32D CONG....2D SESS.

encumbered with the debt of its revolutionary war. It had vast resources, but they were undeveloped. It was not ready to pay at once. It was in the condition in which our own Government was described to have been by the Senator from Maryland, immediately after our Revolution, and her creditors began to cast a wistful eye towards the Treasury of the United States. We begun to hear it said by them that the United States were bound to pay the debts of Texas, because the United States were in the enjoyment of the receipts from the customs of Texas. The United States have never acknowledged that obligation to this day. It was not acknowledged in the resolutions of annexation, or at the time the boundary act was passed. That act provided that $10,000,000 should be paid to Texas; and inasmuch as that act diminished that fund-to wit: the public landswhich had been established by the act of annexation as security to the creditors of Texas, it substituted what was more than an ample equivalent; it substituted a provision that $5,000,000 of the amount granted by the act should not be paid to the State of Texas until the creditors or at least, all of those for whose debts the customs were pledged, should file their releases in the Treasury of the United States. Thus it will be perceived, that the Government of the United States, throughout the whole matter, adhered to its original theory, to wit: that the debt of Texas, previous to the annexation, was the affair of Texas, and not of the United States. It is provided in the boundary act, that $10,000,000 should be paid-to whom? Not to the creditors-no, sir-but to the State of Texas; reserving, however, the right to retain $5,000,000 in the Treasury of the United States until those creditors who had been secured on the public lands should file their releases in the Treasury of the United States; so that, so far from this provision in the boundary act being a recognition of an obligation on the part of the United States to pay the debts of the State of Texas before the annexation, it is an adherence to the original idea that the debts of Texas were the affairs of Texas, and that the United States would do no more than secure to the creditors whatever was to be received by the compact with the United States, from its public lands.

The State of Texas, in looking into those obligations, has chosen to say that she owed but a certain sum, and that she would scale those obligations; that she was not bound to pay what appeared to be due upon their face, but would only pay the amount of cash value which she had actually received; and I understand from a member of the House of Representatives from the State of Texas, that the table upon which the debt was scaled was one which the creditors at a meeting originally presented as a scheme which they would be willing to take. The State of Texas scaled the debt according to that table; but the creditors finding that they could not receive dollar for dollar from the State, or that they would not receive, according to that law, even the whole five millions, have now come back upon us, and a proposition is introduced here to pay them not only the five millions for which we were bound by the boundary act, but to pay them instead, $8,333,333 33that is, such a principal sum as will amount, at three per cent., to the same annual interest with five millions at five per cent.

I object to this proposition for several reasons. One is, that if we do this, we assume for the United States a liability for the debt of Texas. Another is, that after assuming that liability, if we discharge it as is here proposed, we do what we are reproaching Texas for doing-we are repudiating a portion of the debt and scaling it; for this sum will not pay dollar for dollar on the face of the obligations for which, according to the Secretary of the Treasury, the revenues from the customs of Texas were bound; and in the next place, not only is it an act of repudiation in that point of view, but it is laying violent hands upon money which we promised to pay to Texas, for the boundary act provides, not that we should pay it to the creditors, but to Texas herself, when the creditors should have filed their releases.

Suppose that we were to pay these $8,333,333 33}, does any man suppose that Texas would not come in and claim the $5,000,000 which were due to her by this statute, this solemn compact, upon the

Texas Debt-Mr. Hunter.

consideration of the vast domain which she ceded for the $10,000,000? She would come in, and I do not hesitate to say that she would be entitled to the $5,000,000, if she chose to demand it. She has given the land, and she has a right to insist that we adhere to our compact, whatever it be, and we have no right to refuse to do it. I admit we may refuse to pay these $5,000,000 until these creditors file their release, but we have no right to take that fund out of the Treasury, and distribute it, upon any principles which we may choose to establish, amongst these creditors. In other words, we have no right to take one of the sovereign States of this Confederacy, and put it under a commission of bankruptcy; none whatever.

But I perceive that an attempt has been made by the honorable Senator from Maryland, with that ability and ingenuity for which he is distinguished, to show that we are not in effect assuming the liability of the debt of Texas by paying the $8,333,333 33 instead of $5,000,000, because he says, in point of fact, the two sums are equivalent. Why, Mr. President, there is an easy answer to this. If the eight and one third millions of stock, payable at the end of twenty years, with an interest of three per cent., is worth more to the creditors of Texas than five millions at five per cent., to run for fourteen years, it must cost more to the United States to pay that sum. That is simple enough. But, sir, it is a question of arithmetic-it is one of figures, which is very easily decided. Eight and a third millions with three per cent. interest for twenty years, will amount to thirteen and one third millions; that is, at the end of twenty years, when 'we shall have paid the three per cent. interest, and when we come to redeem the principal, we shall have paid in the whole thirteen and one third millions. Five millions at five per cent. for fourteen years, after the time is elapsed when we have paid interest and principal, will amount to $8,500,000. So that one proposition costs more than the other, according to that calculation, by $4,833,333 334. Or take it in another way. Take it according to the present value of the stock. I made inquiries last summer, and was informed that it was the opinion of an intelligent financier and dealer in stocks in New York, well acquainted with such things, that at that time a three per cent. stock, to run for twenty years, would yield what the Senator from Maryland said, to wit: eighty-five cents in the dollar. So that the present value of eight and one third millions, or the value at that time for which it sold in the market, would have been $7,083,050. At the same time, the then value of five millions of five per cent. stock for fourteen years, which he estimated at 106, would have been $5,300,000. So that this proposition is dearer to the United States than the other by the difference between $5,300,000 and $7,083,000. Or, if I chose to go into it, there is another way of calculating. I might take the present value of the eight and one third millions payable twenty years hence, and add to it the value of an annuity for $250,000 for twenty years; and upon applying the same principle to a five million loan, we should find almost as great a difference as in any of the modes in which I have presented the calculation. But there can be no doubt about this. There can be no doubt that when we pay eight and one third millions in three per cent. stock to run twenty years, we pay more than if we paid what the boundary act requires us to pay, viz: five millions of five per cent. stock having fourteen years to run.

