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

competent to decide that question as the Senate of the United States?

Mr. SEWARD. If my honorable and very esteemed friend from Louisiana, who argued this case with great ability the other day, had not had his attention diverted, he would have seen that I have already anticipated the question which he has propounded to me. I threw out this view of the subject to show that what Mexico insists upon has at least the merit of plausibility. I ask only that it be so considered. It is enough for my purpose that according to the view which I have taken, the committee have not shown the validity of the assignment, and the validity of the title of the claimants.

I ask you now to consider what are the unreasonable demands which Mexico makes, and which it is supposed that we cannot allow; and I shall take that in the words of the honorable

chairman of the Committee on Foreign Relations, [Mr. MASON:]

"In all the propositions which have since emanated from the Mexican Government, in their proposals inviting new companies to construct this work, they have imposed limitations and restrictions which must discourage all from attempting it, or which would have the effect, if complied with, of leaving that work exclusively in the charge of the Mexican Government. The propositions are of this character: the contractors are required, in the first place, to acknowledge the unqualified sovereignty of Mexico over the transit, and her right to impose any political charges whatever upon persons or property passing over it. They are required to acknowledge a concurrent right in the Gov. ernment of Mexico to fix the corporate charges. They are required to agree to place their mail steamers under the national flag of Mexico, and all their vessels are to be subject to tonnage and lighterage duties. They are required to agree to transport no troops or munitions of war across the Isthmus, except with the express permission of Mexico. They are required to discriminate in favor of such nations as shall guaranty this monopoly, by deducting twentyfive per cent. from the corporate charges in their favor; they are required to transfer the work at cost to Mexico, and, more than all, those who are there constructing this work are required to renounce their right to the protection of their own Governments, and become de facto Mexican citizens."

Tehuantepec Grant-Mr. Seward.

guished Secretary of State. What is the opinion of the New Orleans company upon that subject? Mr. Hargous tells us, in his letter to the late Secretary of State, Mr. Webster, when invoking the intervention of the Government:

"They are aware that in ordinary cases it is not the practice of the United States Government officially to interfere in behalf of citizens of the United States, who may com plain of the violation of a contract which they may have entered into with a foreign Government; but inasmuch as all general rules have their exceptions, and as the interest of the American Government and public, and especially those of the citizens of the West and Southwest, are largely involved in the success ofthe Tehuantepec enterprise, they flatter themselves that in any just complaint they may have cause to prefer against the Mexican Government, they shall receive the hearty protection of their own.

"Your answer upon this point especially is respectfully solicited, and will be anxiously awaited."

Here are these proprietors telling the Government of the United States that they know that nations, as practiced by this Government. what they ask for is an exception to the law of There

is the honorable Committee on Foreign Relations telling us that the rule is universal. I shall subscribe to this rule with some qualifications, which I will submit to the consideration of the Senate. The first qualification is, that the rights of a citiwhich the Government is bound to protect, are just rights-not unjust ones; that they are not unjust, unconscientious, or immoral rights.

zen,

Mr. MASON. What is an unjust right? Mr. SEWARD. I say just rights in distinction from legal rights. According to the honorable Senator's notions and mine, there are things that are right because they are declared by law. There are things that are right whether they are declared by law or not. The second qualification is, that the rights which the Government is bound to protect, must be certain and absolute, not uncertain or doubtful. Third, that the right of the individual to the protection of his Government is subordinate to the general welfare and interest of the State. Upon this point, as the honorable chairman of the committee will give some authority, I letter of Mr. Hargous, which I have already subwill repose myself on Mr. Webster's reply to the mitted:

"Should the event prove otherwise, however, it cannot be doubted that in such a case, in which the interests of individuals would be obviously subordinate to those of the public, any other means which might be necessary for your protection would be authorized and employed."

Now, sir, you see what the whole difficulty is; that what is claimed for these American proprietors is that they shall not be obliged to denationalize themselves, but that Mexico shall be obliged to denationalize herself; that the Congress of the United States, or the citizens of the United States, shall have control over the commerce of the Isthmus in all the particulars which have been read from the speech of the honorable Senator. Now, The protection which a Government owes to consider the condition of the United States, which its citizens is a protection according to circumI will not portray; consider the present condition stances a protection consistent with public jusof Mexico, which I need not describe; consider tice and the public welfare. The Government may the character of the population of the United States discharge itself of its obligations in some cases, by and of Mexico, which I need not illustrate; con- leaving the individual to maintain his domestic sider the extent of the franchises thus insisted rights in the domestic courts, and it may leave the upon, and tell me what result can happen to Mexcitizen who has rights under a foreign Government ico, by her conceding what is demanded of her, to seek redress from that Government in its courts short of a dismemberment, sooner or later, of the or otherwise. There never was, and never will Mexican nation, a dissolution of the Federal Union be a Government which can be under an obligaof the States, and the extinction of the Republic of tion to its citizens by which one of them, having, Mexico, even if, while we are here, that extinc- for the purpose of commerce or speculation, tion has not already come about. Sir, in that case made a contract with the subjects of another counMexico will not be a self-sustaining Power. She try, or with the Government of another country, must be sustained by somebody. Except the can ipso facto involve the nation to which he beUnited States, there is no American power that can longs in reprisals or war, to compel that Governguaranty the maintenance of a Government in ment to execute its contract.. That would be to Mexico. The United States will not consent that enable one citizen, at the suggestion of his own any European Power shall guaranty the preserva- interest or caprice, to put in jeopardy the interest, tion of a Government there. The Monroe doc- welfare, happiness, or safety, of all other citizens. trine, and the traditions cherished by us, prohibit Least of all can there be any such principle of the that. What then? As a consequence of making law of nations applied in a case where the conthese concessions, Mexico must fall into the Uni-tract is disputed, or of doubtful morality or validted States.

