The News State and the Fiscal Problems (1935)

Last winter some alarm was created by a proposition, discussed in Congress, to tax the proceeds of the mines. The title to these is unquestionably held by the general government, and our people rest their claims thereto on possession alone. But the Federal government has so long acquiesced in the tenure relied upon, not only in Nevada but in all the Pacific states, and by its non-interference invited and induced its citizens to embark in the hazardous pursuits of mining, that vast amounts of labor and capital have been laid out and expended, upon the implied assurance that there would be no departure from what seemed to have become the fixed and settled policy of the country. Upon this tacit understanding, extending over a period of fifteen years, the miner and the capitalist have been stimulated to assume the risk of an uncertain calling. The adventurer, permitted to enjoy the undivided fruits of his toils, encouraged by that fostering care so generously extended to the citizens of the republic, has predicated his plans and calculations upon an acquiescence indulged in by the government, so long as to well nigh make it a rule of property. . . . . Enterprise and adventure should be encouraged to continue the search for treasure unrestrained and unincumbered. That such will be the continued policy of the government, I have no serious doubt.[1]

The revenues derived from this law did not measure up to expectations, but the state controller declared that this was due largely to the depreciation in value of the assessable property of the state. One provision that had been practically inoperative was that of the passenger act. Only $272.08 were paid into the state treasury from that source during the first year. The Pioneer Stage Company had refused to make returns according to the law and the case was finally brought up to the Supreme Court, which rendered an opinion May 31, 1865, declaring the law constitutional. From that decision there was taken a writ of error and the matter was transferred to the United States Supreme Court. The receipts from the property tax of 1865 were approximately $150,000; from the poll tax, $17,000 ; from the proceeds of mines, $15,447, of which about $14,800 came from Storey County and the balance from Lander County. About $20,000 was realized from the stamp tax. The total receipts from all sources except bond sales during the first fourteen months of statehood ending December 31, 1865, were approximately $316,000. For redemption of territorial and state bonds, and for interest on the debt, the state during this period expended over $150,000, and the net state debt at the close of 1865 was approximately $423,000. The territorial debt inherited by the state was approximately $267,000. In refunding this, in meeting the high cost of financing under war-time conditions, and in paying the ordinary and extraordinary expenses of state government during the first year of its operation, Nevada at the end of 1865 had a debt considerably in excess of that at the close of the territorial period, and still faced the problems of financing in a period of depreciated currency and the high interest rates on bonds and temporary loans.[2]

Governor Blasdel in his message had expressed the hope that provision should be made for the establishment of a university, or welfare institutions and for state support to the public school system. But from the survey of state finance which has been given it is evident little money could be found for such purposes. Among other items in the expenditures during the first year of statehood was about $67,000 for the "soldiers' fund," and over $23,000 for the support of the State Prison. When these items are added to the interest and sinking funds of the state and territory, the various funds for the payment of salaries and other fundamental state expenses, little was left for the common schools and other institutional services. The item "for support of common schools" was about $3,000, but over $4,000 was assigned to "expenses of state library." By the act of February 14, 1865, the Secretary of State was made ex-officio state librarian. By that act, every officer of the state, civil and military, except commissioners of deeds and notary public, had to pay five dollars on the issuance of his commission, and every attorney, when admitted to practice, paid ten dollars, these fees being contributed to the library fund. Another act made it the duty of every county recorder to keep on file for public use copies of at least one newspaper published in each county.[3]

Nevada was a frontier state, and the population of its mining camps contained thousands of men who had cut away from the ties of home and civilization. Nevertheless, the school statistics would indicate no great disparity in the matter of homes and families. In 1865[4] there were approximately 4,500 white children under twenty-one years of age, while other classes reported included 121 Indian children, twenty-four Mongolian children and twenty-three negro children. There were 2,601 white children between six and eighteen years. The school register showed an enrollment of 1,994 pupils, but with an average daily attendance of only 886. It was reported that 725 children attended private schools and over 600 did not attend any school. Only one public school teacher had taught the same school for two consecutive years. There were doubtless at that time a number of "private classes" rather than "private schools" maintained. The oldest of the private schools was the Sierra Seminary at Carson City. The first territorial Legislature had authorized the incorporation of this seminary. "Miss H. K. Clapp, one of the earliest ladies to take up her home in Nevada, started a private school about that time (1861), and has been teaching a private school for boys and girls continuously ever since, under the name of the Sierra Seminary."[5]