It is obvious, then, that upon this proposition we shall pay more than we are bound to do by our boundary act; and if we pay it, we must do so upon the principle that we are bound for that debt of Texas If our obligations extend beyond that act and cover a part, they cover the whole This, sir, must be manifest to all.

But if we pay the eight and one third millions, and no more, upon this supposition, is it not obvious that we are doing the very thing for which Texas is reproached? If these eight and one third millions be worth only eighty-five cents on the dollar, and if the debt, for which the customs of Texas were bound, amounts to eight and one third millions, as the Senator from Maryland has stated-and it amounts to more, as I shall presently show-is it not obvious that we are paying that debt at eighty-five cents on the dollar, instead of

SENATE.

paying it according to its face? If we owe it, what right have we to scale it in that manner? Or if we do scale it in that manner, how does it lie in our mouths to charge Texas for having adopted a similar scheme? If we are to scale it, there must be some discrimination such as Texas has made. The man who furnished a dollar's worth for every dollar for which the State is indebted to him, must be entitled to more than the man who furnished but twenty-five cents' worth on the dollar. If they are to be scaled, there must be some equitable principle upon which it should be done.

But I deny that the United States are liable for the debt of Texas. I deny that they are liable for the debt of Texas according to the law of nations or the law of nature, and I think I can show it. I know that there is a great array of very respectable opinions-nay, sir, of the highest legal opinions amongst living authorities-opposed to my view; but I must say, from the examination which I have given to the subject, that these opinions seem to have been very loosely and hastily given.

We have the opinion, first, of Mr. Reverdy Johnson. Mr. Johnson says:

"That whatever rights belonged to each State separately before they were united, will afterwards be the rights of the collective State, and the same obligations that each State were under separately before, the collective State will be under afterwards."-Grotíus, v. 2, ch. 9, sec. 9.

Let us see now, how far his authority sustains him. I will read the whole of section nine, of chapter nine, of book second, of Grotius, which is as follows:

"But if two nations be united, the rights of neither of them shall be lost and become common, as the rights of the Sabines first, and afterwards of the Albans, were transferred to the Romans, and so when they made one State, as Livy expresses it. The same may be also adjudged of kingdoms which are really and truly united, and not only by a treaty of alliance, or because they have but one prince."

Now, according to Mr. Johnson's quotation from Grotius, the same obligations which each State was under separately, the collective State was under afterwards. Not at all. Mr. Johnson gives us his own inference instead of the text, which refers to a different matter. To understand the text we must look to the instance, which is taken from the early dawn of Roman historyfrom its early twilight, if I may use the term-and refers to the old history of the adoption of the Sabines and Albans by the Romans, into the rights of citizenship. Livy says in each instance to which Grotius refers, that they were carried to Rome, and there admitted equally to the rights of citizenship; and yet upon this instance, doubtful as it is, so remote, so ancient, is to be founded this grave principle of public law, by which we are to be charged with these $8,000,000. Sir, I know that it was said that the Romans stole the Sabine women, but I believe it is nowhere recorded, either in history or fable, that they ever paid a Sabine debt, or the debt of any other people whom they ever conquered or united to their empire. Such a thing is not found even in the myths of that early day, much less in history. And yet, upon that old instance thus stated by Grotius, and thus unconsciously perverted-because I know it was not designed by that distinguished gentleman-we have the grave position laid down that we are bound to pay the debts of Texas. Where is it to be found in Roman history that the Roman people held themselves bound for the debts of conquered provinces? Where can the instance be shown? Grotius was too well read in that history to make such an assertion.

Next comes the opinion of the Secretary of the Treasury. He is a little more cautious. He says

that

"It will be found that all writers on public law, having any authority, are agreed upon this point from the time of Grotius to the present. Indeed, the proposition thus asserted is so obviously just that it is not possible for a nation in modern times to controvert it without forfeiting that character for justice and probity which, happily for mankind, has become indispensable for sovereign States."

This reference is so general, that I do not know how to meet it. I can only stand on the old maxim-De_non_apparentibus, et non existentibus, eadem est ratio. When the authority is presented, I hope and believe I shall be able to meet it.