Mr. President, I began this examination, if not in favor of the propositions of the committee, at least favorable to a result which would enable me to support these claimants. The result is not satisfactory. I am obliged, therefore, to say that I cannot vote to sustain the resolutions. I will now briefly review the points made by the committee, in my own order. And first, this point is made by the committee:

"That the United States stands committed to all of its citizens, to protect them in all their rights abroad as well as at home, within the sphere of its jurisdiction."

I hope the Senate has considered the length and the breadth of this proposition. I am obliged to ask some modification of it. I am glad to know that I have the support of Mr. Hargous, who has charge of this claim, and also of the late distinNEW SERIES.-No. 10.

ity. This disposes of the first proposition of the committee.

Their second proposition is:

"That should Mexico within a reasonable time fail to reconsider her position concerning said grant, it will then become the duty of this Government to review the existing relations with that Republic, and to demand such measures as will preserve the honor of the country and the rights of its citizens."

This is a corollary from the first proposition, and falls with it. Their third proposition is:

"That in the present posture of the question, it is not compatible with the dignity of this Government to prosecute the subject further by negotiation. If Mexico, therefore, shall offer further negotiation, it shall be declined, unless it shall be offered based upon our own terms."

This, also, is a corollary from the first proposition, and falls with it. Moreover, if it be consistent with the dignity and honor of this nation to abide by its treaties-treaties solemnly and

SENATE.

sacredly made-then it is consistent with the duty of the United States, and it is their bounden duty, either to tender to, Mexico, or to wait till Mexico shall tender to them, a proposal to submit this dispute to an arbitration consisting of two persons, one of whom shall be named by each Power, or to the arbitration of a foreign nation. This disposes of the resolutions of the committee.

Mr. President, I am approaching the end of this long discussion, and I shall dismiss now Don José Garay, his grant, his assignment, his assignees, and their grievances. I come to a second ground, which has been assumed, not so much in the report, as in the speeches of the honorable Senators who support these resolutions, viz: That the United States have a public interest in opening the Tehuantepec communication as an oceanic connection, which renders it the duty of the United States on this occasion to adopt the resolutions submitted to us upon this subject. I have to say, in the first place, that as any defect in the Garay claim, or in the assignments of it, cannot be cured by the existence of a coincident public interest on the part of the nation, so also this public interest which is thus brought before us is not aided at all by the Garay claim. If it is the right of the United States to compel Mexico to enter into a stipulation to open the way, that right is absolute and independent of the Garay grant, whether that grant be valid or otherwise. Upon what ground

is it that the Committee on Foreign Relations claim this right? Hear the honorable chairman of that committee.

"I come now to look at this question in another point of view. I lay it down, without hesitancy and without fear, that we have a right to a way across Tehuantepec. According to public law, this Government may demand of Mexico a way across Tehuantepec; and Mexico cannot refuse it unless she becomes disloyal to the general compact of nations. What is a right of way? Every one is familiar with that. It pertains to individuals in life as it pertains to nations. I understand that writers upon public law derive it from that primitive state, when the entire earth was common to all men, and passage over it was free to all, according to their varied necessities. Such was the nature of this right before Government was formed, or the institution of separate property ordained. By these, the right in question was only limited in its exercise; it was not destroyed; and it revives and resuscitates whenever there is a necessity making the way indispensable. It is illustrated in familiar life every day. If I purchase a piece of land. so surrounded by the possessions of him from whom it is derived that I have no way out to mill or to market, I may take it, as a right incident to the acquisition. It is a principle resulting from necessity, and is modified as circumstances may require. A way impracticable in its use is the same thing as no way at all; and such is the exact postitre of our present way across the northern continent. We purchased California from Mexico, paid a large equivalent for it, and we have in fact no way across our own continent to get to it."

That is, the law of nations gives us the right to cross the Isthmus of Tehuantepec, and it is an absolute right. As it is by virtue of the higher law, higher than treaties, higher than the Constitutions of the United States and of Mexico, the law of God, which is the law of necessity, it is a perfect right. I have to say on this argument, in the first place, that when we had such a right, one so perfect, and descending to us so directly from Almighty power and Divine justice, it was most bungling diplomacy to rest that right upon the grant of the Mexican Government to Don José de Garay. I have to say, in the second place, that while I might not deny that we have the right to a way across Mexico, there is still another question which the honorable Senator has not disposed of. I remember a comedy which I saw acted once, in which the parents of two lovers sought to oppose their union under a mutual mistake. It resulted in their flight and marriage, and when they presented themselves for forgiveness, the parents found that just exactly the union which they had desired and studied to bring about was what had taken place, and which they had opposed, under the supposition that each had some other party in view. The father of the groom was obdurate. The father of the bride said, "Well, now, will you not forgive your son? Have you not got your own way after all?" The inflexible parent replied, "Yes, I have got my own way, but I have not got my own way of having it.' Now, I ask the honorable chairman of the committee, whether besides having an absolute right, by the higher law, to the road across Mexico, we have a right to our own way of having it? I think

not.

