REPORT OF THE FUND COMMISSIONER. OFFICE OF FUND COMMISSIONER, Springfield, Dec. 1, 1840. To the Hon. the SPEAKER of the House of Representatives: SIR: In obedience to a resolution of the Senate, bearing date on yesterday, requesting a report of the success of my negociations, the amount of interest duc 1st of January, 1841, and the available means to pay it, has just reached me, or I should have given it an earlier answer. The amount of bonds sold on account of bank stock, $2,665,000 3,187,000 Total, $5,852,000 Upon this sum interest will be required on the 1st January, 1841, which will amount to $175,560. Of the above bonds $300,000 were sold to three banks at Buffalo, New York; and under their contracts an interest account was to have been kept, and no coupons presented for payment until the las: payment was made. They have, however, passed the bonds, and some, if not all, of the coupons, were presented for the interest, and will no doubt be presented in future. In July, I thought of refusing to pay them; but on consulting my counsel, and various friends in New York, it was concluded that when passed into the hands of innocent purchasers the State had no right to refuse to pay them. Messrs. Wright & Co. of London, have sold about $250,000 worth of bonds, the money arising from the sale of which went to pay our interest on the 1st January, 1840, and advancements previously made by the Bank of the United States to the Fund Commissioners, they (Messrs.. Wright & Co.) have also delivered over to Thompson & Forman, for railroad iron, bonds to the amount of the iron which has been shipped; but what amount of bonds they have paid over I am not yet informed. Messrs. Wright & Co., however, inform me that they will provide the interest on the bonds they have disposed of. The State has due her From Mr. Delafield, over and above interest, about From the City Bank of Buffalo, and the Tonawanda Bank, taken from Delafield, about $412,000 From A. H. Bangs & Co. From the Bank of Commerce at Buffalo From the Erie County Bank From the Commercial Bank, about Total, Since my report of August last, the Commercial bank of Buffalo has paid me in State scrip, about $57,000—thus reducing her debt, then $90,000 to $33,000. The Erie County Bank, I understand, has scrip, and intends paying her debt in it likewise. I have no idea we shall realize in money any thing from the above debts in time for our interest, due Ist January, 1841. That I might report fully in relation to the above debts, and ascertain the chances and best mode of obtaining money to pay our January interest, and the freights, duty, and charges on the railroad iron, in progress of shipment to New Orleans, by Thompson & Forman, of London, under their contract with the late Fund Commissioners, I was induced to visit New York, just before the time of your convention. We have obtained an injunction against Mr. Delafield; and from what Mr. Ruggles, our counsel, had written me, I was in hopes a favorable compromise could have been effected. On sounding him, however, he offered only 75 per cent. of the claim in the merest trash that you can imagine-worse than his offers to me last summer, which were reported in my correspondence with him. From all that I can learn of the situation of Mr. Delafield, I do not believe he is able to pay the whole debt:: and unless, in a compromise, he can swindle the State out of enough to make himself comfortably rich, I think he is disposed to keep all. I fear the law cannot force from him justice to the State; and I believe more can be gotten from him in a compromise than in any other way. But still, whoever makes the compromise, must suffer him to make a hundred or two thousand dollars, or nothing can be effected. Without direct authority from the honorable Legislature, I was not disposed to give him so large a bonus, and therefore could effect nothing. No part of the debt of $50,000, due from A. H. Bangs and others, has been paid. Pratt, one of the parties, offers 15 bonds in full discharge of his obligation; and our only hope of doing better is to implicate the stockholders and directors of the Onandago Bank, Our attorneys are in hopes they can be made liable, and are now in search of information for that purpose. The Bank of the United States has agreed to advance freights, &c. &c. on railroad iron, up to the 1st February next, if she can be repaid such advances at that time. I placed in her hands 100 bonds as a guaranty that her advances should be paid, as I thought it out of the question that the iron of a sovereign State should be sold for its freight and charges. I found money in New York more in demand, and more difficult to obtain, than it was a month or two ago. Our only chance of obtaining money for our January interest will be by hypothecation of Bonds on temporary loans of four or six months, or by sale of the bonds at what they are worth in the market. Our bonds are now worth from 76 to 80 per cent., a little less than they were worth a short time since. All other stocks, however, have suffered the same depreciation, and it is attributed to the preparation of the Banks to resume specie payments, and the unsettled and belligerent attitude of the leading powers of Europe. Messrs. Nevins, Townsend, & Co. of New York, whom I have always found to be the steady and efficient friends of our State, kindly promised to try and procure for me the January interest, and the advances of the Bank of the United States, if the honorable Legislature would authorize temporary loans. These same gentlemen advanced to me for the State Bank of Illinois $50,000, to pay our last July interest; this sum is still unpaid, and I hope provision will be made for its payment. Our State will be entitled to the next semi-annual dividend on her Bank stock, which will probably be about $90,000. We are indebted, however, to the State Bank the above named $50,000, and to the Bank of Illinois about $238,000 or $240,000, for advances made a year or two ago. Whether the Banks shall retain the next dividend or not is for the honorable Legislature to say. I hope the honorable Legislature will adopt at once, and, if possible, unanimously, a resolution that the Honor and Credit of the State can, ought and shall be maintained; and that authority be given to some person to provide, on the most advantageous terms, the January interest, and the money necessary to pay freights and charges on the railroad iron, now in progress of shipment; this done, the manner by which subsequent interest shall be paid, can then be discussed and agreed upon. If our interest in January and July next be punctually paid, and some policy adopted by which it can be paid afterwards, I have no doubt our Bonds will immediately rise in value, and ultimately command a higher price than they have ever done. Since the above report was in part written, the following resolution of your honorable body has been handed to me: R. F. BARRETT, Esq. SENATE CHAMBER, Nov. 30, 1840. SIR: The following resolution was this day adopted by the Senate, viz: "Resolved, That the Fund Commissioner be required to report forthwith to the Senate, whether or not the $50,000 in the hands of Judge Young and Gov. Reynolds at the date of his report of August 20, 1810, has been by those gentlemen or either of them, paid over to the Fund Commissioner; and if not paid, whether or not the Fund Commissioner has made demand for the same, and if demanded and not paid, what reasons were offered for refusing to pay; and also, if within the knowledge of the Fund Commissioner, how long said $50,000 has been in the hands if said Young and Reynolds, or either of them previous to his said report." In answer to the above resolution, I have only to say, that this said $50,000 belongs to the Canal Fund of which the Governor is the fiscal agent. I have had no right to demand it, and of course never did. I understood, however, from Judge Young and Gen. Thornton, that it was drawn in February last, under the contract with Messrs. Wright & Co., entered into last year by Judge Young and Gov. Reynolds. My report of August was designed to explain to the Governor, and the members elect to the Legislature, the necessity of a called session, and to prepare them for prompt action on the finances of our State. To give them a full view of the finances upon which they would be called on to act, I also gave what I knew of the Canal debt, as obtained from the public documents and other sources. I knew at the time, that it was not my province to speak of the canal and its debts, but the interest was to be provided for all the debts of the State, and it was needless to provide for one class of debts, and not for the other, I therefore, spoke of this $50,000 in the hands of Judge Young and Gov. Reynolds, as available to the Canal Fund. I have the honor to be, with very much respect, your obedient servant, RICH'D F. BARRETT, Fund Commissioner. |