The Senator from Maryland is a little more precise. He quoted a dictum of Wildman, taken from Vattel, and founded upon a single instance in German history. I mean the cession of Sile

32D CONG....2D Sess.

sia by the Empress of Austria; a cession made in her right, as Queen of Poland, to the King of Prussia. That was done by the treaties of Breslau and Berlin, about the year 1742, as the Senator from Maryland has said. But it must be observed, when you come to look at this, that the instance referred to does not sanction the principle as laid down by Vattel and Wildman in these general views. Allow me, however, to go one step further before I come to analyze the instance, and show what principle it does justify. I say if that principle were acknowledged by nations as they have stated it, their own case would not be in point here, because when Silesia was united to Prussia, she lost all her former nationality; if, indeed, she could be said to have had any; it was totally merged, and she had no Government left but that of Prussia. She did not reserve an independent Government like that of Texas, with independent resources left her afterwards to which

her creditors could refer.

But, sir, I maintain that the instance itself does not sanction the position as laid down by these writers. Why, sir, what was the treaty of Breslau and Berlin? It was a treaty which closed one of those long wars between the Empress of Austria and the King of Prussia. It contained a variety of mutual stipulations; it contained stipulations with regard to religious rites. It ceded Silesia here, and it ceded to the Empress of Austria certain rights in Bohemia there. It settled all the matters in conflict between them, and it was provided, inasmuch as the Empress of Austria had made this cession, that a debt which she owed, not as the owner of Silesia, but as the Empress of Austria, which had been hypothecated upon her revenues in Silesia, should be transferred to the King of Prussia. And what was more natural? It was a debt due to the English and Dutch, and secured upon this branch of her revenue, not as a debt of Silesia, but as a debt of the Empress. And it is to be observed, that the guarantor to that treaty was the Government of Great Britain, which promised to bring in the United Provinces as joint guarantors with itself. What so natural as that in the arrangement of this treaty and the settlement of these mutual equivalents, the Empress of Austria should have provided for the convenience of the parties guaranteeing the treaty, and for the convenience of all the parties to the treaty, that she would pay off her debt to England and Holland, by simply transferring to them the obligation due to her from the King of Prussia? Now, sir, to have made this a case in point-and these authorities seemed to be conscious of it, for they say that without the treaty it would have resulted from a natural law-this ought to have been the state of things. If the Empress of Austria had ceded Silesia without saying one word about the debt to the King of Prussia, and the King of Prussia had paid the debt on the ground that it went with Silesia, then it would have been a case in point to establish the law of nations, as Vattel has laid it down. But this was a mere matter of arrangement between the parties, made not on account of any obligation under the law of nations, but for mutual convenience. And again, I say, that even if it established that, it would fall far short of the case now before us, because in the case of Texas, resources were left to her, which were large enough to meet her debts; a separate and independent government was left to her; she remained a sovereign State, and there was ample security for her creditors.

But let us go a little further, because I wish to trace this principle which has been laid down as one of national law, to show that it never has been regarded by the nations of the earth as national law, and will probably never be so regarded. There are other instances in which one nation, on account of conquering or obtaining by cession the provinces of another, has been bound by its debts. But I believe I may safely assert, that in all these cases it was a matter of express treaty stipulation. As a proof that this was done by arrangement, and not from any view of being bound to it by the law of nations, it will be found that whenever provinces have been taken without any treaty, the conquering nation never has paid the public debt, or any part of it, for the nation from whom the territory was wrested. Thus, in the treaty between Denmark and Sweden, where Nor

Texas Debt-Mr. Hunter.

way was ceded by Denmark to Sweden, and Swedish Pomerania was taken by Denmark-I speak of the treaty of Kiel, in 1814-it was specially provided, as a matter of arrangement and calculation, that Sweden, taking Norway, should pay a certain portion of the debt of Denmark; and Denmark taking Swedish Pomerania should pay the debt of that province. But, sir, just before that, a treaty had been made between Sweden and Russia, at Fredericksham, in 1809, under which Sweden lost Finland. There was no stipulation about the debts, and none were ever paid by Russia for Sweden, because the matter was left to be regulated by the law of nations, which prescribed no such thing.

But how was it with us? We took a portion of the territory of Mexico. Well, sir, if the law is good for the whole it is good for a part. If we would have been bound for the whole of the debt of Mexico to third parties if we had taken the whole of Mexico, it would seem to be but obvious justice that we should be bound for a part of the debt of Mexico, when we took a part of her territory. But when we took a part of her territory, were we bound for any portion of its debts? Just as much as we are bound for the Texas debt, incurred before annexation. If this principle were true as a principle of public law, we should be bound to pay a portion of it. How would it operate? Suppose we were to take the position, and admit that we should have been bound for the whole debt of Mexico, if we had conquered it, what is the result? Why, she could have obtained what funds she pleased to fight us with; because the creditors would know that they would be paid in any event. If Mexico succeeded, she would be bound; if we had conquered and absorbed her, we should have been bound to pay the very debt she had contracted to fight us with. Could there be any such principle under the law of nations? Does the history of nations show any such practice to sanction such a principle? Are there precedents for it? None, sir. The only case which has been produced, is one of special treaty stipulation, and it was a case in which it was no debt of Silesia, but a debt of the Empress of Austria, hypothecated upon her revenues in Silesia, and under circumstances which showed the manifest convenience of making this special arrangement. Why, sir, we have come to a pretty pass, if, notwithstanding our own act upon that statute-book, where we affirm that we were not bound and would not be bound, we are made to pay this debt upon such dicta as these, and drawn from such precedents as the history of old Roman transactions with the Sabines and Albans may furnish us with upon such a subject as this. Are, then, the authorities to be produced here to saddle the United States with such a debt as this? I hardly know, sir, how to characterize such a pretension. It is not the law of nations; and so far as we can judge the matter, we have settled and decided that question. We decided it in the joint resolutions of annexation, and we adhered to that theory of our obligation in the terms of the boundary act itself.