But, sir, the honorable Senator supposes that

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

this right of way over Tehuantepec inures to us by virtue of a higher law, upon the ground, that a portion of our territory is behind Mexico and another portion before Mexico, and it is necessary for us to pass through Mexico in order to go from one part of our possessions to another, like a farmer who has a right to go to another part of his own farm over another man's lands, I' I remind the Senator that we voluntarily placed ourselves behind Mexico; and I think that if I go and take a farm behind another man's farm, or the soil under his farm, I have no right to reach that new possession by going across, and over, or upwards, and through his farm.

Fourthly: At the time we acquired our possessions on the Pacific, we applied to Mexico to give us this very right of way across the Isthmus of Tehuantepec, and she gave us good reasons why she thought she had rather not. We assented and waived the demand, and permitted her to rise from the earth, upon which we had prostrated her, without surrendering this right. Now, I think it is too late to insist upon it.

Fifthly: If our real object in obtaining the right of way across the Isthmus of Tehuantepec is to open an interoceanic communication for our own benefit, and for the welfare and benefit of mankind, the right has already been offered for our acceptance, and the offer is still open. What has been already quoted proves this. But for greater certainly, hear your Minister, Mr. Letcher:

"Recently I have had several earnest conversations with Mr. Ramirez, regarding the treaty of Tehuantepec. Our interview two nights ago lasted upwards of four hours. His Excellency, upon each occasion, manifested great concern upon the subject, and was evidently very much sur prised at my apparent indifference. It is quite obvious he now feels sensibly the responsibility of his position. I listened calmly and patiently to all he had to say. He reit erated, in strong language, what he had often previously declared, that the treaty, in its present form, could never be ratified by the Mexican Congress; that any attempt on the part of the Government to favor its approval, would end in nothing but its own immediate downfall; that he was sorry to say the feeling of his country, at the present time, against the United States, was exceedingly strong; so much so, that no one in power could venture to advocate a more intimate association with that country; that he was aitogether satisfied the interest of Mexico, and in fact that of

Tehuantepec Grant-Mr. Seward.

place in no other way, except under the privilege granted to Don José Garay. This pretension (which Mr. Letcher believes himself bound resolutely to uphold) has caused the ufter failure of all pending negotiations by blocking up all the doors to a prudent compromise; it is altogether incompatible with the decree of Congress, which declares the privilege of Garay to have become extinct, in consequence of the illegality of its extension; under such circumstances it was impossible to negotiate a satisfactory treaty, and if negotiated, nothing would have been gained by it, for Con gress was determined to reject it."

Now, sir, you have only to contemplate one more grade in the humiliation to which you have brought Mexico, to bring compunction to your heart. Here it is: Mexico has not only offered you this very right on the condition that you would relinquish the Garay grant, but she has offered to indemnify-ay, to indemnify the assignees of the Garay grant for pecuniary losses:

"In answer to a suggestion or two I had the honor to offer, I understood his Excelleney to say, in so many words, in order to avoid all difficulties that may probably arise, in case the treaty shall be rejected, Mexico is willing to indemnify the holders of the Garay grant, and also the New Orleans company, for the money they have heretofore expended in the enterprise.

"In my dispatch of the 29th of October, I mentioned that the minister had used this remark, in substance: 'Mexico is prepared to stand all the consequences that may result from a rejection of the treaty.' I am now pretty well satisfied he meant pecuniary consequences, and nothing more." -Letter of Mr. Letcher.

Senators, behold here the fundamental error in all these transactions-the error which might have been, and ought to have been, perceived-a private speculation with which the Government had nothing to do, combined, mingled, confounded with a great national enterprise-a private speculation, undertaken on public account. A great national interest, brought down to the mire, and polluted by contamination in an association with private speculation. Now I ask, is it not about time to separate this private speculation from this great national world-wide important concern? Sir, our dignity as well as our interest requires us to review our own position, and not to ask Mexico to reconsider hers-to retrace our own steps-to dissolve our connection with this New Orleans company; to dissolve the connection of our Government with

connection between the two oceans; that so far from throwing obstacles in the way of that connection, Mexico was fully prepared to go every reasonable length to secure that great object; that Mexico was poor and oppressed, but so far as he had it in his power to guard and protect her honor, he was determined she should not only be free from just reproach, but should stand upon elevated grounds before the world, in every particular, in reference to a matter of so much importance; that although she had been and was at this moment badly treated by many of my countrymen, still, from motives of sound policy, she was disposed-and such was his own sincere wish-to concede to the United States, in preference to any other Power, all the privileges which might be necessary to accomplish the greatest enter

prise of the age; but that, in the event of such concession,

no allusion must be made to the Garay grant.

"Leave out that grant-say nothing about it, and I am ready,' said he, to enter into a treaty with you which I think will be satisfactory to both countries.""""

upon the Mississippi, or upon South street on the East river; to dismiss them to the remedies afforded by the nation with which they have contracted-which remedies are the only ones they have a right to expect, or in making their contract could have contemplated. Then prosecute this great design of interoceanic communication across Mexico, by fair, open, single-handed, single-hearted diplomacy. The Isthmus of Tehuantepec will be opened in good time. It cannot long remain closed against the spirit of the age. The advance of our country, and of civilization throughout this continent assures us that it will be opened.

