ved that the circumstances justified him in thus transcending his powers. In expressing " his hopes" he thereby intimated that he had reason to fear that his arrangements might not receive the sanction of the commissioners.

In the same letter he informed me that $1000 had been already deposited, of the loan, certificates of which would be immediately sent to be by Mr. Lapham, then at Cincinnati, and that the remainder of the loan being $30,000, would by his arrangements be deposited in instalments of $3000 each at the end of every month.

The precise character of the bankable funds in which the loan was payable, I could not determine from the tenor of the letter. I was satisfied that they were not bills issued by the Ohio Life Insurance and Trust Company-but whether they were bills of specie-paying banks remote from Cincinnati, or the bills of suspended banks then current at Cincinnati, at what discount, if any, such funds were at Cincinnati or elsewhere compared with specie, the letter did not disclose. I made no inquiries, but suspended my opinion, until the arrival of Mr. Lapham with the certificates, when I expected definite and satisfactory information upon these points

In a few days Mr. Lapham arrived and presented to me as from Mr. K. two certificates of deposite of $500 each, of the Ohio Life Insurance and Trust Company, payable to the order of Byron Kilbourn, Esq., in current bank notes and endorsed by said Kilbourn to the order of John H. Tweedy.

I was astonished, as truly stated in my letter alluded to in the report, at the appearance of these certificates. I was astonished, because the certificates were made payable to the order of B. Kilbourn, Esq., instead of to the order of the Receiver—a blunder (as I then regarded it) for which I could not then account, though I am at no loss to account for it now.

I was astonished to find that the bankable funds in the letter were current bank notes-and my astonishment was increased in learning upon inquiry, that Mr. Lapham had been furnished by Mr. Kilbourn with no explanation of the strange mistake in the certificates, nor with any information respecting the par value of the current notes in which the certificates were payable.

I at first declined receiving these certificates of Mr. Lapham, as money received on loan.

Upon consulting with the other commissioners it was considered that any such loan was unwarranted by law, and that such funds could not be safely and properly received and disbursed by me as Receiver.

I then made inquiries at the office of the Insurance Company as to the kind and value of the current bank notes bankable at the Ohio Life Insurance and Trust Company, and was informed that the certificates which I presented would be redeemed in bills of the Indiana State Bank and of the Ohio Banks of equal value.

Indiana and Illinois money was then at a discount of from 8 to 10 per cent. at Milwaukee.

Mr. Mitchell, the cashier of the Insurance Company, upon being asked on what terms he would cash such certificates, replied that the best he could do would be to give Illinois bills, charging a discount of from three-fourths to one and one-fourth per cent.

I was then disposed to reject such certificates in payment of the loan.

But a contractor on the work, to whom was then due $1,000, and who had objected to those funds, representing that he had made arrangements by which he could make the certificates serve his purpose I, after long hesitation and with many misgivings, gave Mr. Lapham a receipt for the certificates, and paid them to the contractor.

The receipt and payment of these certificates was regarded by me to be irregular at the time, and the propriety of the step taken was then more than doubted and soon after much regretted.

The urgent necessities of the contractor and the confident hope indulged by himself and the commissioners, that the residue of the loan of $30,000 would be negotiated strictly within the law and every objection to the character of the funds removed, induced me to overlook the irregularity.

To prevent future difficulty, I wrote, after consulting the commissioners, to the President of the Ohio Life Insurance and Trust Company, Mr. Williams, the letter so much censured in the report of the Loan Agent-a copy of this letter is herewith submitted.

In that letter I apprised that officer of the views of the commissioners in respect to the character of the proposed loan, the nature of our objections, and of the reasons upon which they were founded, expressed the confident belief that the Loan Agent would be able to make such arrangement as would obviate all objections, and requested him to notify the contractor of our views, and to suspend the transfer of the bonds if in his possession until such arrangements were made.

I wrote by the same mail to Mr. Kilbourn, informing him of my letter to Mr. Williams, stating therein the same objections to the loan, and the reasons therefor, and requesting him to make such arrangements as would enable me to properly receive and expend the funds contracted for.

The impropriety of the deposite of the $1000 received, to the order of the Loan Agent was not particularly criticised, it being (as I have already stated) then regarded as a mere oversight which would not again occur.

