Co. in your letter of May 1, immediately after its reception, 
 by the steam ship British Queen, which sailed from New York on the 1st 
 ot June following. See the letter of Gov. Reynolds and myself, dated 
 the 26th of May, 1840, (No. 16.) See, also, my letter to you, dated May 
 26, 1840, (No. 14,) in which reasons are likewise assigned for not paying 
 over the $10,000 to General Thornton, and for not drawing for the 
 20,000 which was payable, by the terms of the agreement, on the 15th 
 of July, 1840. See, also, my letter to Gen. Thornton of May 25, 1840, 
 
5 [353] 
 
 {No. 15, in the appendix,) on the same subject. After our letter of May 
 25th, to Gen. Thornton, in which we declined doing any thing until it was 
 known that Messrs. Wright & Co. had accepted of the alteration pro- 
 posed by your letter of the 1st May, he returned back to Washington 
 from New York, and informed Gov. Reynolds and myself thai he had 
 succeeded in procuring $45,000 for the IVew York interest, which became 
 due in that city on the tirst Monday in July, 1840; but that he had en- 
 tirely failed to make any arrangement for the interest in London, 
 which fell due on the same day; and that, unless Governor Reynolds and 
 myself would draw for the 20,000, he would be under the necessity of 
 returning to Illinois, as nothing more could be done; and that the inevi- 
 table consequence would be, the loss of our credit as & State, perhaps an 
 abandonment of the canal, and certain ruin of the contractors, who would 
 be left without mean? to proceed any further with their contracts. In 
 this emergency, Gov. Reynolds and myself finally concluded to draw a 
 conditional draft on Messrs. Wright &. Co. provided Gen. Thornton would 
 give us a lien upon bonds to the amount of 45,000, in the hands of Ne- 
 vins, Townsend & Co. to secure us against any improper use of the draft; 
 which he agreed to do. For an explanation of this transaction, I refer 
 you to our letter to John Wright & Co. of May 29, 1840, (No. 1*3,) with 
 the vouchers A, B, and C, which follow; to General Thornton's letter to 
 Nevins, Townsend & Co, of May, 29, 1840, (No. 19,) and his letter to 
 you of June 1, 1840, (No. 18, in the Appendix.) Some time in July I 
 received a letter from Mr. Wright, dated June 30, 1840, in which he in- 
 formed me that ho had accepted our draft for the 20,000, and that bonds 
 enough had been sold to cover the amount; that he had made a pro- 
 visional arrangement with General Thornton for the continuance of sales 
 until March, 1841; but says nothing about accepting the terms proposed 
 in our letter, of securing the entire amount to be paid within the year 
 1840, as prescribed in your letter of instruction on that subject. See his 
 letter to Gov. Reynolds and myself, (No. 20.) 
 
 In your letter of June 14, 1840, you for the first tie approve, uncon- 
 ditionally, of the contract with Wright & Co. provided, in my judgment, 
 it could be made available to save the credit of the State, as you saw no 
 other means of averting that calamity. You also express surprise in that 
 letter, that General Thornton should have understood you as approving 
 the contract unconditionally, before he came to Washington, as such was 
 not your intention; and that you could not disapprove of my caution, 
 situated as I was, in holding the proceeds of the 10,000 untouched, for 
 reimbursement, in case he (Mr. Wrighi,) should decline the proposed 
 change of contract. See No. 21, in appendix; your letter to Governor 
 Reynolds and myself, dated June 25, 1840, (No. 22,) and your letter to 
 myself, dated July 2, 1840, (No. 23.) In the last letter referred to, you 
 say: "It would seem by Gen. Thornton's letter to me, that some mis- 
 understanding existed in relation to the payment of the July interest, 
 as it seems that he expected me to direct you tp apply the 10,000 which 
 you have drawn, and the 20,000 which you were authorized to draw 
 for, to its payment. This 1 could not do before Mr. Wright had consent- 
 ed to the proposed alteration of the contract." You also informed me 
 that the 225,000 of renewed bonds, with semi-annual interest, would 
 
[354] 6 
 
 be forwarded to me by the Auditor of State, with instruction to send 
 them as early as possible to Gen. Thornton, at London, to be substituted 
 for the old bonds, of that amount, left with Wright & Co. under my con- 
 tract; and to request Mr. Wright, on receipt of them, to cancel the old 
 ones, and to send them to you by Gen. Thornton, on his return to the 
 United States. Mr. Edmund Roberts, of Springfield, brought these bonds 
 to Washington, and at my request took them to Nevins,Townsend, & Co. 
 of New York, who forwarded them to London. See the letter of Gover- 
 nor Reynolds and myself on this subject, dated July 20, 1810, to John 
 Wright & Co. (No. 24,) and Mr. Wright's letter to me of the 29th of 
 August, 1840, (No. 25,) in which he acknowledges the receipt of the 
 bonds, and proposes^to transfer a portion of them to Messrs. Smiths. Mag- 
 mac & Co. on account of the agreement made with that house by General 
 Thornton, for the benefit of the contractors on the canal. On the 15th 
 of October, 1840, I wrote to Messrs. Wright & Co. at the request of 
 General Thornton, and with your approbation, (both of you being present 
 at the time,) and requested them to transfer all the new bonds received 
 to Messrs. Smiths, Magniac & Co. as suggested; which I suppose has 
 been done as I have heard nothing to the contrary. See my letter to 
 Wright & Co. (No. 26.) I have received the copy of a letter addressed 
 to your Excellency, by Samuel Allinson, Esq. late agent of the house of 
 Wright & Co. in London, dated December 1, 1840, (No. 28,) to whicb 
 I beg leave to call your attention, for the purpose of showing that no 
 loss will be sustained by the failure of that old and respectable house, 
 and the necessity of appointing a special agent to receive the unsold 
 bonds, as they have passed out of their hands under the assignment of 
 bankruptcy. As soon as I heard of this failure, at New York, I immedi- 
 ately advised you of the fact, and addressed letter? to Messrs. Wright & 
 Co. and Samuel Jaudon, Esq. (Nos. 29 and 30,) to which I refer you, in 
 relation to the course I thought it my duty to pursue, to save the State 
 from injury by any attempt at a misapplication of the unsold bonds, by 
 requesting their immediate delivery to Mr. Jaudon, as our agent. Your 
 verbal instruction to use the avails of the 10,000 in payment of the 
 interest w*hich became due on our canal bonds, in New York, on the first 
 Monday in the present month, just before I left home for Washington, 
 is therefore the first instruction which I have received to make an appli- 
 cation of these funds to the purposes of the State, as will appear by the 
 annexed correspondence, and an extract from your message to the Gene- 
 ral Assembly of Illinois of the 26th of November, 1840, (No. 27,) and also 
 an extract from the same message (No. 3*2,) in which reasons are also 
 given why this money was not previously paid over to Gen. Thornton. 
 
 This interest on our canal bonds, amounting to $39,COO, I have paid in 
 New York, according to your instruction, with the further sum of $11,000 
 to Nevins, Townsend & Co. in part payment of money advanced by them 
 to Gen. Thornton, to pay the interest in July last; making, together, the 
 sum of $50,000. See my letter to you, from New York, dated Decem- 
 ber 28, 1840, (No. 31,) and the accompanying vouchers (A, B, and C.) 
 
 Your letter of December 12, 1840, requesting me to pay this interest, 
 and to dcposite the residue of the funds in some safe bank, was not re. 
 ceived until my return from New York, on the 30th of the past month; 
 
but I trust, nevertheless, that the payments, as made, will meet jour ap- 
 probation. See extract from your official letter, dated December 12, 1840. 
 (No. 33.) 
 
 During the time of purchasing western funds, I drew checks on the 
 Bank of the United States as frequently as it was convenient to make 
 exchanges, and kept my deposites in the Bank of Washington in this city. 
 When it became necessary to convert these funds into such as were 
 equal to specie in New York, I continued my deposites in this bank, which, 
 although it did not pay specie for its notes, was nevertheless the place at 
 which the members of Congress received their compensation. When the 
 deposites consisted of drafts, they were made in sealed packets, not liable 
 to be touched; and special when in specie; and at the end of the session, 
 the bank gave me specie drafts on New York, for such of the deposites 
 as had been made in gold and silver. At the close of the last session of 
 Congress, a portion of these funds, consisting chiefly in certificates of de- 
 posite on the banks of Illinois and Indiana, were still on hand, and could 
 not be exchanged in the eastern market without a losing sacrifice. These 
 I exchanged chiefly in the city of St. Louis; and when the proceeds were 
 in specie or notes on the Bank of Missouri, I made my deposites in that 
 bank; where they remained until converted into eastern exchange. 
 
 I found much difficulty from first to last, and was at considerable ex- 
 pense in making this latter conversion into par funds. And, although the 
 last exchanges were more favorable than the first, on account of a rise in 
 the value of western bank notes, still, when taken altogether, I was well 
 satisfied to find that nothing had been lost by the operation. Surely 
 nothing has been gained, commensurate with the responsibility, trouble, 
 risk, and expense, (to say nothing of the abuse I have received from those 
 who have attempted from first to last to render this loan ineffectual,) in- 
 curred in bringing this matter to a close. No loans have been made to 
 any bank, broker, or other individual, of any part of this money, for inter- 
 est or otherwise; and no interest has at any time been received from any 
 bank, broker, or other person, on such account, to the value of one cent. 
 I have thus given you a statement in detail of every thing concerning the 
 negotiation with the house of Wright & Co. since the contract which was 
 made on the 30th of October, 1839. General Thornton will doubtless 
 furnish such further explanation as' may be required in relation to the 
 proceeds of the 20,000 draft, as I have no further information than I 
 have already given on that subject. 
 
 Of the $4,000,000 of sterling six per cent, canal bonds originally issued, 
 with interest payable annually, $1,000,000 was sold to Thomas Dunlap, 
 Esq. of Philadelphia, by Messrs. Rawlings and Reynolds; $500,000 was 
 delivered to General Thornton, by your direction, at Quincy; $1,000,000 
 was left on deposite for sale with John Wright & Co. in London, under 
 the contract of October 30, 1839; $1,200,000 was, by your instruction, 
 deposited with Messrs. Nevins, Townsend & Co. in New York, subject 
 to the order of the board of canal commissioners; and the residue, 
 $300,000, is on deposite for safe-keeping in the Bank of the United States 
 at Philadelphia. 
 
 Of the $2,000,000 of new bonds in denominations of 300 and 100 
 sterling, with interest payable semi annually, $1,000,000 was sent out to 
 Wright & Co. and supposed to have been transferred to the house of 
 
[356] 8 
 
 Smiths, Magniac & Co. as heretofore explained; and the other $1,000,000 
 last received, is on depositc with the Bank of the United States in New 
 York. Thislatler amount, and the $300,000 on deposite in Philadelphia, 
 I suppose, had better he cancelled and returned to Illinois; but nothing 
 af that kind can be done with propriety without your special instruction, 
 [n relation to the statement of the amount of deposite to my credit, as 
 furnished by the bank, there is certainly a mistake, either by the mixing 
 jp of other accounts, or an error in the calculation, as the amount of ex- 
 changes agreed for would not produce the sum stated. This, however, is 
 a matter between the bank and myself, and which shall be corrected on 
 my first visit to Philadelphia, if such an error should be detected. All that 
 [ received for the State, under the contract with Wright & Co. was 
 10,300 equal to $49,897 77 7-9 specie funds in New York, including 
 the 9 per cent, which was the difference agreed to be given in exchange 
 between New York and London. A pound sterling in London is worth 
 bul 84 44 4-9, being at the rate of four shillings and six-pence sterling to 
 the dollar: 10,300, at that rate, would produce $ 15,77 777 7-9, to which 
 add 9 percent, or $4,120, the difference in exchange, and it makes the 
 sum of $49,897 77 7-9, as before stated. For this sum I was liable, but 
 for no more. It is true, if, instead of making an agreement with Mr. 
 Jaudon in London for payment in Philadelphia, I had brought 10,300 
 in sovereigns or pounds sterling, in gold, that they would, at the rate of 
 $4 85 to the sovereign, which is the current value in this country, have 
 produced the sum of $49,955 par funds in New York. The difference 
 between these sums being on account of insurance and other charges for 
 transportation between London and New York. 
 
 The sum of $49,897 77 7-9 in specie funds at New York, is all, there- 
 fore, that the State can reasonably claim or expect; and this sum, with 
 an overplus of $102 23, has been paid to her credit according to your 
 instruction. 
 
 1 see it stated in some of the newspapers (unfriendly, of course,) that 
 this money was originally received in specie, and afterwards used in pur- 
 chasing the notes of the Bank of the United States, on speculation, at a 
 great depreciation. I need,, only say that such was not the fact, as the 
 bank was then in a state of suspension, and did not, and would not, pay 
 specie for any of its liabilities; this being the reason why payment was 
 made and received in bank notes, but at such rate as to make the amount 
 equal to specie, as before explained. When I went to England, I took 
 wi h me $3,900 of money of the State, of which, on my return to the 
 United States, I enclosed you a draft, to he placed in bank to canal ac- 
 ccount, for $1.500; retaining only $2,400, the actual amount of my ex- 
 penses, which is all that I have received for compensation and expenses. 
 You may recollect having proposed to allow me five dollars per day over 
 and above these expenses, as our agreement originally was when I ac- 
 cepted this agency, that I should be paid my expenses at all events; and 
 th.tt the compensation would depend on future legislative action; and 
 that as they had only provided for the payment of five dollars per day, 
 this was all you felt authorized to allow; but suggested, as the better 
 way, as that amount was considered altogether inadequate, that the sub- 
 ject should again bq subjected to the Legislature. So that nothing on that 
 account has been received. I was absent on this mission near six months 
 
before my return to Washington; which, at five dollars per day would 
 amount to near $900. Besides this, 1 went twice to New York at your 
 request, on State business, as will be seen by the annexed correspon- 
 dence, at an expense each time of about fifty dollars; being absent each 
 time about ten days. No remuneration has been made on these accounts,, 
 either by refunding the amount of expenses, or providing any compensa- 
 tion. In regard to the payment of the interest on our State bonds, I will 
 venture to make a suggestion, in relation to the causes which have given 
 you so much trouble, and which have subjected our agents to so much 
 abuse, for an occasional assumption of responsibility, and an apparent 
 sacrifice of our securities, when air other resources had failed by which 
 our credit could be preserved. 
 
 These difficulties have been constantly produced, by requiring bonds 
 for that purpose to be sold at par only, when it was notorious that these 
 bonds most frequently on such occasions, could not be cashed at seventy- 
 five cents to the dollar. What has been the consequence? The Governor, 
 or agent under his instruction, must either resort to expedients unauthor- 
 ized by law, or suffer the credit of the State to perish. In this way,, 
 great injustice is often done to and undue exactions extorted from, those 
 who are bona-fide purchasers of these bonds. As, for instance, (and as 
 has actually been the case several times within my knowledge,) the Le- 
 gislature fails to make efficient provision, in proper time, for the pay- 
 ment of interest; our ogent, not being able to raise the amount required, 
 by a sale of bonds, and especially at par, according to the law and his in- 
 structions, goes to the Bank of the United States, to Nevins,Townsend & 
 Co., or somebody else, largely interested in our bonds, (which must of con- 
 sequence become greatly depreciated, if not valueless, on a failure to pay 
 interest,) states his difficulties, and tells them, if they do not come forward 
 and make advances, that they,, as well as the credit of the State, must 
 suffer, and that no other resources are left to him, &c.; and in this 
 way coerces an advance of money, whether willing or unwilling, to an- 
 swer present purposes; and for which afterwards both he and they were 
 censured for an illegal hypothecation of bonds, when all else had failed by 
 which the interest and credit of the Slate could be preserved. 
 
 This matter of providing for the payment of interest, so essential to 
 all concerned, ought never to be postponed to the last day, nor left to de- 
 pend in the slightest degree on remote contingencies, which are always 
 uncertain, and ought never to be relied on. 
 
 It appears to me that much the better plan would be to establish for 
 this purpose a permanent agency in New York. Such an agent being 
 always upon the ground, better acquainted with the fluctuations which 
 are continually going on in the money market, would, from his position 
 and superior information, have it in his. power to take advantage of cir- 
 cumstances, make more advantageous arrangements, and be more prompt 
 of course, in providing means as they are wanted. I would also again 
 direct your attention to the immediate necessity of appointing, under 
 some new authority of law, a special agent to settle up our business with 
 the late house of Wright &, Co. in London, and to receive and trans- 
 mit the unsold bonds. If a London agent should be appointed, I should 
 think, under all circumstances, that Mr... Jaudon ought to be preferred. 
 
[358] 10 
 
 T 1 TU Ml 1 J 11 f xl_ U 
 
 In conclusion, I hope you will make due allowance for the hasty man- 
 ner in which this statement has been prepared, as I have bestowed upon 
 it such time only, since my return from New York, as was permitted at 
 intervals when not necessarily engaged in legislative duties, which arc 
 not without their labor, whatever may be thought of them elsewhere. The 
 annexed correspondence I have had some trouble in arranging; but, volu- 
 minous as it may appear, it is still necessary to a proper understanding 
 of the manner in which the business connected with my agency has 
 been transacted. In my negotiation with Wright & Co. in London, I 
 have not touched a cent in commission, per cents., or otherwise, save 
 the 10,300 for which I have accounted; an-d I refer with pride to all 
 with whom I have had any thing to do, as an agent of Illinois, as well in 
 London as in the United States, for the rectitude of the course which 
 has uniformly, I trust, governed all my actions. 
 
 All which is respectfully submitted, 
 
 RICHARD M. YOUNG. 
 
 
 . 
 
 APPENDIX. 
 
 No. 1. 
 
 . 
 
 Samuel Jaudon to R. M. Young. 
 
 i ;,;., -\f t i i oon 
 
 LONDON, November 1, looU. 
 
 DEAR SIR: I sent your order to Messrs. Wright & Co. this morning; 
 and in reply received a note from them, stating that they could not ac- 
 cept the order, but that the amount would be paid on the 15th of Janu- 
 ary. I therefore have thought it best to return the order to you; and, for 
 fear of any accident to this letter, I have enclosed it to J. Cowperth- 
 waite, Esq., Cashier of the Bank of the United States, who will hand it 
 to you. 
 
 As soon as you reach Philadelphia, you can draw a bill on Wright & 
 Co. in the usual form, payable on the 15th of January. This will pro- 
 bably be quite as well as if they had accepted the order. 
 Wishing you a pleasant passage, 
 
 I am, dear Sir, yours, very truly, 
 
 S. JAUDON, 
 Hon. R. M. YOUNG, 
 
 On board the British Queen. 
 
11 [359] 
 
 No. 2. 
 JR. M. Young to John Wright $ Co. 
 
 PHILADELPHIA, November 30, 1839. 
 
 GENTLEMEN: I was advised by your confidential clerk, (who drew, at 
 my request, the order which was presented to you for the 10,000 ster- 
 ling on our contract, dated the 30th of October ultimo, by Mr. S. Jau- 
 don, agent of the Bank of the United States, on the morning after I left 
 London in the British Queen,) that you could not, according to the cus- 
 tom of London, accept a bill or order drawn in London, but would give 
 Mr. Jaudon an assurance that the amount would be paid on the 15th day 
 of January, according to your stipulation in the said agreement. This 
 assurance I supposed would be satisfactory to Mr. Jaudon, and would 
 answer his purpose as well as an acceptance. On my arrival at Ports- 
 mouth, I received a note from Mr. Jaudon, in which he mentioned that 
 the order had been presented, and that he had received an assurance from 
 you that the amount would be paid on the 15th of January next; but that, 
 on further reflection he had concluded to return the order to me, and 
 wait until I could arrive at Philadelphia, and draw a bill according to the 
 regular course of business. I have accordingly taken up and cancel- 
 led the order, and have this day drawn upon you for 10,000 sterling, 
 in duplicate, in favor of J. Cowperthwaite, chashier of the Bank of the 
 United States at Philadelphia, payable the 15th day of January next, 
 being the first amount agreed to be advanced on our contract of the 30th 
 of October, 1839, for $1,000,000, or '225,000 sterling, of "Illinois and 
 Michigan canal stock;" which I hope you will honor and pay, according 
 to the terms of said agreement. 
 
 Since my arrival in the United States, I have learned with pleasure 
 that Governor Carlin, of Illinois, has issued a proclamation to convene 
 the Illinois General Assembly on the first Monday in December instant. 
 This arrangement will consequently enable me, without any delay, to 
 direct the Governor's attention, and through him that of the General 
 Assembly, to the importance of changing the form of the bonds, so as to 
 make the interest payable semi-annually, and in other respects as sugges- 
 ted and stipulated in our agreement of the 30th of October. I have no 
 doubt that I will be able to effect the change in the manner desired, and 
 will see that no unnecessary delay is permitted. 
 
 Please let me hear from you as early as may suit your convenience. 
 Address me at Washington City. 
 
 Very respectfully, 
 
 Your obedient servant, 
 
 RICHARD M. YOUNG. 
 Messrs. WRIGHT & Co. 
 
[360J 12 
 
 No. 3. 
 
 From John Wright fy Co. to R. M. Young. 
 
 LONDON, January 4, 1840. 
 
 DKAR SIR: In answer to your favor of the 30th of November, received 
 by the British Queen, I was most delighted to see your handwriting; for 
 I was really not without apprehension for you, on account of the illness 
 which you labored under in Hegent street. 
 
 There will be no difficulty in paying your bill of 10,000, and I am 
 happy to say that notwithstanding the badness of the times, we have 
 sold enough bonds to meet it, and have a fair prospect of a good market 
 for them; and am therefore happy to find you intend to send over the ad- 
 ditional bonds confided to your negotiation, and which I trust we shall 
 sell on favorable terms, as all alarm about American State securities is 
 fast subsiding, and I trust it will be long before we experience a year of 
 similar difficulty to that now passed. 
 
 I am glad you anticipate no difficulty in altering the bonds to the form 
 you mention; and I hope to arrange with Mr. Jaudon.that we may be 
 the sole agents for the Illinois State, and trust we shall transact its busi- 
 ness to its entire satisfaction. 
 
