tions, enriching them to an unlimited and uncontrollable extent. With such an enormous income by the State, the burthen of taxa tion would be entirely removed; we would be enabled doubtless to ship our produce to market for half of the present rates, which would double the value of crops and farms, and incidentally all other real and personal property; the cheapening of travel in a corresponding ratio would double the amount of it; we would visit our distant friends oftener, cultivate an extensive social inter course by rail-indeed the whole country would be much as a city now is with its street railroads; promote harmony and good fellowship throughout the length and breadth of the State-in a word, have a very millenium in Illinois!

We have noted the fact of the governor being authorized at the session of 1838-9 to negotiate a further loan of $4,000,000 for the canal. Money was stringent at the time both in Europe and America. The fiscal negotiations of the fund commissioners, made in Europe prior to this, were anything but satisfactory. Gov. Carlin, therefore, unwilling to put the new canal loan in the hands of these agents, and ambitious doubtless for the glory of his administration, commissioned ex-Governor Reynolds, the very last public man in the State, perhaps, for a duty so responsible and delicate, requiring an extensive and accurate knowledge of domestic and foreign fiscal affairs. The latter urged the association with himself of R. M. Young, then a senator in congress, to which the governor ultimately acceded. In their over-weening desire to raise money to carry forward the public works, both the fund commissioners and Gov. Carlin's financial agents made some very ill-advised and bungling loans, attended with heavy losses to the State.

Reynolds hurried immediately forward to New York, where he met and obtained the advice and assistance of Mr. Rawlings, one of the fund commissioners. They sold to Mr. Delafield, of N. Y., April 23, 1839, 300 bonds of $1,000 each, bearing 6 per cent. interest, payable half-yearly at Philadelphia and New York-the principal becoming due in 1860. In this the law was exceeded. because it provided only for annual interest. The whole of the 300 bonds were delivered, and payment was stipulated as follows: $50,000 within 15 days into the bank of the New York Banking Company, thence to be drawn out on not less than ten days sight drafts, in forty different installments; the next payment of $50,000 was not to be made till the 1st of August, 1839, in the notes of some bank or banking association of New York city, of a denomination not exceeding $10; and in like manner the remainder, commencing October 1st, in monthly installents of $50,000 each. Here was a sale of interest-bearing bonds made in April, the bonds all immediately delivered, and yet they were not finally to be paid for until the following January, 1840.

April 29, 1839, the same gentlemen contracted with Thomas Dunlap (whose performance was guaranteed by the United States bank of Pennsylvania,) to sell him 10 00 bonds due in 1870 of £225 each, annual interest 6 per cent.; and both principal and interest payable in London, "at the rate of 4s. 6d. sterling to the dollar." Payment for the bonds sold was to be made in ten equal monthly installments of $100,000 each, without interest, in $10 notes. This million dollars it was estimated by the house com

ittee of the Illinois assembly, could be redeemed with 250,185 overeigns, 11s. 2d., instead of £225,000, realizing a gain of 18,14 sovereigns, Ss. 10d. to the purchasers, equal to a loss of 91,250.34 to the State of Illinois. The contract was, besides, a laring departure from the law, because the commissioners bound he State to pay in British coin £225,000, instead of $1,000,000 ; nd while the State was paying interest on her bonds she not only id without the money for ten months but got no interest for that ime. The money was to be paid in bills of the United States ank, but before the State actually received it, it became depreiated 10 per cent., making a loss of $100,000 on the amount. The total loss of this one transaction was near $200,000. The aw required ready payment in cash for all bonds sold.

These transactions with Delafield and Dunlap, amounting to $1,300,000 in Illinois bonds, became in part the basis for starting into operation the New York free banking system, about that time authorized, which required a deposit of State stocks, in double value of the circulation, together with a small percentage of specie in the bank vaults. Our financiers thus enable several of the "wild-cat" institutions to start business, by furnishing them Illinois bonds on credit, and receiving in payment the moneyafter proper exchange with other banks doubtless-issued in pursuance of the charters, Illinois meanwhile paying interest for the privilege of advancing their bonded capital!

