incurred. The Green river improvement cost | lature on this subject, before they determine up$859,126 79-the Kentucky river $901,932 70 on adopting the propositions of either of the the Licking river $372,520 70; and from this last named improvement we have never derived a cent. Besides this, we have expended the following sums on turnpike roads: Maysville, Washington, Paris and Lexington road, Franklin county, road to Louisville, Shelby co., road to Louisville, Mercer co., Crab Orchard road, Danville, Lancaster and Nicho Scott county, road to Frankfort, Louisville to mouth Salt river, Elizabethtown to Bell's tavern, Bardstown and Springfield road, $213,200 00 78,122 00 151,382 00 42,950 00 17,064 00 gentlemen from Nelson. The legislature of this state have heretofore had an unlimited power to create debt, and nearly every state in this union has the same power. Those which are most democratic in their form of government, with the exception of New York, Louisiana, and one or two others, have not deemed it necessary to 20,000 00 put any other check upon the power of their le45,000 00 gislatures to create debt, than the responsibility 55,145 46 of the members to their constituents. We, 71,800 00 therefore, are about to tread on new ground, and the vote which delegates here are about to give is one probably for which they will be called to a stricter account than any other which they may, or have, given, during the session. Every one must have been struck with the evils which have been alluded to by the elder gentleman from Nelson, (Mr. Hardin); the quantity of money we have spent, the indebtedness in which we are involved as a state, and the amount of taxation necessary to pay the interest and principal of that indebtedness. In view of these facts, what then do the committee who reported this article propose to do, to check this debtcreating power? In the thirty-third section, they say that the legislature of Kentucky, from 84,581 16 this time henceforward, shall never have the 118,778 24 right to contract debt, except by the consent of 85,488 70 the people to whom the act creating the debt, 87,194 16 with a provision incorporated in it for the liquidation of it, shall first be submitted for their assent or dissent. Let me ask them if it is desirable that we should proceed further, and declare. that the legislature shall be shorn of all power, and not even have the miserable privilege of creating a debt to the extent of one year's income, and that whatever may be the failure in the revenue, they shall not have power to supply the deficiency? What have the committee done in this particular? They have declared that the state legislature-notwithstanding the advance in wealth and population of the state-never shall increase the public indebtedness beyond a sum which the annual income will pay-say five hundred thousand dollars-inasmuch as difficulties might spring up, the effect of which would be to disgrace the state, unless this provision existed. Disastrous periods might occur, like that of 1840, when it was necessary to borrow money to save us from the disgrace of repudiation. You who have been claiming for the legislature such authority as to say that they should have the power to remove the whole judiciary, are now declaring, with most singular inconsis-100,650 tency, that they should not have the power of contracting a debt which, altogether, singly or in the aggregate, will not exceed the annual revenue of the state. I do not understand why it is that one moment you wish to repose a pow er so vast in the legislature, and in the next wish to deny them even this small privilege, when it may be necessary, perhaps, to save the state from disgrace. Suppose this capitol should burnMr. PRESTON. I concur in the necessity of why, fifty thousand dollars would not be suffiputting some restriction on the power of the le- cient to restore the library or to supply the fur. gislature to involve the people in debt. And I niture even. This building, itself, cost more ask the attention of the convention to the thirty-than one hundred thousand dollars. And would second section of the article, that they may see you leave the legislature of the state houseless in what attitude it places the power of the legis- for three or four intervening years, until an act ryville road, Bardstown and Louisville road, road, Versailles to Kentucky river, Maysville and Bracken road, Total, on turnpike roads, 109.646 00 88,072 59 $2,525,456 15 income upon the sinking fund paid the interest upon the foreign debt, Mr. PRESTON. Notwithstanding the expla could be submitted to the people and passed by the legislature? I am utterly averse, also, to striking out five hundred thousand dollars and substituting therefor one hundred thousand dol-nation of the gentleman, which leaves me allars; and for the same reasons. Would it be im- most as much in the dark as I was at first, I still provident to say that a man may contract debts think that the main part of my facts are unanto an amount which his annual income would swered. The fact was, as I understood, that the reimburse? Would it be improvident then to say part of the surplus revenue of the United States the same thing of the state? Might it not hereafter allotted to Kentucky, and set apart to be applied lead to great evils in the conduct of the affairs of to school purposes, was applied to the liquidathe state, to impose such a restriction? Now, tion of the internal improvement debt. Our here is the thirty-third section, and if it is not bonds having sunk to seventy per cent. on the stringent enough in all conscience, to satisfy ei- one hundred in the northern market, this school ther of the gentlemen from Nelson, I cannot fund was