 Pray send the bonds in the altered form as soon as you can. 
 
 My respectful compliments to Mrs. Young, and best regards to Gov- 
 ernor Reynolds when you see him; and believe me, with every good 
 wish of the season, 
 
 Yours, ever sincerely, 
 
 JOHN WRIGHT. 
 RICHARD M. YOUNG, Esq., 
 
 Washington City, United States. 
 
 No. 4. 
 From John Wright fy Co. to R. M. Young. 
 
 HENRIETTA STREET, LONDON, 
 March 18, 1840. 
 
 MY DEAR SIR: 1 am sorry that I have not heard from you since your 
 favor of the 30th of November. 
 
 I had the pleasure of writing to you on the 4th of January, and I was 
 congratulating; myself on having sold enough of your bonds to fulfil my 
 contract, (and which was done with extreme difficulty when some prin- 
 ted documents received from the United States have given me the painful 
 information that the legality of our contract is questioned; and I am of 
 course, prevented carrying out some arrangements which 1 thought would 
 have ensured a regular sale of the bonds through our insurance office, 
 which would have been as agreeable to you as it would have been grati- 
 fy ing to me. Instead of which, I see myself designated as a shark and 
 
13 [361] 
 
 usurer in a public document, and one who wished to take every advan- 
 tage over your countrymen. Now, I with difficulty got 92 for the bonds 
 I have sold; but could I insure one per cent, commission for all our labor, 
 I should be quite satisfied. But, as I told you when here, it is impossi- 
 ble to sell the bonds in the city, or on the continent, without giving a 
 handsome margin to brokers or other sub-agents; and all I can say on 
 this subject is, it will ever be my study to get you the highest price; but 
 1 cannot do what is impossible. 
 
 We write to you more officially to-day, so I shall only add that I am 
 sure the conduct pursued will mortify you as much as it has done me. 
 
 Your dollar sixes were selling here at a much more than a proportion- 
 ate depreciation; and you must be aware that the State of Indiana, and 
 many others, interpreted the par exchange exactly as we did. 
 
 It is doubly mortifying, as I had resolved to accept no other agency 
 than that of Illinois, and had hoped soon to have got you the most 
 remunerating prices for your bonds, and had even flattered myself I 
 should have some day seen your fine country, and witnessed the improve- 
 ments made in it by the great openings contemplated from Chicago to 
 Cairo; but I fear this will now all end like a dream. My best regards to 
 Governor Reynolds, who, I am sure, will alike feel much annoyed at 
 this extraordinary conduct of your statesmen. 
 
 It will be useless to send more bonds till we know how to act, without 
 reproach on our side of the water as well as yours. 
 
 Surely money, even at 10 per cent., would be cheaply borrowed for 
 such remunerating communications. 
 
 The conduct pursued is to me inconceivable. 
 
 I hope Mrs. Young, as well as yourself, is quite well; and remain, 
 
 Yours, ever sincerely, 
 
 JOHN WRIGHT. 
 RICHARD M. YOUNG, Senator of Illinois, 
 
 Washington City, United Stales. 
 
 No. 5. 
 From S. Jaudon to R. M. Young. 
 
 LONDON, March 18, 1840. 
 
 Sm: Feeling most deeply how very important it is, not only as it 
 regards the Illinois State stock, but the stocks of all the other States, that 
 the acts of the commissioners, in their contracts with Messrs. Wright & 
 Co. and Messrs. Thompson & Forman, should not be repudiated, by the 
 Legislature, in so far, at least, as they have been bona fide acted upon, 
 I cannot avoid appealing to you in regard to the report which has been 
 presented by a majority of the Judiciary committee on this subject. 
 
 The question as to par was discussed here verv often; and although 
 (as you may recollect)! differed in opinion from you, yet the fact that 
 $1,000 were considered equal to j225 sterling by the Indiana and 
 v 
 
[362J 14 
 
 Alabama Commissioners, and that those States had sanctioned this in- 
 terpretation, was considered sufficient to settle that question. 
 
 As to price, I can mention to you that I have, within the past week, 
 bought for a house on the continent upwards of $50,000 of the dollar 
 Illinois six per cents, of 1860 and 1870, at 78 to 78* per cent. This, 
 with the usual difference of ten per cent, for sterling bonds, would 
 only place those which Messrs. Wright & Co. have at 88 and 88i per 
 cent.; so that the sales which they have made have been considerably 
 above the current market price. The State has, therefore, had its mo- 
 ney on the best possible terms that the market would afford; and the 
 contractors deserve great credit for having sold the bonds so well. 
 
 I trust that you will use your influence so far, at least, as to prevent 
 any interference with the sales that have bona fide been made. If the 
 Legislature are not satisfied, let them stop all future sales; but it would 
 be most unwise, impolitic and injurious to touch the past. The State 
 will have to resort to this market for the means of completing its pub- 
 lic works; and it is better that it should submit to the sales that have 
 been made on the very best terms, than cause the slightest reason for 
 distrusting its good faith or that of its agents. 
 
 I am, with great respect, 
 
 Your obedient servant, 
 
 S. JAUDON. 
 Hon. R. M. YOUNG, 
 
 Senate of the United States, Washington. 
 
 I beg you to communicate with Governor Reynolds upon this impor- 
 tant matter. 
 
 No. 6. 
 Extract of a letter from Governor Carlin to R. M. Young* 
 
 SPRINGFIELD, February 3, 1840. 
 
 DEAR SIR: The Legislature has this day adjourned. A resolution 
 passed both Houses, annulling all the negotiations for money made by 
 the agents of the State during the past year, and absolving the State 
 from liability; but was reconsidered in the Senate. A resolution passed 
 the House requiring the Secretary of State to transmit said resolution to 
 Messrs. Wright & Co., in London, declaring that no law existed in Illi- 
 nois authorizing the sale of bonds at 91 to 100, and requesting a re- 
 turn of the bonds placed in his hands as your agent. This resolution 
 was defeated in the Senate. As the Legislature have declined appro- 
 bating your arrangement, I do not feel at liberty to confirm it; but how 
 the business can be adjusted, I am not prepared to say, as I presume 
 you have drawn upon Messrs. Wright & Co. for 10,000, &c. 
 
 I leave to-morrow in the stage for Quincy, and will write to you again. 
 
 In great haste, your friend, 
 
 THO, CARLIN, 
 Hon. R. M. YOUNG. 
 
15 [363] 
 
 No. 7. 
 
 From Gov. Carlin to R. M. Young. 
 
 QUINCV, ILLINOIS, February 19, 1840. 
 
 DEAR SIR: Yours of the 28th ultimo came to hand yesterday, enclo- 
 sing a draft in my favor, of $1,500, upon the State Bank of Illinois, for 
 the use of the canal. It would have afforded me pleasure to have com- 
 plied with your request, by laying your letter before the Legislature, had 
 it been received before the adjournment. A resolution passed the House 
 of Representatives, declaring (as I was informed) that no law of Illinois 
 authorized the sale of State bonds in Europe, or elsewhere, at 91 to the 
 100, arid requiring the Secretary of State to communicate said resolution 
 to Messrs. Wright & Co. of London, demanding a return of the bonds 
 placed by you in the hands of said company. This resolution, however, 
 did not pass the Senate; but all legislative action during the session dis- 
 approbated ail negotiations made during the last year, both for the ca- 
 nal and internal improvement. I could not therefore consent to assume, 
 the responsibility of ratifying your contract with Messrs. Wright & Co. 
 after the many strong expressions of disapprobation by the Legislature. 
 I would therefore advise cancelling the contract, and a surrender and 
 return of the bonds by Messrs. Wright & Co. The friends of the canal 
 did not desire its consummation, on the ground that no reliance could be 
 placed upon it to furnish funds for the use of the canal, as all seemed to de- 
 pend upon the sale of bonds by Messrs. Wright & Co. 1 think I advis- 
 ed you in my last that an act had passed allowing five dollars per day 
 (only) as compensation for the service of all agents of the State employed 
 in the negotiation or transportation of money, except in cases of specific 
 contracts by which I had agreed to allow a larger compensation. This 
 act I consider oppressive, as the compensation allowed by it will fall 
 greatly short of paying the travelling expenses of the agents while in the 
 service of the State. We cannot be envied for patriotism, when it shall 
 be known that we refuse to compensate individuals for services render- 
 ed by them in accordance with law, or even to allow them a suiticient 
 sum to cover their expenses. The amount retained by you being only 
 equal to your expenses while actually engaged as agent of the State, all 
 notions of justice and equity would seem to forbid the restoration or re- 
 payment ot any part of it; but the compensation allowed you by the re- 
 cent act of the Legislature will not probably cover half that amount. 
 Being fully satisfied that the public good seldom or never requires private 
 sacrifice,! think I hazard little in saying that the next Legislature will 
 make an allowance more proportioned to the importance of the service 
 in which you were engaged; and as a return of the whole amount expen- 
 ded by you while on your tour from this place to Europe and back again 
 must seriously affect your private means, I cannot see any impropriety 
 in withholding it until after the meeting of the next Legislature; and, if 
 proper compensation is not then allowed, you can refund the money. 
 
 An act passed at the last session, allowing the canal commissioners to 
 issue scrip to meet the liabilities of the canal up to the first of March next; 
 
[364] 16 
 
 
 
 after which time the contractors propose to receive State bonds at par r 
 until funds can be procured. This plan I have objections to, as it will 
 tend to reduce the value of the bonds, and com; el the contractors to sell 
 them at any price they will command. But a portion of them allege 
 that they cannot abandon the work; and it would appear unjust tore- 
 fuse the payment of the estimates due them in bonds at par. 
 
 An act passed authorizing the issuing ojf bond?, and the sale of them, 
 for canal purposes, the interest payable semi-annually. If it is possible, 
 I hope you will effect a sale in the United States of $1,000,000; but the 
 contract must be complete par at the place, and in the currency, where 
 the contract is made. I am thus particular, in order to avoid futuie cen- 
 sure, which must and will always follow disappointment and failure. 
 
 #**#**** 
 
 Your friend, 
 
 THO. CARLIN. 
 Hon. R. M. Youwo. 
 
 No. 8. 
 
 Letter from W. B. Ogden, of Chicago, to R. M. Young, with a note ai 
 bottom by Governor Carlin. 
 
 QUINCY, March 7, 1840. 
 
 DEAR SIR: As one of a committee appointed by contractors on the 
 Illinois and Michigan canal, I am on a visit to his Excellency Governor 
 Carlin, with a view to some settled policy for progressing with the work 
 upon the canal the ensuing season. 
 
 The contractors are willing to carry on their work, if they can receive 
 payment in bonds, at par. to 4)e hypothecated or sold for their account, 
 through a proper and prudent agent, in large parcels, and in such a man- 
 ner as not to injure the credit of the bonds. 
 
 The Governor has assented to this arrangement; and the contractors 
 are extremely anxious to avail themselves of your arrangement with 
 Wright & Co. for a million or a million and a half accounting to the 
 State for what shall, on all hands, be admitted the full and legal par value 
 of the bonds disposed of. The contractors expressed to me their strong 
 desire, before I left Chicago to avail themselves of this arrangement, if it 
 will surely prove availing in the course of the summer. And any funds 
 that you may have received, or can obtain on account of that negotiation, 
 the contractors are very anxious to obtain; and will pay any difference 
 to the State, if any, that shall be necessary to make the sale par to the 
 State. And they beg me to urge upon you to retain any such money 
 for them, to remit through the Governor or canal commissioners, for their 
 benefit. 
 
17 [365] 
 
 The Governor says he has written you to withdraw the bonds deposi- 
 ted with Wright & Co., altogether, or so far as the money has not been 
 received upon them. 
 
 The contractors now have the Governor's consent to their availing 
 themselves of the loan contracted by you with Wright & Co., securing the 
 State par for the bonds, provided it can be made available to them; and 
 they feel almost that their salvation, in a business point of view, would 
 be found in obtaining it. 
 
 The anxiety felt by a large community as to the fate of the canal, is 
 most intense; and the fate of a thousand business men, directly or indi- 
 rectly, depends upon it. 
 
 Payment in bonds will insure the progress of the canal, if they can 
 be properly and favorably disposed of. But an early realization 
 is, of course, vitally important; and, with that view, I address you, in 
 in behalf of contractors, in relation to your arrangement with Wright & 
 Co. 
 
 Will you oblige me with an immediate reply, advising me of the par- 
 ticulars and prospects of that negotiation? And if any thing can be ob- 
 tained from it beneficial to contractors, withhold, as you have here the 
 Governor's assent to do, the withdrawal of the bonds until the matter 
 has bef j n considered by contractors, after the receipt of jour reply to this, 
 and until after you hear from me again. 
 
 Very truly, yours, 
 
 W. B. OGDEN, of Chicago. 
 Hon. R. M. YOUNG. 
 t 
 
 The subject matter of the above letter from Mr. Ogden to Judge 
 Young meets with my approbation, provided the money can be realized to 
 suit the convenience of the contractors say in instalments of $200,000 
 on tiie Lst of May, July, September, November, &c. 
 
 THO. CARLIN. 
 
 t No. 9, 
 
 R. M. Young to William B. Ogden. 
 
 WASHINGTON CITY, March 29, 1840. 
 
 DEAR Sin: Yours of March 7th, bearing date at Quincy, as one of a 
 ^committee appointed by the contractors on the Illinois and Michigan ca- 
 nal, was received by last evening's mail; ard 1 hasten a reply by the 
 earliest opportunity, agreeably to your request. I shall feel much grati- 
 fied if I can in any way be of assistance in saving the contractors from 
 bankruptcy and ruin, the canal from abandonment, and our citizens and 
 State from so great a calamity. The contract I made with Messrs. John 
 Wright & Co., of Henrietta Street, Covent Garden, London, for the sale 
 of one million of the Illinois and Michigan Canal bonds, was most un- 
 questionably, a much better contract for the State than any one acquain- 
 ted with the then depressed condition of the money market in London 
 
[366] 18 
 
 supposed could have been made, under the adverse circumstances atten- 
 ding it; and was, and still is, in my opinion, in strict conformity with the 
 law under which I acted, by which the bonds were required to be dispos- 
 ofatpar. The bonds were severally for the sum of 225 sterling, or 
 $1,000 in our currency, estimating the pound sterling value at the rate 
 of four shillings and sixpence to the dollar. All Governor Reynolds and 
 myself had to do as agents of the State, was to procure, for the use 
 of the canal fund, $ 1,000 in par money for each of these bonds. Did 
 we make such an arrangement? The agreement with Messrs. Wright 
 & Co., which I forwarded to Governor Carlin was for 91 in the 100, 
 in London, giving the benefit to the difference in exchange between Lon- 
 don and New York to the State of Illinois, which at that time, was com- 
 puted at nine per cent, with a condition annexed, that, if the exchan- 
 ges should at any time fall below nine per cent, in New York, and 
 Messrs. Wright & Co. were advised of that fact, they were to increase 
 the price of the bonds above 91, in proportion to the fall of the ex- 
 changes, so as to preserve the relative value of the bonds as contemplated 
 by the agreement. The question now is, would this price produce $1,000 
 in par funds, (by 'vhich I mean specie) for each of the bonds in Illinois! 
 In the first place, I draw on Messrs. Wright & Co., at New York, for 
 204 15s. sterling the amount for which I sell one of the bonds of '225 
 or $1000, counting at the rate of 91 in the 100. I sell the draft in 
 New York at 9 per cent, advance, which is equal to 18 8s. 6d. sterling, 
 which, added to the sum drawn for, makes the sum of 223 3s. 6d.; this 
 rendered into dollars is $992, omitting fractions. I deposite this sum in 
 one of the banks in New York, and a draft is drawn upon it by the canal 
 commissioners at Chicago, at two per cent, advance, which was the usual 
 difference in exchange between Illinois and New York previous to the 
 suspension of specie payment by the banks; and it will produce in Chi- 
 cago, in funds equivalent to specie, $1.010 84 cents. But an illustration 
 more simple and easier of comprehension may be given to such as are not 
 accustomed to calculate exchanges, and the rendering of pounds, shillings, 
 and pence into our currency. 
 
 In London, a sovereign of gold is exactly a pound sterling, or twenty 
 shillings, British currency. Now, suppose, instead of leaving the money 
 in depcsite with Messrs. Wright & Co. in London, for the purpose of 
 making drafts upon ic in New York, I had brought with me the avails 
 of one of these 225 or $1,000 bonds in gold. I would have had at 
 New York on my arrival, 204| sovereigns. A sovereign, according to 
 the American standard, and its actual value, as received and paid out by 
 the banks in New York, is worth four dollars and eighty-five cents. 
 Those sovereigns, consequently, would be equal to $993 and a fraction. 
 This sum I deposite in bank at New York, and it is drawn for as above by 
 the canal commissioners at Chicago, at two per cent, advance. The 
 amount realized in specie, or its equivalent, in Illinois, by this operation,, 
 would be $1,012 86 cents. Is this not a par arrangement, as was under- 
 stood by the General Assembly by which the law in question was enac- 
 ted? Suppose, for instance, after these bonds were executed by the 
 Governor for sale in a foreign market, $1,000 for each bond had been of- 
 fered in Illinois: would not the proposition have been accepted as being 
 in accordance with the spirit and intention of the law? You may re- 
 
19 [367] 
 
 collect that $ 500,000 of these sterling bonds were delivered to General 
 Thornton, one of the canal commissioners, for sale at Chicago, or within 
 the limits of Illinois, at par: now was it expected that General Thornton 
 was to obtain more than $1,000 for each of these bonds? and did he sell 
 for more, or not? And yet these were a parcel of the same sterling bonds, 
 for the sale of which Governor Reynolds and myself made the arrange- 
 ment with Messrs. Wright &, Co. in London, It is, nevertheless, true that 
 we lose the difference in the exchange, in the payment of interest and in 
 the reimbursement of the principal. What that difference may be, no one 
 can tell. Nor can it be known, at (his time, whether the exchanges will 
 be for or against us, when the principal shall become due, as that must de- 
 pend upon the course of trade between the two countries, and a variety 
 of other circumstances, when the event occurs. Be that as it may, the 
 sale was considered as at par, according to the signification of the term 
 among bankers and merchants, both in England and the United States. 
 Before the agreement was signed, Messrs. Wright & Co. submitted it, with 
 the laws of Illinois, and our commissions from the Governor, under which 
 we acted, to their attorney, (who is a gentlemrn of acknowledged legal 
 ability in London,) who pronounced it a par arrangement, and in con- 
 formity with the law and our powers; and such being my opinion, the 
 contract was consummated for $1,000,000 of the bonds, and might 
 have been extended for $2,500,000, if I had not supposed that the residue 
 had been disposed of at New York, by my colleague, Governor Reynolds, 
 on his return to that city. You will also bear in mind, that the corn- 
 missions, &c. of Messrs. Wright & Co. for selling, were to be discharged 
 out of such excess over and above the 91 in the 100, not exceeding 
 four per cent., as might be realized above that minimum, and that all 
 above 95 in the 100 was to be equally divided between Messrs. 
 Wright & Co. and the State. There was also a clause which prohibi- 
 ted Messrs. Wright & Co. from selling below the minimum of 91, even 
 to reimburse themselves for advances, which were to be made at five 
 per cent, being one per cent, less than the interest on the bonds. 
 
 This, in my judgment, is decidedly a better contract than can be made 
 again; and, if it should be cancelled, according to the understanding of 
 the late General Assembly, as I am advised by Governor Carlin, it will 
 be a hopeless task to undertake the sale of Illinois bonds in that market, 
 at least; and the credit of the State would greatly suffer, 1 fear, both 
 abroad and at home, for the want of confidence in its future legislation, as 
 it respects all liabilities for moneys advanced in aid of her public im- 
 provements. As for selling Illinois bonds in New York or Philadelphia 
 at par, at this time, I should think it would be utterly impossible. The 
 last sale of our bonds at New York was at seventy-two cents to the dol- 
 lar. A short time ago, Major Charles J. Nourse, exchange broker of this 
 city informed me that he was authorized by some person at New York to 
 offer a parcel of Illinois bonds to the Secretary of the Treasury, (who 
 was about investing some Indian annuities, I believe, in State stocks, at 
 seventy-one cents to the dollar, and that his proposition was refused. 
 Judging from these facts, therefore, it would seem that a par arrangement 
 could not at this time be effected a* either of these cities. 
 
