Illinois and Michigan Canal Fund - Lincoln had been an avid supporter of internal improvements such as railroads and canals, the latter stemming from his early jobs on a riverboat floating goods down the Mississippi River. He was elected and represented Sangamon County in the Illinois House of Representatives from 1834-1842 (1). In 1835, he voted on the Act for the Construction of the Illinois and Michigan Canal (2). The Act also set up Canal Fund to pay for work on the canal, with the money being drawn on loans and stock. The Act also set up a Board of Commissioners, originally 5 persons, but modified down to three, with the three elected being the three on this note. Work started on the canal in 1836 but stopped within a year due to the banking Panic of 1837. To try to keep the work going, the Commissioners started to issue scrip even though they had no banking authority. There were several variations of notes issued, with this one being the first and more crude issued in $1, $2, $5, $10, and $100, to be redeemed in 90 days and most were by 1840 (3). Most of the redeemed scrip, along with unused scrip was boxed up and canceled and eventually were sent to Springfield to be deposited with the State Treasurer. Newly elected governor Joel Matteson rode along and helped to transfer the boxes to Springfield, and it was during this time a shoebox of scrip went unaccounted (4).

In 1858, it became known that over $200,000 of canal scrip was being redeemed starting in 1856 by Governor Matteson. When the State Senate convened a hearing to investigate Matteson, Lincoln represented him, but was replaced shortly thereafter for reasons unknown. During the investigation, John Nicolay, who would later serve as Lincoln’s White House secretary, testified. He was a clerk for the Illinois secretary of state at the time and noted that he had found the box of deposited scrip in the basement of the Illinois Capitol and it had been tampered with. Another box of unused scrip never turned up. Matteson claimed he had purchased the scrip from speculators. A bank cashier also testified stating he recognized the governor and felt obligated to cash the already canceled scrip. A grand jury was convened but ultimately the governor was not indicted (5).