After the negotiations in New York and Philadelphia, the governor's agents, ex-Gov. Reynolds, and two of the fund commissioners, Gen. Rawlings and Col. Oakley, in May, 1839, repaired to Europe to effect further loans for the State. Judge R. M. Young, the other agent of Gov. Carlin, in custody of the bonds, subsequently joined them in London. The money market in Europe was tight, but the commissioners, whom the law required to be "experienced and skilled in finance," were not to be baffled. After considerable delay, Messrs. Young and Reynolds, on October 30th, 1839, deposited with John Wright & Co., of London, 1,000 bonds, representing $1,000,000, to be again reckoned in British coin of £225 each, authorizing them to sell or negotiate the bonds at a rate of not less than £91 for the £100. If more than 91 per cent. could be obtained for them, the surplus, not exceeding 4 per cent. was to be retained by Wright & Co. as commissioners; any excess beyond 95 per cent. for said bonds, was to be equally divided between the State and the said brokers. On this contract the brokers agreed to advance £30,000.

The law under which the financial agents acted, we will reiterate, expressly required ready payment in cash for all bonds negotiated, and that none should be sold for less than par. Although the bonds might be hypothecated, yet when the agents authorized Messrs. Wright & Co. to sell them at 91 per cent., they acted without warrant of law. The brokers sold about half a million dollars worth of the bonds, when they failed, with both the proceeds of these sales and the remainder of the bonds in their hands. The unsold bonds, being the property of the State, were afterward returned by the receivers, but the money received on those sold was adjudged as assets of the firm, in which the State was compelled to share pro rata with other creditors, amounting to a few shillings on the pound.

The Hon. E. B. Webb, from the house judiciary committee, ti whom the accounts for the sales of bonds were referred, reporter Jan. 29, 1840, saying: "The anxiety of the agents to procure money for the State, or their eagerness to succeed in effecting sales where others had failed, induced them to enter into contrac injurious to the best interests of the State, derogatory to her dig nity, and in every way calculated to depreciate her securities. Resolutions were adopted by the house, disapproving of these transactions, whereby the State was required to receive in payment local bank bills, as under the contracts with Delafield and Dunlap, and the sales made on credit; condemning, as in contravention of law, the hypothecation of bonds with John Wright & Co., to be sold at 91 per cent.; declaring that the agents had transcended the powers vested in them, and that their London negotiation was void, copies were to be transmitted to J. Wright & Co.. Covent Garden, London. By this time it had become patent that more loans could be effected at par, as the law required. The dark cloud of infatuation which obscured the vision of the people began also to be dissipated, and as glimmers of light shone through they became clamorous against the large extent in which the works were feebly prosecuted simultaneously at all points. The ideas of Governor Carlin, in one short year's time, underwent a total revolution with regard to the grand system of internal improvement. He now found from correct data, that the State would speedily impose upon herself a debt of not less than $21,746,444, at an annual interest of $1,310,776, with a revenue of less than one sixth that amount-$200,000; that the then debt of the State exceeded already $14,000,000, which rested upon a community of less than half million souls, remote from markets, and with little commerce to bring in money. The giddy magnitude of the idea became appalling to his excellency, and he convoked the legislature in extraordinary session for December 9th, 1839.

no

In his message, after alluding to the spirit of speculation so rife in 1836, whereby not only individuals but deliberative bodies were lured from the paths of prudence and economy by this overweening delusion, he says:

"At this critical and most important crisis, a bill was introduced into the legislature, providing for a general system of internal improvements by the construction of nearly 1,300 miles of railroad, and the improvement of various rivers; and such was the zeal with which it was urged, and so numerous and powerful were its friends, that it passed through both honses by large majorities. No fear seemed to be enter tained by its advocates, but the ability and resources of the State would prove equal to the accomplishment of such a herculean task, and they pointed with pride and exultation to that high rank in the scale of wealth to which the measure would finally elevate us."

His excellency, now discovering impending ruin and dishonor, invoked the legislature to the exercise of wisdom and unity of action in the adoption of such measures of reform as would best subserve the public welfare and save the State from bankruptcy and degradation.

The legislature, whose ruthless hand was destined to destroy the stupendous system, was composed in the main of the same members who had originally passed it; who had but one short rear before supplemented and endorsed it by the addition of works involving a further expenditure of $1,000,000, now by their delib