then seized upon and applied for that conceive what will answer that purpose. It purpose. These are the facts about it if my memprovides: ory serves me aright. I will not allude further "No act of the general assembly shall author- to that part of the subject. Every member here ize any debt to be contracted, on behalf of the must see the necessity of allowing the legisla commonwealth, unless provision be made there-ture to remedy these casual deficiencies in the in, to lay and collect an annual tax, sufficient to revenue, or expenses not provided for such for pay the interest stipulated, and to discharge the instance, as the destruction of the public builddebt within years; nor shall such actings by the creation of indebtedness, but not to exceed singly or in the aggregate, the sum of $500,000. Is the thirty-third section not sufficient guard against the abuses of legislative discretion in the creation of state debts? I think it is. I shall vote against the amendment reducing the amount, and I hope the convention will pause before they strip the legislature, and through it the people, of all power or discretion in this matter. At least allow them, when they are utterly restricted from the creation of debts for any the revenue, or unforseen expenses not provided other purpose, to provide for casual deficits in for. take effect until it shall have been submitted to the people at a general election, and shall have received a majority of all the votes cast for and against it." So that, in fact, the committee, by this clause, have declared that not only is the action of the legislature necessary to create a debt, but that the people themselves, at the general election following, shall sanction or disapprove of their act. Now, at the time of the general bankruptcy in 1840, no state in the Union had such a restriction on its legislature. The then aggregate of the indebtedness of the several states amounted to about $240,000,000, and nearly every one of them repudiated or were on the verge of that disgrace. The state of Kentucky at that time, under the general depreciation of property and great failures in the revenue, was only saved from the bankruptcy which threatened by plundering the school fund. The gentleman from Nelson (Mr. C. A. Wickliffe) says no, but so I understand the facts to be. Mr. C. A. WICKLIFFE. If I thought there could probably arise, under a frugal and prudent administration of the government of Kentucky, the necessity for the exercise of this debtcontracting power, to the extent of half a million of dollars, like the gentleman from LouisBut retain it as it is, and my word for it no fu ville, I might go with him to retain the section. ture legislature will ever have occasion to resort to the loan prescribed in the following section. What is this thirty-second section? Why that Mr. C. A. WICKLIFFE. The legislature set you may borrow $500,000, annually, to meet the apart the sum of $800,000, according to my re- contingeneies of deficits in your annual revecollection, from that portion of the surplus rev-nues. Stop there, and perhaps there would be enue of the United States allotted to the state of no dangerous or improvident exercise of this Kentucky. The remainder of the sum was sub power; but there are also in this clause, expresscribed in stock to the bank of Kentucky, if I sions and words I do not understand, or else r collect aright. The law setting apart the they ambiguously confer a power that may be im$800,000 for school purposes, provided, that it providently exercised-"to meet casual deficienshould be vested in profitable stocks. The then cies in the revenue, or to meet expenses not proexecutive being authorized by a separate statute vided for." What does the committee mean by to borrow a million of money by the issue of the "expenses not provided for?" The legislature bonds of the state, bearing five per cent. interest, may run the state into debt upon this old sysand unable to sell these bonds abroad, or think- tem of internal improvement, to the amount of ing that these bonds were a good investment for $500,000, and the next year may borrow $500,the school fund, therefore, made those bonds pay-000 more to meet that indebtedness not provided able to the school commissioners to the amount for by law, and which the revenue is not equal of $800,000. That was the disposition of that to pay. That is my reading of the section, and fund, and its proceeds were applied to the object of internal improvements. Sometime during the administration of Governor Letcher the legislature, with a view of reducing, on paper, the state debt, ordered the bonds given to the school commissioners to be cancelled, and thus was blotted out the school fund. The public revenue and credit did not suffer in 1840, and the it is nothing more or less than authorizing the legislature to borrow at pleasure, if they can create a necessity therefor by any system of expenditure, however provident or improvident. Mr. PRESTON. The section provides that they shall not at any time, singly or in the ag gregate, exceed $500,000. Mr. C. A. WICKLIFFE. Does the gentleman mean in all time to come, or as long as the con- water navigation. The school fund, as a fund, stitution shall be in force? Mr. PRESTON. Yes sir. Mr. C. A. WICKLIFFE. I do not so read the section, but if that is the intent, then it ought to be amended, because in the course of fifty years we may be under the necessity of borrowing an amount largely beyond that. Now we provide for the raising, every year, by our system of taxation, the money necessary to defray the expenses of government. There may be occasions in which deficits of 40, 50, or $100,000 may occur, from the failure of the collecting of