The committees of the Legislature received a great mass of testimony and had before them as witnesses several officials of the Central Pacific, the Placerville and Sacramento Valley and the San Francisco and Washoe railroad companies.[6] Possibly the chief purpose of the investigation was to stimulate construction on the part of either of the rival organizations so that Nevada at the earliest date might secure railroad communication. Certainly Nevada at that time had nothing more than advice and moral encouragement to offer.

amendment. It was adopted by a vote of thirty-one to one, and on the same day the Legislature adopted a concurrent resolution "that the governor be authorized and requested to telegraph to the President of the United States the resolution endorsing the proposed constitutional amendment abolishing slavery throughout the Union, which passed this day."[7]

In the meantime the Legislature in joint convention had elected the two United States senators. The joint convention was held December 15, 1864. The nominations were : William M. Stewart, of Storey County, Charles E. DeLong, of Storey, James W. Nye, of Ormsby, John Cradlebaugh, of Ormsby, and B. C. Whit-man, of Storey. DeLong had been one of the conspicuous members of the constitutional convention, while Stewart had served in the 1863 convention. Judge Cradlebaugh had been district judge under the Mormon regime. There were fifty-two votes in the joint convention and twenty-seven were required for choice. On the first ballot Stewart was elected, receiving thirty-three votes.[8] Each member of the joint convention had voted for two candidates. The result of the vote was : DeLong twenty-three, Nye twenty-three, Cradlebaugh twelve, and Whitman thirteen. The second ballot when each member voted for one candidate resulted as follows : Nye twenty-three, DeLong seventeen, Cradlebaugh nine, and Whitman three. The third ballot had the same results, and the convention was deadlocked in this position through the fourth and fifth ballots. One vote was transferred from Cradlebaugh to Nye in the sixth ballot, and after two more fruitless efforts the convention adjourned until the next day.[9] Whitman's name was with-

After the senatorial ballot had been completed a resolution was offered that the convention should proceed to elect a United States senator to succeed the senator whose term would expire March 3, 1865. The resolution was voted down and a few days later the Senate adopted a resolution that no joint convention during that session should be called for the purpose of electing a successor to either Stewart or Nye unless a vacancy occurred or it was definitely determined that the term of one of the senators would expire in March, 1865. As a matter of fact Nye's term did not expire until March, 1867. The Legislature passed an act prescribing the manner of electing United States senators. Under the terms of this act no joint convention could be held for the election of United States senators except at the regular session of the Legislature which convened "next preceding the commencement of the term which is to be filled."[10]

A joint memorial and resolution of the Nevada Legislature, January 28, 1867, approved the project and instructed the senators and representatives to use their best endeavors to obtain from Congress aid to promote the construction and completion of the tunnel.[11] With this resolution Sutro went before Congress, and

Altogether this is a picture of typical western civilization as it existed during the decade of the 1860s. But this picture cannot be made to apply to the state as a whole. When men went out, particularly into the region north and east, they were subject to adventures and dangers quite different from those to which they were exposed on the busy streets and around the mine shafts of the Comstock Lode. During the period of the Civil war and the years immediately following every section of the great overland stage and mail routes bore the brunt of a continuous and devastating Indian warfare. These hostilities had blazed out all the way from Eastern Nebraska, where the Sioux, the Arapahoe and Cheyenne were the principal aggressors, through Wyoming and Utah, until General Connor in 1863 broke the chief power of the Shoshone resistance in the battle of Bear River, and on westward to California, over the route where the various kinsmen of the Shoshones and the Pah-Utes were constantly restive and making trouble for travelers and settlers alike. Reservation Indians and wandering parties, in addition to the traditional resentment against the intrusions into this country, did not resist the temptation to kill or steal when conditions were favorable. From the overland trail north to the state line are scores of spots associated with fights in this period of irregular and guerrilla warfare.[13] A review of the Indian situation during 1865 is presented in the following quotation from Governor Blasdel's message of January, 1866:

community remotely situated from the ocean or other cheap means of communication.[14]

[1]An Assembly resolution, concurred in, December 21, requested the United States Senate to defer any action "in reference to the taxation and disposal of the mineral land, or the taxation of the mines, or the proceeds thereof," until Nevada's two United States senators might take their seat.

[2]The Constitution provides that all the lawful debts and liabilities of the territory should be assumed by the state. During the session of the 1867 Legislature an ingenious theory was developed to extend that responsibility to obligations incurred during the time that Nevada was a part of the Territory of Utah. This was in a Senate bill entitled "An Act to Make Compensation to the Hon. John Cradlebaugh, United States district judge, the same as that of the late United States district judges of the Territory of Nevada." In the report of the Senate committee on claims occur the following paragraphs:

We find that Judge Cradlebaugh, in 1859, was one of the associate judges of the Supreme Court of the Territory of Utah, and was at that time located at Salt Lake City, and dispensing justice in a manner not satisfactory to the Mormon population of that portion of the territory.