That the principles to the extent to which Vattel has carried them are not sustained by the practice of nations, and cannot be true, I think I have proved. Still, sir, there is some foundation of truth for them, and to some extent he is sustained by the practice of nations. When one nation conquers another, a third party which holds a right of way or fishery within the limits of that conquest, does not lose its rights thereby. To argue that, the third party must be conquered, and that is not pretended. Its right to this use of territory is as perfect as if it had held a portion of the soil itself. This right is very different from the one set up here. The one is compatible with the rights of conquest, the other not; the one is capable of definition and capable of enforcement, the other is indefinite and incapable of enforcement.

Well, sir, if we are not bound by our own stipulations, and not bound by the law of nations to pay this debt, how are we bound? Are we morally bound? Why? If so, it can only be because that the fact of our taking the customs of Texas has disabled her from paying her creditors, which it may be maintained would not have been the case, had she never been annexed. If, on the other hand, Texas was placed in a position, and in circumstances of greater ability to pay these debts in

SENATE.

consequence of the act of annexation, although she lost her customs, than she would have been without the act of annexation, the creditors have no moral claim against us, because we have improved their condition. How is it, sir? We all know that the effect of the annexation was to give her peace, and to encourage settlements, and facilitate immigration and population. We all know that the State of Texas, as a State, was amply labe to pay the debt which she had conteracted. She had a hundred millions of acres of land which were bound for that debt. She had, last year, at the time I made inquiries into that subject, between eight and nine millions of money in her Treasury and in our Treasury together, which she might have applied to that purpose. In order to show these facts, I would like to have read a letter which I received from one of the gentlemen who represent her on this floor.

The Secretary read as follows:

WASHINGTON, August 23, 1852. DEAR SIR: I have received your note asking, "first, What is the amount of the United States indemnity now in the Treasury at Austin?

"Second. What is the estimated quantity of the public domain in Texas?

"Third. Since the act of 1851, are you aware that the creditors of Texas have by any authorized committee petitioned her Legislature to pay the difference between the scaled rate and face value of the securities and certificates of stock of her public debt?

Fourth. What do you estimate the first class, or, in other words, the debt for which the revenues were specially pledged, estimating the interest to the 1st of April, 1853, according to the admission of the Secretary of the Treasury of the United States ?"

By the first inquiry, I presume you desire to know what amount of the $5,000,000 already paid over to Texas remains in her treasury. I am informed, upon what I regard as good authority, that she has appropriated to the payment of a portion of the debt decided by the Secretary of the Treasury of the United States not to be included in the proviso in the boundary act, $1,096,833 12, which, I presume, has been paid. I understand that about $200,000 have been appropriated for other purposes, which would leave in her treasury $3,704,166 88, besides the interest on the $5,000,000. The Legislature of Texas has appropriated $3,480,297 59, to be paid to the creditors included in the decision of the Secretary of the Treasury of the United States, on condition that the proviso in the boundary act be so modified by Congress as that Texas may receive from the Treasury the amount for which she may file the releases contemplated in the proviso of the said act.

To the second inquiry: 1 think the public domain of the State is estimated at not less than one hundred millions of

acres.

In answer to your third inquiry: I believe some three or four creditors did so petition. The largest number, I understand, have not, either by themselves or any authorized committee, taken any such steps, and I am informed that no definitive action was had upon the petitions that were

filed.

Your fourth and last inquiry presents an interrogatory which it is difficult to answer, as it involves several questions, arising out of the laws of Texas, and the decision of the Secretary of the Treasury of the United States, of the 13th of September, 1851. I inclose you the joint report of the Auditor and Comptroller of the State of Texas, dated 12th November, 1851, subsequently to the Secretary's decision, which shows that the total ostensible debt, including interest, is $12,436,991 34. If you deduct from that amount $1,738,872 27, decided by the Secretary, as I understand his decision, not to fall under the proviso, it would leave $10,698,119 07, not including the additional interest which seems to be contemplated by the report of the Committee on Finance.

I also inclose copies of the several acts of the State of Texas in relation to her public debt. Yours very truly, Hon. R. M. T. HUNTER,

THOMAS J. RUSK.