fices, or the depreciation of property; but I do not see that there can be a failure arising from these causes, to the amount of half a million at any one time, and thus creating the necessity for the borrowing of that amount of money. is based merely on a promise of the state to On 18th January, 1840, one bond, $500,000 $850,000 These bonds drew five per cent. interest. The interest accumulated, and continued to accumulate, until the whole amount due by the state to the school fund, comprising interest and principal was $1,299,268 42. Since then, and down to January 1, 1850, interest has accumulated, and not included in that sum, to the amount of $51,223 29. In relation to the school fund, of which I spoke, I mistook the amount by $50,000. It The gentleman from Louisville, (Mr. Preston,) was $850,000, not $800,000; and the facts in re- says that our stock fell in the market to about gard to it are as I have stated them. But so far sixty eight on the hundred. I think he is in as paying the interest on the state debt, and the error there; and that our six per cent. stocks, demands which fell on the sinking fund, even never fell below par. The five per cents. perduring the crash of 1840, alluded to by the gen-haps did. A report made to the legislature in tleman, when the banks stopped specie pay- 1845-6, exhibits the terms and conditions of every ments, and when credit at home and abroad was loan in the state; and it shows that the five per made to falter and to sink, this state was able to cent. stocks were never sold at less than at par, exmaintain her credit, by the prompt payment of cept in one instance, and then ninety eight for one her coupons for every dollar, the day it become hundred, while the six per cents. never fell below due. A bill of exchange was drawn by our it. There was some railroad and turnpike bonds banks on New Orleans, which was negotiated that fell below par; but the actual loans were at New York. The debt fell due on the same never obtained at that disadvantage. We now day the bank dividend fell due, and in order to owe, taking it altogether, upwards of $7,000,000; meet the payment in New York, the sinking and we pay $271.289 35 interest. There is fund commissioners had always to anticipate its an annual drain upon us for interest, to that payment by a bill of exchange drawn through amount; and it now goes beyond the mountains. the bank, and based on the debt the bank would Our expenses have increased at a remarkable owe to the fund on the first of January. That rate. I will read now a table, to show what a is the way in which the debt was met in 1840. wonderful knack we had of getting up stairs, on My object is to strike out $500,000, and to fill this subject. the blank with such sum as may be likely to be needed in case of a deficit of the revenue. In relation to the other section, authorizing the borrowing of money, with proper guards, I am prepared to go with the gentleman as far as is prudent and proper. Mr. HARDIN. The government of the United States, after the national debt was paid, had a surplus of about $28,000,000, and its annual income being amply sufficient for the ordinary expenses of government, an act of congress was passed, dividing this money among the states, according to their representation in congress. Kentucky having ten representatives and two senators, was entitled to twelve parts, according te the whole representation in congress. Several of the states, Virginia, I think, and one of the Carolinas, refused to receive their shares. Kentucky received $1,433,756 29, and became responsible, whenever the necessities of the general government should demand it. to return the money; and I presume this will never be, unless we should get into some war of several years duration, and entirely exhaust our means. When that money was received, Kentucky, by some act of legislation, set apart $850,000 of it, for common school purposes. Previous to that time, there was no common school fund at all; and that act is just as binding and obligatory on the state, as are those passed providing for slack The whole amount of revenve collected by the sheriffs In 1829, was $61,396 05 66,309 38 62,351 44 In 1832, was 70,598 82 In 1833, was 64,758 58 that a restriction should be put on the power of the legislature to contract debts hereafter. I am not for repudiation. I am for paying every dollar we owe. There is no calamity that could fall on the country, that I believe would be equal to repudiation. York has a larger debt, and so has Ohio. Yes-ing. Why in the name of God, what is half a and I will tell the gentleman another secret; million dollars-says one; and yet the people Great Britain has a larger debt. France has a are called upon to pay nineteen cents, under the larger debt; and all the great powers of Europe equalization law, and if a man's wife has to have a larger debt. But it does not follow that wear spectacles, or if she has got too old, or too there is much comfort in owing about $7,000,000 fleshy to ride on horse back, and has a buggy, and paying $271,000 per year interest, to go he must also pay the specific tax on them. Genwhere? Is it paid out here? No. Where does tlemen have a happy knack of saying all this is it go then? It goes to New York, and is about nothing; and yet out of these nothings, an enas much loss to Kentucky as if it went to the ormous debt has been created. The Ohio river East Indies, and was there worked up into im- at its source is nothing, and yet when it gets to ages. Now what is the interest and duty of Louisville, it is a big river. How the state debt Kentucky? It is to provide a competent and ac- has been swollen to $7,000,000 is fully exhibited tive sinking fund to extinguish the