ing always leads to profusion in expenses. In addition to this, there is an important check on private debts which does not apply to public debts. A private man, when he incurs a debt, knows that he must not only pay the interest punctually, but that he will sooner or later be called on for the principal. But if a government only pays the interest punctually, the principal may remain unpaid forever. 5. Nothing but violations of constitution, and violations of law, or gross frauds in the negotiation of public debts, will justify a repudiation of them. No matter how unwise it may have been to borrow it, and no matter how foolishly it may have been expended, if the money has been borrowed according to law and constitution, it ought to be paid. 6. There is no force in the observation that one generation is not bound by the debts of another. The property created by the industry of one generation passes to that which succeeds it, and so on in perpetuity. The State never dies. The individuals that compose the State are always changing, just as the atoms of the human body are changing; and it is impossible to mark the succession of individuals that compose a State in such a way as to say that one class of them shall not be responsible for the debts incurred in the times of their predecessors. The benefits that may arise from incurring a public debt may extend through many generations. If the wars of William Pitt were really necessary to preserve the independence of Great Britain, it is just and right for the English people of the present day to pay the interest on the debt incurred in the prosecution of these wars. The Americans of the present generation have done no more than justice in paying off the debt of the Revolution, for they are in the full enjoyment of the blessings of the Revolution. 7. After a government has once made a regular audit of a claim against it, and issued a negotiable acknowledgment of the same, it has no right in after years to reopen that audit. A negotiable evidence of public debt, no matter what its form may be, transfers all the rights of the original holder to the final possessor. This point was very clearly set forth by Mr. Sedgwick, of Massachusetts, in the debate in Congress, in February, 1790, on the funding of the revolutionary debt. “Whenever a voluntary engagement is made for a valuable considera tion for property advanced, or services rendered, and the terms of the contract are understood, if no fraud or imposition is practised, the party engaging is bound to the performance, according to the literal meaning of the words in which it is expressed. Such contracts, whether of a government or an individual, may either be transferable or not transferable. The latter species of contract receives an additional value from its capacity of being transferred, if the circumstances of the possessor should render the sale of it either nccessary or convenient to him. To render the transferable quality of such evidences of contract in any degree advantageous to the possessor, it is necessary to consider, in case of sale, the alienee possessed of all the property of the original holder; and, indeed, it is highly absurd, and even contradictory, to say, that such evidences of debt are transferable, and at the same time to say that there is in them a kind of property which the holder could not convey by bona fide contract. "This is the construction which has invariably been given to these contracts, whether formed by government or by individuals." These are the views which we, and the great majority of our readers, have held from our youth upwards. But, in opposition to these sentiments, Texas maintains, through her authorities, that a State, in the times of her prosperity, is not bound to fulfil the engagements she entered into in the times of her adversity, but is at liberty to modify them to such extent as to herself may seem equitable. These views are very distinctly set forth in a message which Governor Bell sent to the Legislature, on the 12th of November, 1851.* "The Republic of Texas having executed her bonds and other evidences of debt in an exceedingly dark and gloomy period of her history, it became necessary to issue them for nominal amounts, bearing no sort of proportion to the amount actually received, and to pledge her resources, arising mainly at that time from her revenue, for their redemption. These securities, generally speaking, were concentrated at very low rates in the hands of moneyed speculators, who had contributed nothing to the achievement of her independence, or to the relief of her actual necessities in the administration of the government at the time they were issued. This consideration, well understood and appreciated, induced an inquiry in respect to the mode of redeeming these securities, as no one could entertain the opinion, for a moment, that the government was under any obligation, either in justice or morality, to redeem them by paying the amount expressed on their face; and that inquiry resulted in the passage of the act of the State Legislature of March 20, 1848, 'to provide for ascertaining the debt of * The reader must not hold Governor Bell personally responsible for these sentiments, but regard him as the exponent of a community in which these principles have so long been