a nation. In such cases we submit to one evil in order to avoid a greater. "3. In other cases it seems expedient to incur public debts, even when they are not absolutely necessary. The benefits resulting from them may more than compensate for the evils. 4. Great caution should be had in incurring public debts, because there are not naturally the same check on them as on private debts. The private man who incurs a debt has to depend upon himself alone for the payment of both principal and interest. The public men who create debts throw all the burden of paying them on others. They may incur these debts for their own special benefit, and the community will have to pay them. Even when the selfish interests of the lawgivers are not advanced in this way, great caution ought to be had in incurring public debts, as too great facility in borrowing always leads to profusion in expenses. In addition to this, there is an important check on private debts which does not apply to public debts. A private man, when he incurs a debt, knows that he must not only pay the interest punctually, but that he will sooner or later be called upon for the principal. But if a government only pays the interest punctually, the principal may remain unpaid for ever. "5. Nothing but violations of constitution, and violations of law, or gross frauds in the negotiation of public debts, will justify a repudiation of them. No matter how unwise it may have been to borrow it, and no matter how foolishly it may have been expended, if the money has been borrowed according to law and the constitution, it ought to be paid. "6. There is no force in the observation that one generation is not bound by the debts of another. The property created by the industry of one generation, passes to that which succeeds it, and so on in perpetuity. The state never dies. The individuals that compose the state are always changing, just as the atoms of the human body are changing; and it is impossible to mark the succession of individuals that compose a state in such a way as to say that one class of them shall not be responsible for the debts incurred in the time of their predecessors. The benefits that may arise from incurring a public debt may extend through many generations. If the wars of William Pitt were really necessary to preserve the independence of Great Britain, it is just and right for the English people of the present day to pay the interest on the debt incurred in the prosecution of those wars. The Americans of the present generation have done no more than justice in paying off the debt of the Revolution, for they are in the full enjoyment of the blessings of the Revolution. "7. After a government has once made a regular audit of a claim against it, and issued a negotiable acknowledg ment of the same, it has no right in after years to re-open that audit. A negotiable evidence of public debt, no matter what its form may be, transfers all the rights of the original holder to the final possessor. This point was very clearly set forth by Mr. Sedgwick, of Massachusetts, in the debate in Congress, in February, 1790, on the funding of the Revolutionary debt. "Whenever a voluntary engagement is made for a valuable consideration for property advanced, or services rendered, and the terms of the contract are understood, if no fraud or imposition is practised, the party engaging is bound to the performance according to the literal meaning of the words in which it is expressed." A correct understanding of the nature 'of public debt, and of the obligation it imposes, is of great importance in a country where running into debt appears to be a leading principle not only of states and cities, but is becoming a leading principle with counties. Once duly impress the public mind with the doctrine that every public debt which has been fairly contracted, must be paid to the uttermost farthing, no matter what burden this may impose on the taxpayer, and we have a check against undue increase of public debt much more powerful than any mere paper constitution can impose. The course taken by the legislature of the State of Texas in regard to the scaling or repudiating a portion of the debts of the republic, of which it is proposed in the course of this sketch to give some further account, is assailed by Mr. Gouge. The various arguments which have been employed in defence of this course, are met and examined with ability. He maintains with Mr. Sedgwick, in regard to the Revolutionary debts of the United States, that public obligations Issue of Treasury Notes and Exchequer Bills. 383 should be fulfilled according to the their treasury notes floated off to the terms of the contract. United States, and were there exchanged for the munitions of war and the necessaries of life. Without the aid thus obtained, the revolution could not have been brought to a successful issue. When the Texans began their revolutionary movement, they had no money, or none worth speaking of, but they drew freely upon their treasury, just as freely as they could have done, if it The result of all these different had been full of money. This continued modes of borrowing was to bring the till their "audited drafts," as they were government in debt in the following called, sunk to fifteen cents in the dollar. amount, as stated by Mr. Chalmers, Then they commenced the issue of trea- the Texan Secretary of the Treasury, sury notes, bearing ten per cent. interest. in his report of Sept. 30th, 1841: As these were for round sums, and many of them for small amounts, they were much better adapted than were the "audited drafts" to serve the purposes of a circulating medium. They accordingly sustained their credit much better, but as more were issued than the demands for currency could absorb, they sunk rapidly in value. To these issues of treasury notes bearing interest, succeeded others bearing no interest, and familiarly known as "red backs," on