Mr. HENDRICKS. Mr. President, 2 or 3 years ago this subject was before the ComClaims, and as a member of that com: mittee I investigated it, it having been referred to me for that purpose. I thought that the adjustment between the State and the company ought to be made and ought to be made upon equitable principles. I thought there were principles which were administered in courts of equity peculiarly applicable to the relations between the company and the State in regard to the lands that had been granted by Congress in 1838, and I concur with the Senfrom Wisconsin in the opinion that both as a question of law and a question of equity the resolution now before the Senate ought to pass, or rather that the motion to reconsider ought not to prevail. In 1838 Congress made a grant of land to Territory the of .to aid in the construc.tion of this canal. It was held by the Dept to be the plain meaning of the law that the Territory was but a trustee for the canal company because of this fact: in the early part of that year the Territory of Wisconsin organized or created the company known as the Milwaukee and Rock River Canal Company, and authorized it to construct a canal so as to connect the waters of the lake with Rock river; in that act of incorporation the territorial Legislature authorized the company to borrow money on interest; and also expressly authorized the company to apply to Congress for a grant of land in aid of the enterprise; and in pursuance of that authority in the act of incor poration the company as a company memo rialized Congress for lands, and upon the memorial of the company the lands were granted to the Territory to construct that particular canal. So that it was always held, and very properly, that the Territory became a trustee for the company in the management and disposal of those lands. Some time afterward the territorial Legislature refused further to carry out the trust; having sold part of the lands, refused by a resolution to pay the proceeds over to the canal company, and directed the officers of the Territory not to pay over any money upon future sales. Here, then, was money in the hands of the Territory and after. ward in the hands of the State arising out of a trust fund. Because the territorial Legislature and the State of Wisconsin refused to pay over this trust money the canal company found itself out of means and under the power given in the act of incorporation borrowed money, If the money in the hands of the Territory and of the State arising from the sale of these lands had been handed over to the company it would not have needed to borrow money; but it had to borrow money because of the refusal of the State and of the Territory to recognize the trust which the act of incorporation and the act of Congress both recognized. This was a thing that Congress thought ought to be corrected; Congress thought this was wrong; and the Senfrom o[Mr. HowARDJ in a report made to the HoRep, as far back I think as 1842,;laid down the obi. gation of the State of Wisconsin, and of Territory the in regard to this trust fund; and I incorporated that report in the report which I made to the Senate 2 years ago upon this claim. When the State of Wisconsin asked to be admitted into the Union she asked that certain lands granted for internal improvement purposes might be made, at the pleasure of the State, a school fund instead of an internal improvement fund. Congress agreed to that, but upon the express condition that the State should settle this claim with the canal company in regard to this trustfund. That is found in the act admitting the State of Wisconsin into the Union, and made her right to the 5%. fund depend upon her settlement of this trus: fund, so that Congress became in fact a court of chancery in regard to the trust fund by the very act admitting the State of Wisconsin. It was for that reason I thought Congress had to settle this question. For that reason I differed with the Senfrom Illinois, who thoughtthat Congress ought not to settle a question between the State and the company. I thoughtCongress had undertaken to settle it in the act admitting the State of Wisconsin, making iat condition of her right to her 5%, fund from the sales of public lands that sheshould: settle this equitable claim of the canal comPo. o pon this whole case the JtResolution of. July 1, 1864, was passed, and it o how the adjustment shall be made: that the State of Wisconsin shall have her 5% fund but there shall be taken out of it this trus: fund; the State shall 1st be charged with all the lands she has sold, 125,000 acres; she shall the be credited with the money she paid over to. build the canal; then the company shallo the money it expended in building the coma in keeping it in repair, building locks, fo ers, &c. When it came to be settled the ComrGLOs: he would not credit the canal company with the interest which it paid upon moneywhich it borrowed, and which it was compelled ". borrow because the trustee refused to pay” the trust money in her hands; and how of Commissioner of the Land Office could decide that I was not able to see.