Chairman Committee on Finance, United States Senate. Mr. HUNTER. Mr. President, so we see that to meet this debt, which at its highest estimate is $10,000,000, Texas had one hundred million acres of land, and at that time last summer, between eight and nine millions of dollars in her Treasury and the Treasury of the United States together. Sir, she was at that day, and she is at this time, in proportion to her population, perhaps the richest State in this Confederacy. There is no State better able to meet the demands upon it, the legal and just demands upon it, than Texas. How, then, can her creditors say we are morally bound, if we, by the consequences of this annexation, have contributed to such a state of the treasury as exists in Texas? Can it be said that we have diminished her pecuniary and fiscal ability to meet her liabilities by this act of annexation with the conditions presented? Not at all. We have increased that capacity; and I believe that we took away from Texas a source of expenditure fully equal, ay, sir, greater, in the event she had remained an independent nation, than her customs

32D CONG.....2D SESS.

would have met. How is it with us? Our customs, together with the receipts from the lands, hardly maintain this Government in the discharge of just such functions as the State of Texas was relieved from by the annexation. This Government is employed in managing our foreign relations and those between the States, which would have been an additional source of expenditure to independent Texas. To meet these obligations we have expended our whole revenue and are in debt. Is it likely, then, that under the state of things which existed before annexation, the revenue derived from customs by Texas would have sustained her army and navy and foreign diplomatic establishment? I hazard nothing in affirming that it is not probable that the revenue from customs would have sufficed to maintain her independence and her relation to foreign nations. If, then, we are in any way answerable to the creditors of Texas for having deprived them of the means of collecting their debts, it is not because we took from Texas the pecuniary and fiscal capacity to pay it, but because we took from her the desire to do so, and lowered and injured her moral tone. Will that be maintained? Will it be said, that although Texas is able, as everybody admits she is, she will not do it, because of any injury to her moral tone by annexation to the United States? That, sir, is the only ground that can be maintained. It is manifest, if we are to be charged with preventing Texas from paying her creditors, that she is able to pay now, and if we are accountable at all, we are to be charged not because she cannot, but because she will not pay these debts.

With regard to the mode which she has taken for disposing of these debts, what concern is it of ours? Have we a right to intervene between a sovereign State of this Confederacy and its creditors, and say how it shall settle those debts? Are we not bound by those courtesies due from one Government to another, to abstain from such a course of legislation as that would be? For how could we offer a greater insult to a State than thus to put it under a commission of bankruptcy?

Mr. President, are our own hands so clean, according to the history given of our previous financial transactions by the honorable Senator from Maryland, that we can afford thus to intervene, in this summary and high-handed manner? Why, he tells us we scaled our own obligations after the revolutionary war, because we were not able to pay them. If we were not able to pay them then, we have been since. There is a petition now before the Committee on Finance, praying us to pay one of those old revolutionary certificates according to its face. And if we are going to take up this principle of paying every debt due, according to the face of the obligation, why do we not go back and pay our own revolutionary debts, scaled in the ratio of one hundred to one-scaled, as well as I recollect, upon the principle of paying only the specie value of the certificate at the time of the funding of the debt. Suppose we were to apply the same principle to the Texas debt, how do we know that it would amount to any more than Texas has agreed to pay? But is our Government, or is Texas the only Government that has done this? Did not Great Britain herself in effect repudiate her debt during her wars with Napoleon? Did she not suspend specie payments by her bank, and pay her creditors in depreciated paper? What was that but a virtual repudiation to a certain extent? And what nation that has dealt largely in paper money has not done it?

But at the same time that I say this, I would express the hope that Texas, which has such ample means, will provide for the payment of all that is justly due from her. I believe that ultimately she will. I am not authorized to speak for her. I do not know what is due, nor is it my concern to inquire. All I know is, that there is a stipulation to which I am bound to look, that these five millions shall not be paid without the assent of Texas and the release of the creditors. When I say without the releases of the creditors, I do not mean to be understood as being opposed to paying those separately who are willing to take what Texas tenders, and to release the United States from further demands. I am bound to that, not by the law of nations or the law of nature, but by our own special obligation, and I will stand to

her Senators at least an explanation. If they are incapable of vindicating her reputation; if she cannot be justified in the course which she has adopt

that; but beyond the express obligation of the boundary act we are not bound to pay one cent. Especially would I not pay it in this discourteous manner towards one of the States in this Confede-ed, racy.

Sir, let us look a little further into this matter, and see to what it would lead us. If this demand is sustained at all, it must be upon the ground, that inasmuch as we have the customs of Texas and are enjoying a portion of her revenue, we are bound to pay her creditors, because the public creditors are entitled to all before any portion goes to domestic purposes; and that our Government in its operation upon Texas, pro tanto, is for domestic purposes, and that therefore we are bound to pay. say that if it can be sustained at all, it is only upon this ground, for the other pretensions are manifestly without foundations of justice. There is no such obligation under the law of nations, and if we take this position, how will it be with our repudiating States and their foreign debtors? May not those foreign nations, which are accustomed to collect the debts due to their citizens at the point of the bayonet, come forward with much more reason and say to us, "Here are the States of your Confederacy that have contracted debts. We are in the habit of dealing summarily with other nations. You interpose between us and them, and || say we shall not collect our debts, and not only that, but you collect your own dues from them for domestic purposes. You collect your customs from them, and yet you do not pay us one cent. Now you must do one of two things: You are bound either to pay us, or you are bound to let us collect our debts from these States as we collect them from other nations." Would not that be a stronger argument for the assumption of any State debt due abroad than the argument here urged in relation to the Texas debt? I think it would be.

