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more from that source. These, together with the ill-advised European purchase of railroad iron, and the various pieces of unfinished railroads in different parts of the State, almost worthless, constituted the resources of the State to discharge a debt, which, considering our population (488,929 in 1840), as one-sixth of what it is now, our wealth, (858,752,168 in 1840), as one-eighth of what it is now, and the value of money then and now at a difference of 100 per cent, which, owing to the large yields from the California, Australia, and other mines since, is an estimate perhaps not out of the way, was equal to a debt upon the State at the present of at least $150,000 000. This was indeed a heavy burden. The annual revenues—$117,821, in 1840—were no more than would meet the ordinary expense of the State government, leaving a deficit annually to the amount of the interest on the debt - $830,182,- to further yearly augment the debt. The

State had sold and hypothecated its bonds until its credit was well nigh exhausted; the people were both unable and unwilling to pay higher taxes, and they were besides largely indebted to the merchants; the merchants to the banks, or for goods purchased abroad; while the banks, on account of suspending specie payment, owed every body who carried one of their rags in his pocket. None could pay in par funds, for they were not to be had.

In this condition of the State, it required great unanimity of action and harmony in counsel to carry it safely over the financial crisis. This did not wholly obtain. The character and genius of the people were very incongruous. Wide differences, social and political, of the two great geographical sections of the State, have prevailed even down to this day. The disparity in wealth between the north and south, the rapid settlement of the former after the close of the Black Hawk war, were not with without jealousy, of which public men partook and carried into the counsels of the State. This mutual misunderstanding of character and purposes was a stumbling block in the way of united and harmonious action in the adoption of the wisest meas. ures for public relief. The canal, as it afterward proved, afforded the best and only avenue leading out of the financial embarrasments, and toward restoring the credit of the State. It stood independent, to a certain extent, of the other works of internal improvement, upon a landed capital of its own, the gift of the nation, and when the latter were abandoned, the work upon it was still more or less prosecuted. But the canal, from the want of unity in the sentiments of the people, now became the subject of bitter attack, for no other reason that it was in the northern part of the State.

Besides, there did not obtain with the people a clear conception of State policy. Men were elected to the legislature with reference to their national politics, greatly intensified by the exciting contest of 1840, and not with regard to the affairs of the State, then of deepest concern to the welfare of the people. Politicians were better acquainted with the devious ways of obtaining office than qualified to discharge its duties in accordance with enlarged principles of statesmanship. This is too much the case at the present time; people in the election of officers are actuated by a desire to confer favor upon the man, rather than choosing a servant who is to perform a service for them and the public at large with wisdom and impartiality. It was therefore difficult to make the questions of present embarrassment and tuture State prosperity paramount, in a broad view, to all other considerations.

By various expedients, means were provided to meet the accruing interest of 1841, on canal loans in New York and London, but not so with regard to the interest on the State debt generally. The fund commissioner, in his report, stated the difficulty of meeting that which would fall due January 1st, 1841; the legislature, elected in August previous, was convoked some weeks earlier than the time of the regular session, for the express purpose of devising means to this end. This was the session by the sine die adjournment of which it was attempted to crush the State banks, or compel them to resume specie payments--a thing impossible for them to do. Much conflict of opinion obtained among members and found expression in a flood of resolutions, as usual at the outset of a session. The questions of difference were as to not paying interest at all, or withholding it only on bonds for which, by the mismanagment of the financial agents, the State had either received less than par, or, as in some cases, nothing. To the credit of the State it is to be recorded, that no idea of repudiation obtained among a large majority of the members. On the contrary, the desperate remedy was proposed of issuing more bonds and hypothecating them for what they would fetch in market. The course pursued by the financial agents of the State in disposing of bonds contrary to law, at less than par value on credit, was severely animadverted, and that the State should pay interest only on what money she had actually received on her bonds was strenuously insisted upon. The opponents of this view contended that bonds were articles of commerce, against which no equities could arise while in the hands of innocent purchasers; that the State must be held responsible for the conduct of its agents; that the legislature in the selection of the fund commissioners, and the governor in the appointment of Messrs. Young and Reynolds, had fully committed the credit of the State to their hands, and if they blundered, the State was bound nevertheless by their acts—she should have chosen agents more "skilled in finance." In this conflict of views, legislation was well-nigh defeated altogether. Alfred W. Cavarly, of Green, now discovered the happy expedient by which to extricate the legislature from its dilemna. He prepared a bill of two sections, which became a law Dec. 16th, 1840, empowering the fund commissioner to hypothe. cate not exceeding $300,000 of the State internal improvement bonds, to raise a sufficient sum of money to pay the interest which would legally fall due on the internal improvement debt in January 1841; the bonds were to be redeemed any time before 1843, and not to draw interest unless forfeited. Thus was the question of contention taken out of the halls of legislation, and the decision of the legality of the loans imposed upon the commissioners—not an unfrequent expedient of deliberative bodies. The legislature further authorized the issuance of State interest bonds, to be sold in market for what they would bring, the proceeds to be applied to the payment of interest and the redemption of hypothecated bonds—a most execrable measure. By another act, Feb. 27th, 1841, an additional tax of 10 cents on the $100 worth of