 I have drawn for 10,000 on the contract with Messrs. Wright & Co., 
 which is received and could be made immediately available to the canal 
 
[368J 20 
 
 contractors, as soon as an understanding can be had that the Governor 
 will sanction a renewal of the contract with Messrs. Wright & Co., and 
 the new bonds are forwarded to London. The contract as it now stands, 
 is a Stale contract ; and whether Messrs. Wright & Co. would consent to 
 cancel it in that form, and make a new contract with the canal contrac- 
 tors, or their agents, I am unable to say. It would certainly be better 
 to make as little change as possible, as a proposition to that ef- 
 fect might induce Messrs. Wright & Co. to suppose that the State, 
 by insisting on the change, did it for the purpose of escaping liability. 
 But this difficulty, I think, could be avoided in this way: Let Governor 
 Carlin authorize me, or some other agent to cause the new bonds to be 
 made at New York, in sums varying from 100 to 300, with the inter- 
 est payable semi-annually on the 1st days of January and July, and 
 changed from the form of the old bond so as to express in addition to the 
 faith of the State, that the canal lands, &c., were also pledged to secure 
 the ultimate payments. These changes, Messrs. Wright & Co. said 
 would be of great advantage in making sales. Then, let the canal con- 
 tractors receipt to the Governor for as many of these bonds as may be 
 agreed upon, as payment for so much money on their several contracts. 
 I could then, with the authority and advice of Governor Carlin, place 
 these bonds in the hands of Messrs. Wright & Co., and secure the avails, 
 as might be directed for the benefit of the contractors. In this way, the 
 Governor could secure the par value of the bonds to the State, in his 
 agreement with the contractors. In addition to the lO r OOO, we can, 
 according to the contract already made, very soon draw for 20,000 
 more; and I have no doubt that the residue could be obtained, in sums to 
 suit the contractors, within a short time thereafter. I have received 
 letters from London, recently, giving the most flattering account of the 
 prospect of sales of our bonds. In a letter from Messrs. Wright &, Co., 
 of the 4th of January they say that they have sold enough of the bonds 
 to reimburse them for the 10,000 drawn for, and have a fair prospect of 
 making further sales on more favorable terms; and urge the necessity of 
 sending over renewed bonds, making the interest payable semi-annually, 
 and changed from 225 to denominations varying from 100 to 300* 
 They also propose to take the residue of the bonds, making $2,500,000,. 
 on the same terms. They conclude by saying that the prejudice against 
 American securities is fast subsiding, and wish the altered bonds trans- 
 mitted as soon as possible. Mr. Samuel Allinson, agent of the House of 
 Wright & Co. in a letter dated 33 st January, says: "The price of Illinois 
 bonds is at present 95 in the 100, and I think will very shortly run 
 up to the full amount expressed on their face, and I am convinced will be 
 preferred to any other American securities. The Bank of England has 
 just reduced the rate of interest from six to five per cent.; and a still fur- 
 ther reduction is expected;" and concludes by urging me to procure 
 and forward the altered bonds, changed as above described. In a subse- 
 quent letter dated 18th February, (the last received,) Mr. Allinson says: 
 "Illinois londs are in good demand, and I think we could dispose of your 
 $2,500,000 easily;" andngain requests that renewed bonds may be sent 
 without delay. Thus you have the prospect held out at London. I was 
 just preparing a letter to Messrs. Wright & Co. to cancel the contract 
 made with them, under instructions from the Governor, which I intended 1 
 
21 [369J 
 
 to have sent by the "British Queen," which leaves New York the first of 
 April; but will not send it until I hear from you on the subject of the pro- 
 posed arrangement. If the Governor should be unwilling to remodel and 
 retain the agreement as a. State arrangement, and the contractors should 
 desire to avail themselves of the benefit of the contract, by substituting 
 their names for that of the State, I will aid them to the extent of mj 
 ability; but doubt the success of such a proposition, and hope the Govern- 
 or mav consent to the course I have suggested. 
 
 I am, very respectfully, 
 
 Your obedient servant, 
 
 RICHARD M. YOUNG. 
 WILLIAM B. OGDEN, Esq. 
 
 P. S. At the date of Mr. Allinson's last letter, they had not heard in 
 London any thing of the doings of our Legislature at the late special 
 session. 
 
 No. 10. : 
 
 Governor Carlin to R. M. Young and John Reynolds. 
 
 QUINCY, ILLINOIS, March 12, 1840, 
 
 GENTLEMEN: A committee of contractors upon the Illinois and Michi- 
 gan canal have visited me, and propose to receive their estimates as they 
 become due, from time to time, in State bonds, provided money cannot 
 be procured to pay those estimates. I am exceedingly unwilling to pay 
 them in bonds; but it would seem to be very hard treatment to refuse to- 
 do so, as such refusal would compel them to abandon their contracts, and 
 would absolutely bankrupt and ruin a great portion of the contractors. 
 They further propose, in case bonds are paid to them at par, to place 
 said bonds in the hands of an agent to sell for them, in the east, in 
 large parcels, so as to prevent them being hawked about in small 
 quantities to the injury of the credit of the State. They further pro- 
 pose and request (with a view of providing certain assurance of money) 
 me to place in the hands of the canal commissioners bonds equal to the 
 probable amount of work to be done during the season, from the 1st of 
 March instant altogether about $1,200,000; with instruction to sell the 
 same at discretion, on such terms only, however, as will secure their legal 
 par value to the State; and the proceeds of such sale, or sales, to apply 
 to the current expenses of the canal. 
 
 Believing it to boa duty devolving upon me to strictly preserve the 
 good faith of the State toward her creditors, I have consented to the fore- 
 going propositions; but to avoid any difficulty that may possibly grow 
 out of such proceeding, I have to request of you and Judge Reynolds to 
 
use your utmost exertions, to make a sale of bonds, in some of the eas- 
 tern banks, to the amount of $1,200,000, payable, in instalments of $200,- 
 000, on the 1st of Mny, July, September, November, &c., but, if possi- 
 ble, procure $500,000 on the first of May, as the debts of the canal, 
 for which scrip has been issued prior to the 1st of March instant, is 
 probably near $300,000. 
 
 I think I informed you in one of my preceding letters, thnt the Legis- 
 lature passed a law providing for the payment of interest on loans for 
 canal purposes semi-annually. The contractors express great anxiety 
 to secure your contract with Messrs. Wright & Co.; but I informed them 
 that I had advised you to cause the contract to be cancelled, and the 
 bonds withdrawn; which I presume you will have done before this reaches 
 you. I cannot however now approve that contract, as the last Legisla- 
 ture was altogether opposed to it; but I, notwithstanding, believe it is 
 better, on the score of expediency, than can be done elsewhere, and 
 would therefore be glad if the contractors could avail themselves of it; 
 but on reflection, I cannot see how it is possible, unless they should first 
 avail themselves of the bonds, and enter into the contract through an 
 agent of their own. Please write me what the preseut prospects are in 
 relation to the sale of bonds in the eastern cities. 
 
 The act of the last session, allowing five dollars per day to agents em- 
 ployed to negotiate loans, I am inclined to construe differently since I 
 wrote you. The act allows five dollars per day, where no specific bar- 
 gain was made by me. In the case with each of you, I made a specific 
 bargain that you were to be furnished a sufficient sum to bear your ex- 
 penses, and were to submit to such allowance as the Legislature might 
 agree upon as compensation for your services. The Legislature surely 
 meant to pay you five dollars per day, overhand above your expenses. 
 At all events, I feel free to do so, under the authority of that act; and 
 shiT.ll therefore, authorize each of you to make an account of your expenses, 
 while engaged in that service, as well as the number of days employed 
 and forward it to me, and I will direct all arrears to be paid to you out 
 of the canal fund. 
 
 An act passed the last session requiring the canal commissioners to 
 sell as much of the canal lands as was necessary tp pay the interest on 
 canal debts; which, I suppose, is the only legitimate source from whence 
 the interest is to be derived. 
 
 If any negotiation is made by you for canal purposes, please ad- 
 vise the canal commissioners immediately. 
 
 With much esteem, your friend, 
 
 THOS. CARLIN. 
 
 P. S. Two drafts of $16,000, each, drawn by me upon the Onondaga 
 Bank, (being the two first instalments due on account of a loan or nego- 
 tiation made by Governor Reynolds and General Rawlings with the 
 Poughkecpsie Locomotive Fire Engine Company, for $128,000,) have 
 been protested by said bank. This loan has been transferred to the Bank 
 of Illinois; and that bank has made advances to the amount of $80,000,) 
 which have been expended upon the State House. This subject I 
 
23 [371] 
 
 referred to the last Legislature, and recommended the indemnity of the 
 Bank of Illinois; but no action was had in reference to it. I pre.^ume 
 the company will'not pay for the bonds, but was informed by the cashier 
 of the Bank of Illinois, that they expressed a desire to return the bonds; 
 which, I suppose, had better be acceded to. But as the instalments 
 were transferred to the Bank of Illinois, it may be proper to secure the 
 consent of that bank to such arrangement, particularly as the State is 
 not in possession of funds to indemnify thut bank, at the present time, 
 for the advances which it has made. I have to request Governor Rey- 
 nolds to ascertain whether there is any certainty of getting the money 
 from said company, and if not, to recover the bo'nds if possible. In that 
 event, the company ought to pay for engraving the bonds. In case the 
 negotiation is cancelled, I wish you to sell that amount of bonds, to ena- 
 ble the State to complete the State House, as contemplated by the law 
 authorizing the loan. I will write to the Bank of Illinois to advise you 
 of their consent to cancelling the contract. 
 
 With great esteem, your friend, 
 
 THOS. CARLltf. 
 Hon. R. M. YOUNG and 
 JOHN REYNOLDS. 
 
 No. 11. 
 
 GOT. Carlin to R. M. Young and John Reynolds. 
 
 QUINCY, ILLINOIS, March 2G, 1840. 
 
 GENTLEMEN: I omitted, in my letter to you of the 12th instant, to re- 
 quest you to place in some bank, in New York or Philadelphia, $1,200,000 
 of the canal bonds, which you have in possession, subject to the order of 
 the board of canal commissioners; provided, however, you have not or 
 cannot sell bonds to that amount. I would much prefer your selling the 
 bonds, in case a sale can be made at par. In one of my former letters I 
 enjoined upon you not to sell bonds at less than par in the currency 
 where the sale was made; but, under existing circumstances, I have now 
 concluded to take the responsibility of authorizing you to sell bomls to 
 the amount of $l, k 200,000, provided you can realize par in Illinois bank 
 paper. A sale at that rate would be as favorable to the State, as to pay 
 that amount of bonds to contractors at Chicago, and would obviate any 
 depreciation of bonds which might grow out of the payment of th m to 
 contractors. In case, however, you cannot sell, please to place the rbove 
 amount in some safe bank, subject to the order of the board of cannl com- 
 missioners; and give them notice thereof as soon as you have determined 
 what bank you will place them in, as it may be important for them to know 
 as early as possible. I also mentioned, in my last letter, that I wished 
 you to sell as many bonds as are necessary to pay the interest th:it will 
 become due on the 1st of July next, on accouut of canal loans; but in 
 
[372] 24 
 
 the same letter countermanded it, in consequence of an act of the last 
 Legislature requiring the canal commissioners to sell as much of the canal 
 lands as would be necessary to pay the accruing interest upon canal 
 debts. I am, however, informed by Gen. Thornton, that money cannot 
 be realized from the sale of canal lands in sufficient amount to pay the 
 interest that will then become due; therefore, in order that the faith of the 
 State may be fully preserved, I consider it my duty, if possible, to cause 
 a sufficient additional amount of bonds to be sold, to enable the State to 
 punctually pay the interest. Be pleased to use every exertion to sell bonds 
 for that purpose, and, in case you should succeed, advise the canal com- 
 missioners of it immediately. 
 
 Your friend, 
 
 THOS. CARLIN. 
 Hon. Messrs. YOUNG and REYNOLDS. 
 
 No. 12. 
 Richard M. Young to Gov. Carlin. 
 
 WASHINGTON CITY, May 15, 1840. 
 
 DEAR SIR: After the joint letter of Governor Reynolds and myself, 
 from New York, in which we informed you of the impossibility of mak- 
 ing sales of canal bonds to pay interest, &c. agreeably to your letter of 
 instructions to us on that subject, I called to see Thomas Dunlap, Esq. 
 president of the United States Bank at Philadelphia, on my return to 
 Washington city, and advised him of our failure, and the probable inabi- 
 lity of the State to pay the accruing July interest, which will fall due in 
 London on the $1,000,000 of canal bonds sold to that institution by 
 Messrs. Rawlings and Reynolds last spring. That interest is stipulated 
 to bo paid at the agency of the Bank of the United States in London, 
 and amounts to $60,000. Mr. Dunlap says that his bank is much pressed 
 to m-jet its liabilities in London, and that he cannot, without much incon- 
 venience, make an advance to meet this interest; but that if the State 
 should fail to provide the means, he will see to the payment, rather than 
 suffer the bonds to become discredited in the London market; as would 
 inevitably be the case, not only there, but also in the home market, upon 
 the happening of such a contingency. In that event I think we can pre- 
 vail upon him to take bonds upon the same terms on which the $1,000,000 
 wero sold, for the amount of interest it may become necessary for him 
 to advance in London. Besides the $60,000 payable in London on the 
 sterling bonds sold to the Bank of the United Stales, there is a consider- 
 able sum due at the same time on the dollar bonds, payable in New York. 
 This, it is the duty of the canal commissioners to pay; and as no provi- 
 sional arrangement could be made for its payment, with the means placed 
 at our disposal by your letter of instruction, it is important that the amount 
 should be raised in some other way, and that speedily, as otherwise the 
 cred't of our stocks will inevitably go down, and with it, necessarily, the 
 credit of the State. We mentioned in our letter from New York, that 
 
25 [373] 
 
 during our stay in that city a parcel of our bonds Were offered at the 
 "stock board" at 70 cents to the dollar, without a purchaser; and that a 
 lot of Indiana bonds were sold at the same time at 65 cents to the dollar. 
 What will be the scale of depreciation upon a failure to meet the payment 
 of the iiterest punctually, no one can foresee. But one thing is certain: 
 that such a result would be injurious in the extreme, if not wholly ruinous 
 to the future credit and prospects of our State. 
 
 While at New York, the citizens from Illinois then present in that city, 
 consisting of Governor Duncan, Colonel Mather, Doctor Barrett, Gover- 
 nor Reynolds, and my sell, had frequent conversations on the subject of 
 our State difficulties, and unanimously agreed that our only hope depends 
 upon the execution, in good faith, on our part, of the two contracts with 
 Messrs. Wright & Co. of London, If these contracts should be aban- 
 doned, what are our other resources to meet the accruing liabilities of 
 the State at home and abroad? We see none nothing before us but 
 mist, and gloom, and hopeless bankruptcy. The canal lands cannot be 
 disposed oi wilhout great sacrifice, if at all; and it will not do to tax the 
 people so heavily as would be necessary, if uniided by other and very 
 considerable means. To think of making further sales of bonds at par, 
 either in Europe or in this country, under existing circumstances, (which 
 are daily 'becoming worse and worse,) is a fallacious calculation, if, in- 
 deed, such an idea should at this time be entertained by those whose duty 
 it is to provide for these and other exigencies of the State. 
 
 These contracts, in our judgment, may yet be consummated, provided 
 you should, on a reconsideration of your former opinions, consent that 
 renewed bonds, with the interest payable semi-annually, to the extent of 
 f 2,900,000, should be executed, and forwarded to Messrs. Wright & Co. 
 on the canal contract, and for the residue of the contract made by Messrs. 
 Rawlings & Oakley. In regard to the contract negotiated by us with 
 Messrs. Wright & Co. Colonel Mather has agreed, on his own responsi- 
 bility as to expense, to have the renewed bonds engraved, and to take 
 them out with him to Illinois, or to see that they are forwarded as soon 
 as they can be made ready. You can then exercise your discretion, with 
 all the information which may be in your possession, whether you will 
 execute them or not, and give instructions tor the execution of the con- 
 tract; it being our opinion that there is nothing in the legislation of the 
 late General Assembly to prevent such a course, if you should consider it 
 expedient. Two-thirds of the new bonds will be for 300 sterling each, 
 and the residue of the denomination of 100 each; Mr. Wright being of 
 opinion that they would be much more saleable than if executed in the 
 old form. We were informed by Colonel Mather that Gen. Thornton 
 had sold only $100,000 of the 8500,000 of bonds placed in his hands for 
 sale within the limits of the State; so that (with the $400,000 in his hands 
 unsold, the $1,000,000 in the hands of Messrs. Wright & Co. which 
 would be withdrawn, the $1,200,000 deposited with Messrs. Nevins, 
 Townsend & Co. in New York, and $300,000 deposited with the Bank 
 of the United States, in Philadelphia all of which, we suppose, would 
 be taken up and cancelled,) the amount of the new bonds would be 
 $2,900,000, to make up the $4,000,00t) authorized by the laws of the 
 State. Very respectfully, &c. 
 
 RICHARD M. YOUNG. 
 His Excellency, THOMAS CARLIN, Governor of Illinois. 
 
[374] 26 
 
 No. 13. 
 Got?. Carlin to R. M. Young. 
 
 QUINCY, ILLINOIS, May 1, 1840,. 
 
 DEAR SIR: 1 have concluded to confirm your sale of $1,000,000 canal 
 bonds to Messrs. Wright & Co. of London: 1st. Because I have no doubt 
 that it is the best and most favorable sale that can probably be effected 
 to enable the State to meet the present and accruing liabilities on account 
 of the canal throughout the year; the present indebtedness to the hold- 
 ers of scrip, and to contractors, amounting to near $400,000. These 
 must be provided for, and the accru : ng interest to be paid on the 1st of 
 July and January next. The last Legislature, by an act passed on the 
 1st of February last, required the canal commissioners to sell as much of 
 the canal lands and lots as would be necessary to pay the interest on 
 canal debts for the present year; but General Thornton tells me that it 
 would be impracticable to raise the money from that source. And 2dly. 
 Because the action of the last Legislature failed to repudiate your con- 
 tract, although it was much animadverted upon; and therefore removes 
 responsibility, to a great extent, on my part. 1 cannot, however, persuade 
 myselt that it is a sale at par, according to the letter of the law; but I do 
 believe it is a par sale, according to the meaning and intention of the Le- 
 gislature at the time it was enacted; knowing, as I do, that they were 
 informed that the price of Illinois stocks at that time in Europe was 93 
 to the 100; and by estimating the difference of exchange at 10 percent. 
 in favor of London, it was contended that 3 per cent, premium would be 
 realized by a sale at that rate. Therefore, the sale of $4,000,000 canal 
 bonds was anticipated to be made in Europe, as the phraseology of the act 
 itself will demonstrate; and if a sale at 93 to the 100 at that time would 
 net a premium of 3 per cent, surely a sale at the same time at 90 to the 
 100 would have yielded par. 
 
 Whatever may be my private opinion as to the utility of contracting 
 those debts, 1 think expediency at present demands the confirmation of 
 your sale to Messrs. Wright & Co. Therefore, if the money can be real- 
 ized to meet the demands upon the canal throughout the present year, I 
 request you to close and confirm the contract; but if money cannot be 
 realized from that negotiation to meet the present and accruing liabilities 
 for this year, then, and in that case, I would advise and recommend can- 
 celling the contract, and a withdrawal of the bonds; because, should the 
 payment of the money be postponed until next year, the Legislature, 
 before that time, will have been convened, and an opportunity afforded 
 for such action as their wisdom may dictate. 
 
 With sentiments of the highest regard, your friend, 
 
 THO. CARLIN. 
 
 Hon. RICHARD M. YOUNG. 
 
 P. S. I presume Gen. Thornton will arrive at Washington by the time 
 this reaches you, on his agency for the canal contractors, for the purpose 
 of selling bonds, which necessity and a sense of justice compelled me to 
 
 .*JonTj^ 
 
27 [375] 
 
 place in the hands of the canal commissioners, to meet the wants and 
 liabilities of the State in the absence of money. I deprecate a forced sale 
 of those bonds by the contractors, (although they take them at par from 
 the State,) both on account of the loss to be sustained- by the contractors 
 themselves, and the effect and pernicious influence that it will have upon 
 the credit and character of our State stocks in future. This, sir, has had 
 no small agency in determining me to confirm your sale of $1,000,000 to 
 Messrs. Wright & Co. General Thornton expressed an intention, when 
 here, in case the money was realized from your contract, to sell an ad- 
 ditional amount of bonds on account. of the contractors, even at reduced 
 prices; alleging that $1,000,000 would be unequal to the present liabili- 
 ties, and keeping the work on the canal in progress throughout the year. 
 I have reflected upon this matter since his departure, and have arrived at 
 the conclusion that it would be infinitely better to curtail the work upon 
 the canal, to the limits of $'1,000,000, than to sell any of the bonds below 
 par; and request you to show him this, and I give it as my deliberate and 
 decided recommendation. The success and ultimate completion of the 
 canal depend less upon the amount of work done this year, than upon 
 keeping the credit oi the bonds inviolate at par. 
 
 T. C. 
 
 No. 14. 
 Richard M. Young to Gov. Carlin. 
 
 SENATE CHAMBER, 
 Washington City, May 20, 1840, 
 
 DEAR SIR: Your letter of the 1st of May, approving of the contract 
 made with Messrs. Wright & Co. of London, for $1,000,000 of bonds of 
 Illinois and Michigan canal stock, provided the money can be realized for 
 the purposes of the canal during the current year, has been received j 
 and we have hastened to inform Messrs. Wright &Co.(by the steamship 
 British Queen, which sails on the 1st of June instant) of the proposed 
 alteration, and of your desire that the contract should be cancelled, and 
 the bonds withdrawn, if the money cannot be promised within the year. 
 I send herewith a copy of our letter to Messrs. Wright & Co. to which I 
 beg leave to refer for the subject-matter of its contents. 
 
 I regret (if it is intended to avail ourselves of this contract,) that any 
 limitation should have been imposed in regard to the time of payment, aa 
 I very much fear Mr. Wright will decline making any promise inconsis- 
 tent with the agreement. To give you an idea of his feelings in respect 
 to any movement which savors of repudiation, or a disposition tending to 
 a non-compliance with existing agreements, entered into, as he supposed, 
 in good faith, and by agents duly authorized by law, I send you the copy 
 of a letter from him, which was politely furnished me by Thomas Dun- 
 lap, Esq. President of the Bank of the United States. 
 
[376] 28 
 
 General Thornton was exceedingly anxious that I should pay the New 
 York interest, amounting to $45,00'\out of the 10,000 heretofore ad- 
 vanced by Mr. Wright, and draw for the '?0,000 promised on the 15th 
 of July, to enable him to pay the interest falling due in London on the 
 first Monday in July, amounting to about $65,0(JO. At first, I was dis- 
 posed to aid him in providing for these payments, and went to Philadel- 
 phia to assist him to make the necessary arrangements with the Bank of 
 the United States; but not having succeeded there as we anticipated, I re- 
 turned to Washington, and, on further reflection and advice with Gov- 
 ernor Reynolds and Mr. Webster declined doing any thing further in the 
 matter. I send you a copy of my letter to General Thornton, now at 
 New York; which will explain the reasons which decided me to adopt 
 this course. 
 