But you want it opened now-you cannot wait. There is no urgency, there is no haste for Tehuantepec. You want first and most, a com

"Among the differences enumerated by your Excellency, there is no one which can produce any serious dif ficulties between the two Republics; for Mexico has always been disposed to consent to the opening of a communication through the Isthmus of Tehuantepec for the free and untrammeled commerce of the whole world; in this

respect she agrees entirely with the ideas and principles expressed by your Excellency in your last message to ConHer Government has given assurance of this in all gress. its official acts: the explicit and full confirmation of this intention your Excellency will have remarked in the projet for a treaty, which the Minister of Relations presented on the 3d of January last to the Minister Plenipotentiary of the United States as a substitute for the treaty then pending, but which presented insuperable difficulties in the way of its being approved. The same feeling now exists-for even after this sentiment had been misunderstood by Mr. Letcher on the one side, and reproved by Congress on the other, (as shown by rejection of treaty,) as late as yesterday, a bill was introduced into the House of Deputies imposing on the Government the obligation to proceed immediately to open the communication by Tehuantepec, and authorizing it at the same time to make use of all the means that it may judge proper and necessary for the attainment of the object. These facts, presented in an authentic form, prove most indisputably that Mexico, far from opposing this great work, encourages it as much as possible; and most conclusively shows that it cannot be a cause for disagreement between her and the United States,

"But by the side of this merely apparent difficulty there is one which is so in reality. not from its own intrinsic character, but from the circumstances which are connected with it. These are found in the pretensions advanced by the agents of the New Orleans company, who appear to be determined that the opening of the communication shall take

Washington, and New York on the Atlantic, with San Francisco on the Pacific. The safety of your country, the safety of its Pacific possessions demands such a communication, not over oceans exposed to all nations and through a foreign territory occupied by a discontented, aggrieved, and probably hostile people, but inland, and altogether through your own country. You want for your own use, for your own commerce, and for the commerce of Asia, a road which shall have the advantage of the best Atlantic and Pacific harbors which can be obtained, with one continuous connection by land, so that there shall be no necessity for reshipment between the Atlantic and Pacific ports; not a way between ports yet to be artificially made, on the Caribbean sea and on the Pacific coast, with changes from land to water carriage requiring breaking of bulk at least twice in the course of transit.

If you aim to erect a high commercial structure, you must lay your foundations broadly in agriculture, in mining, and manufacture; and all these within your own domain; and use the resources which God and nature have given to you, and not those which Providence has bestowed upon your neighbors. And you want, for the same reason, a passage across the continent of your own, not shared with any foreign Power, and through your own domain, and not through a foreign domain.

SENATE.

If you will be the carriers of Europe and of Asia, if you will be the carriers in even your own interoceanic commerce, you must receive, you must convey, you must deliver merchandise within your own temperate zone, not within that torrid zone whose heats are noxious to animal and vegetable productions, and while so deleterious to the articles most abundant and most essential to the subsistence of man, pestilential also to human life itself. This is the communication across this continent which you want.

But I shall be told, as I have been told by the advocates of these ill-starred resolutions, that a railroad across our own domain is not feasible. I shall give but a brief answer to that-an answer in the letter of an illiterate man, whose experience enables him to bear conclusive testimony:

WASHINGTON, February 4, 1853.

SIR: I have the honor of replying as follows to your note of the 2d instant, making certain inquiries regarding the practicability of building, and the best location for the proposed Pacific railroad, that I think it is perfectly practicable, and the best route will be found by going into the valley of the Rio Grande at Albuquerque, and thence crossing over by the Moqui villages and Little Colorado river to Walker's Pass in the Sierra Nevada, and from there down the San Joaquin valley to San Francisco.

I have crossed from New Mexico to California by four different routes, namely: Cook's Sonora route, the Salt river route, that recently followed by Captain Sitgreaves's party, and the old Spanish trail; and the one I have before described (Captain Sitgreaves's) is, in my opinion, decidedly the best. It is shorter, more direct, and has more timber and level country, fewer mountains, more cultivated, and perhaps more cultivatable land than any other route.

I have trapped on nearly every stream between Cook's route and the Great Salt Lake, and am well acquainted with the region of country between these places. Very respectfully, your obedient servant,

Hon. WILLIAM H. SEWARD.

ANTOINE LEROUX.

I shall be told that if it be feasible, the length of the road is so great as to deter us from attempting it. What is it? Two thousand miles. What are two thousand miles of railroad for the people of the United States to make, who, within eighteen years past, have made twelve thousand miles? The railroads which have been made in the State of New York alone have an aggregate length of two thousand three hundred and one miles, exceeding the distance from lake Erie to the Pacific ocean. And if you add the canals, the chain would reach from the banks of the Hudson river to the shores of the Pacific ocean. The railroads already made in the United States, if drawn out into one lengthened chain, would reach from Liverpool to Canton. The railroads which have been made and are now being made in the United States, if stretched continuously along, would more than encircle the globe. Again, I shall be told of the cost of this railroad. And what will be its cost? One hundred millions of dollars. A cost not exceeding the revenue of the Government of the United States for two years only-a cost not exceeding the revenue of the Federal and State Governments for one year. One hundred millions of dollars; why we have offered that sum for one island in the Caribbean sea! One hundred millions of dollars; why New York city spent one sixth of that sum in supplying itself with water, and grew all the while! One hundred millions of dollars; the State of New York has already spent, in making canals and railroads, one hundred and thirteen millions, and prospered while spending it as never State or nation prospered before. That one hundred millions of dollars, if it should never be directly reimbursed, will be indirectly replaced within ten years by the economy which it would enable us to practice in the transportation of the Army, and of the supplies of the Army and Navy over it, not to speak of the still more important benefits of bringing the public domain into cultivatien and into increased value, and developing rapidly the mineral wealth of California, which can be only imperfectly realized now, because labor on that side of the Continent is worth four dollars a day, while it is worth but one here.