debt as it in the tables to which I have referred. And I shall become due; and that will be in about will say that, in traveling through the country, twenty-five years. My plan-if I had the pow-no reform have I heard so loudly called for, as er-would be, to keep the sinking fund up to what it now is, and by saving and economy, to withdraw from other purposes, money enough to pay the debt in twenty seven or twenty eight years. I was greatly in hopes that this convention would so construct the government that we should be able, to economise at least $50,000 a year; but it has not done so; and I am for a tax to raise that sum; to be appropriated over and above what the sinking fund now is. The fund thus increased, the first year would pay $50,000 -the next $53,000-the next $56,180 and so on, until it will pay the debt in twenty-five years. I do not want the legislature to have the power to run us in debt any more. If the section means, that they never shall so long as this constitution may stand, incur more than $500,000 indebtedness in the aggregate, then it improves the section; yet I should be unwilling thus to restrict the legislature, because in the course of fifty years, we may expect in a great state like this, to be obliged to borrow more than that sum. Mr. CLARKE. Early in the session of this convention, resolutions were offered by some two or three gentlemen, and my remembrance is, that some one or two were referred to the committee of which I have the honor to be chairman. These resolutions were on the subject of imposing some restriction upon the power of the le gislature, in the contraction of public debt, and they were duly considered by the committee. I think I but express the sentiments of every member of that committee when I say, that they all concur in the opinion, that some restriction ought to be imposed. There were in the committee, those who believed that one restriction would be sufficient, while others believed a more rigid one would be necessary, but there were none who did not believe that some restriction should be imposed on the legislative action on the subject. The past history of the state has satisfied, not only them, but as I believe a large majority of the people of the state, that a wild and reckless system of running into debt, had pervaded the legislature in by gone times, for a number of years, and that their heedless, headlong practice in this particular, should be restrained. This thirty-second section was incorporated into this report for that purpose. The gentleman from Louisville, (Mr. Preston,) said, suppose the capitol should burn down. Well sir, if this miserable building, drawn after a Grecian Temple, and looking for all the world, when across the bridge, like the end of another bridge to the hill back here and which is a disgrace to the state-if it should take fire; why in the name of God let it burn. We have had one or two capitols burned down, and a meeting house, or two; and I do not care how soon we get rid of this mean, contemptible, There were those in the committee who bebridge-looking edifice. It is any thing but a lieved that the legislature, for this purpose of capitol, in which to do business. Let the gen-supplying casual deficits in the revenue, should tleman go to Mississippi, and see the magnificent not go beyond $50,000 in their power to borrow; capitol at Jackson; and as a Kentuckian, he others believed the limit should be $100,000, will feel disgraced and humbled at the compari- others $250,000, and others again $500,000. But son. But our building cost 70 or $80,000; and at the time that section was drafted in commitif it should burn, would it be necessary to bor-tee, it was not intended or supposed that a disrow $500,000 to re-builu it? Will not two cents cretion was conferred on the legislature at any additional tax, provide the amount necessary? time, singly or in the aggregate, to create a debt Certainly; and the same meaus should be re-exceeding $500,000. No one of them supposed sorted to, to meet any similar emergency. I am that the legislature, under this phraseology, “or not against spending a thousand, or a million for expenses not provided for," could at one sesdollars, if it is necessary to the prosperity of the sion appropriate half a million, thus incurring country. But I am unwilling to confer upon expenses, and then at the next session, could the legislature the power of getting us into levy a tax or issue state bonds for the purpose debt. They have got us into debt enough al- of defraying that expense; and so on from sesready. The gentlemen who have argued here, sion to session running the state into debt. I am do not seem to understand the condition of the constrained to acknowledge that the section does common people of the country. It is a very not meet my entire approbation, because if there hard task for a man now to pay his taxes; and is any ambiguity in its language, I am well satyet gentlemen seen to regard it as a mere noth-isfied that the construction placed on it will be the people to raise the money to meet such deficit. There is no necessity, therefore, for this provision granting them the power to borrow $500,000. There is no one subject, on which the people are so universally agreed, as the propriety of limiting the debt-contracting power of the legislature, and no reform was more loudly called for. All know that our taxes have been largely increased in consequence of the state debt; and I do not want any thing done by the legislature to increase that taxation, unless the question shall have been first submitted to the people for their assent or dissent. This is what the people of my section of the country at least, expect at the hands of this