I think there is but one safe ground on which we can possibly stand, and that is, that the persons who deal with the States of our Confederacy take the risk, because they deal knowing the relation in which they stand to us, and to the rest of the world. And so those who dealt with Texas knew the risks when they were dealing with her and charged her accordingly. There is no doubt that they charged Texas for everything furnished her with profits enough to cover the insurance.

Sir, we tread here upon dangerous ground; let us take care how we commit ourselves to principles which may possibly have so dangerous an appli cation in the future. The principle as laid down by the creditors of Texas may serve their own purposes of present convenience; but the United States, I think, in view of the peculiar form of our Government, should hesitate long before they adopt it. I do not believe myself that it is a principle either of the law of nature or of nations; for that cannot be said to be a law of nations which nations have never sanctioned by their usages and practices, whatever may be the opinion of elementary writers in regard to the subject as a matter of abstract inquiry. But I will not further prolong my inquiry into the question before us.

It was my purpose to present as briefly as I could the facts of the case, and the reasoning which has led me to a conclusion so opposite to that at which the honorable Senator from Maryland has arrived, and having done that, I take my

seat.

TEXAS DEBT.

no excuse will be rendered for it, and to determine upon the merits of her claims to consideration and to the due regard of her sister States, it is proper that we should advert to the circumstances under which those debts originated, and under which they are held by the present claim

ants.

Texas, when she rose from her revolutionary struggle, did not owe much more than $2,000,000; and more concurred in the opinion that she owed but_a_million and a half than that her debt exceeded two millions. This constituted the amount of her entire liabilities at that time, and up to the year 1838. From the period of the commencement of her separate Government, in the fall of 1836, down to the winter of 1838, her entire debt did not exceed $2,500,000, embracing all her liabilities; and her entire currency in circulation was less than half a million. It was from 1838 up to the end of 1841, that the debt accumulated from two and a half millions to the enormous sum of twelve millions of dollars. This was not, as gentlemen seem to understand it in most instances, a debt created by the sale of bonds, pledging the faith of Texas for their redemption; for a little more than one million of bonds are all that are outstanding against Texas. The other debts have resulted from her currency. The impression has gone abroad that Texas was placed on a footing with other States, Indiana, Illinois, Pennsylvania, Mississippi, and others, who sold their bonds at a depreciation, and that, therefore, the question would not arise whether she received the full value of those bonds or not; but that she was bound to pay them at their face; that she had received the most that could be obtained for them, and that the risk justified the depreciation of price at which they were purchased.

I know that these are the impressions which have gone abroad throughout the community; and if Texas, when her credit was low and depressed, had been compelled to raise means for the support of her armies and for the expenses of her civil list, and had for that purpose sold bonds calling on their face for a hundred cents to the dollar, and had only received fifty cents, she would yet have been bound in good faith to redeem them according to the letter of the liability, and would have had no obligations but inability to pay her debts. But excuse for shrinking from punctually meeting her

when we look into the nature of the liabilities of Texas, we find that, with the exception of about one million of dollars, they are of a very different character from what has been generally supposed. Texas issued promissory notes. Up to 1838, these passed currently at par. A change in the administration of the Government then took place, and the first act of the new Administration was to raise new regiments for the purpose of defending the frontiers, as it was said, and then, although the previous amount allowed to the Executive for frontier defense had been inconsiderable, it was swelled up by appropriations to the amount of a million and a half of dollars, and the civil list had no less than half a million appropriated to support it.

of promissory notes into circulation, had the effect of lowering the value of the former currency, and the whole depreciated at least fifty per cent., and gradually declined from that to the lowest point of depression. Successive issues were made, and the

The throwing of these two millions of dollars

SPEECH OF HON. SAM HOUSTON, depreciation continued during the years 1839,

OF TEXAS,

IN THE SENATE, February 11, 1853, On the bill to provide for the payment of such creditors of the late Republic of Texas as are comprehended in the act of Congress of September 9, 1850.

Mr. HOUSTON said:

Mr. PRESIDENT: I am very reluctant to occupy a moment of the precious time of the Senate, and particularly when other matters which are, in the estimation of honorable gentlemen, of so much urgency are pressed upon the attention of the body. But the bill before the Senate seems to implicate the character of the State of which I am in part the representative on this floor, and demands of

1840, and 1841; and in proportion as the issues were increased the depreciation went on. During that period immense expenditures were incurred and liabilities issued, for which there was not the semblance of authority. The Santa Fé expedition was fitted out, and must have cost more than one million of dollars; and that expenditure was incurred, not only without authority, but in positive violation of the expressed will of the two Houses of the Texan Congress, by a mere dictum of the Executive. The arms and munitions of war of the country were entirely expended in that expedition; and accumulated expenditures were bequeathed to the succeeding Administration. Thus issues to the amount of millions were made without authority, and they became valueless. In

32D CONG.....2D SESS.