 If it is desirable to carry out our contract with Wright & Co. in good 
 faith, my present impression is, that it will be essential for you to with- 
 draw the limitation contained in your letter of approval of the 1st of May, 
 so as to leave the payments to be made according to the terms of the 
 agreement. In respect to the substitution of new bonds, providing for 
 the payment of the interest semi-annually, you say nothing in your let- 
 ter, or in any of your correspondence with General Thornton. General 
 T. says that such was your intention, and that he will undertake to pro- 
 cure and forward the new bonds to Mr. Wrigh/. This will be necessary 
 to render that contract effectual, as the old bonds are admitted on all 
 hands to be unsaleable with the interest payable but once a year. 
 
 I am informed that the accounts brought out by the "British Queen," 
 from London, represent American stocks, with but few exceptions in a 
 state of very great depression. Arkansas six per cent, sterling stock 
 sold a few days ago, in New York, at 56 to the 100; and although money 
 is plenty there, it cannot be obtained for our western and southwestern 
 State securities. 
 
 Very respectfully, your friend, 
 
 RICHARD M. YOUNG. 
 His Excellency, THOMAS CARLIN, 
 
 Governor of Illinois. 
 
 No. 15. 
 
 R. M. Young to General Thornton* 
 
 SENATE CHAMBER. 
 Washington City, May 25, 1840, 
 
 DEAR Sm: Since my return from Philadelphia, I have consulted with 
 Governor Reynolds on the subject of providing for the interest on our 
 canal bonds at New York and London. He is altogether unwilling 
 to make such an appropriation of the 30,000, or any portion of it, 
 until it is known that Messrs. Wright & Co. will accept the condition 
 imposed by Governor Carlin, in his letter of approval the first of May 
 
25 [377J 
 
 and especially as the Governor did not in that letter, request us to assist 
 you in payment of the interest. I also mentioned to him the guaranty 
 offered by Colonel Mather, as president of the State B;ink of Illinois, for 
 the reimbursement of the $45,000 proposed to be paid in New York. 
 He s.jys he cannot consent to any such arrangement, as he is unwilling 
 to assume responsibility without express authority from the Governor. 
 Without his consent, 1 do n>t feel authorized to act; and must therefore 
 decline, for the present, doing any thing further in the matter. It ap- 
 pears to me upon much reflection, that it would be better to inform Mr. 
 Wright of the approval of our contract by the Governor, with the circum- 
 stances attending that approval, and at the same time to hold ourselves in a 
 position to cancel the contract, by refunding the 10.000 drawn, and 
 asking for a return of the $l t OOO,OuO of bonds, provided he is unwilling 
 to promise the money within the current year. It would unquestiona- 
 bly be better to keep this contract, for the present, separate and . istinct 
 from all other transactions, until we can close it up in some way, and 
 surrender our agencies. 
 
 1 do deplore exceedingly the present condition of things, and s?e no- 
 thing but mist and gloom in the prospective; and regret exceedingly that 
 the last legislature did not do something effectual to place the credit and 
 integrity of the State on some substantial basis. The July interest should, 
 at all events have been provided for with certainty, and not left to de- 
 pend on remote probabilities. 
 
 We will send our letter, with its enclosures to Messrs. Wright & Co. 
 by the British Queen, which sails on Monday next, and ask the favor of 
 you to take out a duplicate: and will lose no time in making our contract 
 available to the State, as soon as Mr. Wright's acceptance of the new 
 condition proposed in the Governors letter shall have been communicated 
 to us. 
 
 Before writing this morning, Governor Reynolds and myself advised 
 with several gentlemen here, in whose judgment we repose great confi- 
 dence, as to ttie course we ought to pursue in the present emergency, al- 
 ter stating the difficulties with which you were surrounded, and the 
 guaranty offbred by Colonel Mather, as president of the State Bank, for 
 the reimbursement of the New York interest; and they advise us a- 
 gainst all expedients, and say that it is our duty, both as it regards the in- 
 terest of the State, and as matter of good faith towards Messrs. Wright 
 & Co. to refrain from doing any thing whatever under our contract, un- 
 til we hear from them, and have their approval of the change proposed 
 by the Governor; and at the same time to hold ourselves in a position to 
 cancel the contract by refunding the 10,000, and asking for a return 
 of the bonds, if Messrs. Wright &, Co. after a consideration of all the cir- 
 cumstances, should be unwilling to promise the money within the current 
 year. 
 
 Very respectfully, 
 
 Your obedient servant, 
 
 RICHARD M. YOUNG. 
 General WILL.IA.H F. THORNTON, 
 
 City of New York. 
 
[378] 26 
 
 No. 1C. 
 
 R. M. Young and John Reynold? to John Wright $ Co. 
 
 WASHINGTON CITY, May 26, 1840. 
 
 DEAR SIR: Your esteemed favors of the 4th and 23d of January, and 
 18th of March, with copies of letters of remonstrance from yourself and 
 Messrs. Thompson & Form an, to his Excellency, Thomas Carlin, Gov- 
 ernor of Illinois, and the copy of the letter from Messrs. Few & Co. to 
 Mr. Blatchford, have been received and duly considered. After the letter 
 of Mr. Young of the 30th of November, in which he informed you that 
 Governor Carlin had issued his proclamation convening the Illinois Legis- 
 lature on the first Monday in December following, and that his attention, 
 and, through him, the attention of the Legislature, had been directed to 
 the necessity of changing the denomination of the bonds from ^25 to 
 sums of 100 and 300, and the still greater necessity of providing for 
 the payment of the interest semi-annually. we waited for the action of 
 the Legislature to enable us to advise you understandingly as to the future 
 operations connected with our negotiation. This, with the subsequent 
 portion of this letter, will account for our delay. At the commencement 
 of the session of the General Assembly, Governor Carlin submitted our 
 contract for the approval or disapproval of the Legislature. We send 
 you herewith the reports of the majority and minority of the Committee 
 on Finance, without comment; suffice it to say, that neither report was, 
 in the end, adopted. After the adjournment of the Legislature, the 
 Governor was at first inclined to the opinion, that, as the contract was 
 not formally ratified, he could not approve it with propriety; and hence 
 the new bonds, with semi-annual interest, could not be procured to make 
 the contract effectual in your hands, it being the general understanding 
 that the old bonds would be unsaleable by reason of the interest being 
 payable but once a year. Thus matters remained fora time; the Govern- 
 or hesitating, and the contractors on the canal anxious that something 
 should be done for their relief. We have at length received an official 
 letter from the Governor, dated May 1, 1840, (a copy of which we en- 
 close to you,) and the copv of a letter addressed to General William F. 
 Thornton, dated April 30, 1840. (which we also enclose,) by which you will 
 perceive that he has concluded to confirm our sale for $1.000,000, the a- 
 mount of bonds left only in your hands. We did not ourselves suppose there 
 was any necessity for a formal approval of the contract by the Legisla- 
 ture, as the power to make contracts, under the laws which governed our 
 action, had been transferred to the agents to be appointed by the Govern- 
 or; but, as the contract contained a provision for semi-annual interest, re- 
 quiring legislative action and sanction to give it effect, we think it wa 
 very properly for that purpose at least sulmitted for consideration, inas- 
 much as the proposed change was not authorized by any existing law. 
 But, without this, the contract was perfect, as all we promised to do 
 was to procure, or endeavor to procure; and, in that respect, complied 
 with our contract to the extent of our engagement. The Governor, we 
 are informed by General Thornton, has also consented to the making of 
 
27 [379] 
 
 the new bonds, which are now in process of execution at the engravers 
 in New York two-thirds to be of the denomination of 300, and the 
 remaining one-third 100, with interest payable semi-annually. These 
 bonds, when engraved, must be sent to Illinois for the signatures of the 
 Governor and Auditor of State, with the great seal of the State; and will 
 immediately thereafter be forwarded to you, for the purpose of being sub- 
 stituted in place of the old bonds now in your possession, provided you 
 are willing, under all the circumstances, to carry the contract into execu- 
 tion as originally intended. You will see, from the Governor's letter of 
 May 1, that his approval of the contract is accompanied with a provision, 
 "that, if money cannot be realized from that negotiation to meet the 
 present accruing liabilities for this year; then, and in that case, I would 
 advise and recommend cancelling the contract, and a withdrawal of the 
 bonds," &c. It is, therefore, for you to judge whether the money can be 
 promised for this year or not. We suppose, if the last instalment can be 
 drawn for at ninety days at the close of the year, which would extend the 
 actual payment at London three months beyond that time, it would 
 come within the meaning of the Governor's instruction, as the money 
 could be realized upon such a draft at New York at the close of the 
 year. You will see by the 7th section, of the act to amend the several laws 
 in relation to the Illinois and Michigan canal, approved, February 1, 
 1840, (a copy of which we also send you,) how far provision is made for 
 the payment of interest semi-annually. We have thus given you a histo- 
 ry of the difficulties which have been thrown in our way, and which still 
 exist, in regard to our contract, which we had fondly anticipated would 
 have been carried out with interest and credit to all the parties concern- 
 ed. We saw no other way of providing for the exigencies of our State, 
 and feeling a deep interest in the prosecution and completion of the 
 work upon our grand canal, we felt a solicitude that something should be 
 done; and all who were in London, and acquainted with the depressed 
 condition of the money market at that lime not only there, but over 
 the whole commercial world will, we are sure award us the credit of 
 having done the very best that could be done, and much better than any 
 one supposed could have been effected, under the various embarrassments 
 attending the money market at home and abroad. How much might 
 have been .realized in monej', under our contract with you, if there had 
 been no interruption to prevent its consummation, you, of course can 
 judge better than we can. If but little has been accomplished, you 
 surely are not justly chargeable with delinquincy, when the embarrass- 
 ments under which you have labored shall be duly considered and justly 
 appreciated. We still hope you will consent to carry out the contract on 
 the terms proposed in the letter of the Governor of the 1st May. If so, 
 we will furnish you with the renewed bonds as speedily as we can, as 
 General Thornton has promised to see that every thing is despatched in 
 that respect as expeditiously as possible. General T., who will deliver 
 you this packet, and to whose care the renewed bonds will be intrusted, 
 assures us that messengers should be provided to carry the bonds, for ex- 
 ecution, to Illinois, and back again to New York, when executed, with 
 all possible despatch; to him we beg leave to refer you for such fur- 
 ther information on this subject as may net be afforded by the explana 
 tions contained herein, and accompanying this letter. If you should, 
 
[380] 28 
 
 however, decline going on with our contract, after the explanations af- 
 forded you, you will please signify in what way you would wish the 10,- 
 000 already drawn to be refunded, and return by some safe conveyance, 
 the $1,000,0 Oof bonds deposited with you, either to the care of Prime, 
 Ward & King, or Nevins, Townsend & Co., of the city of New York, 
 We have, up to this time, refrained from drawing upon your house for 
 the 20,000 authorized by your letter of credit of the 31st of October last, 
 and which will become payable in London on the 15th of July, 1840, by 
 reason of the beforcmentioned difficulties. We regret that the Governor 
 should have limited his approval to the condition of a change of the agree- 
 ment so as to make the money available during the present year; but we, 
 nevertheless, hope that you will find yourself in a situation to enable you 
 to comply with that condition without inconvenience. We should not, 
 of ourselves, have proposed any change affecting the original contract in 
 any respect whatever, being satisfied with the agreement as it is; but as 
 the Governor evidently yielded to a supposed necessity, with much hesi- 
 tation and reluctance, and as we are anxions to avoid difficulty, we 
 would be gratified if you would consent to the proposed alteration, to 
 limit all the payments within the current year. Our Legislature will 
 convene again on the first Monday in December next, when we trust 
 something may be done to place the integrity of the State upon some 
 substantial basis. We will thank you to favor us with n reply to this 
 communication by the earliest convenient opportunity, as we are desi- 
 rous so far as we are concerned, to bring this matter to a close with the 
 least possible delay, with the view of resigning our agencies as soon as 
 we can do so with propriety. 
 
 We are, very respectfully, 
 
 Your obedient servants, 
 
 RICHARD M. YOUNG, 
 JOHN REYNOLDS. 
 JOHN WRIGHT, Esq., 
 
 Covent Garden, London. 
 
 P. S. The 10,000 sterling advanced by you on my draft, in favor oi 
 the cashier of the Bank of the United States, in pursuance of the agree- 
 ment made by me with Mr. Jaudon in London, has not been appropria- 
 ted to any State purpose, and will be retained until I hear from you on 
 
 the subject. 
 
 R. M. YOUNG. 
 
 No. 17. , 
 
 Messrs. Reynolds and Young to John Wright 
 
 WASHINGTON CITY, May 29, 1840. 
 
 DEAR SIR: Since writing to you by the British Queen, on the 26ih of 
 the present month, we have at the request of General William F. Thorn- 
 ton, of Illinois, who is the acting president of the board of commission- 
 ers on the Illinois and Michigan canal, ventured to make a draft on you 
 
29 [3811 
 
 for the twenty thousands pounds sterling authorized by your letter of 
 credit of the 31st of October, 1839, to .assist General Thornton in pay- 
 ing the interest on '225,000 sterling, sold to Thomas Dunlap, Esq. of 
 Philadelphia, and which is payable at the agency of the Bank of the 
 United States in London, on the first Monday of July 1840, and some ar- 
 rearages clue the United States Bank for interest heretofore advanced in 
 Philadelphia, amounting to about twenty-four thousand dollars. Our 
 draft in triplicate, is dated 23d May, 1840, and payable to A. Lardner, 
 Esq., acting cashier of the Bank of the United States, and the negotia- 
 tion is to be made through the agency of Mr. Jaudon, in London. It is, 
 however, distinctly understood, that, as Governor Carlin of Illinois has 
 limited the approval of our contract to the payment of the money within 
 the present year, and much delay has been occasioned by the Legislature 
 of our State in bringing about a consummation of our agreement, the 
 draft or bill before mentioned is drawn subject to your approval, without 
 being subject to protest ordamages fornon-acceptance; leaving you free 
 to refuse the bill and annul the contract, if you should be unwilling under 
 all the circumstances, to carry it into effect. We have attached a letter to 
 each number of the bill, expressive of this understanding, with the assent of 
 Thomas Dunlap, Esq., president of the Bank of the United States, as you 
 will see by his own signature on the same sheet of paper, in his note to 
 Mr. Jaudon, dated May 23, 1810, which is also the date of our letter ac- 
 companying the bill. The reason why the date of the bill (which is the 
 23d of May) does not correspond with the date of this our letter of advice 
 of to-day, is because wo had these bills made out several days ago at 
 Philadelphia, and haH concluded, when we wrote you by the British 
 Queen not to make any use of them. But as we have since changed our 
 minds upon the subject, and being now in a situation to place you in pos- 
 session of the renewed bonds, through General Thornton, in a very 
 short time, we hope it will suit you to goon with the agreement, and that 
 you will find it convenient to promise the money, as explained in our ori- 
 ginal letter, within the present year. 
 
 We remain with respect and esteem, 
 
 Your obedient servants, 
 
 RICHARD M. YOUNG, 
 JOHN REYNOLDS, 
 
 Agents of the State of Illinois for making the Illinois 
 and Michigan Canal State Loan. 
 
 N. B. We have omitted to send copies of the communications ac- 
 companying our original letter by the British Queen of the 26th of the 
 present month, as we are confident that letter, with its contents, will 
 reach you safely. 
 
 R. and Y. 
 
[382] 30 
 
 A. 
 
 PHILADELPHIA, May 23, 1840. 
 20,000 sterling. 
 
 On the fifteenth day of July next after date of this our third of ex- 
 change, (first and second, of same tenor and date, unpaid,) pay to the or- 
 der of A. Lardner, acting cashier, twenty thousand pounds sterling, value 
 received; which charge as advised by 
 
 Your obedient servants, 
 
 RICHARD M. YOUNG, 
 JOHN REYNOLDS, 
 
 Agents of the State of Illinois for Illinois and 
 Michigan Canal Loan. 
 
 Messrs. JOHN WRIGHT & Co., London. 
 
 B. 
 
 PHILADELPHIA, May 23, 1840. 
 
 SIR: We send you through the Bank of the United States, the annex- 
 ed bill on Messrs. Wright & Co. London, for 20,000 sterling the pro- 
 ceeds of which, when paid, you will please apply to the pajmentof inter- 
 est due on the first Monday in July next on 225,000 sterling Illinois and 
 Michigan canal bonds, No. 1. to 1,000, j22o sterling each interest at six 
 cent, annually. 
 
 It is, however, distinctly understood between the Bank of the United 
 States and ourselves, that should the bill not be accepted or paid by 
 Messrs. Wright &. Co., it is not to be protested; Messrs. Wright & Co. 
 having the option to annul and repudiate the contract at present existing 
 between them and us, in relation to the loan to the State of Illinois for 
 canal purposes. We have written fully to those gentlemen to-day on the 
 subject; and our bill, as above, will be paid or not, as they may think pro- 
 per to decide. 
 
 We are, very respectfully, 
 
 Your obedient servants, 
 
 RICHARD M. YOUNG, 
 JOHN REYNOLDS, 
 
 Agents of the State of Illinois for making the Illinois 
 
 and Michigan Canal Loan. 
 S. JAUDON, Esq., London. 
 
31 [383] 
 
 C. 
 
 BANK OP THE UNITED STATES, 
 
 May 523, 1840. 
 
 DEAR Sm: The foregoing letter of Messrs. Young and Reynolds, is in 
 conformity to an understanding we have with them, and we request you 
 will carry the same into effect. 
 
 Very respectfully yours, 
 
 THOS. DUNLAP. 
 S. JAUDON, Esq., 
 
 Agent of the Bank of the United States^ London. 
 
 No. 18. 
 General Thornton to Governor Carlin. 
 
 NEW YORK, June 1, 1840. 
 
 DE\R SIR: I have been twice to Washington, to Philadelphia three 
 times, and am now in New York for the third time, struggling to make ar- 
 rangements for the payment of the July interest on canal bonds, as well 
 in London as in New York. 1 have spared neither labor nor responsi- 
 bility in the attainment of so important an object, convinced, as all others 
 connected with our affairs are, th;it, unless the interest be promptly pro- 
 vided, and that provision be at once made known, no further negotiations 
 need be attempted, either through Messrs. Wright & Co., on account of 
 the State, or through any other channel, on account of contractors. The 
 immediate prostration of the State credit, already seriously impaired, and 
 the consequent ruin of thousands of our citizens, could not be averted a 
 single day, if it were believed that any part of our interest would re- 
 main unpaid. After your sanction although conditional, of Messrs. 
 Young and Reynold's contract with Messrs. Wright & Co., 1 calculated 
 that the 10,000 already drawn, and the '20,000 authorized to be 
 drawn for in July, would certainly be applied to the payment of interest, 
 since Messrs. Wright & Co. had ample security in their own hands to re- 
 imburse themselves, even should they choose to relinquish the contract; 
 and 1 was under the impression that you had written to Messrs. Young 
 and Reynolds to pay the interest, if in their power. But they say they 
 have received no order from you to pay the interest in any event; and 
 that if they had, the conditions attached to your sanction of Wright & 
 Co.'s arrangement render it improper for them to part with the 10,000 
 now in hand, until they can be assured that Messrs. Wright <fc Co. will 
 proceed to carry out thoir contract, notwithstanding the modifications in- 
 sisted on. For the same reason, they hesitated several days in drawing 
 for the '20,000 due in July, to enable me to pay our interest in Lon- 
 don; but have since consented, on condition that I would deposite 
 
[384] 32 
 
 with them two hundred State bonds, until you should have ordered them 
 to apply any funds derived from Messrs. Wright & Co. to the payment 
 of interest. Hence you will see the necessity of immediate instructions 
 to that effect. 
 
 Failing to obtain the 10,000 now in the hands of Judge Young, I was 
 compelled to borrow $45,000 in this city, for the payment of that part of 
 our interest coming due in the United States, and to rely upon arrange- 
 ments in England to meet the London interest, if Messrs. Wright & Co. 
 refused to honor Messrs. Young and Reynold's bill for 20,000; which 
 they will have a right to do, and which, by agreement with the Bank of 
 the United States, is not to subject us to any damages whatever. But I 
 carry such letters to Mr. Jaudon and others at London, as will, with very 
 little doubt secure the payment of the European interest at the proper 
 time. It is the unqualified opinion of every intelligent financier I have 
 conversed with, that unless our engagements are kept with Wright &. 
 Co., and they continue to repose confidence in our stocks, it will be need- 
 less to offer the bonds in Europe; and, if discredited in Europe, it would 
 be equally fruitless to try the American market. I therefore look 
 upon the good will of Wright & Co. as so essential to our preserva- 
 tion and so necessary to the re-establishment of our character, that I trust 
 you will not hesitate a moment in taking off al! restrictions, and leaving 
 them free to act according to the original understanding with Judge 
 Young. By that agreement, the bonds were to be sold or withdrawn 
 within eighteen months from last October; which limitation, without 
 further provision, will bring the matter to a close in April next; and 
 even if they refuse to warrant full sules during the present year, and I 
 am obliged to sell a few bonds on account of the contractors, any money 
 which Wright & Co. can furnish up to the middle of April will be 
 much needed before new negotiations can possibly be effected. Judge 
 Young and Governor Reynolds will write you on the same subject; and if, 
 our recommendation be attended with success, they should be informed 
 of it with the least possible delay, in order that the information may reach 
 London time enough to avail us, in the event of the refusal of Wright & 
 Co. to proceed as now restricted. 
 
 I have had engraved under the supervision of Judge Young, new 
 bonds of 300 and 100, with semi-annual interest, to an amount suffi- 
 cient to substitute those in the possession of Messrs. Wright & Co., (say 
 425,000 sterling) which will be forwarded to you without delay; and I 
 beg you will be good enough to execute them as early as practicable, 
 and transmit them to Judge Young, who will take the proper s-teps to 
 forward them to me in London; and, if used by Wright & Co., I will 
 take up the old bonds, and deliver them to you on my return, (seeing that 
 they ate first hammer-cancelled,) as soon as the others pass into the hands 
 of Wright & Co. I shall also have prepared 500 bonds of $1,000 each, 
 to be sold in this country for scrip and money, which when you have 
 executed, you will hold until bonds of '225 each be presented to you in 
 exchange, by those to whom I may sell with that condition, agreeably to 
 your letter of instructions, to me of the 1st of last month. Our delega- 
 tion generally, and Judge Young particularly, have been very useful to 
 me in procuring me proper letters, and otherwise aiding me in the object 
 of my mission. I am using every effort to get off this morning in the 
 
33 [385] 
 
 British Queen for London; consequently arn much hurried, which will 
 excuse me, 1 hope, for the hasty manner I have made this communication. 
 I shall write again from London as soon as I can do any thing decisive, 
 and would be much pleased to hear from you. 
 
