Summary of Legislative Debate on “A Bill Providing for the Payment of Interest upon the Public Debt” 11 December 18401
Mr. PECK, from the committee on finance, reported a bill providing for the payment of the January interest, with an amendment, being a substitute for the bill referred on yesterday. The bill being read,
Mr. TRUMBULL said, as it appeared to be of the same character as the bill rejected yesterday by the House, he thought it would be useless to take it up. He moved to lay the bill on the table.
Mr. LINCOLN said, the bill was precisely the same as that of yesterday, with the exception that it omitted the vexed and long debated question, whether to pay bonds in the hands of innocent holders. Mr. L. wished the two questions to be kept separate.
The motion to lay on the table was then put and lost—ayes 31, nays 40.
The question then being on receiving the bill reported by the committee,
Mr. HARDIN offered to amend by adding a section, setting apart a fund out of the taxes for the payment of future interest. Mr. Hardin said, the object he had in view was to make some permanent provision to meet this interest; he was for a permanent measure, and not for a mere temporary expedient. Judging from the votes already given, he thought such a bill as the committee had reported could not pass the House. Mr. H. here went into a calculation of the amount of State debt and interest falling due, and concluded by saying it would be impossible for him to vote for such a bill, without some kind of provision as that which his amendment proposed. This bill would double the whole interest to be paid, and not after all succeed in paying it. Without some provision of a permanent nature, we should only increase our debt and depreciate the value of our bonds. Mr. H. called upon the committee to know what was the end, aim and means they proposed.—Was is[it] to go on hypothecating bonds again and again, with no means for the payment of them? He wished to see day-light before him. He had always been opposed to the system which had involved us in this difficulty, but he now felt the responsibility resting upon him in relation to the payment of the debt, notwithstanding his having been clear of participating in its creation.
Mr. LINCOLN would not take a wide range. The amendment brought up the question of raising means to redeem the hypothecated bonds. He wished to provide first for the immediate necessity of paying the January interest, and he was pledged, when that object was accomplished, to join in providing a permanent means to provide for meeting the interest hereafter. He had already offered a proposition similar to that of the gentleman from Morgan. Mr. L. objected to the particul[a]r measure of Mr. Hardin, as throwing difficulties in the way of meeting the ordinary demands of the State treasury.
Mr. HARDIN was willing to adopt any such judicious modification of his amendment, as would meet the object of providing a permanent measure, and avoid the difficulty pointed out.
Mr. PECK replied, as chairman of the finance committee, to the various objections raised against the bill reported. He professed to have no superior skill in matters of finance, but if this matter is of such importance as the gentleman has said it is, why with his great pretensions had he not proposed a measure suitable to the occasion? The session had been short, and the committee had not had time to do more than propose a measure for the immediate emergency. He knew the gentleman and his friends had their favorite measure, and wished to resort to the banks for relief. Mr. P. was not in favor of any such measure as that in which they centered all their hopes. In reference to the authors of the internal improvement system, that was a measure originating with both parties, and if any culpability exists both parties are equally responsible; the odium could not justly be thrown upon either political party. Mr. P. did not vote for the system any more than Mr. H., but he felt bound now that we were in this difficulty to do his utmost to provide for the honor and reputation of the State, that they at least might be safe. As to our bonds being below par, the bonds of the wealthiest nation in Europe had often been sold below par; the British consols, which were worth 100l. par, had been often sold for 66l. This was not now the time to go into the question of measures for ways and means to provide a permanent fund; we had only nineteen days before us when the payment would become due, those questions which would take some time to decide ought to be taken up afterwards, and then be acted on with due deliberation.
Mr. HARDIN then modified his amendment as was suggested by Mr. Lincoln, and handed it to the chair.
Mr. KITCHELL said he was opposed to this amendment; for the purpose of testing the sense of the House, he would move for a call of the House; which was ordered.