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property was imposed, to be set apart exclusively as an "interest fund,” pledged to pay the interest on these bonds; and the minimum assessment of all lands was to be $3 per acre. The fund commissioner, Mr. Barrett, by hypothecating internal improve. ment bonds, paid off the January interest, 1841; but by the time the Jnly interest was to be raised, Ilinois stocks had depreciated in market so that Mr. J. D. Whitesides, the new fund coinmissioner, hypothecated with Macallister and Stebbins, of New York, $504,000 in interest bonds for $321,600, as was promised him, but of which amount only $261,460 was ever by them paid. This was the origin of the notorious “Macallister and Stebbins bonds,” of which more hereafter. Another law, showing the extremity to which this legislature went, was that of Feb. 27th, 1841, regulating the sale of property under execution. This serves to illustrate both the hard times and the inconsiderate and unjust legislation to afford relief to the debtor class at the expense of the creditor. It provided that property levied upon should be valued as in "ordinary times,” to be made by three householders summoned by the officers, of whom the creditor, debtor, and officer should each choose one-placing it in the power of the officer to favor either party at his option; the property was not to sell unless it brought two-thirds of their valuation ; no way was provided by which the creditor, if two-thirds of the valuation was not bid, could hold his lien-forcing him to stay collection or suffer a discount of 334 per cent. The law was made applicable to all judgments rendered and contracts accruing prior to the 1st of May, without reference to the legal obligations of the time when contracts were entered into-being in violation of that clause of the constitution of the United States, declaring that "no law shall be passed imparing the obligations of contracts." In the case of McCracken vs. Howard, the supreme court of the United States subsequently held the law to be unconstitutional.. The law in the meantime had been instrumental, by various arrangements between parties, in extinguishing many debts. But this species of legislation seldom effects the benefits intended. It is apt to be harrassing and vexations to both debtor and creditor, while experience teaches it to be distructive of all confidence between men in business, requiring prompt compliance with contracts; and it tends further to affect inimically the trade and commerce of the State. These views were enlarged upon in a solemn protest against its passage, signed by such names as John J. Hardin, D. M. Woodson, Lyman Trumbull, and many others.t

After July, 1841, no further effort was made to pay interest on the debt of the State. Her bonds declined rapidly in market to 14 cents on the dollar. In a few months, Feb. 1842, from proximate causes already stated, the State bank, with a circulation exceeding $3,000,000, finally went down; in June the Illinois bank at Shawneetown, with a circulation exceeding $1,500,000, also broke, thus rendering worthless about the only money there had been for some time in the country, and adding materially to the pressure of the times. The banks had managed to keep up the value of their circulation far above the bonds of the State, but to conciliate an unfriendly legislature by advances on anditor's war*See 2d, Howard, 608. +See House Journal, 1841.

rants, for the State house then building, and to carry forward the public works, an unwarranted expansion snapped their threads of life, spreading disaster round about them. The condition of this fair State, with her calamities thus augmented, was truly distressing. Abroad, her name was freely associated with dishonor; emigrants, dreading high taxation, gave it a wide berth, unless it were those who, having no character of their own, cared little for that of the State of their adoption ; while the people here with rare exceptions were anxious to sell out and flee a country which presented no alternative but dishohor or exhorbitant taxation. The chances to sell were, however, in inverse ratio to the desire, and while impending financial ruin, disgrace, and the fear of taxation kept the State from gaining population as rapidly as had been her wont, the impracticability of effecting sales saved her against loss. In the meantime, an utter dearth and stagnation in all kinds of business prevailed. The notes of the banks were receivable in payment of taxes for which purpose they had been to a small extent hoarded by the people; but now the governor, auditor and treasurer, forbade their receipt by the collectors of the State revenue, except at specie rates-50 cents on the dollar. This step was unwarranted by the law, and condemned by the press and people in public meetings, irrespective of party until such a breeze was raised about the ears of the officers of State" that they were fain to retract their pretentious proclamation, and taking the other extreme, suspended the collection of the taxes till the meeting of the legislature.