I shall be told there are constitutional difficulties and political dangers attending the opening of this railroad stretching across our own country to San Francisco. Does, then, our Constitution authorize us to make a canal or a railroad through a foreign country, and inhibit such a work in our own? If there is a right under the Constitution for that, why is there not for this? What new gloss of the Constitution or the resolutions of 1798 invests us

32D CONG....2D SESS.

I have again and again announced to be an opinion entertained by me. I think it is founded upon principles of eternal truth and justice. Texas being an independent Power, recognized as such by all the great Powers of the earth, invited loans to be made to her to enable her to prosecute the then existing war between her and Mexico. She told those whom she invited to make these loans, that if you make them, the duties on foreign imports shall be sacredly pledged for the reimbursement of the loans.' The loans

were made. The money was received and expended in the establishment of her liberty and her independence. After this she annexed herself to the United States, who thenceforward acquired the right to the identical pledge which she had made to the public creditor to satisfy the loan of money which be had advanced to her. The United States became the owner of that pledge, and the recipient of all the duties payable in the ports of Texas."

"Now, sir, I do say that, in my humble judgment, if there be honor, or justice, or truth among men, we do owe to the creditors who thus advanced their money upon that pledge the reimbursement of the money, at all events to the extent that the pledged fund would have reimbursed it if it had never been appropriated by us to our use. We must recol lect, sir, in relation to that pledge, and to the loan made in virtue and on the faith of it, there were three parties bound: the United States, Texas, and the creditor of Texas, who had advanced his money on the faith of a solemn pledge made by Texas."

When the boundary bill was introduced, after . the failure of Mr. Clay's project, called the omnibus bill, similar arguments were addressed to the Senate, which gentlemen must well recollect. The retention of five millions in the Treasury was vindicated, upon the ground that it was the duty of the United States to protect their Treasury from liability which might thereafter be brought against it, upon the supposition that Texas might possibly apply the money which she was to receive under that boundary act, in a manner not satisfactory to her creditors, and that if she did not satisfy her creditors, this Government would be liable to perpetual demands by those creditors for the payment of their claims.

In the remarks with which I introduced the boundary act I presented similar views, acknowledging at the same time the reluctance with which I had come to such conclusions. I justified the large sum which that bill proposed to give to Texas, by the consideration that we had absorbed that source of revenue to whose future productiveness her creditors had looked for relief and payment.

I held that it was not "a sufficient answer to say that, without annexation, Texas would have had no security, and therefore no increase of 'commerce, for we know that her independence 'would have been acknowledged by Mexico on 'the condition of eternal separation from the United States; and that if this scheme guarantied by England and France had gone into operation, she would soon have gathered strength 'and grown in prosperity." I did not propose, as some did, to reserve to the United States the right of distributing the money among the creditors of Texas, partly because I was unwilling to seem to cast any reproach upon the State, and in part because I supposed that she could herself better settle with her creditors. But as the money voted to Texas was given with the view of enabling her to discharge those obligations which seemed to be also a charge upon the United States, I endeavored to guard the Treasury of the Union against the contingencies which might flow from the measure by the proviso which reserves five of the ten millions until the revenue creditors have filed at the Treasury releases of their claims.

Then, sir, I hold that Congress, both by the terms of the resolutions of annexation and by the boundary act of 1850, has recognized that the United States were under some sort of liability for that portion of the debts of Texas for which her revenues from customs were pledged. The general argument as to this liability is stated with sufficient distinctness in the remarks which I have read from Mr. Clay's speech. The United States having taken that fund which was pledged by the late Republic of Texas for the payment of a certain portion of her debt, must take it with the obligation of satisfying that debt. That is the general proposition.

This doctrine is not new. It is not unknown to the publicists; on the contrary, it has been well recognized. I find in a book of authority on international law a reference to the well-known case of the Province of Silesia. Wildman, in his work on national law, says:

Texas Debt-Mr. Pearce.

"But in that case the conqueror acquires no rights but those of the State with which he is at war, and takes subject to all absolute or qualified alienations previously made. Thus the King of Prussia, when he acquired Silesia by conquest and cession, bound himself by treaty to pay the debts for which that Province had been mortgaged to British merchants. But without such express stipulation, Silesia would still have remained subject to the mortgage, for he could conquer no rights but such as were vested in his enemy."

This mortgage of the revenues of Silesia was made by Charles VI., Emperor of Germany, in the year 1734, I think. Its conquest by Frederick was consummated in the time of his daughter, Maria Theresa, and the cession was made by the preliminary treaty of Breslau, in 1742, the seventh article of which treaty provided that the King of Prussia should pay those debts for the revenues of which the Province of Silesia was mortgaged to certain English merchants.