Mr. PARSONS wished briefly to explain why he could not go for the amendment of the honorable gentleman from Morgan. He wished this bill to pass; he would not be willing to pay interest on money which we had not received, but it was now too late to discuss that question, intricate and doubtful as it was. There were now only nineteen days for the Fund Commissioner to proceed to New York, to hypothecate the bonds and to pay the interest on the State debt. However anxious he might be, as an individual, that the State should not suffer by paying for money which by the conduct of Delafield we had been in part defrauded of, yet he felt himself imperiously called upon to act and vote in such a manner on this important occasion, as not to permit our credit to suffer and our character as a people to be injured by a failure to meet our engagements. He was not willing that we should fail one day—no, not even one hour, in paying the interest due. The Governor of this State called the Legislature together to prepare for this object; we have had a session of two weeks already, and what has been done? Has any measure been proposed? In a few days, if we do not act decisively in this mater, the credit of our State will suffer materially. We all know, said Mr. P., what an injury was inflicted on the credit of Pennsylvania for not paying her interest in time; and shall we let the time go by, and lose the opportunity by protracted debate and never-ending amendments? We are acting for future generations; they will look at the conduct of this House, and the course we adopt at this time will be thoroughly scrutinized. This is a sov[e]reign and independent State, and shall her credit be ruined? Shall it go forth to the world that the State is bankrupt? He trusted in God it would not. He regretted to say, that in the view of our affairs much ignoble despair had been exhibited; we had heard the words “blighting, withering.” &c. employed. He spurned such terms; he despised such a pitiful and desponding view of our condition. True we are in debt, but let us only reflect what are our resources! The State of Illinois, which by her position and unequalled advantages both of soil and climate was destined to become in a few years by the energy and industry of her inhabitants one of the greatest, wealthiest and most powerful of the nations of the world; will be able in a short time to pay the principal of her debt more easily than now she can the interest. He was not willing that she should be made to appear a bankrupt to the world; he would not have the day to g[o] by, he would have the interest paid on the very hour it was due. He hoped, for the sake of accomplishing this end, that this amendment would not be adopted, and that the bill of the committee would pass the House. Mr. P. denied that the party with which he acted was responsible for having led to this debt. The people themselves were in favor of the system, and their representatives acted in accordance with their desires and instructions. It could not be charged on any particular party; it was enough that we are in debt and the interest must be paid in January next. The only question now before us is the providing means for immediate payment. It appeared to Mr. P. that the House should act speedily and energetically, and to let the Commissioner proceed without delay with the necessary bonds to New York and pay the amount of the interest due. He had no doubt, from the character of the Commissioner, that he would be able to hypothecate them on the best terms. Mr. P. represented a high-minded and honorable people, who would not consent for a moment that the State should be dishonored by a failure at this time, and her name be stigmatized as a bankrupt.
As to the debt which now presses on us, in a few years the people of this State will be able to pay it, our resources were vast, they were super-abundant; he was sorry to say that the stigma on our State was chiefly to be attributed to our own friends: people had made themselves busy in spreading doleful accounts that the State was ruined, that it was bankrupt, that we had an over whelming debt, were under desolating influences &c. He regretted this, it was weak, it was narrow policy, it was unbecoming as well as unfounded and untrue.
It was the working of excited and diseased imagination. The imagination exercises a strong influence over the human mind, said Mr. P. In many instances it is well known that a man in perfect heal[t]h may be made really sick and be brought to deaths’ door by repeated declarations working on his imagination, telling him that he is very sick. So it was now in a great measure with our State: we are even at this moment well able to pay every cent we owe; our resources are undiminished, our soil poures forth its riches, and yet notwithstanding that we are among them as flourishing people in the world, by repeated assertions of ruin blight, mildew, &c., an effect had been produced, much to be regretted, which was only predicated on the imagination. It was unworthy of men and of statesmen to fall into such error and to be influenced by despondency so produced. He hoped the Bill would pass.
Mr. ENGLISH was convinced that arguments and long speeches would never pay the debt. He had voted for some of these heretofore but he would now vote for a bill to pay for the interest due, without involving any other question tending to delay the measure. He believed the expense of the debates on the amendments proposed, would have paid the amount of the sum said to be due for interest on certain of the bonds. Mr E. then moved to lay the bill and amendments on the table. The motion was l[o]st—ayes 34, nays 37.
Mr. CAVARLY was opposed to the amendment, because it imposed an additional tax more than was now imposed by law; it was a temporary expedient, and he could not yield his assent to it.
Mr. C. then proposed as a substitute, an amendment providing a different but permanent fund. This not being in order.
Mr. C. moved to lay Mr. Hardin’s amendment on the table, which was decided in the affirmative Ayes 48, Noes 38.
Mr. CAVARLY then offered his amendment, setting aside the taxes to accrue on certain lands as a fund to meet the interest.
Mr. C. would not detain the House long: he had voted for every measure hitherto brought forward where there was any reasonable hope of doing something effectual to preserve our honor unsullied: but he held, that the bonds in order to insure confidence must be predicated on some permanent fund; so that having a foundation to rest upon, they might obtain credit, solidity and character. This he thought to be absolutely necessary. Carrying the pledged faith of the Sta[t]e and what was better still the pledged revenue of the State they would then be better than the bonds of any other state, whereas without such a measure they would sink to nothing!
Fourteen years ago, Mr. C. had the honor of a seat in this House: he then for the purpose of building County Courts had brought forward the measure which has ever since been acted upon, to turn a portion of the State Revenue to the counties, he now took the opportunity of recalling that revenue from the Counties which on his proposition had been diverted from the State Revenue and bringing it back again to the use of the State in its time of need. This was but just and fair: In withdrawing the land tax from the counties to the State we shall do justice to ourselves and sustain the credit of the State without adding a single additional tax to those already existing.
