Page images

terest from the previous quarter day in each case. These rates have been reduced quarterly and semi-annually, as the period of redemption approached; and at the close of the fiscal year, the Commissioners fixed the rates which they would pay until the first of January, 1836, at 4 per cent for the 6's, and 2 per cent for the 5's of 1837, with the current interest added from the first of October until the time of purchase.

The Commissioners have from time to time during the last three years, caused notice to be given to the holders of stock, of the premium which would be paid on the surrender of it; and in relation to that portion of the canal debt which is payable in 1837, notice was given on the first day of June last that the Commissioners were provided with funds for the redemption of the stock, and that the State would not pay interest on the same after the first of July, 1837. The holders of the stock were at the same time offered a premium of 5 per cent on the 6 per cents, and a premium of 3 per cent on the 5 per cents of 1837, for the transfer of the same to the Commissioners after the holders should have received the quarter's interest due on the first of July last. These prices have been paid for the stock to the end of the fiscal year.

From the time of giving notice to the holders of stock on the first of June last, to the first of October, four months, the Commissioners paid for the purchase of canal stock the sum of $730,099.86.

To meet these payments the Commissioners drew upon the banks which receive the tolls from the collectors, thus applying to the payment of the debt, the principal part of the nett receipts from toll of the present season.

The evils and hazards incident to an accumulation of the surplus of this fund in the banks, to the amount of five or six millions of dollars, and the inconvenience of paying three millions and a half of the debt in a single year, have prompted the Commissioners to the efforts which they have made since 1833, to purchase the stocks at the premiums which have been paid. The views of the Commissioners in relation to this matter have been presented to the Legislature in their reports for the last two years, and to which they respectfully refer.

[blocks in formation]

If the course which has been pursued by the Commissioners had not been adopted, the accumulations of the surplus moneys, principally deposited in the banks, would have amounted on the 30th September, 1835, to the sun of $6,394,109. While the Commissioners have considered the investments in the banks reasonably safe and profitable to the Canal Fund, they have at the same time believed that the substantial interests of the business community, of the Canal Fund, and of the banks themselves, would be best promoted by applying the current revenue to the payment of the debt, and keeping down the deposites in the banks to a reasonable amount.

Since the first of January, 1833, the Commissioners have cancelled of the stock of 1837, the sum of $1,804,004.13; leaving unredeemed of the stock payable in that year, the sum of $1,684,995.87. If the purchases for 1836 should be equal to those of 1835, there will remain to be redeemed in 1837, about $1,340,000. As this sum will be drawn from a capital of between three and four millions, distributed among fifty banks, it can be paid on the first of July, 1837, without any inconvenience to the banks or the business operations of the State.

The paper annexed to this report and marked T, gives a detailed statement of the several parcels of stock purchased during the year for which this report is made.

The Commissioners have obtained from the office for transferring canal stocks in the city of New York, a statement of the proportion of the outstanding stock held on the 30th September, 1835, by foreigners, by persons in this State, and by persons in other States of the Union. The result is given in the following table, viz:

[blocks in formation]

Several parcels of stock were purchased and paid for by the Commissioners, previous to the 30th of September, which, in consequence of closing the transfer books at the Manhattan bank ten

days before the time for paying the quarterly interest, were not transferred and cancelled until on and after the first of October. This occasions a difference between the statement made at the transfer office and the statement of outstanding stock (see R,) of $121.925.66; which agrees with the amount purchased by the Commissioners before the 30th September, and cancelled after the Ist of October, within thirty cents.

Management of the Canal Fund Moneys. In the last annual report a history was given of the measures adopted by the Commissioners since 1826 to obtain interest on the surplus Canal Fund moneys in their hands. To that report, and the one made in 1833, the Legislature is referred for information: in relation to the management of these funds for the last ten years. The amount received annually for interest on the surplus deposited in the banks, from 1826 to 1835, is given in the following statement, viz:

[ocr errors]
[ocr errors]
[ocr errors]

Received for interest on deposites in 1826,.........

1827, ....
1835, .

$4,515 04 4,987 96 7,281 20 7,576 30 24,000 17 35,710 31 84,619 15 122,236 74 117,092 00 148,280 62


[ocr errors]

$556,299 49

The above sum of $556,299.49 embraces only the interest paid by the banks. The Canal Fund has been increased by interest on other investments during the same time, to the amount of $111,054 57. Making a total addition to the fund, from interest on the surplus moneys, of $667,354.06.

At the close of the fiscal year, the Canal Funds were invested as follows, viz:

[blocks in formation]

$3,406,709 72 $173,390 53 Total invested at 5 per c.

81,099,833 591 41" 2,250,921 26 3155,954 87

$3,406, 709 72

The table annexed to this report, and marked S, exhibits at one view the sum held by each bank on the 30th September, 1834, the amount received and paid during the year, and the amount remaining in each bank on the 30th September, 1835.

Loan to Neversink Navigation Company. It becomes the duty of the Commissioners again to call the attention of the Legislature to the situation of ten thousand dollars of stock issued by the State, and purchased by them as an investment of a part of the surplus funds of the Erie and Champlain canals. This stock was issued by virtue of the first section, chap. 222, of the laws of 1828, to the president, directors and company of the Neversink navigation company, bearing interest at the rate of 5 per cent. For the redemption of this stock, and the due payment of interest thereon, the act pledges “the faith and credit of the people of this State." The certificates of stock were issued in May, 1828, and delivered to Otto William Van Tuyl, the president of the company, and they were purchased by the Commissioners of the Canal Fund, seven days after they were issued, at a premium of one per cent, making the whole sum paid for this stock $10,100. The interest was made payable semi-annually at the back of the Manhattan company, and was paid by the Neversink navigation company, up to and including the half year's interest

which fell due on the first of January, 1831. The draft of the Commissioners for the interest due on the first of July, 1831, came back dishonored, and from that time to the present, now more than four years, no payment of interest has been made upon the said stock. The Comptroller, in 1831, signified to the Commissioners that he did not feel authorized by any law to draw his warrant upon the Treasury for the payment of the interest upon this stock, and no authority has since been given to draw the same from the Treasury. It is necessary and proper, therefore, that an act should be passed, authorizing the payment from the Treasury of the interest upon this stock from January, 1831, until the principal is paid. The amount of interest in arrear is about $2,500.

For a full history of the frauds which were so successfully praetised in obtaining a loan of the credit of the people of this State, for the Neversink navigation company, the Legislature is respecte fully referred

1. To the report of the committee on internal improvements in the Assembly Journals of 1828, p. 760:

2. To the Comptroller's report, Legislative documents of 1830, No. 49:

3. To the report of the Attorney-General, made to the Assembly in 1838, Doc. 262.

The act for loaning the credit of the people to the Neversink navigation company, declared that “the certificate of William A. Thompson, or a majority of the judges of the court of common pleas for the county of Sullivan, that they conceive the security to be sufficient, shall be deemed satisfactory."

The certificate of Judge Thompson was furnished; but when, after the failure of the company to pay interest, proceedings were instituted by the Attorney-General on the bond, it was found that the sureties were unable to pay, and although a recovery was had against them of $8,000, nothing has been collected, and they have been released from the judgment against them in favor of the people, by virtue of chap. 281 of the laws of 1832.

Before issuing the stock, the Comptroller was directed to take an assignment to the people, by way of mortgage, of the rights and privileges of the company in the Neversink river, with all the

« PreviousContinue »