Summary of Legislative Debate on “A Bill Providing for the Payment of Interest on the State Debt,” 4 December 18401
The House resolved itself into a committee of the whole on the bill providing for the payment of the interest on the State debt, Mr. Webb in the chair.
On motion of
Mr. TRUMBULL a communication from the Fund Commissioner relative to the amount of the interest due on the 1st of January was then read.
Mr. Lincoln moved to strike out the body and amendments of the bill and insert in lieu thereof an amendment which in substance was that the Governor be authorised to issue bonds for the payment of the interest, that these be called “interest bonds”—that the taxes accruing on Congress lands as they become taxable be irrevocably set aside and devoted as a fund to the payment of the interest bonds. Mr. Lincoln went into the reasons which appeared to him to render this plan preferable to that of hypothecating the State bonds. By this course we could get along till the next meeting of the Legislature, which was of great importance. To the objection which might be urged that, these interest bonds could not be cashed, he replied, that if our other bonds could, much more could these which offered a perfect security, a fund being irrevocably set aside to provide for their redemption. To another objection, that we should be paying compound interest he would reply, that the rapid growth and increase of our resources was in so great a ratio as to outstrip the difficulty; that his object was to do the best that could be done in the present emergency; all agreed that the faith of the State must be preserved; this plan appeared to him preferable to an hypothecation of bonds, which would have to be redeemed and the interest paid. How this was to be done he could not see; therefore he had after turning the matter over in every way devised this measure, which would carry us on till the next Legislature.
Mr. KITCHELL moved an amendment to the amendment, proposing that the property of the State on the various works of internal improvement should be advertised for sale, giving six weeks public notice, that said articles should then be sold for cash and the proceeds if any employed to pay our debts. Mr. K. went at some length into the support of his amendment; these works he said were decaying and perishing the Engineers instruments were being destroyed, the houses were falling to decay, the timber rotting. What could be more honourable than selling our property to pay our debts? Suppose we cannot pay by the 1st of January? will the heavens fall down? Many persons there were who could not meet their engagements, yet they were honorable men. If after selling all these articles, any money was over after paying our debts it might be deposited in the public Treasury.
Mr. MURPHY of Cook went into an examination of the measure proposed by Mr. Lincoln. He was much struck with the plan, but in reference to our immediate exigences it did not appear to him practicable. Mr. M. then went into details of the two measures, he thought the plan good if it could be so modified as to raise the funds required in time to save the credit of the State.
Mr. PECK did not rise to discuss the merits of the bill, for he thought there was too much good sense in the House that he should feel apprehensive of its passage. Mr P ridiculed the idea of selling the follies of a former Legislature to pay the debts it had caused to be contracted. He urged the necessity of supporting State credit, and explained of what a sensitive nature it was compared with individual credit. He blamed that party zeal which had led to the suspicion that his state would repudiate its loans, and represented, that Michigan, which had issued similar bonds, and had been also cheated by corporations, as all would be who trusted to them, yet she had maintained her faith inviolate and her bonds had maintained a better price than ours. He thought the proposition of the gentleman from Sangamon objectionable on the ground that there was not time sufficient. He feared the protraction of debate until the time to save our credit had gone by
Mr LINCOLN followed, and advocated at some length, the measure of his amendment, urging that it was far less an expedient, and less temporary in its nature, than the measure of the bill.
Mr GRIDLEY supported briefly the amendment; and suggested that probably the holders of our bonds would take these new bonds thus secured for payment in lieu of interest.
Mr KITCHELL briefly explained.
Mr MUNSELL was not willing to go for expedients: in the last 12 or 14 years our monetary affairs had gone on badly: he wished to see the money paid on the 1st of January, if possible, but he would not vote for mere expedients. He was prepared with a proposition if that of the gentleman from Sangamon should fail. He had done nothing to help to raise this debt, he had been an uncompromising opponent, but now that the State was in debt he was willing to raise means to pay the principal as well as the interest.
Mr CAVARLY would propose to incorporate the plan of Mr Lincoln with that of the Finance Committee, and not sell, but hypothecate these interest bonds, and by this means create a fund. He would agree to create a perpetual fund to pay the bonds hypothecated.
Mr KITCHELL’S amendment was then put by the chair and lost without a division.
After a brief discussion as to the disposition of the bill, on motion of Mr Hardin, the committee rose, when,
On motion of Mr Carpenter, the bill and amendments were referred to the committee on Finance.
Printed Document, 1 page(s), Illinois State Register (Springfield), 11 December 1840, 2:3.