This a true and plain account of a transaction which has been the subject of a violent denunciation, occupying several pages in what might be expected to be a grave public document, and which has brought upon an individual who conceived himself to be performing a very plain and humble duty as a public officer, and a real kindness to the loan agent himself, a tirade of violent abuse.

The objections of the commissioners to the loan proposed by the agent were clearly drawn from their views of the law and of the authority directing the agent, and may be distinctly stated as follows:

The funds to be received were not the bills of the specie paying bank, selected by the commissioners where the deposit was to be made.

They were not payable in the bills of any specie paying bank. They were not convertible into money at the place of deposit without a serious loss.

They were liable to another objection.

They were not for practical purposes, equivalent even to depreciated but current paper of suspended western banks, whose paper was designed to be excluded by the law.

Could these certificates be converted into the best western funds in

circulation without loss, risk or difficulty-would these funds readily be received by the contractors-could future contracts be let at rates equally favorable as in anticipation of specie funds-could that object of the law, the circulation of a better and wholesome currency, be overlooked it might perhaps by some be deemed a rigid construction of the law, to reject such funds because they were not equivalent to legal currency-and the Receiver might have been justified by some in assuming the responsibility to take and disburse such funds, under some circumstances,

It appears that, at the time, these certificates could not be exchanged without loss and difficulty for Illinois bills.

The certificates could not be received by the contractors generally, as the sums must be paid out on estimates varying from 50 to 500 dollars. In anticipation of such funds, further jobs would not be taken at prices as low as before. There being no exchange between Milwaukee and Cincinnati, the Receivers or other holders obliged to cash the certificates, must have submitted to the terms dictated by the cupidity of the money broker.

Loss must have been sustained by the Territory or her officers, for which the law does not provide, and other embarrassing and discreditable consequences might have ensued, and a currency been put into circulation, continually depreciating in the hands of the people, worth 10 or 12 per cent. less than the money exacted from the purchasers of canal lands for interest to meet the interest on such loans.

If I had felt myself authorized to receive and expend current bank notes under the loan, I should have hesitated under the circumstançes to use these funds, until some arrangement had been made, or mode pointed out by the loan agent by which these certificates could be converted and used without loss to the Territory.

These are some of the objections to the proposed loan, honestly entertained by myself and the commissioners, and which fixed me in the resolution not to use the funds receivable on such loan.

This resolution being formed, it became plainly my duty to give notice thereof to the parties whose arrangements might be affected thereby, that is to the loan agent, the depository of the bonds and to the contractors.

Tbat duty was performed by my letters to Mr. Williams and to Mr. Kilbourn.

The loan agent not being then in Cincinnati, I thought it prudent to desire Mr. Williams to cause the arrangements for the loan to be, for the time being, suspended, before the delivery of the bonds, until the objections to the loan could be avoided by converting the funds to be deposited into legal currency or its equivalent.

I feared that unless the transfer of the bonds was suspended, the bonds might pass beyond the control of the agent.

Had I used without objection, the certificates sent by Mr. Lapham; had I suffered the entire loan of $30,000 to be deposited and the bonds to pass without an intimation of the views of the commissioners and myself, and after silent sanction of the loan-had I rejected the balance of $30,000—my conduct would have misled the loan agent, and merited severe censure.

The letter did not assume to dictate or control the agent in the performance of his duties, as he affects to believe, though the commissioners by designating the bank of deposite, did prescribe and dictate the character of the funds; neither did I seek to arrest his doings in the exercise of a discretion devolving solely upon himself, for he had no discretion or responsibility to exercise or abuse:

But the letter did "distinctly object " to the kind of funds proposed to be received-did "pronounce" such loan to be illegal-did give notice of the determination of the Receiver not to sanction such loan by acceptance of the funds-did propose by a timely intervention to prevent any mischief or embarrassment likely to result from the transfer of the bonds.

In pursuing this course, instead of being prompted, as charged, by a disposition to thwart or embarrass the operations of the agent-the commissioners and myself were so solicitous for his success in his efforts, that they would not have been deterred by any over-nice scruples or technical irregularities from the sanctioning of any loan, which any fair and liberal construction of the law would justify.

But all this ado about the interference of the Receiver is mere pretence, and made to mislead. However unjustifiable may have been the course of that officer, he did not and could not defeat the arrangements of the Loan Agent.