The Legislature of the Territory, at the session of 1858-9, established a district composed of the counties of Humboldt, Saint Mary's and Carson, which district substantially covered the territory which is now the State of Nevada, and assigned him to officiate in said district, which he did from August 1, 1859, until March 15, 1861, and had exclusive jurisdiction over all criminal and civil cases.

We find that the amount of business before his court was extensive, and which required the holding of court 181 days in 1860, some testimony going to show that he transacted more business than has ever been done by any other court during the same time either in the state or territory; that all the expenses of living and doing business in that day were much higher than since, and that the compensation paid by the Federal Government to its officials was totally inadequate to defray the necessary expenses of their positions.

The report then goes on to state that the three justices under the territory were paid a salary of $4,200 per annum in addition to what they received from the Federal Government. The report then continues: "This case is one of equity, and not based upon statutory law, as we are unable to find any act passed by the Legislature of either the State or Territory of Nevada, which assumed the indebtedness of that of any portion of Utah Territory out of which grew the Territory and State of Nevada; but we do find that former Legislatures, at a time when the cases were placed before them, have passed upon, allowed and ordered paid many if not all that have brought claims before them for services rendered in that portion of Utah which became Nevada; and we cannot see, as a matter of equity, why the State of Nevada is not as much bound to respect claims arising in Utah Territory where the benefits derived from such services are the legitimate heritage of the people of the State of Nevada, as though they did arise under the government of our own state." In view of the character of the services rendered by Judge Cradlebaugh the committee recommended that the additional salary compensation should be allowed. This bill passed both Houses at the close of the regular session, but in the special session that followed, Governor Blasdel vetoed it. In the course of the veto he said:

"During the years 1859, 1860 and a portion of 1861 the Hon. John Cradlebaugh held commission as a Federal judge, within and for the Territory of Utah. At the date of his appointment and commission by act of Congress then in force, his salary was fixed at $2,500 per annum. He therefore took the office and entered upon the discharge of his duties with full knowledge of the compensation he was to receive. He agreed to serve the United States and the people of Utah Territory for the salary fixed by law. . . . . Whether the compensation received was adequate or not, it must be apparent that the Hon. John Cradlebaugh has no claim, legal or equitable, against the State of Nevada, for increased compensation as United States judge of Utah." His service as United States judge ended with the act organizing Nevada Territory and he was at no time a judge of Nevada Territory. "It is true in the division into judicial districts, it was his fortune to be assigned to Carson County, out of which the present State of Nevada was carved; but Carson County did not agree to pay him additional compensation, nor did the Territory of Utah agree to pay additional compensation for the services rendered; and if the territory had so agreed, it would have become a legitimate claim against Utah, and not against the State of Nevada." The whole message seems to completely demolish this ingenious claim, and when the Senate voted on the measure in an attempt to pass it over the veto it did not get even a majority.

[3]On January 1, 1866, the State Library had 3,289 volumes, of which 881 were in the law department and 2,408 in the miscellaneous department. The report of the state librarian is an interesting exhibit of the type of general literature then accessible to the public officials and bar of the state. Most of the books were public documents, laws and court reports. Of the books received from the territorial library the only ones of a general literary interest were the works of John Adams and Thomas Jefferson. One exhibit is of books purchased "under an appropriation of Congress of March 3, 1863, received May 10, 1865." This list is apparently a collection of the standard literature of the day, corresponding roughly to the White House Library of recent years. The ancient classics are well represented. including translations of the Greek and Roman dramatists, orators and historians; the works of Addison, Byron, Bacon, Boswell's Johnson, Coleridge, Dryden, Hume, Macaulay, Smollett, Goldsmith, Gibbon, Irving, Lamb, Longfellow, Locke, Milton, Montaigne, Shakespeare. Apparently Emerson, Lowell and Hawthorne were not represented, but among the best sellers of the day was a volume of Uncle Tom's Cabin.

[6]The printed results of this investigation are found in the appendix to the Journals of the Senate of the first session of the Legislature and comprise some valuable source materials for a detailed history of railroad beginnings on the Pacific Coast.

[7]This amendment was proclaimed as part of the constitution December 18, 1865.

[8]William Morris Stewart was born at Lyons, New York, August 9, 1827, and died in 1909. He left Yale College to go to California, arriving in San Francisco in May, 1850. After mining for a time he studied law, was admitted to the bar in 1852, and was attorney-general of California in 1854. He went to Virginia City in 1860, was interested in the Comstock Lode, served as a member of the territorial council in 1861, in the Constitutional Convention of 1863. He was reelected United States Senator for the full six-year term January 12, 1869. In 1887 he was again elected to the Senate and served consecutively for three terms, until 1905.

