In 1834 the Michigan boundary question, in which that State acted a very headstrong and reckless part, was first brought to light. Michigan, notwithstanding the approval by Congress of the constitutions of Indiana, Ohio and Illinois, in each of which their respective boundaries were clearly pointed out, claimed, as her southern boundary, an east and west line drawn through the southern extreme of Lake Michigan. In a recognition of this claim Indiana would have lost a district ten miles wide, extending entirely across the northern part of the State, including one of the fairest and most desirable portions of her territory, and have been entirely excluded from any access to the lake, except through a foreign jurisdiction. In addition to these considerations, there were other reasons why Indiana should have opposed the Michigan boundary claim. In the first place, the mouth of the Maumee river, and the termination of the Wabash and Erie canal, laid within the limits claimed by Michigan, and it was more than probable that Ohio would abandon co-operation in the work if the territory was transferred. Beyond this, Indiana would to a great extent lose the benefit of one of her greatest public improvements. This controversy continued until 1836, when Congress refused to acceed to the demands of Michigan, but, settled the question by extending her territory in the Lake Superior region.

In 1834, the State bank again commenced operations "under very favorable circumstances." The stock in all the branches authorized was subscribed by individuals, and the installment paid as required by the charter. The loan authorized for the payment on the stock allotted to the State, amounting to five hundred thousand dollars, was obtained at a premium of one and five-hundredths per cent. on five per cent. stock, making the sum of over five thousand dollars on the amount borrowed.

In December, 1835, the legislature of Indiana convened in the "New State Capitol," at Indianapolis, and on the occasion Governor Noble, in his message, remarked: "This is your first session in your new capitol, and from the conviction that the occasion will not fail to inspire feelings of exultation

within you, I will not withhold, on my part, the offering of a hearty welcome and congratulation. It is an edifice worthy of the State, and, being dedicated to the public interests, within these walls the representatives of the people will annually assemble to perform some of the most important duties ever delegated to man. The people, through their representatives, will here speak their wishes, utter their complaints, and obtain redress for their wrongs." Forty years have passed since these sentiments were uttered by Governor Noble, and still "New (now old) State Capitol" is universally the scene of legislative activity.

**

During the year 1835 the work of public improvements was pushed forward. "The operations on the line of the Wabast and Erie canal," says the Governor's message, “have been conducted the past season with energy and great success. The middle division, extending from the St. Joseph dam to the forks of the Wabash, about thirty-two miles, has been completed, for about two hundred and thirty-two thousand dollars, including all repairs to this time. * Upon this portion of the line navigation was opened on the fourth of July, on which day our citizens assembled to witness the mingling of the waters of the St. Joseph with those of the Wabash, uniting the waters of the northern chain of lakes with those of the Gulf of Mexico in the south. On this division boats have been running, without the interruption of a day, since the letting in of the water." On other parts of the line the work progressed with speed, and the sale of canal lands was unusnally active.

In 1836 we find that the State bank was 66 subserving all the valuable purposes for which it was established," agricultural products were abundant, and the market was good; consequently the people were in the full enjoyment of all the blessings of a free government and of an enlightened civilization.. In this year the first meeting of the State Board of Internal Improvement was convened, and entered upon the discharge of its numerous and responsible duties. Having assigned to each member the direction and superintendence of a portion of the work, the next duty to be performed preparatory to an

enlarged sphere of active service, was that of procuring the requisite number of engineers. A delegation was sent to the eastern cities, but returned without engaging an engineer-inchief for the roads and railways, and without the desired number for the subordinate stations; but after considerable delay the Board was fully organized and put in operation.

During the year 1836 the public works, under the new management, were successful. The Wabash and Erie canal progressed steadily. The navigation of the middle division, from Fort Wayne to Huntington, was uninterrupted. Sixteen miles of the line between Huntington and Lafontaine's creek were filled with water and made ready for navigation, and the remaining twenty miles were completed, with the exception of a portion of the locks. From Lafontaine's creek to Georgetown reasonable progress was made, several sections having been completed and received by the Board. The line from Georgetown to Lafayette was placed under contract. During the same year about thirty miles of the White Water canal extending from Lawrenceburg through the beautiful valley of the White Water, to Brookville, were also placed under contract, twenty-three miles of the Central canal, in the vicinity of and passing through Indianapolis, were placed under contract and work commenced upon it; about twenty miles of the southern division of this work, extending from Evansville into the interior, were also contracted for. On the line of the Cross-Cut canal, from Terre Haute to the intersection of the Central canal, near the mouth of Eel river, a commencement was also made on all the heavy sections.

Early in this year a party of engineers was organized, and directed to examine into the practicability of the then contemplated Michigan and Erie canal line. The result of its operations gave evidence of the expediency of the work. Soon after the organization of the Board of Internal Improvement, a party of engineers was fitted out and entered upon the field service of the Madison and Lafayette railroad, and in the same year contracts were made for the building of this road from Madison to Vernon, on which work was actively commenced. Contracts for grading and bridging the New

Albany and Vincennes road, from the former point to Paoli, about forty miles, were also let. Other roads were also undertaken and surveyed, and, in all respects, a stupendous work

of internal improvement was undertaken. Truly did Governor Noble remark: "Upon the issue of the enterprise in which we are now engaged, our State has staked her fortunes. She

has assumed a great responsibility, but one that is full of hope and of promise. * * * Our great system may be said to be fairly begun, and the State has embarked in a course of policy from which there is no retreat."

CHAPTER XXIII.

ADMINISTRATION OF GOVERNOR WALLACE.

ITH the opening of Governor David Wallace's admin istration murmurs of discontent were beginning to be audible among tax payers. In the estimation of a very respectable portion of the people, the State had undertaken entirely too much; that the very attempt to prosecute so great an enterprise as was contemplated by the Board of Internal Improvements with the means in possession or expectancy, must inevitably involve the State in debt from which it would be difficult, if not impossible, to extricate itself, and thereby entail upon the people the worst of all evils-oppressive and ruinous taxation. These predictions, coming from intelligent lips, were well calculated to chill the ardor and extinguish the spirit of enterprise in which these public improvements were conceived. In reference to this sad phase of public affairs, Governor Wallace, in his first annual message to the legislature in 1837, said: "But the astonishing success which has thus far attended our progress; the realization of all, and more than friends, the most sanguine, dreamed of; nay, the flattering auspices of the future, should, it appears to me, dispel every doubt, and quiet every fear which such boding prognostics may have created." These sentiments from the governor were well calculated to disguise the painful opinion which he himself possessed at this time, that the State would not be able to carry the load of public improvements with which she had burdened herself, unless the general depression of public and private enterprise