account of a red impression on the back. These depreciated more rapidly than their predecessors. The Texans tried to arrest the downward course of their audited drafts and their treasury notes, by various provisions for funding them in stocks bearing eight and ten per cent. interest. But as the audited drafts at first, and afterwards the treasury notes, had been made receivable for public dues, the whole of the revenue of the government was received in its own inconvertible paper. It consequently had not the means of paying the interest on its stocks, and the certificates thereof sunk as matter of necessity, in a ratio corresponding with the treasury notes and the audited drafts. Audited drafts. Funded debt Treasury notes and bonds. Total.. $193,643 53 4,381,004 64 1,672,300 00 457,380 00 1,000,000 00 $7,704,328 17 This it will be observed was nearly four years before annexation was effected. The independence of the country had been acknowledged by the United States, and also by France, England, and Holland, but it was still disputed by Mexico. The crisis was a trying one. Up to this time all its revenue laws had yielded it only eight dollars in specie, and its credit was now entirely gone. In this emergency, the government resorted to an expedient which nothing could justify and which only sheer necessity could excuse. It suddenly declared that its treasury notes, which owed all the little value they had left to their being receivable for public dues, should be no longer so receivable. It then resorted to the issue of what were called "exchecquer bills." These were, in fact, only a new kind of treasury notes under a new name. But as the issue was limited to 200,000 dollars, and as there was never more than forty thousand dollars in circulation, at one time, and seldom so many, than had been that of the "red backs." So little confidence, however, could the government inspire, that these exchecquer bills, limited though they were in amount, were seldom at par, and sunk sometimes to twenty-five cents on the dollar. The Texans also sought to negotiate loans abroad, and with this view sent commissioners to the United States and afterwards to Europe. But all efforts their credit was much better sustained to borrow in a direct way were unsuccessful, excepting some small loans obtained in the early part of the revolution from gentlemen of New-York and New-Orleans, and amounting in all to less than 70,000 dollars, and excepting a loan of $457,000 from the United States, and the obligations increased to the amount of about $750,000 to Messrs. Schott & Whitney of Philadelphia, Mr. Dawson of Baltimore, and Mr. Holford of London, for the purchase of the navy. In an indirect way the amount the Texans borrowed was very large: for By this contrivance, however, the government, having disbanded its army, and laid up its navy in ordinary, managed to sustain itself for about three years, and till the annexation of Texas to the United States was effected. By the resolution of annexation, it was among other things provided, that the object was simply to ascertain the amount State of Texasof the debt, by collecting together all "Should retain all the vacant and the evidences thereof, and separating unappropriated lands lying within its limits, to be applied to the payment of the debts and liabilities of said Republic of Texas; and the residue of said lands, after discharging said debts and liabilities, to be disposed of as said state may direct; but in no event are said debts and liabilities to become a charge against the United States." In this way the United States government sought to relieve itself from the liability it had incurred, according to the laws of nations and the principles of equity, on account of having absorbed the revenues which had been pledged for part of these debts; and the people of Texas, in convention assembled, fully and freely assented to this arrangement, by making the resolutions of annexation a part of their state constitution. the genuine certificates from the counterfeits that were afloat. Nor did some of them discover their mistake till they received new certificates from the State of Texas, certifying that there was due to them only three-fourths, one-half, onefourth, and, in some instances, no more than one-fifth, of the amount that had been expressed in the certificates that had been issued to them by the late republic. Previous to this, however, some of the creditors had petitioned the Congress of the United States for relief. They maintained that however binding on Texas might be the provision in the articles of annexation, it did not release the United States government from the obligation it was under, to discharge the debts for which the revenues had been pledged, seeing that it had absorbed those very revenues. It had thereby left nothing to Texas but her wild lands, and wild lands are a poor fund out of which to The first legislature of the State of Texas (an entirely distinct body from the Congress of the late Republic of Texas) assembled early in 1846, and determined that the debts of the late republic ought discharge debts either public or private. to be paid, but paid on principles which, as far as our knowledge extends, are entirely new in the history of finance. They determined that the debts should be paid, not as expressed in the contract, but according to an arbitrary standard adopted by the legislature of the state, as to the value the late republic was supposed to have received. They saw that Texas, having parted with her customs revenues, could not comply with the engagement she had entered into in the articles of annexation. At the very first session of Congress that followed the act of annexation, some of the creditors set this forth in their memorial; and as fast as the scaling policy of Texas began to be understood, the number of these memorials increased. The second legislature, which