Canal Scrip Fraud facts for kids
The Canal Scrip Fraud was a financial problem in Illinois that happened a long time ago. It involved special papers called "canal scrip" that were used to pay for building the Illinois-Michigan Canal. Some of these papers were used dishonestly, causing a big scandal for the state.
The Illinois Canal Scrip Mystery
In 1839, the state of Illinois ran into money trouble. To keep building the Illinois-Michigan Canal, they started printing special papers called "canal scrip." Think of these as official IOUs, meaning "I Owe You." The state promised to pay back the money later to anyone holding these papers.
What Went Wrong?
Years later, in 1857, something strange happened. A lot of the canal scrip that had already been paid back and canceled somehow ended up being used again! In 1859, the state's money manager, Jesse K. Dubois, told the lawmakers about this problem. He reported that the former governor, Joel A. Matteson, had illegally used these old, canceled papers to get money from the state a second time.
Lawmakers in the state senate started an investigation. They found that the canceled scrip had been given to Governor Matteson from the canal office in Lockport. Matteson then used these papers to get paid again. Governor Matteson sent a letter to the investigation committee. He claimed he had bought the papers without knowing they were already used. He offered to pay the state back for all the money lost. The lawmakers decided to accept his offer, and the investigation stopped there.
The Story Continues
Not everyone was happy with this decision. Other state officials, who were from a different political group (the Republicans), thought the case needed more looking into. They took the information to a special group called a grand jury in Sangamon County.
A grand jury listens to evidence and decides if there's enough reason to believe a wrong action might have happened. In April 1859, after hearing what happened, the grand jury first decided that Matteson should be formally questioned about the issue. However, some of the jury members changed their minds. After another vote, they decided there wasn't enough reason to move forward with the case against Matteson. So, the matter was closed.