At this crisis in the fair fame of our State, there were not wanting men, in position to aid in moulding public opinion, who favored repudiation, both by the plan of omission and by directly declaring this purpose, and "setting the moral sense of mankind at defiance.” Gov. Ford says:

“It is my solemn belief that when I came into office, I had the power to make Illinois a repudiating State. It is true I was not the leader of any party; but my position as governor would have given me leadership enough to have carried the democratic party, except in a few coun: ties in the north, in favor of repudiation. "If I had merely stood still and done nothing, the result would have been the same. In that case a majority of both parties would have led to either active or passive repudiation. The politicians on neither side, without a bold lead to the contrary, by some high in office, would never have dared to risk their popularity by being the first to advocate an increase of taxes to be paid by a tax-hating people."

Again he says:

“The people of Bond county, as soon as the internal improvement system passed, had declared in a public meeting that the system must lead to taxation and utter ruin; that the people were not bound to pay any of the debt to be contracted for it; and that Bond county would never assist in paying a cent of it. Accordingly, they refused to pay taxes for several years. When the system went down, and had left the State in the ruinous condition predicted by the Bond county meeting, many people remembered that there might be a question raised as to the obligation of payment. Public men everywhere, of all parties, stood in awe of this question; there was a kind of general silence as to what would be popular or unpopular. The two great political parties were watching each other with eagle eyes, to see that no one should get the advantage of the other. The whigs, driven to despe. ration by repeated ill-success in elections, were many of them in favor of repudiating, as a means of bettering their party. The Sangamon Jauros!

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and the Alton Telegraph, the two leading whig newspapers of the State, boldly took ground that the debt never could and never would be paid, and that there was no use to say anything about it.* Very many democrats were in favor of the same course, for fear of losing the power the democratic party already possessed.

It was thought to be a very dangerous subject to meddle with. democratic convention which nominated Mr. Snyder for governor, a resolution against repudiation offered by Mr. Arnold of Chicago, was laid on the table by an overwhelming vote of the convention, so as not to commit the party one way or the other. It was evident that this was to be a troublesome question, and a great many of the politicians on both sides were as ready to take one side of it as the other, and their choice depended upon which might finally appear to be most powerful The whigs were afraid, if they advocated the debt-paying policy, the democrats would take the other side, and leave the whigs no chance of ever coming into a majority; and the democrats feared that if they advocated a correct policy, the other side might be more popular, and might be taken by the whigs. I speak only of the leaders of parties, amongst whom on alls les there was a strong suspicion that repudiation might be more popular than taxation."


Partisan Malice and Revolutionary Conduct.-By act of Feb. 10, 1841, the legislature repealed out of office the then 9 circuit judges, increased the number of supreme judges from 4 to 9, and, in addition to their duties as a supreme courtand their functions asthe council of revision, imposed upon them all the circuit court busi. ness in the State. Since 1835 the supreme judges, relieved of circuit duty, had acted solely as a court of appeals, errors and revision. The present change was a bitter partisan measure, in the language of Gov. Ford, “confessedly violent and somewhat revolutionary."

Three of the four supreme judges were of the whig party—the minority party of the State—while Judge Smith was a democrat. Gov. Ford says: “It is due to truth here to say, that Wilson and Lockwood were in every respect amiable and accomplished gentle. men in private life, and commanded the esteem and respect of all good men for the purity of their conduct and their probity in official station. Wilson was a Virginian of the old sort, a man of good education, sound judgment, and an elegant writer, as his published opinions will show. Lockwood was a New Yorker. He was an excellent lawyer, a man of sound juilginent, and his face indicated uncommon purity, modesty, and intelligence, together with energy and strong determination. His face was the true index of his character. Brown was a fine, large, affable, and good looking man, had a tolerable share of tact and good sense, a complimentary, smiling and laughing address to all men, and had been elected and continued in office upon the ground that he was believed to be a clever fellow."

The State, in the exciting party struggle of 1840, had gone for Van Buren and both houses of the legislature were largely democratic. The supreme court had two years before offended the

*After the publication of Gov. Ford's history, in 1854, more than three years after bis death, both the Alton Telemraph and Ilinois State Journal, formerly the Sangamon Journal, denied having favored repudiation. either directly or indirectly; that they wuiformly opposed it with zeal, and always advocated the liquidation of the entire public debt at as early a das as the means of the State would justify.-See Illinois State Journal, March 7, 1855.

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