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sum might be hereafter appropriated 10 me, as Fiscal Agent, for making the disbursements.
In the absence of a loan, I had hoped that the appropriations would have come into my hands without any unnecessary delay. In this reasonable expectation I have been disappointed. No funds have been received from the Treasury. My correspondence with the Department will show very clearly that in the natural course of events the funds should have been received early in June.
Whenever the money be received by me from the Treasury, it will be paid over without delay to the persons authorized to receive it.
I have the honor to be,
SAM’L B. KNAPP, Fiscal Agent, W. T.
The Speaker also laid before the House a communication from the Executive, eaclosing documents relating to the Milwaukee and Rock River canal, as follows:
Madison, August 10th, 1840. To the Hon. Speaker of the House of Representatives :
Sir: I have received the resolution of the House of Represena tatives of the 8th inslant, asking for. what information may be in my possession in relation to the loan authorized by, an act of the Legislative Assembly, approved February 25th, 1839.
For the information of the House, I herewith enclose capies of the cor. respondence between the Executive and Byron Kilbouro, Esq. the agent appointed to negotiate the loan in question,
I am, with great respect,
MILWAUKEE, March 25th, 1840. His Excellency Henry Dodge, Governor of Wis. Ter.
Sir : I received per last mail, your favor of the 14th instant, enclosing an official paper appointing me an agent, in behalf of the Territory, to negotiate the Canal Loan of $50,000 : also, another, appointing the Bank of America, in the city of New York, an agent to receive on deposite said loan : also, accompa. nying these papers, were the bonds of the Territory for said loan.
I shall not be able to visit the eastern States in person, before mid-summer; but shall, in the mean time, correspond with such capitalists as I may consider most likely to take the loan or furnish valuable information in relation to it.
I have the honor :o be, sir,
Very respectfully, your ob'ı servant, (Signed)
MILWAUKEE, April 21st, 1840. His Excellency HENRY DODGE, Governor of Wis. Ter.
Sir: Enclosed I send a letter received last mail from S. Hig. ginbotham, Esq. on the subject of the Canal Loan, containing three propositions:
1st. To negotiate, in the present instance, only one half of the loan authorized ;
2d. To make payment in advance for the interest for four years ;
3d. To give assurance of applying the first money received for lands in payment or liquidation of the principal,
The first of these propositions I should feel authorized, as your agent, to accede to, without further instructions, for the reason that the loan contemplates the borrowiug of “ any sum or sums of money not exceeding fifty thousand dollars;" and by your letter of appointment, I am authorized to deliver over to such person or persons so many of the certificates aforesaid, &c. which authority would enable me to negotiate each part as might be practicable, or as circumstances might justify. The 2d and 3d propositions, however, involve a discretionary power which alone belongs to the Governor, and I therefore submit them, to ascertain your pleasure.
If the Canal Lands now on hand were drawing interest, and were, therefore, productive to the Territory, it would not be con. sistent with the act to pay it out for more than six months in advance for interest on a loan, for such advance payment would in effect be reducing the value of the bonds just as much below “ ihe par or nominal value thereof,” as would be equal to the interest which the Territory would authorize or 'receive as interest on its deposites. Consequently, if this fund was now deposited at an interest of 3, 4 or 5 per cent, and shovli be withdrawn to pay in. terest on the loan, the Territory would lose whatever that amount of interest would be on the different instalments of interest, up to the respective periods when they would severally become due. But, inasmuch as the deposites are made without interest, the Ter. ritory, in fact, would lose nothing. By paying it out for interest in advance, as suggested by Mr. Higginbotham, it would be the same thing to the Territory, whether the same interest be paid at once for interest on the loan, or left upproductive in bank, subject
payment of that same interest at stated intervals, within the proposed period of time; and in one respect it might be better to the Territory to make such payment at once ; for in that case, that amount of interest would be actually paid, and the Territory re.
lieved from any risk of loss on the deposites, however remote. I do not, it is true, consider there is much risk involved; but all hu. man institutions are more or less subject to casualties, and there is therefore, in all our affairs, more or less risk to incur, from all which the Territory would be entirely relieved, as far as this money is considered, if paid as proposed. I would not, however, advo. cate it, if the money was not now on hand, and lying entirely useless to the Territory; and by making the disposition of it that has been suggested, we may perhaps be enabled to obtain a fund for active use, which will confer a very essential benefit on the Territory. This appears to me, is a correct view of the true policy for the interest of the country, and doubt not that will 80 view it. But I have thought that by a rigid construction of the act of the Legislature, you might perhaps, hesitate in authorizing the loan to be negotiated on these terms, as it might leave room for those who are disposed to çavil at any thing, to endeavor to make it appear that the loan was obtained as much below the par or nominal value or amount thereof," as the use of the interest money would be worth, so paid in advance. To obviate, therefore, any possible difficulty of this kind, and to place in your hands a full indemnification, I called a meeting of the board of directors yesterday, and submitted to them my views, together with the proposition contained in the resolutions here enclosed, which were unanimously adopted by the board,
The highest rate of interest which can be allowed from any sound institution for permanent deposites, range from 3 to 5 per cent, and for temporary deposites they will not pay any thing. In order that you may feel fully and amply justified in paying this interest in advance, the board propose to pay to the Territory six per ceni. on the amount so advanced, which will in fact amount 10 + a premium on the bonds to that amount more than the Territory would receive, if the canal fund should be permitted to lie dormant, as at present, and at the same time promote che interest of the country. By the expenditure of this sum of money, and the benefits to be derived from the construction of a very important section of the canal, which can be accomplished with the sum of money proposed to be loaned, the Territory will be perfectly safe in accepting the propositions of the company, from the fact that they have already advanced a greater sum of money to pay ne. cessary expenses in securing the grant of canal lands than would be sufficient to pay the difference of interest, as proposed; so that the Territory is already paid in advance for whatever the company have thus assumed to pay; but if denied, the company will let this amount stand, and pay the requisite amount in cash, when due.
The 3d proposition of Mr. Higginbotham is anticipated, and provided for in the 24th section of the act of February, 1839, as will be seen by reference to it. I presume that all that he or others would desire on this point, would be the assurance that the first loan obtained should be the first to be discharged, agreeable to the provisions of that section.
I can safely say that a large majority of our citizens are very anxious for the progress of the canal, and feel a deep interest in the success of the loan; even the proposed amount would furnish very great relief, if now put in circulation as a medium of business, and would be most welcome to every class of citizens, with the present exchanges. The loan, if now made, and subject to the use of the Territory, would be worth 5 or 6 per cent premium; so that in every point of view, it appears to me that good policy dictates, and the law sanctions the proposed measure, if it be practicable to carry it into operation, by obtaining the money. With the expression of the earnest hope that your Excellency may so view the subject, and sanction the measure, I have the honor to be, very respectfully, your ob't serv't, (Signed)
BYRON KILBOURN, Agent for obtaining the Canal Loan.