A Bill to Provide for the Payment of Interest on the Public Debt, [23 February 1841]1
2
Sec:[Section] 1st Be it enacted by the People of the state of Illinois represented in the General Assembly: That hereafter, in addition to the revenue now raised by taxation, there shall be shall be levied and collected, for state purposes, ^a tax at the rate of twenty ten^3forty cents on each one hundred dollars worth of all property—
Sec: 2nd Said additional revenue, so raised, shall be set apart exclusively for the payment of interest on the state indebtedness— and be called the "Interest Fund"
Sec: 3rd That the minimum valuation of all lands for the purpose of taxation, shall be four dollars per acre4— And each assessor, shall in addition to the oath now required by law, be required to swear particularly, that he will, in no instance, value any land at four dollars per acre, that he, in his conscience, believes to be worth more—
Sec: 4th The Governor shall from time to time issue such an amount of state bonds, to be called the "Illinois Interest Bonds"5 as may be absolutely necessary to raise funds for the payment of interest on the state debts, that there is no other means of paying— and also sufficient to redeem all state bonds now hypothecated—
Add in ^Sec 4^ Sec 4.
Provided that [?] interest shall be paid upon [bonds,?] which have ^been^ parted with contrary to law except so far as the state has [?] consideration therefor.
6
7
Sec: 5th Said Interest8 Bonds shall be sold by the Fund Commissioner, for the best price they will command, and the proceeds by him faithfully applied to the foregoing objects
Sec 6th Said Bonds shall be reimbursable [ ?] ^after^ the year 1865, and bear interest at the rate
<Page 2>

<Page 3>

<Page 4>
of six per cent per annum, payable half yearly—
Sec: 7th A sufficiency of the said "Interest9 Fund" is hereby irrevocably pledged, for the payment of interest upon the said "Illinois Interest10 Bonds"11 and the same shall be applied to that object in preference to all other objects—12