One would suppose that that analogy was tolerably perfect; but I may be told that there was a very great difference; that the mortgage of the revenues of Silesia included all the revenues of Silesia; that it was equivalent to a surrender of the whole taxing power, and that Texas has not by her union with the United States given up the whole of her taxing power. But let us look at it a little further. When Silesia was ceded to Prussia, the contracting party that had engaged to pay this debt, was the head of a great subsisting empire; shorn, indeed, of a very small part of her immense possessions, but still with a vast extent of territory, and with most ample resources. While Silesia could no longer be taxed by the Empress Queen, all the rest of the vast possessions over which her sovereignty remained intact, could be taxed.

It was not, therefore, anything but the transfer of the thing pledged which made the King of Prussia liable. The ability to pay remained in the original contracting party, almost, if not quite undiminished; for, in comparison to the revenue of such an empire as that of Maria Theresa, the revenue of Silesia must have been inconsiderable, and scarcely worth mentioning. But not so with Texas. In surrendering up her revenues from imports, she surrendered that which was the principal source of her revenue; she gave up more than four fifths of all her annual income.

I find, by reference to a tabular statement which I have examined, that in the year 1844, the revenue of Texas from imports amounted to $177,000, and that her revenue from all other sources was less than $50,000. Besides, we know that in modern times the principal source of revenue to all nations, certainly to all maritime nations, is revenue from duties on imports. Why, sir, it was the surrender of the duties from customs by the States of this Union, upon the formation of our Federal Constitution, which was one of the principal grounds for the assumption of the debts of the State governments by the Government of the

Union.

In the case of Silesia, to which I have referred, the liability of the imperial head of the Germanic Empire remained, and the ability of the Empress to pay the debt, which had been contracted to these British merchants, remained, but the thing pledged having been assigned to the King of Prussia, that monarch took it with the burdens upon it, and therefore bound himself to pay, and, after some very curious controversies, did finally satisfy

the claims of the British merchants.

The same principle may be found in Bynkershock's treatise on the Law of War. At page 191 he says: "Conquered countries, like lands purchased, pass cum onere." He illustrates it by reference to certain territory of the King of Spain conquered by the States General, and which, before that conquest, had been hypothecated by that monarch. He says that if the States, instead of conquering, had purchased it from the King, the creditor would still have been entitled to his pledge, as he was upon its transfer by conquest.

After the passage of the boundary act of 1850, the Secretary of the Treasury and the President of the United States found that it was their duty to consider what classes of the debts of Texas came within the provisions of that act, and the Secretary made a report upon the subject, in which the President concurred.

The debts of Texas may be divided into six classes. There is the debt contracted under the

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Texan act of 1837, called, I believe, the ten per cent, consolidated fund. There is the debt commonly known as the five million loan, all of which was not issued, created under the authority of various laws of Texas. There was another class of debt created under one of the acts of February 5, 1840, called the eight and ten per cent. funded debt; and there was another debt created under another act of February 5, 1840, called the eight per cent. treasury bonds. Then there were Treasury notes of three different classes, and finally another item of public debt which consisted principally of drafts, audited and unaudited, which were, in fact, drawn upon the Treasury of Texas for the current expenses and supplies of the Government, and sometimes properly called the domestic debt. Of these six classes, two did not appear to the President and the Secretary of the Treasury to come within the principle assumed by the bill. The eight and ten per cent. funded debt of February 5, 1840, called in the report of the Secretary of the Treasury "class C," was one of those which did not come within the principle assumed by the boundary act, because by the act which created that debt, there was no pledge given of revenue from imports either for the payment of principal or interest, or any provision making this debt receivable for public dues. Class F, consisting of audited and unaudited paper called "domestic debt," not being funded, or put into the shape of stock, bonds, Treasury notes, or promissory notes of any sort, had no pledge of duties on imports, and, of course, it was decided had, in some way or other, a pledge of the revenot to be within the bill. All the other classes nue from imports for their payment. Class A, which amounts to $1,651,590, principal and interest, on the 1st July, 1850, had a pledge on import duties for the perpetual payment of interest. This special pledge, being a perpetual one, for the payment of the interest, is, of course, equivalent to a pledge for the payment of the principal; and that class, therefore, comes within the provisions of the act of 1850, according to the report of the Secretary of the Treasury, as approved by the Presi dent. The loans designated in "schedule B" of the report made under various acts, amounted to about $2,582,000.

By a section in the Texan act of January 14, 1840, the revenues of Texas generally were pledged for the redemption of all loans negotiated by the authority of the Republic; and although the revenues from customs were not mentioned eo nomine in that pledge, yet as the pledge was a general one of all the revenues, it was considered by the Secretary and President to include, and to be, in effect, a pledge of the revenue from the customs, since, if it did not pledge each and every item or source of revenue, it did not pledge any, and did not amount to any pledge at all; and, therefore, if it had any operation or effect at all, it must be considered as a pledge of the revenue from customs.

Class D, as it is called in the report of the Secretary of the Treasury, consisted of eight per cent. Treasury bonds created under one of the acts of February 5th, 1840. That act provided that those bonds of the Republic should be at all times receivable by any collector of revenue or at the Treasury Department in payment of any debt to the Government, or of any duties on imports. This quality of receivability in payment of all public dues, including duties on imports, is in effect as full a pledge of the revenues from customs as if those revenues had been pledged eo nomine,

Schedule E comprised the three classes of Treasury notes, all of which were made receivable for the payment of public dues, including the duties from customs.