 Very respectfully, your obedient servant, 
 
 W. F. THORNTON. 
 His Excellency, THOMAS CARLIN, Governor of Illinois. 
 
 No. 19. 
 Gen. Thornton to Nevins^ Townstnd fy Co. 
 
 WASHINGTON CITY, May 29, 1840. 
 
 GENTLEMEN: You will please deliver to Messrs. Richard M. Young and 
 John Reynolds, of Illinois, bonds, or Illinois and Michigan canal stock, to 
 the amount of 45,000 sterling; to be held by them as security for draw- 
 ing on Messrs. Wright & Co. of London, for 20.00(1; to be applied to 
 the payment of interest on 225,00 sterling of said stock, due in London 
 the 1st of July next. 
 
 Respectfully, your obedient servant, 
 
 W. F. THORNTON. 
 Messrs. NEVINS, TOWNSEND & Co. New York. 
 
 No. 20. 
 John Wright 6f Co. to R. M. Young and John Reynolds. 
 
 LONDON, June 30, 1840. 
 
 MY DEAR SIRS: Thanks for your kind communications; and I am 
 happy to find that all the difficulties (as I fully expected) about the par 
 of exchange have been satisfactorily arranged. 
 
 Gen. Thornton, to whom I have had the greatest pleasure in being in- 
 troduced, has arranged with us to continue the issue of the bonds, as 
 agreed between us, till March, 1841, subject then to new arrangements; 
 so that we shall, or rather have, accepted the bill of 20,000. 
 
 I am happy to say, among our private connexions we have sold bonds 
 to cover the above amount, and hope to succeed equally well in future: 
 but there is no chance with the public at the price mentioned, just at 
 present; but time? must alter this side March. 
 
 Trusting this will find you quite well, believe me yours, ever sincerely, 
 
 JOHN WRIGHT. 
 
 Messrs. YOUNG and REYNOLDS. 
 
|386] 34 
 
 No. 21. 
 From Gov. Carlin to K. M. Young. 
 
 QUINCY, ILLINOIS, June 14, 1840 
 
 DEAR SIR: Your letter of the 26th ultimo, together with the accompa- 
 nying copies ofletters addressed to Messrs. Wright & Co. of London, and 
 to Gen. W. F. Thornton; also, a copy of a letter from Messrs. Wright & 
 Co. to Thomas Dunlap, President of the United States Bank, were received 
 by last mail, and I hasten to reply. Your letter to me, and the accom- 
 panying copies, most fully disclose the difficulties with which the atiairs 
 of the canal are surrounded, and its future prospects and progress threat- 
 ened. The last Legislature, by their act, required the canal commission- 
 ers to sell as much of the canal lands as would be necessary to pay the in- 
 terest upon the canal debts for the present year; consequently, no other 
 legitimate source was left from whence to derive the means for that pur- 
 pose. But, being verbally informed by General Thornton, in March 
 last, that money could not be realized from the sale of lands to meet the 
 interest which would fall due on the 1st July next, and believing that the 
 character and true interest of the State depended upon the punctual pay- 
 ment of the interest as it became due, I took the responsibility of instruct- 
 ing you and Governor Reynolds to use every exertion to sell bonds for 
 that purpose ; which, however, proved unavailing. At that time, as at 
 present, I felt fully persuaded that the confirmation of your contract with 
 Messrs. Wright & Co. was the best that could probably be done, to en- 
 able the State to progress with the work on the canal; but the uncertainty 
 of obtaining the money from that quarter to meet the expenditures for 
 the year, together with the doubts I entertained of the contract being 
 strictly a par sale, and the powerful efforts by members of the Legislature 
 to repudiate not only that, but all other contracts made by the agents of 
 the State during the past year, deterred me from approving it at that time. 
 The doubts I entertained, however, of its being completely a par transac- 
 tion, principally controlled m^ action thus far; believing, as I did, that 
 the hostility evinced by a portion of the Legislature did not emanate from 
 the most patriotic motives; but when the necessity arose of paying the 
 contractors with State bonds, I then determined that the interest of the 
 State would be better promoted by availing ourselves of your contract, 
 provided the money could be had within the present year, and thus super- 
 sede the payment of bonds to contractors. This conclusion was appro- 
 baled by General Thornton; but he alleged that the money must be 
 received during the present year, or the greater portion of it, otherwise 
 it would be unavailing. From the tenor of your letter, as well as of a pub- 
 lished letter from General Thornton to William B. Ogden, of Chicago, 
 I would infer that some misunderstanding existed between Gen. Thorn- 
 ton and myself, in relation to the confirmation of your contract with 
 Messrs. Wright & Co. and the payment of interest, &c. J cannot, how- 
 ever, conceive it possible that the General could have understood that 
 your contract was approved unconditionally, as he expressly stated that 
 the money must be realized during the present year. 
 
35 [387] 
 
 A failure to pay the interest punctually, as it becomes due, under exist- 
 ing circumstances, would, in my conception, prove most destructive to the 
 interest and prospects of Illinois; and I would, unhesitatingly, incur 
 almost any responsibility to avert such a calamity. You say, that "if it 
 is desirable to carry out our contract with Wright & Co. in good faith, 
 my present impression is that it will be essential for you to withdraw the 
 limitation contained in your letter of approval of the 1st of May, so as 
 to leave the payments to be made according to the terms of the agree- 
 ment." 
 
 If a withdrawal of the limitation of the time of payment could now 
 furnish the means of the payment of the interest falling due on the 1st 
 of July next, both in New York and in London, and save the State from 
 the humiliation and mortification of a forfeiture of good faith and honor, 
 it unhesitatingly would be done: but if such withdrawal would not pre- 
 vent the catastrophe, no end nor advantage would be attained by it. And 
 as the interest will become due about the time this reaches you, it will, 
 therefore, be too late to make any provision for the interest falling due in 
 London; but I will repeat, that if such withdrawal will avert the cala- 
 mity, then it is freely and fully made. An additional reason to those 
 before stated, for not promptly approving your contract with Messrs. 
 Wright & Co. was, that if the money was not paid during the year, the 
 Legislature would be convened before any thing could be derived from 
 thai source; and, therefore, an opportunity afforded to make any provi- 
 sion they might think proper, for the future wants of the canal. You 
 will discover that the entire \bject is to provide for the present year. 
 General Thornton spoke to me of the guaranty offered by Col. Mather, 
 as President of the State Bank of Illinois, for the reimbursement of the 
 New York interest; and he added, that he would not leave the eastern 
 cities until the interest was provided for. I therefore relied upon his, 
 yours, and Gov. Reynolds' joint exertion; and still hope that you will 
 succeed in devising and procuring means to pay the interest. I cannot, 
 however, disapprove your caution, situated as you are, in holding the 
 proceeds of the 10,000 untouched, for reimbursement to Wright & Co. 
 in case he should decline the proposed change of contract. If I had the 
 control, at present, of any fund belonging to the State, I would not hesi- 
 tate to divert it from its legitimate use, and apply it to the payment of the 
 interest. 
 
 1 have a letter now before me, from Mr. Woodbury, Secretary of the 
 Treasury, informing me that $57,289 37, on account of the three per 
 cent, fund, arising from the sales of public lands, is due, and ready to be 
 paid to the State of Illinois on the application of the proper authority, to 
 be accompanied by a report in conformity to the act of Congress of the 
 12th December, 1820, giving an account of the application of said fund 
 by the State, &c. This fund is, by law, to be added to the school fund, 
 and I have no control of it, otherwise, I would apply it to the payment 
 of the interest, and reimburse it out of the first money procured for canal 
 purposes. Mr. Woodbury's letter will be enclosed, this evening, to the 
 Auditor and Secretary of State the money, to be drawn for and re- 
 ceipted by them; and it then becomes revenue for the use of the State. 
 But still I have no control over it. 1 hope you will use the utmost dili- 
 gence to provide means for the payment of the interest; and whatever 
 
[388] 36 
 
 responsibility you may incur, shall be sustained to the utmost by me, and' 
 I feel assured, by the Legislature and the people also. 
 
 Your friend, 
 
 THOS. CARLIN. 
 Hon. R. M. YOUNG, 
 
 No. -22. 
 GOP. Carlin to R. M. Young and John Reynolds. 
 
 QUINCY, ILLINOIS, June 25, 1840. 
 
 GENTLEMEN: I have only time to drop you a hasty line, to let you know 
 that I have determined to take the responsibility of confirming Judge 
 Young's sale of $1,000,000 canal bonds to Messrs. Wright & Co. uncon- 
 ditionally, according to the tenor of that contract. This I would have 
 preferred doing at the outset, to the payment of bonds to contractors, 
 had it not been doubtful as to the receipt of the money in due time to 
 meet the wants upon the canal; and General Thornton himself insisted 
 that it would not do to rely upon that contract for money to defray the 
 expenses of the canal during the year, as it would depend upon the sales 
 made by Mr. Wright, and, consequently, nothing certain could be de- 
 pended upon from them; but as the General and yourself, and Judge 
 Young, agree in recommending it, I have consented. You will, there- 
 fore, please confirm the contract, in case Mr. Wright has not previously 
 accepted of the restriction proposed in my letter to you of the 1st of May 
 last. The new bonds, to supply those in the possession of Mr. Wright, 
 have been received and signed by me this day, and will be sent by to- 
 morrow's stage to Springfield, to be completed; and thence to you, ac- 
 cording to the request of Gen. Thornton, to be forwarded by you to him, 
 at London. I have thought it best to leave the filling up of the numbers, 
 and to whom payable, blank; to be filled up according to your direction, 
 as it may be possible that Mr. Wright will decline the contract, altoge- 
 ther, and in that event the bonds could be made payable to another: be- 
 sides, I am not entirely positive of the commencing number of those bonds 
 now in Mr. Wright's hands. I expect the new bonds will be conveyed 
 to you by Mr. Roberts, of Springfield. Want of time compels me to 
 close. 
 
 Your friend, 
 
 THO. CARLIN, 
 
 Governor of Illinois. 
 
 Hon. R. M. YOUNG and 
 
 JOHN REYNOLDS. 
 
37 [389] 
 
 No. 23. 
 GOTO. Carlin to R. M. Young. 
 
 QUINCY, ILLINOIS, July 2, 1 840. 
 
 DEAR SIR: I wrote you in great haste on the 25th ultimo, informing 
 you that I had determined to confirm your sale of $1,000,000 canal bonds 
 made to Messrs. Wright & Co. of London, in October last, free from all 
 restriction. This I would have done, in preference to the payment of 
 bonds to contractors; but the committee appointed by the contractors 
 about the 1st of March last, composed of General Thornton and others, 
 albged that your contract could not be relied on for money to meet the 
 wants of the contractors, as it depended upon Mr. Wright's success in 
 selling the bonds; and, in case he should fail to procure the money to 
 meet their demands during the present year, inevitable ruin would be 
 the consequence. But Gen. Thornton wrote me, immediately before his 
 departure from New York to Europe, urging the propriety ot confirming 
 your contract, and says that it will dispense with the sale of bonds on 
 account of the contractors. I therefore, without hesitancy, consented, 
 and expressly informed and instructed him that it should supersede the 
 sale of that amount of bonds on account of contractors. The semi-annual 
 bonds will be forwarded to you by the Auditor from Springfield: you 
 will please send them as early as possible to Gen. Thornton, a. London, 
 and advise Messrs. Wright & Co. on receipt of them, to cancel the bonds 
 which you left in their hands before surrendering them to Gen. Thornton, 
 to be by him returned to me. 
 
 It would seem by General Thornton's letters to me, that some misun- 
 derstanding existed in relation to the payment of the July interest, as it 
 seems thai he expected me to direct you to apply the 10,000 which you 
 have drawn, and the 20,000 which you were authorized to draw for on 
 Mr. Wright, to its payment. This I could not do before Mr. Wright had 
 consented to the proposed alteration of the contract. I understood Gen. 
 Thornton to say that he thought the guaranty of Col. Mather would be. 
 sufficient to induce you to do so, in case the interest could not be pro- 
 vided for from some other source. 
 
 Your friend, 
 
 THO. CARLIN. 
 
 Hon. RICHARD M. YOUNG. 
 
 No. 24. 
 Messrs. Young and Reynolds to John Wright fy Co. 
 
 WASHINGTON CITY, July 20, 1840. 
 
 DEAR SIR: Yours of June 30th, acknowledging the receipt of our com- 
 munication-; on the subject of our agreement of October 30, 1839, is duly 
 received, and we are happy to learn that the difficulties with which our 
 negotiation was surrounded arc likely to be removed. The new bonds, 
 
(390] 38 
 
 in denominations of 300 and 100, respectively, with interest payable 
 semi-annually, duly executed hy the Governor of Illinois and the Auditor 
 of State, with the great seal of State affixed, in pursuance of the laws of 
 Illinois, have been received by us in this city from Illinois, and transmit- 
 ted to Messrs. Nevins, Townsend & Co. of the city of New York, with 
 instructions to forward them to Gen. Thornton in London by the earliest 
 safe conveyance, to be exchanged by you as far as may be necessary for 
 the bonds now in your hands. It is the request of Gov. Carlin, of Illinois, 
 that you cause the old bonds to be cancelled before their delivery in ex- 
 change to Gen. Thornton for the renewed ones, which will relieve all 
 the parties concerned from any further responsibility in relation to them. 
 It is, nevertheless, his wish that Gen. Thornton should preserve them in 
 their cancelled condition, and bring them with him on his return home. 
 We are happy to inform you that the Governor has withdrawn all restric- 
 tion in respect to our contract, and has authorized us to inform you that 
 the contract is to stand, if agreeable to you, in all respects, without any 
 restriction whatever, according to the original agreement. We trust, 
 therefore, that you will find yourself now placed in a situation, with 
 the renewed bonds, to make sales as fast as the necessities of the State 
 may require, at the stipulated prices. You will find the numbers, and to 
 whom payable, 6fC. left blank in the renewed bonds: these we authorize 
 either yourself or General Thornton to fill up, as circumstances may re- 
 quire. We sent a copy of Gov. Carlin's letter to us to Gen. Thornton, 
 in which he agrees to confirm our contract in all respects as it was made 
 with you, which we requested Gen. Thornton to communicate to you. 
 We are obliged to you for the acceptance of our draft for 20,000 ster- 
 ling, and are pleased to understand by your letter that you have sold a 
 sufficiency of our securities to indemnify for advances thus far made, &c. 
 We trust that you will continue to exert yourself for our State; and that 
 you may be fully indemnified in the sequel for all the trouble and vexa- 
 tion we have given you, and to which you may yet be subjected before 
 our negotiation is brought to a termination. ^ 
 
 Wishing you health and happiness, we subscribe ourselves, most re- 
 spectfully, your obedient servants, 
 
 RICHARD M. YOUNG, 
 JOHN REYNOLDS, 
 
 Agents of the State of Illinois for negotiating loans for the 
 Illinois and Michigan Canal. 
 
 JOHN WRIGHT, Esq. 
 
 No. 6 Henrietta street, Covent Garden, London. 
 
 No. 25. 
 
 Messrs. Wright fy Co. to R. M. Young. 
 
 . 
 
 LONDON, August 29, 1840. 
 
 SIR: We duly received your favor of the 20th ultimo, by the British 
 Queen, which also brought us the box advised in your letter, addressed 
 
39 [391] 
 
 to Gen. Thornton; which we have opened, and find to contain bonds of 
 100 and 300 each, to the amount of 225,000. 
 
 In consequence of what the General said to us before he quitted Eng- 
 land, we have considered it more prudent not to disturb these bonds until 
 we have written instructions again ffom you, as he seemed anxious (as he 
 will no doubt explain to you,) that we should transmit some of these bonds 
 to Messrs. Smith & Co. and take in return some of those already in their 
 hands. 
 
 If you think it more desirable, we could give them the whole, and await 
 the exchaige of those already advised to you as having been sold to our 
 friends, until the next package ariives, when we could return all the bonds 
 cancelled, with coupons payable annually, (which will never suit our 
 market,) held by us and Messrs. Smith & Co. 
 
 For these reasons we shall wait until we hear from you again. We 
 presume the 100 bonds transmitted should be numbered from 1 to 450, 
 and the 300 from 1 to 600; upon which point you will be pleased to 
 favor us with your instructions. In the interim we have every hope that 
 after Messrs. Smith & Co. shall have disposed, at the lower price, of the 
 bonds they contracted for, of being able to resume the sales as heretofore. 
 
 We trust Gen. Thornton has safely arrived on your side of the water; 
 and, with our best compliments to him, we remain, sir, 
 
 Your obliged servants, 
 
 WRIGHT & Co. 
 
 P. S. The letter addressed by you to General Thornton we have also 
 opened, being aware that it only advised the transmission of the bonds. 
 To Judge YOUNG, 
 
 Washington, U. S. 
 
 No. 26. 
 R. M. Young to John Wright < Co. 
 
 QUINCY, ILLINOIS, Oct. 15, 1840, 
 
 GENTLEMEN: Yours of the 29th of August ultimo, advising me of the 
 receipt of mine of the 20th of July, by the British Queen, with the box of 
 canal bonds forwarded by the same conveyance, is duly received. You 
 are right in supposing that the 100 bonds should be numbered from 1 to 
 450, and the 300 bonds from 1 to 600; and you are authorized to cause 
 them to be numbered accordingly. Gov. CarJin, our State Governor, 
 and Gen. Thornton, are now present while I am writing, and, with their 
 concurrence, I empower and request you to transfer the 225,000 of new 
 bonds, with semi annual interest received, as advised by your letter, to 
 Messrs. Maaniac, Smiths & Co. in fulfilment of Gen. Thornton's contract 
 with that house. We shall expect you in the mean time to pay the Janu- 
 ary interest on these bonds, as proposed by you in your letter to General 
 Thornton of July 18, and will, of course, make no other arrangement. 
 General Thornton has brought with him from our seat of Government 
 
[392J 40 
 
 225,000 also, of the new form of bonis, which only require the Gover- 
 nor's signature to make them perfect. These bonds, when executed, are 
 intended to be substituted in the place of those you now hold, and which 
 you are requested to transfer to Messrs. Magniac, Smiths & Co. 1 shall 
 set out for Congress, at Washington, about the 10th of November instant; 
 and as this will be the first safe opportunify of conveying these bonds to 
 New York, 1 expect to take them with me. They will, immediately on 
 my arrival in New York, be transmitted to you at London. You will 
 pursue the Governor's directions in cancelling all the old bonds, and af- 
 terwards sending them, as soon as the renewed ones are received, to my 
 address, care of Messrs. Nevins, Townsend & Co. New York. You will 
 also see that the coupons on the renewed bonds are made to correspond 
 precisely with those attached to the old bonds. We confidently expect you 
 will use every exertion to sell these bonds on the terms agreed, as we are 
 very solicitous that the work on the canal should not be interrupted for 
 the want of funds. I think you may expect the new bonds, which I will 
 take out with me to New York, from the middle to the latter part of De- 
 cember. Please inform me whether, on the receipt of the new bonds, we 
 might be permitted, in case of necessity, to anticipate sales, in sums to 
 suit your convenience, from 30,000 to 50,000. If we succeed well in 
 the amount committed to your care, it is very probable that we shall 
 continue to employ your house to make sales for us until the whole work 
 is completed. 
 
 Very respectfully, fec. 
 
 RICHARD M. YOUNG. 
 Messrs. JOHN WRIGHT & Co. 
 
 No. 27. 
 
 Extract from Gov. Carlin's Message to the General Assembly of Illinois > 
 dated November 26, 1840. 
 
 "To pay that portion of interest falling due in Europe, (in July last,) a 
 draft was drawn by Judge Young upon Messrs. John Wright & Co. of 
 London, for '20,000; it being part of 30,000 advanced by said company 
 on a contract for $1,000,000 canal bonds, entered into in October, 1839. 
 10,000, being the residue of the above 30,000 advanced by said 
 Wright & Co. has been placed on deposite in the United States Bank, 
 and 1 have instructed Judge Young to apply so much thereof as may 
 be necessary for the payment of the. interest becoming due in New York 
 on the first Monday in January next; and I am informed by General 
 Thornton, that the means are provided to meet the interest due in Lon- 
 don at the same time. As the contract with Messrs. Wright & Co. 
 was much animadverted upon by the last Legislature, notwithstanding 
 I was convinced that no sale could be made more advantageous to the 
 State at the time it wag effected, or during the present year, yet I hesi- 
 tated very much before assenting to its confirmation. Being, however, 
 informed that no other means could be obtained to meet the July interest 
 in juondon, to prevent a forfeiture of good faith on the part of the State, 
 
41 [393] 
 
 I at once determined to confirm the contract. The residue of the bonds, 
 after deducting the 30,000 advanced, still remain in the hands of Messrs. 
 Wright & Co. and are as yet unavailable to the canal fund. If they are 
 not sold prior to the 1st of April next, the contract ceases by its own sti- 
 pulations; and, in that event, no means are provided for the prosecution 
 of the work on the canal for the ensuing year," &c. 
 
 THO. CARLIN. 
 SPRINGFIELD, November 26, 1840. 
 
 No. 28. 
 < 
 
 Samuel Allinson to GOTO. Carlin. 
 
 LONDON, December 1, 1840. 
 
 SIR: It becomes my painful duty to inform your Excellency of the fai- 
 lure of Messrs. Wright & Co. I address Judge Young and Gen. Thorn- 
 ton; but as those letters may miscarry, I think it due to the part I acted 
 in the negotiations of these gentlemen, and of Messrs. Rawlings and Oak- 
 ley, to apprize your Excellency of this sad occurrence. I beg to refer 
 you to any of these gentlemen for my position here, and to the Govern- 
 ment at Washington for my official character as consul in France. 
 