<Page 5>

<Page 6>
[docketing]
A bill for an act to provide for the payment of interest on the State Debts—
[docketing]
laid on table
[docketing]
13
1Abraham Lincoln wrote the text of the bill and the bill’s title on page six.
Roy P. Basler, editor of The Collected Works of Abraham Lincoln, wrote that Lincoln introduced this bill on December 7, 1840. Research in the House Journal and contemporary newspapers, however, reveals that Lincoln introduced a different bill--which started as an amendment on December 4--on December 7.
Roy P. Basler, The Collected Works of Abraham Lincoln (New Brunswick, NJ: Rutgers University Press, 1953), 1:217-19; Illinois House Journal. 1840. 12th G. A., 86; Illinois State Register (Springfield), 11 December 1840, 2:4.
2On February 20, 1841, the House of Representatives adopted a resolution calling for the creation of a committee of seven to report upon the best means to provide for the payment of interest on the public debt and the disposition of the internal improvement system. The House appointed Abraham Lincoln and six others to this committee, then added two additional members, making it a select committee of nine. On February 23, 1841, the select committee of nine issued majority and minority reports in response to the resolution. Cyrus Edwards issued the majority report; Leander Munsell issued the minority report. After a lengthy debate, The House tabled the reports. Accompanying the reports, the committee reported four bills on public revenue: a bill for a loan for canal purposes, a bill for the early completion of the Illinois and Michigan Canal, a bill in relation to the State Bank, and HB 6, authored by Lincoln, to provide for the payment of interest on the state debt. On the morning of February 24, the House took up Lincoln’s bill and tabled it. In the afternoon session, the House engaged in long debate on Lincoln’s bill, in which Lincoln participated. Lyman Trumbull offered an amendment providing that no interest would be paid upon bonds sold contrary to law. The House refused to table the amendment by a vote of 35 yeas to 45 nays, with Lincoln voting yea. The House adopted Trumbull’s amendment by a vote of 43 yeas to 35 nays, with Lincoln voting nay. The House amended the first section by striking out “twenty” and inserting “ten” in lieu thereof. The House tabled an amendment to the fifth section placing restrictions on bonds issued by a vote of 50 yeas to 25 nays, with Lincoln voting yea. The House also tabled an amendment to strike out the third section and insert in lieu thereof the words “all lands shall be valued in reference to their true value,” by a vote of 46 yeas to 33 nays, with Lincoln voting yea. The House refused to order the bill engrossed for a third reading by a vote of 27 yeas to 50 nays, with Lincoln voting nay.
In the evening session of February 24, the committee of nine reported back Lincoln’s bill, first introduced on December 7, 1840, amended by the Committee on Finance on February 4, and referred to the committee of nine on February 22, without amendment, and the House discharged it from further consideration. The House formally laid aside the bill. Lincoln moved to amend this bill as amended by striking out all after the enacting clause and inserting as a substitute the bill the House had rejected earlier in the day, plus Trumbull’s amendment. The House adopted an amendment to the third section striking out “$4” and insert in lieu thereof “$3” as the minimum value at which all lands shall be valued. The House refused to amend the first section by striking out "ten" before the words “cents on every hundred dollars worth of property,” by a vote of 29 yeas to 42 nays, with Lincoln voting nay. The House also tabled a motion to add an additional section. The House adopted Lincoln’s substitute as amended, and ordered it engrossed for a third reading by a vote of 43 yeas to 27 nays, with Lincoln voting yea. On February 25, the House passed Lincoln’s substitute as amended by a vote of 40 yeas to 37 nays, with Lincoln voting yea.
On February 25, the Senate referred the House bill to the Committee of the Whole and made it the special order of the day for February 26. On February 26, the Committee of the Whole reported back the bill without amendment, and the Senate referred the bill to the Committee on Internal Improvement. In the afternoon session on February 26, the Committee on Internal Improvements reported back the bill with amendments, in which the Senate concurred. On February 27, the House concurred in the Senate amendments. On February 27, the Council of Revision approved the bill and the act became law.
Illinois House Journal. 1840. 12th G. A., 90, 455, 478-79, 480-81, 489-91, 492, 497, 511-12, 544, 549, 555; Illinois Senate Journal. 1840. 12th G. A., 408, 415, 417, 420, 434; Sangamo Journal (Springfield, IL), 5 March 1841, 2:4, 5; Illinois State Register (Springfield), 11 December 1840, 3:1; 5 March 1841, 2:2, 3-4.
3On February 24, 1841, the House of Representatives amended the bill by striking out “twenty” and inserting “ten” in lieu thereof.
Illinois House Journal. 1840. 12th G. A., 490; Sangamo Journal (Springfield, IL), 5 March 1841, 2:5; Illinois State Register (Springfield), 5 March 1841, 2:4
4On February 24, 1841, the House of Representatives amended this section by striking out “4” and inserting in lieu thereof “3”.
Illinois State Register (Springfield), 5 March 1841, 2:4; Sangamo Journal (Springfield, IL), 5 March 1841, 2:5.
5On February 26, 1841, the Senate adopted an amendment that struck out the words “Illinois Interest Bonds.”
Illinois Senate Journal. 1840. 12th G. A., 420.
6On February 24, 1841, the House amended the bill by adding the proviso. Lyman Trumbull, sponsor of the amendment, first introduced it on December 8, 1840 as amendment to an early bill to pay interest payments due on January 1. Trumbull’s amendment read: “And provided further, That no interest be paid upon any State bonds which have been parted with, without authority of law, and when the consideration therefore has never been received by the State.” Trumbull’s amendment, however, does not appear in the engrossed bill.
Illinois House Journal. 1840. 12th G. A., 90, 489; Sangamo Journal (Springfield, IL), 5 March 1841, 2:5; Illinois State Register (Springfield), 5 March 1841, 2:3.
7This separate insertion appears on image two. To keep sections five and six on page 1, the editors moved the separate insertion here. Page two will be blank.
8On February 26, 1841, the Senate adopted an amendment that struck out the word “Interest.”
Illinois Senate Journal. 1840. 12th G. A., 420.
9On February 26, 1841, the Senate adopted an amendment that struck out the word “Interest.”
Illinois Senate Journal. 1840. 12th G. A., 420.
10On February 26, 1841, the Senate adopted an amendment that struck out the words "Illinois Interest.”
Illinois Senate Journal. 1840. 12th G. A., 420.
11On February 26, 1841, the Senate adopted an amendment that inserted after the word “bonds” the words “so sold.”
Illinois Senate Journal. 1840. 12th G. A., 420.
12On November 23, 1840, Governor Thomas Carlin called the General Assembly into special session two weeks before its was constitutionally mandated to gather to tackle the state debt crisis brought by the Panic of 1837 and large expenditure on the internal improvement system. Richard F. Barrett, the fund commissioner, reported on December 3 that the semi-annual interest on the state’s $5,825,000 debt, due January 1 and July 1, was $175,560, making the state liable for $175,560 on January 1.
The special session--known as Session 12-1-ended on December 7 without any substantive legislation. On December 15, 1840, the General Assembly passed an act making provision for the payment of the interest due on the internal improvement debt on January 1. During a debate on this legislation on December 12, Lincoln spoke in support of it as a stopgap measure to pay the January interest. During debate on December 15, representatives echoed similar sentiments, though some voiced concern about the absence of additional tax revenue, arguing that the State should either raise property taxes or sell public lands and deposit the receipts into a permanent fund from which the state would make future interest payments. The act only provided for payment of January interest; as Barrett had reported on December 3, the state would have to make another interest payment of $175,560 on July 1. Debate in January and February centered on legislation for the July interest and a permanent solution.
The act enacted on February 27 did not prove adequate to permanently resolve the debt crisis. The tax increase did not bring in sufficient revenue, and on July 1, the state defaulted on its interest payment. Solution of the debt problem did not come until a full recovery from the Panic of 1837 and return to prosperity after 1842 and the passage of several laws to liquidate the debt.
Illinois House Journal. 1840. 12th G. A., 47-48, 48-51, 78, 108; “An Act to Diminish the State Debt, and Put the State Bank into Liquidation,” 24 January 1843, Laws of the State of Illinois (1843), 21-30; “An Act to Reduce the Public Debt One Million Dollars, and to Put the Bank of Illinois into Liquidation,” 25 February 1843, Laws of the State of Illinois (1843), 30-36; “An Act to Provide for the Sale of Public Property and the Payment of the Public Debt,” 4 March 1843, Laws of the State of Illinois (1843), 191-94; “An Act to Authorize a Settlement with Macalister & Stebbins, and Further to Diminish the State Debt,” 4 March 1843, Laws of the State of Illinois (1843), 287-88; Michael Burlingame, Abraham Lincoln: A Life (Baltimore, MD: The Johns Hopkins University Press, 2008), 1:162-63; Illinois State Register (Springfield), 18 December 1840, 3:5; 25 December 1840, 2:3-4; John H. Krenkel, Illinois Internal Improvements 1818-1848 (Cedar Rapids, IA: Torch, 1958), 177-80.

Handwritten Document, 6 page(s), Lincoln Collection, HB 6, Illinois State Archives (Springfield, IL)