The amounts of these different classes of debt, principal and interest, on the first July, 1850, may be thus stated:

Class A... Class B. Class D. Class E.

.$1,651,590 02

2,582,902 70

1,472,918 80

2,586,546 00

$8,293,957 52

If there be any error in this statement it is probably too large by some forty or fifty thousand dollars. I take it, however, as I find it in the Secretary's report, based upon the statements of the Auditor and Comptroller of Texas.

These are the four classes which were recog

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

nized by the Secretary of the Treasury and by the President of the United States, and they, with|| the full amount of interest on them up to July, 1850, amounted to about $8,293,000. The whole amount of the debt of Texas is about $12,400,000. So much as comes within the principal assumed by this bill is, or was at the time I have indicated, about $8,294,000.

The Legislature of Texas having seen this report of the Secretary of the Treasury, approved by the President, have passed an act by which they seem to have recognized the soundness of the principles assumed by that report, and they have provided out of the $5,000,000 which have already been paid to them from the Treasury of the United States, for the two classes excluded by me in the enumeration which I have mentioned, and excluded by the President and the Secretary of the Treasury. They have provided for their domestic debt, (class F,) and they have provided for the class called C, or the eight and ten per cent. funded debt of 5th February, 1840, and I understand that in many instances claims under those two classes of debt have been presented at the Treasury of Texas, and actually paid and receipts filed. For the other four classes they have provided conditionally; and here comes the difficulty which has rendered it necessary to introduce this bill. They have provided for the payment of some of these claims at par, of some at eighty-seven and a half cents to the dollar, of some at fifty cents, and of some at twenty cents on the dollar. The whole amount of these four classes, as scaled by the act of the State of Texas, is something less than $4,000,000, including principal and interest.

The creditors of Texas are not willing to accept the terms thus offered them by that State. They contend for the payment of their claims, dollar for dollar. While Texas alleges that she has scaled these claims according to the rates at which she actually received value for them, the creditors contend that that was no part of the contract. Their contract was, to be paid so much as the obligation on its face states to be due; and they deny the right of the Legislature of Texas to reduce the amount of their obligation from its face value to that which the State alleges it actually received, or to that which it alleges to have been the average of what it actually received; for, in some cases, it being actually impossible to tell what was received by the State, on the particular bond, or evidence of debt, the Auditor and Comptroller of Texas have averaged the whole class. Texas has also provided that these four classes of debts which she has thus proposed to pay according to the scaled rates, shall not be paid until the United States shall have modified their proviso in the boundary act. Annexed to her scaling act is this proviso:

"Provided, That payment shall be made on any claim against the State, included in or forming a part of articles 1st, 2d, 5th, 6th, 7th, 8th, and 11th, or for interest which may have accrued thereon, included in articles 12th and 13th, in the first section of this act, when the Governor of this State shall be notified by the President of the United States that the Secretary of the Treasury of the United States has been required by law to issue to the State of Texas the five millions of dollars of stock withheld under the provisions of said act, approved September 9th, 1850, until certain creditors shall have filed releases at the Treasury of the United States, as therein required; or that said Secretary has been required by law to issue to the State of Texas sums of said stock, equal to the sums for which the State may at any time present the required releases from any portion of said creditors at the Treasury of the United States; after which notice, such claim or claims shall be paid, as provided for in other cases."

Texas, therefore, requires the Government of the United States to modify the proviso of the act of 1850, by which the five millions were retained in the Treasury of the United States, before any portion of these claims can be paid under her liquidation act. In 1848 Texas passed an act "to provide for ascertaining the debt of the late Republic of Texas, by which she required her 'creditors to present their claims to the Auditor and Comptroller of public accounts, on or before the 'second Monday of November, 1849, and declaring that all claims not then presented should be 'postponed." The government of the State subsequently passed another act extending the time within which those claims should be produced at the Treasury of Texas, and provided that all not produced by the first Monday of September, 1851,

Texas Debt-Mr. Pearce.

Then followed the

should be forever "barred." liquidation act, the terms of which I have endeav-|| ored to state to the Senate.

The Senator from Virginia, [Mr. MASON,] in the substitute which he proposes to offer, and which has been printed and laid upon our tables, proposes so far to adopt the action of Texas as to authorize the creditors who hold these claims to receive at the Treasury of the United States the payment of the amount at which their debts have been scaled by Texas. It is very unpleasant for me to say anything upon this subject, and I would very gladly avoid it if I could, but I am bound to say, while I endeavor as far as possible to avoid casting any reproach upon Texas, that it seems to me the Government of the United States owes it to its reputation not to participate in the act by which it is proposed to reduce the claims of these creditors below the value stipulated on their face. This Government has never done so, except under the influence of an inexorable necessity.