 This is the third private banking-house that has recently stopped here, 
 owing, partly, to the pressure upon them of the joint-stock banks. Mr. 
 Wright has made himself so conspicuous in the support of American secu- 
 rities on a liberal principle, that the joint-stock banks, and some city 
 bankers and brokers, have labored to destroy him; and their misrepre- 
 sentations induced the Bank of England to withdraw its aid when most 
 needed. Thus has this old and respected house become the victim of 
 animosity so well directed, that I regret to say it can rise no more. The 
 house stopped on the 23d ultimo, and a fiat of bankruptcy has issued 
 against the partners. The Illinois bonds left with the house by Judge 
 Young and Messrs. Rawlings and Oakley, are thus, for the moment, in 
 charge of the Court of Bankruptcy; but no fear need be entertained of 
 their appropriation, except for the amount advanced the State by Wright 
 & Co. 1 have always understood Mr. Wright that sufficient have been 
 sold to cover these advances. He is in a distant part of the countiy, but 
 I shall see him in a few days, and will communicate to your Excellency, 
 the state of the account. To an authorized agent of the State of Illinois, 
 only, will these bonds be delivered, after payment of any balance due 
 Wright & Co. I do hope to make some provision for the payment of 
 interest in January, on the bonds sold by Wright & Co. and will continue 
 to advise you of my progress. With this view I am negotiating with the 
 very powerful house of Palmers, Mackillop, Dent & Co.; and had 1 the 
 power of securing to them the banking account of paying dividends, 1 
 should doubtless succeed. This house was selected by Gen. Hamilton to 
 be the bankers for the loan obtained here of two millions of dollars for 
 South Carolina, and by Col. Gamble for a similar loan for Florida. I ven- 
 
 A2 
 
[394] 42 
 
 ture to recommend it to you as one of great resources and influence. They 
 are not money bankers, but a commission house with great means; and 
 for their credit, reference can be made to Rowland & Aspinwall, New 
 York. 
 
 Mr. John Horsley Palmer is a director of the Bank of England, of 
 which he has been thrice elected Governor. He originated, and by his 
 sole great power, carried the measures of relief given by the bank to the 
 American merchants in ISST-'SS; and 1 cannot refrain from expressing 
 my conviction, that if the State of Illinois would make this house its agent 
 in Europe, funds for completing both the canal and central railroad 
 might regularly be obtained. 1 promised Judge Young and Gen. Thorn- 
 ton, that, at a proper time, I would visit Paris, with a view to introduce 
 the Illinois bonds in that market. 1 have but recently returned to Lon- 
 don, and am able to say that, with prudence and perseverance, I think a 
 large amount might be placed there among the higher classes in France. 
 The early settlement of Frenchmen in Illinois, and the missions of La 
 Salle and Marquette, are topics of interest. The bonds of Ohio and New 
 York have become a favorite en the Paris Bourse; but they were intro- 
 duced cautiously and with great influence. 
 
 I observe that the State holds 40,000 acres of unsettled lands. Could 
 not these, with the railroad as it progresses, the depots, cars, revenues, 
 &c. be pledged by the State for the redemption of the debt to be incurred 
 for that system of improvement, in the same way as the lands are made 
 a security for the canal debt? I think such an arrangement would doubt- 
 less secure the negotiation of bonds. As an American, I am truly desi- 
 rous of serving the State of Illinois: my children look to it as their future 
 residence: my son is laboring hard at King's college to finish his educa- 
 tion as an engineer, and go out there: and I am thus encouraged to urge 
 upon your Excellency, the adoption, as agents, of the above house, known 
 as they are throughout Europe and the United States. 
 
 I think you will reflect how much better a permanent agent of high 
 character will serve the State, than one of equal character specially de- 
 puted: for the first is at home, ready to take advantage of circumstances; 
 while the other must be a stranger to local matters, anxious to finish his 
 mission and return home. The settlement of the account with Wright 
 and Co. will require an agent of character and weight. 1 would there- 
 fore advise that a power of attorney be forwarded to Messrs. Palmers, 
 Mackillop, Dent & Co. to act in the premises. I give the names at foot. 
 The contract for iron made by Messrs. Rawlings and Oakley with 
 Thompson expires on the 1st of January, 1841. Their contract is at 
 9 10s. The same iron has ever since been bought, and is now bought, 
 at 7 to 7 5s. Messrs. Palmer & Co. contracted with the New York 
 and Erie Railroad Company, early in September last, for 5000 tons T 
 rails, at 9 5s. per ton, on a credit The iron was bought of the British 
 Iron Company, ana the whole of it has already been shipped. 
 1 have the honor to be, sir, your obedient servant, 
 
 SAMUEL ALLINSON. 
 His Excellency, Gov. CARLW. 
 
 Names of the partners of Palmers, Mackillop, Dent fy Co. George 
 Palmer, John Horsley Palmer, James Mackillop, Lestock Peach Wilson, 
 Thomas Dent, George Palmer, jr. and Edward Horsley Palmer. 
 
43 [395] 
 
 No. 29. 
 R. M. Young to Samuel Jaudon. 
 
 NEW YORK, Dec. 23, 1840. 
 
 DEAR SIR: On my arrival here on yesterday, I learned with much sur- 
 prise that the house of Wright & Co. of London, had stopped payment, 
 rrudence, therefore, requires that the earliest application should be made 
 for the return of the Illinois and Michigan canal bonds, which were left 
 on deposite, under the contract made with that firm, by Gov. Reynolds 
 and myself, to be sold on certain stipulated terms, so far as the same may 
 not have been sold. By our latest advices from Mr. Wright, the whole 
 amount of sales did not much exceed the sum of 31,000, and we have 
 drawn ^30,300; so that the greater portion are still on hand and unsold. 
 You may recollect that the bonds wore not sold to Messrs. Wright & Co. 
 nor were they hypothecated for any advances made; but were merely 
 left for sale with them, as agents of the State of Illinois. As Mr. John 
 Wright informed me in his last letter that a sufficiency of bonds had been 
 sold to cover all advances, with a small surplus in his hands,! presume, of 
 course, that there will be no difficulty in the residue being handed over to 
 you, on application. I therefore authorize you, as agent of the State of 
 Illinois, for the control and management of said bonds, to call upon Messrs. 
 Wright & Co. for them, and request that they may be delivered over to 
 you, and that they may be immediately cancelled either before or sub- 
 sequent to their delivery to you, and forwarded to my address by the 
 earliest safe opportunity, to the care of the branch of the United States 
 Bank in New York. Your early attention to this important business 
 will much oblige yours, very respectfully, 
 
 RICH'D. M. YOUNG, 
 Agent of the State of Illinois, 
 for negotiating sales of Illinois and Michigan Canal Bonds. 
 
 SAMUEL JAUDON, Esq. London. 
 
 P. S. If necessary, please take measures to prevent the furthe rnego- 
 tiation, or any improper use being made, of said bonds. 
 
 R. M. YOUNG, 
 
 Agent, 6fC. of the State of Illinois. 
 
 No. 30. 
 R. M. Young to John Wright fy Co. 
 
 NEW YORK, Dec. 23, 1840. 
 
 GENTLEMEN: On my arrival in this city, for the purpose of transmitting 
 lo you the 225,000 of Illinois and Michigan canal bonds, in deuomina- 
 
[396] 44 
 
 tions of 300 and 100, with interest payable scmi-annually, for the pur 
 pose of substituting them in the place of the old bonds deposited with you 
 under our contract of October 30, 1839, 1 learned with surprise and un- 
 feigned regret, that your old and respectable house had been compelled, 
 from its numerous engagements, to stop payment. We cannot, of course, 
 expect you, under the circumstances, to proceed further with the agree- 
 ment; and I have accordingly empowered Samuel Jaudon, Esq. agent of 
 the Bank of the United Slates, to call on you for the unsold bonds, who 
 wili receipt to you for the same. You can have them cancelled before 
 their delivery to Mr. Jaudon, or he can have it done afterwards, before 
 they are sent home. By the latest advices from your house the net pro- 
 ceeds of sales exceeded 31,000; and the advances were stated at 
 somewhat a Jess sum, but exceeding 30,000. If, by the terms of the 
 sale of such bonds as may have been disposed of, you have undertaken, 
 on the part of the State of Illinois, to deliver bonds of the new denomina- 
 tions of30j and 100. with semi-annual interest, the requisite number 
 can be forwarded to such person or persons as you may appoint in Lon- 
 don, as soon as we are informed upon the subject. 1 will of course with- 
 hold the bonds 1 have with me, as you would not expect me to send them,, 
 under existing circumstances. 
 
 You will please deliver the unsold bonds deposited with you to Mr. 
 Jaudon, on application. I sincerely condole with you in your misfortune, 
 and hope that things may not turn out as badly ibr your interest as the 
 news on this side ol the water would seem to indicate. 
 
 1 remain, very respectfully, your obedient servant, 
 
 RICHARD M. YOUNG, 
 Agent of the State of Illinois for Illinois and 
 
 Michigan Canal Loan. 
 Messrs. JOHN WRIGHT & Co., London. 
 
 No. 31. 
 
 Richard M. Young to Gov. Carlin, voiih receipts A, B, C. 
 
 NEW YORK, Dec. 28, 1840, 
 
 DEAR SIR: 1 mentioned in my letter to you of the 23d ultimo, from 
 this city, that my object in coming was to pay the January interest on our 
 canal bonds, and to forward the 225,000 sterling bonds of the new de- 
 nomination to Messrs. John Wright & Co. of London, to be substituted 
 in place of the old ones deposited under the contract made with that 
 house, by Gov. Reynolds and myself, on the 30th of October, 1839. 1 
 also informed you in that letter, that I had met the news here of the fai- 
 lure of Messrs. Wright & Co. and that 1 had consequently refrained from 
 sending out the bonds, and would have them cancelled and returned home. 
 Upon further reflection, 1 think it would be improper to cancel them 
 without your instruction to that effect; and 1 have, until further advised, 
 deposited them for safekeeping with the United States Bank in this city. 
 
45 [397] 
 
 As Mr. Wright may have sold the amount mentioned in his last letter, of 
 which the net proceeds were stated at 31,753 Os. 3d. with the under- 
 standing that the old bonds were, when received by him, to be substituted 
 by the new; and as we have received nearly, if not quite, all of these pro- 
 ceed?, justice and good faith would seem to require that so many of the 
 new bonds should be held in readiness to be sent out to London for this 
 purpose, if our next advices should make it necessary. At the request of 
 Messrs. Nevins, Townsend & Co. who were anxious for the arrival of Dr. 
 Barrett, fund commissioner, (with whose co-operation it was hoped that 
 provision could be made for the whole of our interest, internal improve- 
 ment and all, at the same time, so as not to make a difference in the price 
 of the coupons in this market, I delayed paying the interest on the canal 
 bonds until to-day. Dr. Barrett not having arrived, and as our State is 
 unrepresented in the Senate, in consequence of the indisposition of Gen. 
 Robinson, I could not consent to remain any longer. I have accordingly 
 deposited, in New York, par funds, with the branch of the United States 
 Bank in this city, thirty nine thousand dollars, which is sufficient to pay 
 all the interest on the canal bonds which will become due, in this city, 
 on the first Monday in January. It is in this bank that all the coupons 
 are made payable. The above amount includes the interest on the three 
 hundred thousand dollars of canal bonds, sold to Mr. John Delafield by 
 Messrs. Rawlings and Reynolds. The interest on the one hundred thou- 
 sand dollars of canal bonds, sold by Gen. Thornton, which is payable at 
 the Phoenix Bank in this city, does not become due until the first Mon- 
 day in July, 1841. In addition to the thirty-nine thousand dollars thus 
 deposited, I have paid eleven thousand dollars to Nevins, Townsend & 
 Co. in part payment of the money advanced by them to Gen. Thornton, 
 to pay the interest on the canal bonds which fell due in July last; making, 
 together, the sum of fifty thousand dollars, in New York par funds. The 
 amount drawn by me from Messrs. Wright & Co. was 10,300 sterling, 
 equal to $49,955 in specie funds in New York, which will leave a balance 
 of $'45 in my favor. Enclosed I send you the duplicate receipts for the 
 $39,000 and the 225,000 of bonds deposited with the United States 
 Bank in this city, and for the $11,000 paid Nevins, Townsend & Co. on 
 account of money advanced to Gen. Thornton: all of which you will 
 please lay before the Legislature. I leave in the morning for Washington 
 city, and will in a very few diys after my arrival make a special report, 
 in detail, to you, of all the matters connected with my agency. 
 
 Respectfully, &c. 
 
 R. M. YOUNG. 
 His Excellency, THOMAS CARLIN, 
 
 Springfield, Illinois. 
 
[398] 46 
 
 A. 
 $39,000. 
 
 BANK OP THE UNITED STATES 
 
 in New York, December 28, 1840. 
 
 Received from the Hon. R. M. Young, of Illinois, thirty-nine thousand 
 dollars, to be appropriated to the payment of the interest due the 4thiday 
 of January, 1841, on the bonds of the State of Illinois. (Illinois and Michi- 
 gan Canal 6 per cents.) 
 
 T. H. YOUNG, Cashier. 
 
 B. 
 
 NEW YORK, Dec. 28, 1840. 
 $11,000. 
 
 Received of Richard M. Young, Esq. eleven thousand dollars, in part 
 payment of moneys advanced by us to General William F. Thornton, 
 President of the Board of Canal Commissioners, to pay the July interest 
 last due on the Illinois and Michigan canal bonds. 
 
 Signed duplicate receipts. 
 
 NEVINS, TOWNSEND & CO. 
 
 C. 
 
 BANK OF THE UNITED STATES 
 
 in New York, December 28, 1840. 
 
 Received from the Hon. R. M. Young, of Illinois, one package, contain- 
 ing bonds of the State of Illinois, viz: 
 
 750 bonds of 100 sterling each - - 75,000 
 
 500 do 300 - - 150,100 
 
 -225,000 
 
 say two hundred and twenty-five thousand pounds sterling, signed by 
 Thomas Carlin, Governor of Illinois, and Levi Davis, Auditor of State; 
 numbers in blank; dated June 1, 1840. Said bonds to be held subject to 
 the order of the said Richard M. Young. 
 
 T. H. YOUNG, Cashier. 
 
 No. 32. 
 
 Extract from the Message ofGov. Carlin, in reply to certain resolutions ad- 
 dressed to him by the House of Representatives, in relation to the sum of 
 10,000, received by R. M. Young, on the contract made by him with the 
 house of Wright fy Co. in London. 
 "In answer to the three last inquiries, I have to say, that the proceeds 
 
 of the said 10,000 sterling, have not been paid to the canal commission- 
 
47 [399] 
 
 ers, because the contract upon which the money was advanced by Messrs. 
 Wright & Co. was not consented to and confirmed by me until the 25th 
 of June last, which was subsequent to General Thornton's demand for the 
 money to apply to the payment of the July interest, and, until that time, 
 could not be used ior canal purposes. It was therefore proper to with- 
 hold it, in readiness to be refunded to said Wright & Co. in case the con- 
 tract should not be confirmed. Consequently, the agents declined to pay 
 over the money when requested by the President of their board. 
 
 "THO& 
 
 No. 33. 
 
 Extract from the official letter of Gon. Carlin to R- M. Young, dated at 
 Springfield, December 12, 1840. 
 
 "I have to request you to see that the interest due in New York, on the 
 canal debt, on the first Monday of January next, is promptly paid out of 
 the said 10,000 sterling. I am informed that a large surplus remains 
 of the '20,000 received from Messrs. Wright & Co. (by Gen. Thornton) 
 in July last. That surplus, together with the residue of the 10,000, after 
 paying the January interest, I wish you to deposite in a safe bank, to the 
 credit of the canal fund, or apply it as you may hereafter be directed, to 
 the payment of the moneys borrowed by General Thornton to pay the last 
 interest in New York. 
 
 "Very respectfully, &c. 
 
 THO. CARLIN. 
 
 *'Hon. RICHARD M. YOUNG." 
 

ILLINOIS) H, R. U2th ASSEM. 
 
 LEOIS. J (2d SESSION. 
 
 
 FEBRUARY 27, 1841. 
 Read and laid on the table. 
 
 
 
 SELECT COMMITTEE, 
 
 . 
 
 ON PROVIDING FOR THE PAYMENT OF INTEREST ON THE STATE DEBT FOR 
 
 THE DISPOSITION OF THE SYSTEM OF INTERNAL IMPROVEMENTS, 
 AND FOR THE CONTINUANCE OF THE CANAL. 
 
 
 MR. EDWARDS, from the Select Committee of nine, made the following 
 
 ' 
 REPORT: 
 
 The Select Committee, to whom was referred a resolution for consider- 
 ing and reporting " upon the best means of further providing for the pay- 
 ment of interest on the State debt for the disposition of the system of in- 
 ternal improvements and for the continuance of operations on the canal," 
 have had the same under consideration, and beg leave to report, as fol- 
 lows: 
 
 That they are fully aware of the magnitude of the task imposed on them 
 by the resolution above referred to embracing, as it does, an outline of the 
 whole financial policy of the State, and lequiring an investigation of the 
 true condition of her liabilities and means together with the best plan for 
 carrying on to completion the public works already begun by the State. 
 Nothing but an imperative sense of duty, and a sincere desire to contribute, 
 as far as lies in their power, to alleviate the anxiety which now rests upon 
 the public mind, could have prompted them to undertake a task so onerous 
 and responsible, and of the practicability of which there exists such a di- 
 versity of opinion. Your committee do not arrogate to themselves any 
 superior wisdom, or means of information, over the committees of this 
 House, to \rhom the questions embraced in the above resolution properly 
 belong. On the contrary, they freely acknowledge their indebtedness to 
 
the arduous labors of those committees; and so far from desiring to super- 
 sede them, their only aim is, in the langauge of the resolution, further to 
 provide, if possible, for the advancement pi the important interests therein 
 alluded to. They feel, with intense anxiety, the urgent necessity of ma- 
 king every exertion to rescue Illinois from the foul stain now likely to blot 
 her hitherto fair escutcheon to relieve her from the odium of being the 
 first and only State in the Union, which has neglected to make the neces- 
 sary arrangements for meeting her solemn engagements, and preserving 
 unsullied her oft plighted faith; and thus not only casting a shade over her 
 own reputation, but bringing into reproach and disgrace that of her sister 
 States and of the whole Union. 
 
 Your committee believe that all parties in this State would repudiate 
 the conduct of Representatives who should return to their homes without, 
 at least, making an effort, in good faith, to avert such a calamity as the one 
 impending one which would render them individually and collectively 
 infamous, in the eyes of the civilized world one which would degrade the 
 character of the republican institutions which we all profess so much to 
 reverence and cherish one so entirely at war with the sentiments of ho- 
 nor and of honesty prevailing among our citizens in their piivate transac- 
 tions, and the destruction of which they would regard as the heaviest curse 
 that could befall a virtuous, intelligent and free people. They would most 
 sincerely deplore, and most indignantly reprobate the intrusion of any 
 party feeling or party bias upon subjects of such vital concern to them- 
 selves and to the State. We, therefore, in behalf of our common con- 
 stituents, most earnestly invoke all of both parties in this House to unite 
 with heart and hand in the cause of the country to stand shoulder to 
 shoulder in upholding its faith and credit and to retire from the contest 
 n!y when that object is attained. 
 
 But your committee are aware that not only the preservation of the faith 
 and credit of our State demands this sacrifice, but that her pecuniary in- 
 terests must and will suffer great and irreparable loss, if this Legislature 
 shall adjourn without having made some efficient arrangements by which 
 such of her works, as policy requires to be continued, can be carried out to 
 completion. Should this Legislature so adjourn, then the people of Illi- 
 nois will have sustained a loss of nine or ten millions of dollars, without 
 the most distant prospect of ever realizing one cent of profit or advantage 
 from so greaf: and ruinous an expenditure. Can the people or their repre- 
 sentatives, contemplate such a state of things without feeling the sad and 
 alarming dereliction of duty, on the part of the Legislature, in failing to 
 make some adequate provision by which something might be preserved 
 from the general wreck? If they cannot, then it is our high and solemn 
 duty at whatever sacrifice of personal popularity at home, or of ease or 
 tranquillity here to begin, at once, in good earnest, and make whatev- 
 er progress therein that time and circumstances will allow. Nor should 
 we fear to encounter the sneers or clamors of senseless and time-serving 
 demagogues, here or elsewhere: for your committee are assured that al- 
 though a temporary excitement may be got up against them, yet, when the 
 subject is understood by the people, (and understood it will be,) all who now 
 join in endeavoring to maintain the credit of the State, and to save a por- 
 tion of her vast investments from indiscriminate ruin, will be cheered by 
 the welcome plaudits of a generous and high minded constituency. 
 
[391] 
 
 INTERNAI, IMPROVEMENTS. 
 
 In the presentation of a plan for carrying on the public works of the 
 tState, your committee will begin with the system of internal improvements 
 a system which they believe, from its magnitude and the inutility of ma- 
 ny of the works projected, it would be altogether unwise in the State to 
 attempt, at this time, to carry on, upon her own responsibility, and at her 
 own expense. But as upwards of five millions of dollars have been expen- 
 ded upon.this system, and no portion of it completed, but many parts in a 
 condition from whicii some advantage may derived to the people and the 
 State, if finished; and as, from the various and conflicting interests which 
 might, and doubtless would be brought to bear upon this subject, no hope 
 can be entertained that the State (even were it desirable to do so.) would 
 finish those portions which are most needed and nearest a completion, your 
 committee would recommend that the plan submitted by the committee on 
 internal improvements should be adopted as a part of the policy of the 
 State. 
 
