On February 4, 1841, Peck of the Committee of Finance made a report on the public revenue, accompanied with two bills: one in relation to the recording of deeds, and another concerning the licensing of merchants, auctioneers, and money brokers and others. Together with its report and these two bills, the committee reported back Lincoln’s bill of December 7 with amendments. The House tabled the report and bills and ordered printed 150 copies of the bills. On February 11, the House took up Lincoln’s bill as amended and referred it to the Committee of the Whole, making it the special order of the day for February 15. In the afternoon session of February 15, the House resolved itself into the Committee of the Whole to consider Lincoln’s bill as amended and the other bills coming from the Committee on Finance. The representatives debated several sections of Lincoln’s bill as amended, concentrating on the first. Lincoln offered amendments, and engaged in the debate over whether the bonds proposed in the bill would be sold only a par value or below (Lincoln favored selling at either par value or below). The House adjourned to meet again later. On February 20, 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 system of internal improvements. The House appointed Lincoln and six others to this committee, then added two additional members, making it a select committee of nine. On February 22, the House referred Lincoln’s bill as amended to the select committee of nine. On February 24, the committee of nine reported back Lincoln’s bill as amended without amendment, and the House discharged it from further consideration. The House formally laid aside the bill. Lincoln moved to amend the bill as amended by striking out all after the enacting clause and inserting as a substitute abill on the payment of interest the House had rejected earlier in the day. The House amended Lincoln’s proposed substitute and agreed to replace the text of Lincoln’s bill as amended with Lincoln’s substitute as amended. Lincoln’s substitute as amended would become the basis of the act approved by the Council of Revision on February 27.

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 $5,825,000 debt, due January 1 and July 1, was $175,560, making the state liable for $175,560 on January 1.

Both the Sangamo Journal and the Illinois State Register reported Lincoln’s speech in defending his substitute to Peck’s bill. The Journal’s account is more lengthy, but the Register’s report offered a few additional details to Lincoln’s remarks not found in the Journal.

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.

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.