[9]During this interim, Mr. Stewart sent a message to Judge Cradlebaugh, stating that if the latter would consent to yield to him all government patronage, which would be due by courtesy to both of Nevada's senators, his election would be secured. The reply of Judge Cradlebaugh was characteristic of the man. `Tell Stewart,' said he, `that I had rather be a dog, and bay the moon, than such a senator.' "(Thompson and West's History of Nevada, 88).

[10]The election law of March 9, 1866, enumerates all the elective state and county officials, and in the case of the representative to Congress required that one such representative should be elected at the general election in 1866 and every second year thereafter. The governor, lieutenant-governor, secretary of state, state comptroller, state treasurer, attorney general, surveyor general, clerk of the Supreme Court and state superintendent of public instruction were to be elected at the general election in 1866 "and every fourth year thereafter."

[11]One paragraph of this memorial contains some statistics regarding the production of the Comstock Lode and some other facts regarding the mining situation, probably for the most part supplied by Sutro and his associates, but representing on the whole a fairly conservative approximation of data always subject to inflated figures:

That the mines of said lode have been worked for seven years last past, and during this time have produced $64,000,000; that the present annual yield is $16,000,000—an amount equal to the total annual production of the Republic of Mexico; that the expenses of working these mines so rapidly increase with the increased depth, that the $16,000,000 were last year realized at a cost of $15,500,000, and at the present ratio of cost to production their resources would, in a few years, be wholly absorbed and the mines practically abandoned; that the causes of increased cost are, amongst others, the accumulation of water in the mines, insufficient ventilation, and the increase of heat with depth; and that now, having reached a depth of 800 feet, these combined causes will prevent their being worked profitably on the present plan, below 1,200 feet; that the Comstock Lode is conveniently placed for deep drainage, being situated on the side of a mountain which declines into a valley, from which a horizontal adit or tunnel, four miles long, can be constructed, which will cut the mines at a depth of 2,000 feet; that this tunnel once constructed, these mines can be profitably worked to a depth of 3,000 feet, and by means of it at least a thousand millions of treasure will be secured; that the State of Nevada cannot render material aid to this indispensable work, by reason of Constitutional inhibitions; that the mining companies, while producing large amounts of bullion and distributing it among the channels of trade and commerce, under existing circumstances derive but an inconsiderable profit, and not equal, without Govern-mental aid, to the successful prosecution of such an undertaking; that the taxable property of the United States has been more than doubled within the last eighteen years, and this increase has mainly resulted from the vast addition to the precious metals within this time, and the further addition of one thousand millions would be an increase to that extent of the public resources, and virtually, a reducing to a considerable extent of the public debt.

[12]Thompson and West's History.

[13]Many of the stories, with all the grewsome details of border warfare, are found in Thompson and West's History of 1881, in Wright's History of the Big Bonanza, and in other early publications.

[14]There were similar resolutions passed in 1867. One of them reported the results of an investigation by a board of commissioners appointed by the previous Legislature to inquire into the losses sustained by the people of Humboldt County as a result of the Indian depredations during 1864-65-66, and estimated those damages to the amount of $151,422, declaring that the persons who had sustained these losses had a just and equitable claim against the Government therefor. Another resolution asked Congress, in view of the rapid increase of population in the eastern part of Nevada and the Territory of Idaho, to establish a daily mail through points in Humboldt County to Boise City. A resolution of March 1, 1869, stated the opinion of the Legislature that necessity no longer existed for the maintenance of the military posts of Fort Churchill, Camp Ruby and Camp Halleck "owing to the establishment of settlements contiguous thereto, sufficient in themselves for their own protection," and earnestly requested that those garrisons should be moved to the region north of the Humboldt River. A few days later another resolution was addressed to General Halleck asking that reinforcements be immediately assigned to the garrison of about sixty men at Camp McDermitt, where an Indian outbreak was being daily feared and where a larger force was needed "to protect the present settlers and encourage the settlement of extensive agricultural and mineral regions, and the trade and travel to and from Idaho."

In this connection should be noted a resolution of March, 1871, urging that Congress should secure the "annexation to Nevada of all that portion of Idaho Territory lying south of Snake River," declaring that the citizens of Owyhee County (Idaho) were in favor of such annexation and that the state line should not be allowed to divide the great "silver-bearing belts" which extended from Nevada north into this region, and also pointing out the "business and commercial relations which exist between our people and the people of the Owyhee portion of our neighboring territory."

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