 This plan provides, in the first place, for the total suspension of all ope- 
 rations upon the several works of internal improvement under the existing 
 laws for the prevention, under any pretence whatever, of any further al- 
 lowance or expenditure by virtue of those laws for the reservation to the 
 State, of lands and rights acquired under and for the use of the system, 
 from forfeiture to the individuals or corporations from whom they were 
 obtained for the sale of all the perishable materials and iron belonging to 
 the State and for the repeal of so much of any act of this State as authori- 
 zes any person to obtain aw assessment for tlie right of way on any of said 
 works. Your committee believe (hat the above proposition is the best 
 that can be adopted, under the circumstances, as it leaves it in the power* 
 of the State to make such disposition of the public works as circumstances 
 may require which power, it is believed, could not have been so safely 
 exercised under an entire and absolute repeal of the laws creating the 
 system. 
 
 Your committee further concur with the committee on internal improve- 
 ments in their plan for the future disposition of the public works which 
 provides for the creation of a board, on the part of the State, to exercise a 
 general supervision over all the works of the State to prosecute all tres- 
 passers on said works and to sell, lease, or contract, in relation to all or 
 any part of the different railways, laid out and commenced by the State, 
 under the restrictions and securities therein provided for; and which fur- 
 ther provides for giving up the works to companies, upon the condition lhat 
 the work done by the State shall be valued that the company shall ex- 
 pend a sum equal to the valuation and then half as much as will be neces- 
 sary to complete the work, before the State shall be called upon to contri- 
 bute any thing further in their prosecution; after which, the State and the 
 company shall be joint proprietors, and participate equally in the profits of 
 the work reserving, at the same time, to the State the right to purchase, 
 within a limited period, the interest of said company, upon the payment to 
 them of the amount which they shall have expended, with six per cent, in- 
 terest and thefeby avoiding the dangers of corporate monopolies, whilst 
 securing the benefits of corporate enterprize. 
 
[392] 4 
 
 Your committee believe that the above mode of disposing of the public 
 works is decidedly the best th.it can be adopted, as it will enable a discri- 
 mination to be made between those works which are of practical utility 
 and those which are not a result which could not be attained in the Le- 
 gislature, no one being willing to authorize the expenditure of public mo- 
 ney upon a work not immediately advantageous to his constituents, with- 
 out including the one in which they were directly interested. It will like- 
 wise save the State from any improvident appropriations, since capitalists 
 would not expend their own money in the construction of a work, unless 
 it would be likely to be profitable; and if profitable, it would not fail to be 
 useful, as its profits would depend upon the facilities it afforded to the com- 
 munity for travelling and the transportation of their merchandize and pro- 
 duce. Besides, this plan, it is confidently believed, would insure the com- 
 pletion of several of the works upon which large sums of money have been 
 expended, without the possibility of loss to the State, and greatly to her 
 advantage, as well in enabling her to realize some profit from the money 
 invested, and which, without this plan, must be irrecoverably lost, as in 
 providing the necessary facilities for travelling and transportation. In, ad- 
 dition to the above reasons, your committee would add that this plan 
 would save to the State a large amount of time and money, lavished upon 
 idle, conflicting and exciting legislation, in relation to the several parts of 
 the system, to the exclusion of other useful business and would interpose 
 a safeguard against incautious and dangerous grants of power to particular 
 com panics. 
 
 STATE DEBT. 
 
 In reference to the payment of interest of the State debt, your commit- 
 tee are disposed to concur with the Finance committee in their plan for 
 taxing the salaries of the officers of the State Government, as well as the 
 members of the Medical and Legal professions, believing that, under the 
 present financial embarrassments of the country, the imposition of such a 
 tax would be cheerfully submitted to by these classes. Nor would they 
 object to a graduated tax upon deeds and other instruments of writing to 
 be recorded, feeling, as they do, the unavoidable necessity of a resort to 
 some specified objects of taxation. They do not, however, concur with 
 the committee on Finance in their proposition to tax merchants, from 
 the consideration that if the tax will have to borne by the merchants, with- 
 out being reimbursed to them, they could not, as a class, justly be called 
 upon to contribute so largely to the support of government; especially 
 when they have suffered so severely from the great pecuniary embarrass- 
 ments which have overwhelmed the country for the last few years. If this 
 tax is, however, to be charged by the merchant on his goods, and collected 
 from the people, then your committee believe that it is not correct in prin- 
 ciple, and would be nothing more nor less than an indirect tax upon the 
 people; a policy which your committee think unwise for the purpose ol 
 raising a revenue for the support of the State Government. They are of 
 opinion that the people will always be found ready to submit to such taxa- 
 tion as is necessary to the wants of the Government; and that they should 
 know how much, and in what manner their money is taken from them. In 
 what your committee have just said, they do not intend to reflect, in the 
 
slightest degree, upon the committee on Finance. Far from it. They 
 believe that committee to be entitled to the highest praise for the zeal and 
 industry displayed in their laudable endeavor to devise the means for ena- 
 bling the State to meet her liabilities without the necessity of a resort to 
 taxation. But your committee are persuaded that such endeavor must 
 ever prove fruitless. For there is (as has been so justly remarked by the' 
 Governor, in his message,) no other efficient mode of discharging a public 
 debt than by a tax upon the industry and property of the people. 
 
 In accordance, then, with this principle, which cannot be too faithfully 
 inculcated upon the public mind, your committee would further propose 
 that, in addition to the taxes already laid, the sum of twenty cents on every 
 hundred dollars worth of property be collected for State purposes that, 
 in the valuation of real property, the minimum shall be fixed at four dol- 
 lars and that, in the oath to be administered to the assessois, they shall 
 swear that they will not assess real estate at four dollars per acre, unless 
 in their belief, and according to their best judgment, it should not be worth 
 a greater amount. But, as the revenue to be derived from taxation will 
 not be available in time to meet our engagements.; your committee would 
 recommend that the Governor shall, from time to time, issue such an 
 amount of interest bonds as may.be absolutely necessary to raise funds for 
 the payment of interest upon the State debt, and for the redemptioniof; 
 bonds heretofore hypothecated said bonds to be reimbursable in the year 
 1865, and to bear interest at the rate of six per cent, per annum, payable 
 semi-annually, and to be sold by the Fund Commissioner for the best (rice 
 they will command; and, that a sufficiency of the revenue raised from the 
 taxes above referred to, shall be pledged for the payment of the interest 
 upon the said bonds. And for the purpose of carrying out the foregoing 
 provisions, your committee herewith report a bill for the consideration of 
 this House. 
 
 In connection with this subject, a majority of your committee would fur- 
 ther recommend that a law should be passed for legalizing the late suspen- 
 sion of specie payments on the part of the bank of the State of Illinois, 
 upon the condition that the bank shall advance to the State the sum of 
 one hundred thousand dollars, annually, until the next regular meeting of 
 the General Assembly, to be applied to the payment of the debts of the 
 State, other than thooe due to the bank; and upon the further condition^ 
 that the bank shall accept the terms above set forth at f.he first meeting of 
 the board of directors after the passage of a bill for carrying into effect the 
 above provisions, which is herewith submitted. This measure is deemed 
 of the utmost consequence by your committee. Although they generally 
 disapprove of bank suspensions, yet, under the peculiar circumstances of 
 this case, they cannot perceive how it is possible to avert the great and 
 alarming evils threatended to the State and to the people by the over- 
 throw of this institution. 
 
 In the first place, it is well .known that about three millions of dollars 
 are due to the bank by the citizens of this State. If the bank should fail, 
 suits would be immediately commenced against all her debtors. They, in 
 turn, would be obliged to sue those indebted to them, in order to raise the 
 amount due to the bank; and thus millions of money would be in suit in 
 the course of five or six months. In addition to the inconvenience of such 
 an increase of litigation, the hurry and anxiety of many persons to raise 
 
[394] 6 
 
 money, and the frequent sacrifice of property under the hamrrter, would 
 occasion a most fearful depreciation of the value of every description of 
 property. And this depreciation would not only affect those who were in- 
 debted, but would extend itself through every ramification of society. 
 Every man who had any thing to dispose of would sensibly feel the effects 
 of such derangement. But let us reflect further, that, if all these debts 
 were collected, we should have no currency left with which to carry on our 
 business transactions, or to pay the amount due for taxes to the Govern- 
 ment. Nor can we overlook the evils which would be occasioned by a 
 depreciated and valueless currency in the hands of our citizens the gains 
 of which wo ild accrue to heartless brokers and speculators, whilst the loss 
 would fall chiefly upon the poorer classes, who are not indebted to the 
 bank, and who obtained its paper in exchange for the sweat of their brows. 
 
 In addition to the losses incurred by the people in their individual capa- 
 city, they would sustain still greater in their aggregate character. If this 
 bank should fail, the State would lose a large portion of the stock which 
 she has invested in it, and thus increase the general pressure arising from 
 the unwise negotiation of State bonds, and the injudicious expenditure of 
 public moneys. The state of things making necessary the legalization of 
 the suspension of specie payments was not brought about, in the opinion of 
 your committee, nor is it under her control. It has existed, and will con- 
 tinue to exist independently of her. or of the action of this Legislature. 
 It is a well known fact that mostof the banks throughout the Union have 
 been compelled to suspend specie payments, and have been sustained in 
 such suspension by their respective Legislatures. The consequence, then, 
 of requiring the Bank of the State of Illinois to maintain her resumption 
 would be to drain every cent of specie from her vaults, and transfer it to 
 those of the suspended banks of other States. And after having thus de- 
 prived us of the only basis which can elevate and preserve our own cur- 
 rency, our institution must fail, and entail upon us the train of ruinous 
 consequences above alluded to. Every man of experince must know that 
 it is not in the nature of any banking institution to carry on its operations 
 at a time when it is the interest of other banks to press it for the redemp- 
 tion of its notes so soon as they are issued. But such is evidently the in- 
 terest as well as the design of other banks and capitalists throughout the 
 country at the present juncture. 
 
 Your committee believe that this question is frequently misrepresented 
 to the people. It is stated that the Legislature, by legalizing the suspen- 
 sion, confers upon the Bank privileges withheld from individuals. This 
 statement of the case is untrue. The Bank may, during a suspension, be 
 sued, and the amount o r her indebtedness may be collected in the same 
 manner as against an individual.. The only effect of legalizing the sus- 
 pension would be, that the existence of the Bank should not be destroyed 
 upon failure to redeem her notes for a certain length of time after their 
 presentation. She would be just as liable to be sued for the same, and her 
 property to be taken in execution, as the humblest individual in the- 
 community. No remission of the indebtedness of the Bank ensues upon 
 the step proposed to be taken by the Legislature. 
 
 Your committee desire not to be considered as being in favor of suspen- 
 sion, unless imperiously required by the circumstances surrounding us. If 
 those circumstances were brought about by the Bank, or removable at 
 
7- [395] 
 
 her pleasure, and she should refuse to continue the resumption, none would 
 be found more ready than your committee to withhold every favor from 
 her. 
 
 In addition to what they have said, they apprehend no danger to the 
 pecuniary interests of the People in the suspension. They have wit- 
 nessed the two last suspensions of this Bank, during which her paper has 
 subserved the purposes of the community, and realized the just expecta- 
 tions of the people, as far as its office of a currency was concerned. In- 
 deed, it is believed that the most distressing embarrassments would have 
 resulted from any other course than the one pursued by former Legisla- 
 tures upon this subject. And they believe that incalculable evils will be 
 the consequence of a refusal on the part of this Legislature to pursue the 
 course pointed out by our experience, and dictated by every considera- 
 tion of prudence, nay, even of humanity itself. 
 
 Your committee are decidedly of opinion that the onerous taxation to 
 be imposed, according to the views of your committee, will be but tempo- 
 rary. The vast increase of wealth and population throughout this State 
 the amount to be received from the lands not hitherto subject to taxation 
 the added dividends to be derived from Bank stock together with our 
 share of the proceeds of the public lands (a distribution of which will un- 
 questionably take place, with or without the sanction of Illinois,) will be 
 sufficient to meet all our engagements, without oppressing our citizens 
 with a continuance of the heavy burdens to be borne for the next two 
 years. 
 
 In conclusion, your committee would plead the want of time as an apo- 
 logy for the crudeness of this report. They regret that the threatened im- 
 mediate adjournment of this body has left them scarce a moment lor such 
 an investigation of the topics above referred to, as their great importance 
 demands. But confiding in the indulgence of this [louse, in the generous 
 spirit of their constituents, and in the consciousness of a patriotic purpose 
 to cherish and protect every interest of the State, they freely submit the 
 result of their labors to the better judgment of this General Assembly. 
 
 
 
 THE CANAL. 
 
 In relation to the canal, your committee have given it as much conside- 
 ration as limited time, and the importance of other subjects referred to 
 them, would allow. It will be seen by reference to the laws relating to 
 the canal, that early after its commencement the Legislature determined 
 to keep out of market all canal lands, except in limited quantities, for the 
 purpose of paying interest. 
 
 Your committee believe this to have been a wise and prudent policy. 
 The country then, as now, was new and sparsely populated. An immense 
 quantity of Government lands unsold not brought into market, and a 
 large portion of it unsurveyed, which would, when brought into market, 
 be subject to entry at Government price, by virtue of pre-emption, and 
 after public sale by private entry; thereby demonstrating the. impossibility 
 of obtaining but a small part of its prospective value. Your committee 
 would respectfully recommend the continuation of this policy, and that 
 no lands should be sold immediately upon the line of the canal, except a 
 
[396] 8 
 
 reasonable portion of lots in towns and villages, where it may be indispen- 
 sibly necessary for raising money to pay interest, and increasing the value 
 of the remaining property; or unimportant lands, of I ut little present or 
 prospective value. That the proceeds of sold and unsold lands be set 
 apart as an interest fund agreeably to the provisions of a bill now on 
 the table; and upon, and in anticipation of this fund, that interest bonds 
 be issued, bearing any rate of interest not exceeding seven per centum 
 per annum, to be sold, and the proceeds applied exclusively to the pay- 
 ment of interest on canal bonds, for which there may be no other means of 
 payment, and by this means prevent that inevitable sacrifice which must 
 ensue. Should those lands be sold under the present depressed and ruin- 
 ous condition of the money market, superadded to the newness of the 
 country, and unfinished state of the canal. 
 
 And while your committee would not hesitate in the opinion that the 
 State should complete the Illinois and Michigan canal as early as possible, 
 as the only alternative whereby the State can avoid very heavy losses, and 
 while it would be desirable to atrictly pursue the policy heretofore adopted, 
 provided means could readily and certainly be obtained, yet it is believed 
 by your committee, that for the purpose of securing the speedy and certain 
 completion of this magnificent enterprize, within the period of three years, 
 at the prices for which contracts have been let, and at the estimated prices, 
 where not under contract, that it would be best for the State to accede to 
 the proposition submitted to your committee, (and made a part of this re- 
 port,) by the agents of the contractors on the line of said canal. 
 
 It will be seen by reference to the report of the canal commissioners, 
 that the canal is more than half done much of it under contract; and if 
 by necessity or design the work should be suspended, it will readily be 
 perceived that great damages must accrue, not only to the State, but to 
 all others concerned. To avert this calamity, a majority of your commit- 
 tee are of the decided opinion that the State must advance steadily and 
 rapidly to the completion of the work. By such a course much will be 
 saved in contingent expenses, which will be the same in any given time, 
 whether the expenditure be greater small. And the same argument will 
 equally and forcibly apply to the accruing interest upon loans already ob- 
 tained. 
 
 It must be obvious, also, that by progressing slowly with the work, it 
 would be much more expensive to the State, longer in developing the real 
 value of all kinds of canal property, and have the effect to retard the po- 
 pulation of that part of the country, while, by the speedy completion of 
 the work, all these interests would be fostered and protected, and conse- 
 quences averted which would depress the spirit and enterprise of the State, 
 increase her liabilities, and injure her credti; and character both at home 
 and abroad. 
 
 There are now on hand, unsold bonds for about one million six hundred 
 thousand dollars, in addition to which a majority of the committee recom- 
 mend that three millions more be issued, which sums are believed to be 
 sufficient for the completion of the work; said bonds to be issued and sold 
 at such times and in such quantities as will promptly meet the estimates 
 from time to time, as it progresses. 
 
 Your committee are further of the opinion, that if this policy is pursued, 
 success will attend the enterprize, and the canal will, as she has heretofore 
 
9 [397] 
 
 done, meet her own liabilities, until her own resources shall exceed the 
 interest on the cost of construction, and produce an overplus, which, added 
 to the unexpended balance of the proceeds of canal property, will finally 
 extinguish her debt. But, should your committee be mistaken in then 
 views on this part of the subject, they hesitate not in expressing the be- 
 lief, that on account of the nationality of the work, the boldness and splen- 
 dor of the plan, the durability and perfection of materials, and the execu- 
 tion of construction, that the General Government would not permit an 
 onerous debt to fall upon the State, but, finding the trust confided to us 
 faithfully administered, would generously, and wisely, grant further dona- 
 tions, which might necessarily be required to release the State from injury 
 or loss, which she might otherwise sustain. Your committee are the more 
 confirmed in this opinion, from the fact that, while the General Govern- 
 ment has, and still may grant, liberal donations to this important enter- 
 prize, she is not the loser by it the entire donation being doubly returned 
 to her, on account of the additional value added to her lands by means of 
 constructing the canal, and its importance to her welfare by the facilities 
 it will afford in a national point of view, both in peace and in war. 
 
 Your committee could extend this part of the report in relation to the 
 canal, almost without limit, but deem it unnecessary on the present occa- 
 sion, believing as they do, that the importance of this part of the subject 
 referred to them, must address itself to the serious consideration and atten- 
 tion, not only of this House, but to the people of the State and the Nation. 
 
. 
 
 
 
 
 
 
 
 
 . 
 
 . . 
 
 ' 
 
 
ILLINOIS) H. R, (12th Ass KM. 
 
 LEGIS. > ( 2d SESSION. 
 
 FEBRUARY 22, 1841. 
 Read and laid on the table. 
 
 MINORITY REPORT 
 
 SELECT COMMITTEE 
 
 . 
 
 TO WHOM WAS REFERRED 
 
 . 
 
 THE SUBJECT OF THE DISPOSITION OF THE INTERNAL IMPROVEMENT SYSTEM, 
 
 THE CANAL, AND THE RAISING AN ADEQUATE REVENUE FOR THE 
 
 SUPPORT OF THE STATE GOVERNMENT. 
 
 
 
 
 
 The undersigned dissenting from the majority of the select committee 
 to whom was referred, the subject of the disposition of the internal 
 improvement system, the canal, and the raising an adequate revenue- 
 for the support of the State government and maintenance of the pub- 
 lic faith, begs leave respectfully to 
 
 REPORT: 
 
 That while the undersigned fully concurs with the majority in the 
 magnitude and importance of the subjects referred to the committee, 
 and the paramount influences they must exercise on the destinies of Illi- 
 nois, whatever may be the disposition made of them. And while he 
 cheerfully concedes to them the same measure of sincerity and honesty 
 of purpose, which he claims for himself; and while he would further 
 award to them that high character for talent and patriotism, which some 
 of them have earned by many years of faithful public service, and of 
 which all give promise. Yet the subscriber cannot injustice to himself, 
 his constituents and the State shrink from the performance of what he 
 believes an imperious duty in setting forth as he now does , the reasons 
 for his dissent. It is a subject of no surprise that on subjects so deeply 
 interesting to the welfare of Illinois, that there should be a difference of 
 opinion, but it is a source of much mortification to the undersigned to find 
 himself alone in the committee. Thus situated coming in collision with 
 the opinions of so large a majority qt the committee, men with whom he 
 
2 
 
 has been accustomed to act, and to men whose better judgments he has 
 been accustomed to refer. The subscriber at the same time he presents 
 this report, is led to distrust his own judgment and is only induced to do 
 so from the responsibility of his station, representing as he does a nu- 
 merous and high minded constituency, whose interests are deeply in- 
 volved in the subjects under consideration, he feels that he may not omit 
 to point out the consequences which he believes will follow the adoption 
 of the plans of the majority. In commenting on their plans the under- 
 signed will endeavor to treat their opinions with respect, but he will ask 
 their indulgence if he does so with plainness. 
 
 The subscriber, believing as he does that he will not have discharged 
 his duty to those whose, interests he represents here by clearly pointing 
 out what he conceives to be the error in the policy recommended by the 
 majority, but that common justice requires that while he calls in ques- 
 tion the wisdom or prudence of the measure suggested by others, he 
 should offer to the consideration of the House, some plan in lieu thereof. 
 This duty the undersigned' will attempt to perform, and to do this he 
 may have to travel apparently out of the strict requirements of the res- 
 olution and take a slight survey of our public expenditures and such 
 subjects of State policy as are intimately connected with, and which ma- 
 terially affect our finances. The un lersigned will have' to ask the indul- 
 gence of the House if his remarks should seem to be lengthy, the inter- 
 ests involved are of so vast and multiplied a character he cannot com- 
 press within very narrow limits his objections to the plans proposed, 
 and submit others which in his judgment promise better results. 
 
 The undersigned is fully aware of the obligation resting on this Legis- 
 lature, not only to provide for the maintenance of the government for 
 the next two years, and provide means if practicable to carry out the 
 canal to completion, but she is imperiously called upon to provide a rev- 
 enue for the payment of interest on our public debt. It is known that 
 our credit and character abroad has already suffered, and the question 
 now arises shall this Legislature adjourn without having made some per- 
 manent provision to meet our engagements, and sustain the faith and 
 character of the State, as far as may be in its power, or whether we 
 shall go Home after so protracted a session without having done any thing 
 to sustain our fast sinking credit abroad, or to relieve the anxieties or a- 
 meliorate the suffering condition of our citizens at home. 
 
 Public honor and public faithshould-.be inviolate, and'on this Legisla- 
 ture rests the solemn responsibility of providing to main.tain it, or we 
 shall be placed before our sister States, and the civilized world in the hu- 
 miliating position of being the first American State, who will have disre- 
 garded our plighted faith, and set at defiance public opinion, by shrinking 
 from 1 our duties, arid refusing or neglecting to do what yet remains in our 
 power towards restoring confidence abroad in l the'rnt'egrity, and in the 
 ultimate ability of the State to meet her engagements. 
 