Mr. MURPHY of Cook thought the amendment offered to pledge the State Revenue arising from the land taxes as a fund to pay the interest semi-annually to be neither wise nor practicable. Mr. Murphy here went into a calculation tending to shew the impracticability of the plan proposed. Again how was this sum taken from State resources to be supplied? The State would be left in a condition incapable of going on without it.
M. McCLERNAND moved to reject the Report and Bill of the Committee: and took this occasion to explain the reasons of the vote he had given in the early part of the morning.
Mr. McC proceeded at some length to state various objections which held fatal against the bill.
Mr.CAVARLY replied to the remarks of Mr. Murphy of Cook upon the measure he had proposed.
Mr. HENDERSON was opposed to the proposition of the gentleman from Green: Mr. H. thought he had mistaken the law in relation to county and State Revenue, when he thought the revenue from real estate was greater than that from any other property. Mr. H. here entered into an explanation and statement of the different kinds of taxes in relation to this argument,
Some counties M. H. said did not go beyond the State tax: this proposition went to increase the tax ten cents on the hundred dollars: he thought it was not wise to leave the Counties in debt beyond all redemption: they ought to be fostered and cherished as well as the government itself.
Another objection which he had against this proposition was that it went upon a system of legislation which was unequal and unfair; it appeared to him both unwise and unjust. Mr. H. here referred to the Military bounty lands which had been taxed for twenty years to shew the unequal operation of the measure proposed. He hoped we should not go back to the time of 1838. If we must sustain the credit of the State, let it be by a direct or indirect tax: he denied that we possessed a magic power to make money; we must adopt the one or the other; he would go for either or both, but he could not give his assent to empty vain and idle expedients which could have no solid effect on sustaining the credit of Illinois. Let us shew to the world that we have made some sound arrangements to pay our debts. Mr. H would refer to Pennsylvania; as long as that State went on borrowing and her politicians had not the nerve to raise money by a tax, her bonds were almost worthless in the market, but no sooner did she use effectual means to raise a fund by a tax, her bonds rose in value and her credit was restored. If gentlemen wish to sustain the honor the character and credit of Illinois, they must go to some sound measure productive of the end desired; but as to the proposition which he had heard so far they were mere expedients making us pay double interest and had nothing in them which could inspire confidence among money holders or lenders. He would vo[t]e against every proposition which did not provide some sure foundation to go upon It appeared to Mr. H. that it would be both time and money lost to send a Commissioner on without some better and surer means of raising the necessary money; while he was up he would set the House right in reference to the Scrip said to have been issued by the Board of Public Works: the board had never authorised any issue, as might be seen on the face of the Scrip; the Commissioners never authorised the Scrip; the contractors drew the drafts; the Commissioners never authorised the scrip to be made. The whole amount of our present Revenue from all sources was $116,000 our Expenditures were $45,000 not including the interest on money borrowed, which alone amounts to a sum more than our Expenditure.
If therefore you take the Revenue of the State to pay the interest, and take a quarter of the revenue of the Counties how could the State meet her ordinary expenses? Must not all her various officers be paid? Pass this amendment, said Mr. H. and my word for it every man will resign, for can they remain and live upon wind? they are already as it is but poorly paid. Pass the amendment and it would not meet the end designed while it would throw the State and counties in a condition of insolvency. He would vote against the proposition.
Mr. KITCHELL said he could not support the amendment as it would hurt the counties, some of which were much in debt, his own among the number.
The questions on the amendment was then put and decided in the negative, Ayes 1. Noes 83, so the House rejected the amendment.
On motion of Mr. Murphy of Cook the House then adjourned.
1This summary of the debate is from the Democratic-leaning Illinois State Register. Another account is from the Whig-leaning Sangamo Journal. This text contains many individual letters in italic type. The editors have considered these as typesetting errors, and have not transcribed them.
On December 10, 1840, Stephen G. Hicks introduced in the House of Representatives “A Bill to Provide for the Payment of Interest upon the Public Debt.” There is no extant text of the document. The House read it twice and referred it to the Committee on Finance, of which Abraham Lincoln was a member. The committee reported back on December 11 with a substitute for the bill. After more debate on December 12, the House voted against reading the bill a third time by a vote of 36 yeas to 51 nays, with Abraham Lincoln voting nay.
Illinois House Journal. 1840. 12th G. A., 99-100, 103-4, 108-9.

Printed Document, 1 page(s), Illinois State Register (Springfield), 18 December 1840, 2:1-3.