The bill to provide for the payment of the interest of the public debt coming up for consideration.
(The bill proposes to hypothecate State bonds to an amount sufficient to pay the January interest on the state debt.)
Mr. Hardin, offered the following amendment,
Provided however, that the said state bonds shall not be hypothecated for less than seventy cents to the hundred, and said bonds shall not be hypothecated for a less term than three years during which time the state shall have the privilege of redeeming said bonds.
Mr. KITCHELL then offered an amendment to the amendment, and briefly explained the object he had in view. The amendment was declared not to be in order.
Mr. PECK was constrained to say that he felt regret at hearing those different propositions. He wished to know if there was any one who was willing that we should be acknowledge debtors and at the same time that we should be unwilling to pay our debts?—This bill called for some provisions to pay the interest on our debt. The state was in an unhappy condition, there were no resources on which we could rely, nothing could be done except the measure proposed of hypothecating the State Bonds. The interest would fall due on the 1st of January; it was well known that the State Bonds could not be sold at par, now then we were reduced to the alternative, either to pay or not to pay. That was the naked proposition, and on it must stand or fall the honor, the credit, and the reputation of our state Should we now shrink from performing this obligation we must no more expect to maintain our reputation for honor or to obtain credit abroad. Now is the time observed Mr. P. to say if we are willing to cherish our honor and credit abroad: the amendments offered tend to produce disgrace to us out of the state; it is the same as if we should say to our creditors “if we cannot realize the full amount of our property we will not pay you.”
Should the House defeat this measure by taking up these amendments, we may bid farewell to our hitherto fair fame, we must take leave of our reputation and character and go down to lasting disgrace and misery.
Mr. Kitchell would enquire whether it was a matter of expedience that we should proclaim to the world that we were degraded and that our bonds were going a begging at 30 per cent discount? If the doctrine of the gentleman was carried out, then if the bonds should only fetch 25 per cent, we must submit to the ruin and become enslaved in order to obtain credit for fresh speculations. He hoped the doctrine would never be carried to that extent. Mr. Bentley moved to refer the bill to a select committee.
Mr. PECK was opposed to the reference, all the objections now advanced had already been well weighed and examined in committee.—The gentleman from Montgomery seemed to be confused in his conceptions of the bill: it does not propose to sell the bonds, but merely to hypothecate them until the times shall brighten up again, when we shall be able to realize the full amount of the bonds, after having maintained the credit of the state. The persons who have bought our bonds look to us for the interest to be paid, if it is not paid, our credit falls, he (Mr. P,) would prefer to sell or hypothecate at 50 or any per cent rather than ruin the reputation of the state. It is well known what opprobrium fell upon a sister state, when Pennsylvania was only one day behind in the payment of the interest her bonds instantly fell. If our bonds have been disposed of and have been purchased by innocent holders, it is not just to refuse to pay, because we have employed bad agents. We are bound to pay the holders and resort to the law against the dishonest agents, they can yet pay and actions have already been initituted against them, but as to the innocent holders of the bonds, we cannot tell, and therefore ought to make no distinction whether they were received from Delafield or from the Locomotive Company.
MR MUNSELL followed in support of the amendment, he thought that if there was no hope of redeeming the bonds when hypothecated it would be better to sell them; how was the money to be raised to redeem them, since the Governor will not recommend any more taxation? He was willing to go on as far as any man in sustaining the good faith of Illinois; but the amendments only proposed that the bonds should not be hypothecated for less than 70 in the dollar, and for a term of three years. It would not be possible to sustain our credit by borrowing when we had no means to pay; he would vote for the amendment; if we are to go down to-morrow we might as well go down to day.
MR TRUMBULL was in favor of the reference of the bill and amendments to a committee. The bill was not restricted as to amount to be hypothecated, We do not know what amount of interest there is to pay. Mr T disagreed with the gentleman from Cook as to paying the interest on all the bonds that were out. If our agents have borrowed money in violation of the law, if our bonds are out when we have received nothing for them, then if we pay in spite of these circumstances what will be consequence? Our agent may go and sell no matter how, for it will be said the state will come in and sanction it, In individual business if an agent goes beyond the authority conferred on him by his principal, the latter is not bound by the agents acts, nor in morals nor in law; therefore the state is not bound. Again, the amount is left by the bill to the direction of our agent; it is not said for what time the bonds are to be hypothecated: we ought to know the amount of the interest to be paid, and not leave it entirely to the fund commissioner; before we provide the means let us first know what is required to be raised. Mr T concluded by hoping that the motion to refer would prevail, and the provision of the amendment be adopted.
MR KITCHELL hoped the bill would be referred—he considered the power to mortgage the bonds to any amount dangerous to grant.
MR MURPHY moved to recommit the bill to the committee on finance.
MR PECK deprecated such a disposition of the bill. If we were willing to borrow, he thought we ought to be willing to repay. As to the innocent holders of our bonds, should we deal with bad faith to them, when they purchased from our agent on the faith of the state? If we had bad agents, did not we employ them? did not we send them abroad? Mr P, after proceeding to enforce the necessity of meeting the public engagements by the 1st of January, at any rate, rather than to fail in honor and good faith, concluded by expressing the hope that the bill would not be referred.
MR LINCOLN was of opinion that the bill, having come from the committee on finance, ought now be referred to a different committee; it was, he thought, a question of great moment, and a select committee might have new views.
MR MURPHY withdrew his motion, whereupon Mr Kitchell moved to lay the bill and amendments on the table, which motion was negatived without a division.
After a motion to adjourn, which was lost by the casting vote of the Speaker, Mr Cavarly moved that the bill and amendments be referred to a committee of the whole House, and made the order of the day for to morrow, (Wednesday) which motion was agreed to. The House then, on the motion of Mr Hicks, adjourned.
Printed Document, 1 page(s), Illinois State Register , (Springfield, IL) , 4 December 1840, 3:3-4