We negotiated loans during the war of 1812, when for every hundred dollars of stock issued we received only eighty dollars, and that in depreciated paper. I believe that according to the calculations of a former Secretary of the Treasury, (Mr. Walker,) the depreciation of the bank paper in which we received the money for which we issued the stock, was so great that eighty millions of stock and Treasury notes only yielded the Government about thirty-four millions in specie value, being less than fifty per cent. The British Government, and almost every Government under the sun, has negotiated loans at less than par. Great Britian during the wars which followed 1793, and between that period and 1815, negotiated enormous loans at rates which yielded her, some only sixtysix dollars, some sixty dollars, and one loan of thirty millions sterling, only fifty per cent. In that one instance, she received only £15,000,000 for £30,000,000 of stock issued; yet no one ever heard any objection to paying the full amount of the obligation as stated upon its face. So sacred has the public faith been held, and so important the maintenance of public credit.

I shall probably be told that our revolutionary debt was not paid at par. That is true of a part of it; but it must be recollected that we paid all our foreign revolutionary debt at par, without reference to the amount we received for the stock which we issued. That debt in the year 1790 was, including principal and interest, about $12,000,000, every dollar of which, including even the three per cents., was paid according to the value upon its face. It is true we had incurred an enormous domestic debt by the issue of continental money, which I think a Secretary of the Treasury stated many years ago, in a report, to amount to about $242,000,000, and this with the issues of the States during the Revolution amounted to over $400,000,000. It is very true that these issues of continental money had been promised to be paid at par; but very soon after they had been issued to an amount more than sufficient to supply all the purposes of a currency, they began to decline; and as the issues were enormously increased, so the depreciation went on until finally they fell from par; at which the money was received on its first issue, down to as low as $500, and in some States to $1,000, for one of specie. It is true that a good deal of this money was afterwards funded at the rate of forty dollars for one, and some of it, I believe, was funded, under the act of 1791, at the rate of $100 to one; but that was not because we considered that we had a right to reduce our liabilities arbitrarily or by the scale of depreciation, which at any time indicated the market value of our issues, but because inexorable necessity left us no alternative.

Had not the continental money, under the arrangement of 1780, been redeemed at forty dollars for one, the Government of the Union, in 1790, would have found itself encumbered by a domestic debt, including the issues of the States, of quite $400,000,000, the interest of which, even at three per cent., would have amounted to $12,000,000. It would certainly have been impossible that it could have given any additional value to these enormous sums by funding them; because it never would have been able to pay the interest. The

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whole exports of the country, in 1790, were only $15,000,000. All the expenditure of General Wash ington's Administration were only $2,000,000 a year, and it would have been utterly impossible to pay the current expenses of the Government, and also even the fourth part of the interest of this enormous sum of money. The truth is, it was a question of possibility and impossibility. The nation was in a state of bankruptcy, and to this inexorable necessity we yielded, paying, however, our foreign debt-holders every dollar of their de mands. Such, however, is not the necessity of the Government now. Such is not the necessity of Texas at this time; and although gentlemen may conclude that Texas is able to pay those debts of her own contracting, the fact is, that she has not paid them; that she does not propose to pay them, dollar for dollar; and that the plan upon which she proposes to liquidate them is not satisfactory to her creditors. They are unwilling to accede to it, and come back to us, reminding us of our original obligation, on the transfer of the pledged fund, to apply at least that fund to the payment of their claims. They remind us of our vaín endeavors to escape from our obligations, by the conditions of the resolutions of annexation, of the admission made, at all events, by the boundary act of 1850; and they make an appeal to us on grounds of manifest justice and equity, and make it apparent that if Texas were now in the possession of the revenues from duties in her own ports, and on her own consumption, she would have ample means to pay those pledges. The United States are receiving all those duties on imports, to an amount greatly exceeding the interest upon this debt, for which it is claimed that they are liable to the creditors of Texas. For it will be recollected that her revenue, in 1844, from customs, was $177,000. Her population has been quadrupled since that time, and the capacity of that population for consumption has increased in a much greater ratio than the population itself; so that, in all probability, the revenues which this Government derives from the duties on goods imported into and consumed in Texas, are not less than $1,000,000 a year, and they are rapidly increasing. This Government, therefore, has got from the annexation of Texas and the diversion to our Treasury of duties on her consumption of imported articles, a fund much more than sufficient to enable it to pay all this debt of Texas, principal and interest, in a reasonable time.

It is true that we have provided for the issue of $5,000,000 of stock to Texas, which has not yet left the Treasury, and which, under this bill, will not leave it. The condition upon which these five millions were to be issued to Texas is, that releases shall be filed at the Treasury of the United States of all the revenue debt of that Republic. A literal compliance with this provision is necessary before the stock can be issued. When that provision was made, it was anticipated that Texas would make an arrangement herself with her creditors, and that was the course of argument used here. Gentlemen will very well recollect that it was then said that the State of Texas could better arrange with her creditors than we could, and that it was much to be desired that she should make such an arrangement. But, sir, she has not made such arrangement. Two years and more have passed away since the passage of the boundary act, and no progress towards such an arrangement has been made with any of the creditors of these classes. How long is the Government of the United States to wait? What is a reasonable time? It seems to me that we have arrived at a period when it is proper, since Texas does not make the arrangement which was contemplated under the provisions of the boundary act, and does not thus protect the Treasury of the United States from the demands of these claimants, that we should now, taking care that we do not violate our compact with Texas, make such an arrangement for ourselves; and that is what this bill proposes to do.

This bill, as amended, or as proposed to be amended by the Committee on Finance, authorizes the issue of this stock to the creditors of Texas, and in return we are to take from them assignments of their claims against Texas. We are not to take releases but assignments. Then the condition upon which the reserved $5,000,000 are to