convention. There can be no necessity then for this proposition; and if I understand the force and meaning of language at all, the gentleman is entirely mistaken, in construing this section, as preventing the increase of the debt at any time beyond $500,000. They might create that amount of indebtedness in any given year, and so on, year after year; for the section does not say, that for all time to come the whole indebtedness shall amount to $500,000 and no more. It is one of those adroitly worded propositions that will admit of any construction emergency may call to allow the legislature to borrow money. My experience and reading have taught me that legislative bodies in all countries are not disposed to give up any thing, but that on the contrary they are inclined to encroachment. If, therefore, the section is susceptible of any other than a plain, palpable and definite construction, I am in favor of making it so plain that none can mistake or misunderstand it. I am willing here to state, that I have not supposed that at any period in the future history of Kentucky, there will be a necessity to borrow more than $50,000 or $100,000 to meet the deficiences of the revenue. It was urged in the committee, as it has been urged here to-day, that if our capital should be destroyed, then it might be necessary to contract a larger debt. That is a very good argument, and might furnish an exception to the general principle laid down in the thirty second section. I do not feel disinclined to say or allow that if an accident of that sort should happen in our state, some provision might be made to meet the emergency. But I declare that my purpose, as one of the committee, is to restrict the debt contracting power of the legislature. If the section, as it is reported, does not do it, to the fullest and utmost extent, I hope that one or the other of the gentlemen from Nelson, will so per-for. fect it as to bring it up to the expectations of the people of the state. For if I know the past history of the state. it has wrung from the people an expression of dissatisfaction at the wild and reckless system of legislation that has charac-vene under this constitution, shall set apart an terized the last fifteen or twenty years. The convention then took a recess. EVENING SESSION. Mr. C. A. WICKLIFFE withdrew his motion to strike out $500,000 and insert $100,000, and in lieu thereof moved to strike out the words "or for expenses not provided for," with a view of obviating any difficulty as to the construction of the section. He then moved that the convention resolve itself into committee of the whole, on the article under consideration, as the Presi. dent expressed a wish to be heard. This was agreed to. The convention then resolved itself into committee of the whole, Mr. BOYD in the chair. The PRESIDENT. I wish to offer an additional section, to precede the thirty second section of this report, in the following words: "The general assembly that shall first con annual sum of at least $50,000 of the public money, which shall be the first to be paid; and provide that the same shall be faithfully applied to the purchase and withdrawal of the evidences of the debt of this commonwealth, until the whole of the said debt shall be discharged: Provided, If the annual sum so appropriated shall not be sufficient to discharge the debt as it becomes due, the general assembly shall have authority to create additional loans for the punetual payment of said debt: And provided further, That the general assembly shall have authority, except as hereinafter provided, to contract other loans." I was a member of the legislature when the original state debt was contracted. I voted for Mr GHOLSON. I desire to make a very few that system of internal improvements, which remarks upon this subject. The whole matter gentlemen take occasion now to denounce as wild, at issue is this: does this convention intend reckless, and extravagant. The men who were to leave in the legislature unlimited power the members of the legislature at that time, into contract debts? If it allows them to go to the stituted and carried out that system of interextent of $500-000 per annum, it might as well nal improvements, did it with the sanction of do it; for they would seldom wish to borrow their constituents. From year to year they rea greater amount than that at one time, and turned to their constituents, who had a full thus they could go on from year to year, and run knowledge of what they had done; and these the state in debt as much as they please. I am men were again and again elected, for the puras much opposed to repudiation as any man; and pose, and with the view, of fully carrying out with the whole taxing power left unlimited, as it that system. And in the part which I bore in will be, to the legislature, no apprehension that matter, Lacted in accordance with the wishes need be entertained of such a misfortune. My of those I represented; and under the same cirobject, in wishing to restrain the legislature, is cumstances, I would so act again. To hear gento prevent repudiation; for if they go on run- tlemen speak now, in regard to this subject, it ning the state in debt as they please, the people would appear there were none left of those who might refuse to submit to it, and declare that re- gave their sanction to the system of internal impudiation was preferable to inordinate taxation.provements as it has been carried out; and that And if actual deficits should occur, the governor they are wiser than the generation which has the power to convene the legislature at any has passed, and had no hand in contracting this time; and they possess the power of taxing debt. I will not go back to the record and refer |