erate action to place the seal of condemnation upon their cherished offspring, was certainly most humiliating, and they hesitated in their course. If they could have wiped the system out, leaving no debt or memory of it behind, it would not have been so disagreeable, but when they reflected that their folly would cost the people $150,000 for every member, the politicians were smitten with fear regarding the future of their preferments. But thanks, the unpalatable task was performed. By the two acts of February 1840, it was provided that the board of fund commissioners and commissioners of public works be abolished; one fund commissioner was provided to perform the same duties as before required of the board, "except that he shall not be authorized to sell State bonds or borrow money on behalf of the State." He was to receive and take charge of the railroad iron purchased in Europe and pay the duty on it; receive back all bonds from persons failing to comply with their contracts, and register and burn the same; to audit and settle the accounts of the late board of fund commissioners and the late board of public works, and bring suit against each member in arrears in the Sangamon circuit court, for which purpose jurisdiction was given it to any county. Three instead of seven commissioners of public works were now provided who were to settle and adjust all liabilities under the internal improvement system, and give drafts for the amounts due contractors on the Fund Commissioners, whereupon such contracts were to be regarded as cancelled. If the drafts could not be wholly cashed, the amount paid was to be endorsed, and the residue to draw interest. All engineers and agents whose services were not indispensible to ascertain the amounts due contractors, were to be immediately discharged. The board was to secure and operate such roads or parts of roads as were completed, fix and establish tolls, and provide for their collection and payment over to the fund commissioners.

The progress of the work on the canal was not arrested; but of the remainder of the works of the grand system (with the exception of a part of the Northern Cross railroad) simultaneously begun in various parts of the State, nothing was ever done, except in detached parcels on every road, where excavations and embankments may even yet be seen-memorials of supreme legislative folly. That portion of the Northern Cross Railroad from Meredosia to Springfield, was afterwards finished at a cost to the State of $1,000,000; its income proved insufficient to keep it in repair and it was subsequently sold for $100,000 in State indebtedness. Of this road some 8 miles of track was laid in 1838, from Meredosia east, the first rail being laid May 9th. The first locomotive that ever turned a wheel in the great valley of the Mississippi was put on the track of this road at Meredosia, Nov. 8th, 1838. George W. Plant, afterward a prominent business man of St. Louis, was the engineer. The locomotive ran over the track 8 miles and back, carrying Gov. Duncan, Murray McConnel, one of the commissioners of the public works, James Dunlap and Thos. I. January, contractors, Charles Collins and Miron Leslie of St. Louis, and the chief engineer, Geo. P. Plant. Twelve years before only, 1826, the first railroad in the United States was built. connecting Albany and Schenectady, in New York. Her eager desire in the race of empire now gave to Illinois

a check for 12 years before another railroad was built. This was the Chicago and Galena, finished as far as Elgin in 1850. Then dawned upon the State the great railroad era which has since covered her surface with a net-work of these iron arteries of commerce, affording rapid and easy communication with almost every county.

Thus, in 1840, after a short but eventful life of less than three years, fell by the hands of its creator the most stupendous, extravagant and almost ruinous folly of a grand system of internal improvements, that any civil community, perhaps, ever engag ed in, leaving a debt of $14,237,348. While great disappointment pervaded the people at the failure of the splendid scheme, they were not surprised nor crushed with the news of its repeal. Indeed, their sobered senses had for some time taught them that to this extremity it must come at last, and they felt that sort of relief a man feels at the loss of half his fortune-he has learned his fate and is thankful it is no worse; possibly he learns a profitable lesson at the same time. While they felt chagrined, there was no one to blame in great part but themselves, for in many cases their representatives had but obeyed the voice of the people as the voice of God. Many names since prominent, honored and great, are recorded in favor of the original passage of the measure, as may be seen by reference to the journal of the assembly of 1837. Illinois was not the only State which embarked in these wild schemes of State undertakings. Indiana, in 1837, pursued the same course. Her bonds to upward $11,000,000 were disposed of, and after expending the proceeds improvidently, extra agantly, and doubtless fraudulently, there remained nothing to show for it but 40 miles of railroad, pieces of canal, and some unfinished turnpikes. Pennsylvania had taken the lead in like schemes of developing the State, for which she at one time owed a debt of $40,000,000, part of which was paid by the sale of the works. The same held good with Ohio; and Missouri, more recently, for the purpose of building railroads and other works of internal improvement, on the breaking out of the rebellion, found herself loaded with a debt exceeding a score of millions of dollars.

Hard Times. With the collapse of the great internal improvement system, the suspension of banks and a depreciated currency, hard times obtained. The total debt of the State was as follows:

School, college and seminary fund (borrowed)

Due State bank for auditor's warrants,

Annual interest upon this amount ($13,836,377,65)

Total,

To meet this debt, outside of taxation, the State owned 42,000 acres of land, bought under requirements of the internal improve ment law; 230,467 acres of canal donation remained undisposed of, besides 3,491 town lots in Ottawa, Chicago, and other places along the line of the canal; the State obtained shortly after by the distribution act of congress of 1841, 210,000 acres of land