December, 1841, Texas suspended payment because she was then unable to pay her debts.

But here let me ask, Who are these creditors who now come forward with such plaintive appeals to this body? Who are they who are imploring the commiseration of Senators: "Help us or we sink?" Are they men who were sufferers by the Texan revolutionary struggle? or are they men who speculated upon the individuals who went through the toils and dangers of that revolution? These promissory notes depreciated in the hands of men who had toiled and fought in the revolution, men who had there given their services and their energies to the cause of independence. In their hands the notes depreciated until they became valueless. They were then thrown upon the market, they were seized upon by speculators. At auctions, in the streets of our cities and villages, they were submitted to public sale and cried off at from three cents to five cents, "Going, going, gone." Then it was that these speculators came in and secured their claims to the generosity and clemency of Texas, and the feeling and commiseration of this body! There were no bonds sold in market for what they would bring; but these were promissory notes sold for a mere song under the auctioneer's hammer, and “in quantities to suit purchasers," for they were piled up as large as cotton bales. When they were cried up till they reached about three cents on the dollar, they would be knocked down to the bidder, and he would be told to go and select from the pile as many as he wanted; he might take a bundle as large as a cotton bale. [Laughter.]

That is the way in which these evidences of debt were obtained. These are the liabilities for which gentlemen claim a hundred cents on the dollar, and which were acquired at the rate of from one to three or five cents on the dollar. No doubt gentlemen in the United States thought the prospect was very fine; they knew that the Texans were descended from the Anglo-Saxon stock, and that they would maintain their liberty in defiance of every difficulty; for the American race never retreated, never took one step backwards, and that from the day they had impressed their footsteps upon a perilous soil, they would go on. Such gentlemen, perhaps, thought that if the Texans were involved in difficulties, they might venture to sell real estate and get money when there was a prospect of investing it in Texas depreciated paper to much advantage. No doubt under these circumstances gentlemen in the United States purchased large amounts of the promissory notes of Texas at ten cents on the dollar, and now come forward and claim one hundred cents on the dollar! To exemplify it more particularly, I will state, that such was the depreciation of Texas currency, that, for instance, if a judge, getting a salary of $3,000, came forward to receive it, and his demand was exhibited, he would receive in Treasury notes $30,000, based upon no issue of bonds, but upon credit. In his hands, the money depreciated, until, perhaps, it became worthless, and then it was thrown into the market in some village, and purchased up by speculators at from one to three or five cents.

This is the character of the Texas liabilities. This is the manner in which they have been bought. What justice, therefore, would there be in giving a hundred cents upon the dollar for their redemption, when they were acquired at rates varying from one cent to five cents? Is Texas bound in good faith to do it? Was the risk to these gentlemen worth the difference between three cents and a hundred cents on the dollar? I think not. Then, let me ask, has Texas evinced a disposition to pay her debts in good faith, and according to the rules of equity?

Upon these funds thus passed away at the most depreciated rates, and that were purchased up at a mere nominal rate, Texas has determined to pay upon none, no matter for what they were bought, less than twenty cents on the dollar, and from that rate up to twenty-five, fifty, seventy, and seventyfive cents, according to the dates of the issues of the notes, and the value at which they were issued, and also including, in most cases, the interest. This is the equitable principle upon which Texas determined to pay her debts. Does this evince a disposition to defraud her creditors, to involve her reputation, to repudiate? In these honest times, if

Texas Debt-Mr. Houston, of Texas.

a man gets his due, he is doing very well. Has not Texas done this towards her creditors? Texas, sir, has evinced no disposition to evade the payment of all equitable and just debts and liabilities.

I have every disposition to be very candid on this occasion, and therefore I think it due to the creditors, I think it due to individuals, and I think it due to the Government of the United States, to state plainly that I would not eschew one liability on the part of Texas, and transfer it to the shoulders of the United States. I would say to Texas,

Pay away the last cent in your coffers, bankrupt yourself, give away your hundred millions of acres of land, rather than throw the responsibility on the United States." If we were to be left destitute of a dollar, and without an acre of land available, the times then would not be as gloomy as those through which Texas has already passed. I would be sorry to see Texas not meet her just liabilities, and throw the responsibility of them upon the United States, and that then, through grace and tender mercy to the reputation of Texas, the United States should liquidate our debts.

I am for doing justice, and nothing but justice; but I am determined that something shall be understood in relation to this matter, more than the partial representation of the claimants was disposed to exhibit to the world. Who are those that are most clamorous against the injustice of Texas, and the wrongs which they have sustained from her? Are they men who have peculiar claims upon the sympathy of this body? Are they men who have peculiar claims upon the confidence of Texas? Are they men who blended their destiny with hers in her hours of trial? Are they men who marched with her armies upon their marches? Are they men who upon her vigils of peril watched with her? Are they men who toiled or starved for her? No, sir. They have sprung up, like dragon's teeth, around this Capitol within a few years; and we find the diffusive influence of this speculation upon multitudes that surround the Capitol. Members are besieged at every step with appeals, "Do this for us; do justice for us; save the reputation of Texas; be honorable, and it will do her some good." They do not say, in significant strains, "Fill our pockets, fill our pockets, will you?" though this is what they mean. They mean nothing else than to acquire, and to take away from either Government-i will not say ill gotten gains-but what would be clear gains, if they got them.