 Before proceeding to suggest any remedies for existing evils, or a plah 
 of escape from them, it many be necessary to take a brief survey of the 
 past to ascertain the causes of our present embarrassments. The amount 
 of our indebtedness, and the resources we 1 have left us to aid in meeting 
 our present and future liabilities. I am aware itis a thankless office t'o 
 review past Legislation 1 and point out its errors, but it may be ' 
 
3 
 
 ry to do it. From a mistaken sense of duty, or from the belief that the 
 people of Illinois would not pay an amount of taxation equal to her just 
 expenses, we have incurred a debt to defray the ordinary expenses of 
 the State Government of one halfa million of dollars, and under such 
 circumstances did the Legislature commence our gigantic system of in- 
 ternal improvement. At this time common prudence and a just regard 
 to the rights of the public creditors as well as the honor and character 
 of the State, and a safe guaranty for the prosecution of the works to 
 completion, all imperiously demanded, that a permanent and efficient rev- 
 enue should be raised, not only sufficient to pay current expenses, but to 
 provide for the payment of interest on the loans contemplated to carry on 
 the public works. For, aside from the impolicy of borrowing money to 
 pay interest on large sums, thereby increasing the debt by the rapid pro- 
 cess of compound interest, a system of financiering ruinous to private in- 
 dividuals or to communities, such a revenue was called for as a basis on 
 which to sustain the credit of the State. For capitalists will only lend 
 money where ample security is tendered for the payment of interest at 
 least on monies borrowed. 
 
 - But the levying a heavy tax at the commencement of the system was 
 loudly demanded by every consideration of prudence and public policy, 
 for as the necessity for such increase of taxation must have been obvious 
 to any mind at all conversant with questions of finance, what time so 
 propitious for the Legislature to have performed a duty at all times so 
 onerous as that of levying taxes. From the large increase of banking 
 capital, and the consequent expansion of the currency, and the addi- 
 tional amount also thrown into circulation by the operations of 
 the various public works in progress, and the popular feeling at that lime 
 in favor of the system, all combined to mark this, as the time most aus- 
 picious for raising a revenue suitable to the public exigencies. But that 
 time was permitted to pass. The internal improvement system original- 
 ly wild and extravagant in the extent which it was contemplated to be 
 carried, want of prudence and economy in its management, and a grow- 
 ing conviction in the public mind that many at least of the contemplated 
 works were uncalled for by the public necessities, or would fail to pay a 
 revenue if completed. The system having received the sentence of con- 
 demnation as expressed by public opinion; money from being very a- 
 bundant has become unusually scarce, the bank being compelled to with- 
 draw a large amount of its circulation; at the same time the public works 
 were stopped, and all supplies stopped from this source; thousands of 
 hands thrown out of employment; the merchants and the community 
 who had become largely indebted in times of apparent prosperity greatly 
 suffering; the State stocks from being at par having rapidly depreciated, 
 so that they arc only worth from 65 to 70 cents on the dollar, and still 
 have a tendency downward; our internal improvement system (so 
 called) abandoned, yet called upon to furnish supplies for the pros- 
 ecution of the canal, requiring during the present year at least fif- 
 teen hundred thousand dollars; a large amount of State bonds pledged, 
 which are already subject to sacrifice, and if it h is not already taken 
 place it has been from the forbearance of the holders of them, 
 another still larger amount, which will in about thirty days be subject to 
 B2 
 
[402] 4 
 
 forfeiture; upwards of $1,300,000 out in scrip now due, and many who 
 have honestly labored for it arc nearly ruined for want of payment 
 over 40D,000 of interest to be provided for our State Bank again in a 
 State of suspension, her resources very much crippled and utterly una- 
 ble in her present position to extend any efficient aid in relieving the ne- 
 cessities of the peopb or of the State; Auditor's warrants as well as every 
 other evidence of State securities "25 to 30 per cent, below par; not one 
 dollar in your treasury, and within one week of the expiration of the ses- 
 sion. At such a time it is that we are called upon to devise ways and 
 means to extricate the State from her embarrassments, relieve the wants 
 of the people, and provide for the reinstation of public confidence and 
 credit. 
 
 The undersigned, in view of our present condition ana future prospects, 
 as one of the committee, distrusting his own judgment, and the more so 
 from his difference of opinion from most of his friends, and his acknowl- 
 edged want of experience in extensive financial operations, he would 
 most willingly avoid the responsibility of suggesting a course of policy 
 to be pursued in the present disastrous situation of our affairs. But he 
 will shrink from no duty that his constituents, or the State may seem to 
 require at his hands, but will freely and fearlessly express his opinions, and 
 suggest such plans as his judgment approves of, trusting the House will 
 excuse the frankness assumed, and give to his suggestions whatever con- 
 sideration they may merit. The undersigned would recommend then, 
 first, a more rigid economy incur public expenditure, and a more strict 
 accountability in our public affairs and agents. 2d, The repeal of the 
 entire Rail road system and the letting the works to companies as far as 
 they may be disposed to take them. 3d, The suspension of all operations 
 on the canal until our State credit shall have been placed on so firm a 
 basis that we may with confidence hope to borrow money for its comple- 
 tion without doing so at ruinous sacrifices. 4th, To provide for raising 
 such a revenue as will inspire confidence at home and abroad, that we are 
 determined to meet our cng?gements and provide the means of paying 
 every honest demand that may be against us. 
 
 The undersigned will have to ask the indulgence of the House, while he 
 offers some of the reasons that impel him to make the recommendation 
 he has done, and particularly in relation to the canal, as his opinions arc 
 at Aariance with the recent expressed opinions of the House on this sub- 
 ject, and it may appear a want of decorum in him to urge a measure on 
 the House it has so recently decided as inexpedient. 
 
 And first the necessity of strict economy and accountability in ihe man- 
 agement of our affairs must be apparent, while we should avoid a mean 
 parsimony in providing for our officers; we should avoid any appearance; of 
 extravagance, in times of such great pecuniary embarrassment, and while 
 it is necessary to greatly increase the burthens of the tax paying commu- 
 nity , common justice requires that the sums thus raised from the hard earn- 
 ings of the community should be husbanded carefully, and above all every 
 dollar should be accounted for. It has been the unpleasant duty of tho 
 undersigned this winter, as chairman of a committee of this House to ex- 
 amine extensive accounts and expenditure?, and the conviction has been 
 fixed in his mind, that this branch of the public service is susceptible of 
 
^ 5 [403] 
 
 great improvement. This course is rendered necessary not only to si- 
 lence well founded complaints at home, but to inspire confidence 
 abroad; for without strict accountability, a large revenue may be 
 wasted, the people oppressed, and yet the just claims of the pub- 
 lic creditors go unsatisfied. It is the deliberate opinion of the under- 
 signed, that in almost every department of the public service a large re- 
 duction in our expenditures might take place without any detriment to 
 the public service, and would render our constituents more willing to bear 
 any burthens we might impose on them by sacrificing some portion of 
 the claims we may be supposed to have on the treasury. 
 
 The repeal of the Railroad system; on this subject the undersigned has 
 heretofore expressed his views which may be found in a minority report 
 submitted some time since, and he will only add, that as Legislators we 
 should respect public opinion, and this opinion he cannot doubt but 
 calls for its repeal; and he is further constrained to say, tb*ff>?o far as he 
 is made acquainted with their feelings on this subject theV will very un- 
 willingly submit to further taxation while this law remains on your 
 statute books. Believing as they do that it is there retained with the view 
 of further prosecuting the system at some future period, an event which 
 they would regard as most destructive of the public interests, and would 
 cut off all hope at ever seeing our State relieved from her embarrass- 
 ments. If companies will take and finish them on fair terms, we should 
 1st them do it; if not, a large share of them should be abandoned before a 
 further waste of our resources is made in so hopeless a project. 
 
 In regard to the canal, the undersigned is anxious to be distinctly un- 
 derstood; he would fain hope to convince the friends of the canal, that 
 the bests interests of that Work itself calls for suspension, and he. will 
 here take occasion to suy, that he desires and expects to see that work 
 finished, and has no doubt? but it will be unless its prospects are blasted 
 by those who profess to be its friends, by throwing the shade of sus- 
 picion around the character and conduct of those who have the manage- 
 ment of it, by making or endeavoring to make it subservient to party 
 purposes, and by pressing for the sale of bonds at their present depreciated 
 prices, and as a necessary consequence still further reducing them in 
 value in market, when if such depression cannot be prevented and their 
 value enhanced, all hope of completing this work must be abandoned. 
 
 This work was carried on last year by a transfer by the Governor of 
 bonds to the contractors at par, and by them sold in London at 17 per 
 cent, discount. Our internal improvement bonds had been worth from 
 90 to 91, and had never been sold by the agents of the Stale for less, and 
 these bonds have always been considered less valuable than canal bonds, 
 as being not so well secured. The value of our bonds in the London 
 market, were of course all depressed to that price, this being the best 
 description of bonds we have. This together with other injudicious sales 
 and hypothecation of bonds at home and abroad, and the fact that the 
 State has provided no permanent fund for the payment of interest, and 
 a pressure in the money market all conspired to sink the value of our 
 bonds until they are barely worth 70 cents in the dollar; and this depres- 
 sion must continue with accelerated force unless the Legislature shal 
 raise a permanent revenue, and all apprehension be removed is to the 
 egular payment of interest, for however solvent the State may be t be- 
 
[404] 6 
 
 lieved to be if she permits her interest to go unpaid, our bonds will be 
 thrown out of market as of no value. It is proposed again to pay 
 contractors bonds in payment for their work. These the contractors 
 must dispose of, as they are unable to carry on their contracts and retain 
 the bonds. Our bonds abroad being now worth only 70 per cent., and 
 every cause operating since the last advices to produce a still further de- 
 decline; any new emissions of bonds without some proper guaranty for 
 the payment of interest must beget still greater distrust, and any sale 
 made of their, must be at prices below 70 per cent., and produce a still 
 greater depression in the prices of all our stocks. Let it be borne in mind 
 that if the cinal goes on these bonds must be sold, at whatever sacrifice, 
 and if this course is permitted your bonds will be depressed to half price. 
 Can any reflecting mind at all conversant with financial affairs doubt thai: 
 this must be the result; all the laws of trade, and the continued if not in- 
 creased pressure on the money market point to this as the inevitable re- 
 sult of putting in market so large an addition of bonds, when stocks of 
 every kind are so depressed, and Illinois bonds peculiarly so, and when 
 our banks east and west are in a state of suspension. But it may be ob- 
 jected that the loss, if any, will be sustained by the contractors. Suppose 
 it granted that for the present year, it is so? What will be our condition 
 next year to continue the work, if our bonds are by this process of 
 shoving them into market this year, sunk to half price? A similar operation 
 must be gone into next year, and a further decline takes place, or sup- 
 pose them to remain stationary? Have our contractors got their con- 
 tracts at such prices, that they can lose one half their pay in the opera- 
 tion of shaving, and sdll sustain themselves? If they can, then the n - 
 ture of their contracts well merits enquiry. But again a very considerable 
 portion of these works have not yet been let, and before the works now 
 in progress can avail the State any thing, these must also be finished. 
 Will this Legislature permit new jobs ro be let, and give bonds in pay- 
 ment, those bonds being worth only half price in market, and which the 
 State must redeem at their face? Will not the new contracts be taken at 
 prices proportionate to the reduced value of the bonds? On the whole, I 
 am constrained to believe that if this system is pursued, your works must 
 stop twelve months hence, without some extraordinary aid coming to our 
 relief, which is a contingency too remote on which to rely for Legislative 
 action, and on interests so important. Would it not be better, and the 
 undersigned would address himself to the friends of the canal, that it 
 should be s spended during the present year; that in the mean time we 
 should raise a revenue, collect our resources, and elevate the character 
 of the State by a rigid compliance with her contracts abroad; by so doing 
 we might next season borrow the money on fair terms, and even without 
 other aid, we would have a fair prospect of carrying on this work to com- 
 pletion; or shall we persist, our bonds be still further depressed in market, 
 our citizens still further embittered against all public improvements, by 
 having State bonds sacrificed, which their farms will be mortgaged to pay, 
 and our creditand standing abroad irretrievab'y ruined. 
 
 But it may be objected in regard to the new contracts, that there is no 
 danger of having to pay exhorbitant prices for their completion, even if 
 the State stock should become still further depressed, as the same con- 
 tractors propose taking them at the estimates of Engineers, and that the 
 
same bill provides for incorporating a company and giving to them the 
 contracts on these terms. In the opinion of the undersigned, this is not 
 the least exceptionable part of the bill. By the incorporation of a com- 
 pany and assigning them the work at a given price, and stipulating for 
 the payment of the works in State bonds at par, the very acceptance 
 of the contracts with such stipulations shows the prices of the work to 
 be put unreasonably high, or the corporation would not take the contract 
 and receive bonds at par in payment, when these bonds are at thirty to 
 thirty-five per cent, discount, and still falling, unless the prices they ob- 
 tained were at unreasonable rates. Again, these estimates were made 
 some years since, when labor on the canal was 20 to 30 dollars permonth, 
 when it can now be obtained at 10 to 12 dollars, showing most conclusive- 
 ly that they are made much too high with reference to the present prices. 
 There can be very little doubt that for cash payment these jobs would 
 now be taken at hall price or less, consequently being a loss to the State 
 of one half the cost of their construction. And it is a subject that well 
 merits the serious enquiries of the Legislature, whether they will give to 
 a chartered corporation all the contracts without permitting others te be- 
 come bidders, thus closing the doors to all competition. Such a course is 
 alike destructive of the interests of the State and other citizens, who 
 may wish to compete for these jobs, and who perhaps possess equal, if 
 not superior qualifications to prosecute them to advantage. 
 
 A revenue; the undersigned came to this place prepared to support any 
 system of taxation that our citizens could bear, and which the preserva- 
 tion of the honor and faith of the State might demand. But this deter- 
 mination was based on the supposition that our Legislation should be 
 founded on principles which had the sanctionof his judgment and such 
 as he believed his constituents would approve. Our commencement by 
 the hypothecation of bonds was regarded as most calamitous, and he will 
 be happy to find his fears were not well founded. We should look at our 
 affairs if possible, with the eyes of statesmen, resolved to find our true 
 situation. These remedies are necessary, and if within our reach, ap- 
 ply them. The undersigned is still the advocate of efficient taxation, but 
 it must come accompanied with measures which promise that the sums so 
 raised from our common constituents shall not be lost in the sacrifice of 
 State bonds. It must be under circumstances that furnishes ground ofhope 
 that our tarnished honor may be cleared of imputation, and that while 
 we provide for the payment of our foreign debt, we do not lose sight of 
 our suffering citizens at home. Shall we not pause? Shall we not look 
 around us and calmly calculate on consequences? Our affairs are yet sus- 
 ceptible of being reinstated. The gloom that pervades every countenance 
 when our State affairs arc mentioned, may be dissipated, and our State 
 occupy that proud position that with prudent councils she is destined to 
 fill. Should the House determine to suspend operations on the canal and 
 prevent the hypothecation of any more State bonds, unless on long time 
 and to redeem bonds that would otherwise be sacrificed, the under- 
 signed will be found lendinghisaid in creating a revenue; but unless such 
 should be the case, every consideration of duty to himself and his constit- 
 uents forbid the idea as only tending to oppress them, without in the 
 smallest degree advancing their permanent interests, but the money so 
 wrung from them will go to fill the pockets of brokers and stock-jobbers. 
 
[406] 8 
 
 The committee recommend the issuing three millions in State bonds, 
 bearing interest at the rate of seven per cent, to carry on the canal, subject 
 to the direction of the contractors to be either sold or pledged on such 
 terms as they may direct. They further propose to issue any amount of 
 bonds that may be necessary, to be called interest bonds, which also bear 
 seven per cent, interest, and be sold for the best price that can be got for 
 them. Here are two classes of bonds to be thrown into market and by dif- 
 ferent owners, the rate of interest to be higher than ever before contem- 
 plated for State bonds, and the necessities of each so great that they must be 
 sold at whatever price the avarice or cupidity of foreign Shy locks may 
 please to give for them, and these different holders each underbidding each 
 other. They (the stock-jobbers) may at first be satisfied with the pound of 
 flesh, but with the growing necessities of the contractors and the State, 
 will the demandsof avarice keep pace, and the suffering victims must sub- 
 mit to deeper and still deeper shaving. Will the Legislature of Illinois 
 thus legalize shaving, on a wholesale scale, themselves being the 
 victims to be operated upon. Will that Legislature which was so recent- 
 ly edified by so pathetic a disquisition on the evils and corrupting tenden- 
 cy of banking, so soon forget the lessons of prudence so freely tendered, 
 and offer her bonds, and with them her honor and character to foreign 
 brokers and money changers, and tell them to take them and give what 
 they please in return? is there any thing in being swindled by a foreigner 
 which makes it grateful to a Sucker bosom? Will our constituents think all is 
 right in sacrificing millions to foreign bankers, and yet our own institutions 
 must be visited by our utmost vengeance, if they resort to r ommon pru- 
 dence to protect themselves? I would invoke the attention of the House 
 to the proposed plans. To my vision, ruin is stamped on their every line. If 
 swindling does not follow in its train, and if further and deeper disgrace does 
 not close the scene, then may we expect "sweet streams to flow from bitter 
 fountains," and the events to belie what the plans hold out. To me the 
 pro3pect seems so utterly devoid of promise thatdid I not know from whence 
 they originated I should pronounce it a hoax. I will only say that looking 
 at the depressed state of monetary affairs, the low situation of our credit, 
 and the tendency of these measures to ruin our credit if now good, the induce- 
 ments held out to shaving, and its inevitable following, two years will not 
 have closed, until you will have ruined contractors an unfinished canal, 
 three millions gone, and will need the aid of a public administrator to set- 
 tle up the affairs of a defunct canal; for, after the waste that must follow 
 so improvident a course no one will be hardy enough to ask lor another ap- 
 propriation. 
 
 The committee recommend the authorizing of the bank to suspend during 
 the period while the western banks shall do so. To this measure the un- 
 dersigned could agree, if such suspension was the act of a large majority 
 of both parties in the Legislature, but from the vote recently taken in the 
 House on that subject, it is obvious that if such a measure passes it must 
 be by a meagre majority. That institution is already hard pressed by the 
 payment of specie, when the vaults of the other banks were closed, and 
 she is in so crippled a condition, that without the countenance of the State 
 authorities, and cherished by them instead of being the subject of invidious 
 attacks, she can render the State or her citizens but little service; and if 
 the same course is taken with her that has been heretofore, like a consump- 
 
9 [407] 
 
 live patient she may linger along with a feeble existence, but her onward 
 course must be faltering until she foils to rise no more. The undersigned 
 regrets the prospect of seeing her go down, money is now scarce and is 
 daily becoming more so, and her paper constitutes a large share of our cir- 
 culating medium, besides she has a large amount of debts oweing her by 
 our citizens, the payment of which at the present juncture must greatly 
 distress thorn. But her business is so cramped that she now makes no profit 
 for the State, or her other stockholders, and satisfied as 1 am that without a 
 total change of policy in regard to her she must fail, and I feel unwilling 
 to assist in prolonging a feeble existence. 
 
 In conclusion, the undersigned wo.ild ask the House, that burthened 
 with a debt of nearly fourteen millions, the annual interest on which ex- 
 ceeds seven hundred thousand dollars; a prostrate bank; four hundred 
 thousand dollars of your bonds already pledged at one-third of their face, 
 part of which are now forfeited, and the balance shortly will be; up- 
 wards of six hundred thousand dollars more lost or in imminent danger in 
 New York by the bad management of your agents; between one and 
 two millions in Europe in a like condition. Your interest falling due be- 
 fore the Legislature meets again unprovided for, and an extra session of 
 the Legislature in consequence almost inevitable; your bonds selling at 
 60 to 70 cents on the dollar; a bankrupt treasury, and an oppressed and 
 dispirited people; thousands of your honest citizens who have labored 
 on your public works are already nearly or quite ruined by withholding 
 from them their just demands; the State so poor she cannot pay 
 her door-keepers much less her members; under such circumstances is it 
 that we are called upon to authorize the emission of three millions 
 more in bonds to be hawked about America and Europe. Your commis- 
 sioners knocking at the door of every pawn-broker andshaver, begging 
 them to buy or lend money on bonds, Illinois bonds. 
 
 The undersigned appeals to members to look at this picture, its shades 
 are dark, but truth would warrant in giving a still darker hue. The un- 
 dersigned would again appeal to members; he would ask them in solemn 
 sadness to examine, closely examine the majority proposition. Let us 
 not be induced by any committee however talented or respectable to take 
 on trial measures so portentous, measures so fraught with evil, if 
 evil it be. Are we prepared to take another plunge? Are we pre- 
 pared to go home and tell our constituents, we have mortgaged 
 their farms for three millions more? Are we prepared to say to them, 
 we have doubled their taxes, but we have provided no means to pay such 
 of you as have faithfully labored on our public works? Shall we say to 
 them, that while we have increased their debts and added to their bur- 
 thens, we have failed to lessen the public expenditure, but have increased 
 it? These arc grave questions, but questions we must expect to answer, 
 if the proposed measures are carried out. The undersigned would not 
 weary the House, but he feels that if these measures become laws you 
 have given the last stab to the credit of Illinois. No more may we hope 
 for repose at home, or honor or character abroad. Your State, your 
 credit, your prospects are blighted. The erect and manly forms of the 
 freemen of Illinois, will become bent, their spirits broken by the hopeless 
 prospect of interminable bankruptcy. In the name of his constituents, 
 the undersigned must protest against a policy so ruinous, and although we 
 
[408J 10 
 
 must suffer in the common calamity, we will at least find some consola- 
 tion in the reflection, that we have done all that we could to avert the 
 ruin with which we shall be surrounded. 
 
 I will close this painful report, by presenting to the House a bill for 
 their acceptance or rejection; in the choice of this and those proposed by 
 the majority of the committee, will in the opinion of the undersigned de- 
 pend much of weal or woe to the people of Illinois. 
 
 LEANDER MUNSELL.