Papers Of Abraham Lincoln

Summary of Legislative Debate on Bill to Provide for Payment of the State Debt, 24 February 18411

On motion of mr Baldwin, the bill to provide for the payment of the State debt, was taken up and read a second time.2

mr Trumbull offered an amendment providing that no interest shall be paid on bonds parted with contrary to law, except so far as the State has received consideration therefor.

Mr Dougherty moved to lay the amendment on the table, which motion was lost, yeas 43, nays 35.3

The amendment was then agreed to, ayes 43, noes 35.4

Mr Henderson moved an amendment, relating to averaging lands, which was rejected5

Mr Archer moved to amend by requiring the county commissioners to lay no county tax above 30 cents on the $100.

Messrs[Messieurs] Ross, Kitchell, White, and Murphy, opposed the amendment.

Mr Carpenter moved to amend the amendment by striking out 30 and inserting 40, which was agreed to, the amendment as amended was then rejected.6

Mr Kitchell offered to amend by requiring that the Bonds shall not be parted with at a less sum than their expressed value.7

Mr Lincoln thought that to maintain the credit of the State, the best plan was to provide for making bonds good and valuable by raising a revenue to meet them, and having done so, then to dispose of them without restrictions and forcing them to an unnatural maximum.

Mr Kitchell replied and called for the ayes and noes.

Messrs Lincoln and Henderson, in reference to the amendment, shewed the absurdity of pretending to sell bonds to pay interest and fixing upon them a price at which they never could be sold.

Mr Bissell moved to lay Mr Kitchell’s amendment on the table, which motion prevailed, ayes 50, noes 35.8

Mr Areher moved to amend by striking out 20 and inserting 10, which was agreed to.9

Mr Peck moved to amend by providing that each county pay 30 cents on the $100 into the State Treasury.

mr Bailey opposed the amendment on the ground that it was unintelligible.

Mr Trumbull could not comprehend it and called for an explanation.

Mr Peck explained.

Mr Trumbull moved to lay the amendment on the table which prevailed and it was there laid.10

Mr West offered an amendment requiring all lands to be valued at their true value, (and not making $4 to be a minimum value as required, in the bill.)11

Mr English moved to lay it on the table, which motion prevailed, ayes 45, noes 33.12

Mr DOUGHERTY moved the previous question which was ordered.

The question on ordering the bill to a third reading was then put and lost, ayes 27, noes 59.13

1On November 23, 1840, Governor Thomas Carlin called the General Assembly into special session two weeks before it was constitutionally mandated to gather to tackle the state debt crisis brought on by the Panic of 1837 and large expenditure on the internal improvement system.
As the House of Representatives debated various legislative remedies, it pursued other measures to ensure that the state would not default on the January 1 interest payment. On December 2, the House adopted a resolution creating a joint select committee to confer with the President and Directors of the State Bank of Illinois to discern as to whether the bank would loan the state money, and if so willing, at what interest rate, to pay the January interest on the public debt. The House placed Lincoln and two others on this committee, but the Senate took no action. On the same day, the House adopted another resolution requesting the Fund Commissioner to report on the amount of interest due on January 1, 1841. On December 3, Richard F. Barrett, the fund commissioner, reported the semi-annual interest on the state’s $5,852,000 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 Richard F. Barrett 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.
Illinois House Journal. 1840. 12th G. A., 47-48, 48-51, 78, 86, 117-19, 121; Illinois Senate Journal. 1840. 12th G. A., 78-79, 79-80; Illinois State Register (Springfield), 18 December 1840, 3:5; 25 December 1840, 2:3-4; Michael Burlingame, Abraham Lincoln: A Life (Baltimore, MD: The Johns Hopkins University Press, 2008), 1:162-63; John H. Krenkel, Illinois Internal Improvements 1818-1848 (Cedar Rapids, IA: Torch, 1958), 177-80.

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 a bill, 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 this debate on Lincoln’s bill.
Illinois House Journal. 1840. 12th G. A., 455, 478, 480-81, 489.

3The Illinois State Register was in error; the actual vote was 35 yeas, 45 nays, with Lincoln voting yea.
Illinois House Journal. 1840. 12th G. A., 489.

4Lincoln voted no.

5Henderson’s proposed amendment was to the third section of the bill.

6Archer’s proposed amendment would have added a clause to the end of the first section.

7Kitchell’s amendment would have added a proviso to the fifth section.

8The House Journal recorded the vote as ayes 50, noes 25, with Lincoln voting aye.

9Archer’s amendment was to the first section.

10Peck’s amendment was to the first section.
Illinois House Journal. 1840. 12th G. A., 490-91.

11The third section included this minimum value. West proposed to the strike out the third section.

12The House Journal recorded the vote as ayes 46, noes 33, with Lincoln voting aye.

13The House Journal recorded the vote as ayes 27, noes 50, with Lincoln voting no.
Despite this setback, Lincoln’s bill in an amended form became the basis of an act enacted on February 27 to help the state out of debt. This act did not prove adequate, however, to permanently resolve the debt crisis. The tax increase included 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., 491; “An Act to Diminish the State Debt, and Put the State Bank into Liquidation,” 24 January 1843, Laws of Illinois (1843), 21-30; “An Act to Reduce the Public Debt One Million of Dollars, and to Put the Bank of Illinois into Liquidation,” 25 February 1843, Laws 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 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 Illinois (1843), 287-88; Michael Burlingame, Abraham Lincoln: A Life, 1:162-63; John H. Krenkel, Illinois Internal Improvements 1818-1848, 177-80.