The largest amount of the outstanding issues against Texas at this time arises from obligations that were issued from her treasury, for which she received but from sixteen to ten cents on the dollar; and now a hundred cents on the dollar is claimed for them, swelling the amount of her debts to millions. No matter how irregularly the debt was contracted by Texas, whether there was authority for the obligations issued or those brought in and funded; whether they were made without appropriations or not, Texas has estimated them, and placed them on a footing with the other equitable demands against her. She has extended equity when she might have caviled, and contended that, according to strict law, or common usage, she was not bound. Yet we are told that if Texas would only come forward and redeem her outstanding obligations at par, or pay all the money she has in her coffers, and the $5,000,000 reserved by the United States, she would establish a reputation above all suspicion; that she would then sustain herself with credit; that it would do her more honor, and make her a more glorious nation than ever existed. Sir, Texas as a State is only a part of this Confederacy; one of thirtyone; and she does not aspire to be more glorious than the United States, or the mighty nations of the earth. We find that they have perpetrated offenses against good morality and national honor, which Texas scorns to do. They have repudiated debts, not only revolutionary debts, but others contracted in good faith. This Texas has not done, and will not do. She has not repudiated one dollar of her revolutionary debt, and she will not do it. She will pay a hundred cents upon every dollar she has realized. Is not that worthy of admiration? Yet gentlemen say she would be glorious if she would pay the nominal amount of her liabilities.

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SENATE.

When the United States repudiated-I do not claim that as authority, but I wish to bring it in array before the public mind-it was for an amount upwards of $240,000,000 of revolutionary debt. Has Texas done anything of that sort? Has she repudiated one just demand, amounting to a single dollar, of citizens of Texas who assisted her in her hours of difficulty? Not one. The United States repudiated millions, and hundreds of millions, held in the hands of war-worn veterans, who had toiled through a revolutionary struggle of seven years. The United States repudiated the revolutionary debt of the war of Independence, which commenced in 1776. Texas, during her revolution of nine years, did not repudiate one dollar that was held by her revolutionary soldiers. The United States, when they assumed the debts of the several States

the old thirteen-after the war of the Revolution, required the States to scale those debts, and paid them at the scaled rates. If we were disposed to be a little tricky, might we not follow these examples? But if we have been tricky, I do not know what fair dealing means.

We do not, however, claim the benefit of the high examples to which I have referred; but I think that in view of them it comes with a very bad grace from the United States to become administrator on the affairs of Texas, and to determine what are her liabilities.

The amount of $5,000,000 that was reserved in the Treasury of the United States, was reserved. at the instance of creditors, who were importuning and surrounding Senators here when legislating on this subject. Some sagacious lawyer had discovered that the United States were liable when they acquired Texas, and received from her means which were intended for the liquidation of her debts. It was not intended by that reservation to determine what the debts of Texas were, but only the debts of a certain character for which the Government of the United States might possibly be held liable. When were they to pay these debts? When ascertained by Texas, and certified to the Treasury of the United States. That was the object of retaining the $5,000,000, as I understood it at the time, and I voted upon the subject in all good faith and confidence, satisfied, as I was, that the amount upon which the impost duties of Texas were pledged did not amount to $5,000,000, and that there would be a large residuum to Texas of that amount.

The President and Secretary of the Treasury of the United States, after the passage of that bill, determined, in effect, that the Government of the United States were liable for all the debts of Texas. It will be remembered that in the administration of the government of Texas from 1841 down to the time of the annexation in 1845, there was not one dollar of debt incurred, nor one liability created. From December, 1841, when the exchequer system was established, and the immense issues of $12,000,000 were suspended, $200,000 was the amount of the currency established by law, and that commenced to issue at the rate of a hundred cents on the dollar. A combination was directly formed of brokers and speculators, gentlemen alien to Texas, who wanted to filibuster, and subvert the Goverment, right or wrong, who said that if they were not admitted into its control or made participants of it, they would subvert it, if by no other way, by revolution. They combined, and by their combination immediately reduced the value of that currency from a hundred cents to seventy-five, and at one time it went down as low as twenty-five cents on the dollar. By economical issues, by extreme economy in the Government, the value rose again. But the Legislature which met annually consumed a large amount, and being opposed to the Executive, sought every possible means to embarrass him; and instead of requiring the taxes to be paid as under the previous existing laws, they repealed those laws for the collection of taxes, or postponed their operation for six months, so as to depreciate the value of, by lessening the demand for this currency, and thereby to embarrass the government in such a way that it could no longer exist. However, the good fortune that presided over Texas, and directed her path, did not desert her. The currency came up again, and was at par; but after a long session of the Texas Congress, it fell to fifty cents, and even as low as thirty-seven and a half cents; but it rose