taken for granted, that it is supposed to be unreasonable to doubt their correctness. the late Republic of Texas,' which act required the auditor and comptroller of the State to reduce all claims presented for liquidation to the actual par value which was realized by the Republic at the time of their issue. The evident meaning and contemplation of that act was, that the holders should be paid in accordance with that amount thus ascertained by the auditorial board, subject to the revision of the Legislature; and the amounts so ascertained were considered all that was actually due from the. State to her several creditors. "That the Legislature had the right to pass this law, there can be no question; and that individuals holding the bonds or other evidences against the late Republic were bound by it, there can be as little." If these principles be true, they ought to be universally adopted; for what is right in Texas, cannot be wrong in Virginia, Pennsylvania, or Ohio. If these principles be true, they will prove a great relief to necessitous governments; for, according to the doctrine above laid down, the stronger the necessity a State is under, in times of adversity, of entering into contracts for supplies of money, the stronger the reason for setting aside such contracts in the days of her prosperity. The greater the necessities of a government, the less favorable, of course, the terms on which it can borrow; but it will lose nothing in the long run by that, for neither "morality nor religion" requires it ever to pay more than it has received. More especially is this true, if the evidences of public debt pass into the hands of moneyed men; and as the great mass of the evidences of public debt always pass into such hands, the State is thereby relieved from its engagements. It is quite enough if it pays onehalf, one-quarter, or one-fifth of what it has promised to pay. That the Legislature has a right to pass such a law as this, there can be no question; and as little question that the creditors are bound by it! Such are the principles of the authorities of Texas. If they be true, they ought, as already remarked, to be universally adopted. If they be not true, they ought to be promptly rejected. With nearly all our States and cities, and many of our counties, running into debt, it is of great importance that the nature of the obligation which public debt imposes should be correctly understood. Public opinion is, to a very great extent, the practical rule of morality; and if a wrong public opinion prevails in one State, it will be apt to spread into others. Ours is, moreover, a family of States; and if one member of a family does ill, all the other members will suffer in reputation. If sovereign States are not bound by their contracts, neither are railroad, nor canal companies, nor individuals; for there cannot be one rule of justice and morality for men in public, and another for men in private life. There is already too much indifference in this country about the payment of debts. The public authorities ought not to increase the evil by setting the people a bad example. But if the States, to whom men look up for the administration of justice, become lax in the fulfilment of their public obligations, private men will be very apt to become equally lax in the discharge of their individual liabilities. We can assure our friends in Texas that nothing was further from our intention, when we visited them, than to make a book about them. We were much pleased with their beautiful country, and much pleased with the people, a few only excepted. But the people with all their intelligence and enterprise, and their country with all its advantages, will never be duly appreciated by the rest of the world, till they review the decision to which they have come respecting the debt incurred in achieving and sustaining their independence. In our pages, we have carefully brought together all the facts necessary for such review, together with whatever else is interesting in the history of finance and currency in Texas. If we have erred, it has not been from selfish interests, for we have never been an owner of one dollar's worth of Texan securities. CONTENTS. PROCEEDINGS UNDER THE GENERAL CONSULTATION. Meeting of the Consultation, October 16, 1835-Reassembling of the same, November 3-Report on supplies sent to the army, and on money in the treasury—Glance at military operations-Extracts from the speech of Mr. Branch Tanner Archer- Money received from Mr. Thomas F. McKinney and from citizens of New Orleans -The land-offices closed-Grants of land to settlers and soldiers Ordinances to raise an army and navy, and to supply them with necessaries-Pro- vision for auditing claims-Duties on imports and tonnage-Collectors of public dues-Act to authorize a temporary loan of one hundred thousand, and a per- manent loan of one million dollars-Other ways and means-Liberal grants of Comprehensive proceedings in four months-Pecuniary affairs of the General Coun- cil-A treasurer appointed-First report of Committee on Finance-Donation of Mr. Hutchins, of Natchez-Proceedings in relation to a United States Bank note— Plan for raising a revenue-Gov. Smith's objections to the way in which money- matters were conducted-Small costs of the campaign-Loan from Mr. Brook- |