assembled in 1847, maintained the grounds that had been assumed by the first, and To relieve itself from these difficulties, passed an act thus "to scale" the debt. and from other difficulties in which it This act was perfectly understood in found itself involved, the Congress of the Texas; but as neither the words "scaling United States passed an act on the 9th or scaled" appeared in either its title of September, 1850, commonly known or any of its provisions, its true bearing as the "Boundary Act." In it it was, was seen by but few of the creditors among other things, provided, that ten living beyond the bounds of the state. million dollars, in five per cent. stocks, They supposed it to be what from its should be passed over to Texas, nomititle it purported to be, simply "an act nally in payment for certain lands purto provide for ascertaining the debt of the chased from that state, but really with late Republic of Texas." One of the the intention that Texas should theresections does indeed make it the "duty with pay the revenue creditors, and of the auditor and controller jointly to re- thereby relieve the United States from ceipt for all claims presented to them, all responsibility it had incurred on setting forth the par value thereof at the account of the debts of the late republic. time the same accrued;" but, in common As a matter of precaution, it was made language, the par value of a negotiable a condition, that only five million in security is its face value, and in this these bonds should be passed over immesense the phrase had been used in pre- diately to Texas, and that the residue of vious acts of Texas. They supposed the the bonds should be retained in the trea Acts of the Legislature-Items of Debt. sury at Washington, till releases should be signed by the creditors, exempting the United States from all further liability on account of the debts of the late republic. Previous to the passage of the Boundary Act, or in December, 1849, the auditor and controller of Texas made a 385 report to the legislature, in which they scaled the debt on the principles they had been directed to adopt. Two years afterwards, November 12th, 1851, they made another and more complete report, in which they represented the total debt to be as follows: The amount of claims not filed, is to act in conformity with the principles of some extent conjectural, and now be- this report. Suffice it to say that the lieved to be too large, by somewhere effect of the act was to divide the debt between half a million and a million into two classes, debt payable and of dollars. But this is not material. debt suspended; and the debt which What is material is, that the legislature, was made payable immediately, emon the 31st of January, 1852, passed an braced the following items: millions, and the interest that had accrued thereon, amounting to $250,000, in gold. By the Sinking Fund Act of the 14th of January, 1840, the proceeds of the public lands were solemnly pledged for he redemption of the debts of the republic. By the resolution of annexation, all the public lands were expressly reserved for the payment of these debts. The State of Texas disposed of part of these lands for ten million dollars, and received in hand five millions of the purchase-money. It applied part of this money to the payment of its "domestic creditors," a part to the payment of the current expenses of the State Government, but not one cent to the payment of debts for which the United States had become liable! The effect of this act was to divide the creditors into two parties. One party, at the head of which was the Bank of the United States, whose debt had been scaled at high rates, united their efforts with those of the authorities of Texas to induce the United States to give up the reserved bonds. They would then receive their pay, some at par, some at 87, and some at 70 cents in the dollar. This was resisted by the other creditors, as thereby they would get only fifty, twenty-five, and in some instances no more than twenty per cent. of their claims. The result is, that, up to the time in which we write, (February 21st, 1853,) the creditors of the late Republic of Texas, with claims upon two governments, which claims are to a certain extent recognized by both, are paid by neither. All the facts connected with the origin and growth of the debt, embrac ing, of course, many of great interest and importance, which could not be introduced into this sketch, are set forth in the order of their occurrence, and with great clearness, in the volume the title of which is placed at the head of this article. ART. VII. - PROGRESS OF THE REPUBLIC CENSUS ONE THOUSAND EIGHT HUNDRED AND FIFTY. (Continued from our last Number.) WHEAT. Wheat, where the soil and the climate are adapted to its growth, and the requisite progress has been made in its culture, is decidedly preferred to all other grains, and next to maize, is the most important crop in the United States, not only on account of its general use for bread, but for its safety and convenience for exportation. It is not known to what country it is indigenous, any more than our other cultivated cereals, all of which, no doubt, have been essentially improved by man. By some, wheat is considered to have been coeval with the creation, as it is known that upwards of a thousand years before our era it was cultivated, and a superior variety had been attained. It has steadily followed the progress of civilization from the earliest times, in all countries where it would grow. The introduction of this grain into the North American colonies dates back to the earliest period of their settlement by Europeans. It was first sown, with OF other grains, on the Elizabeth Islands, in Massachusetts, by Gosnold, at the time he explored that coast, in 1602. In 1611, wheat, as well as other grains, was sown in Virginia, and by the year 1648 there were cultivated many hundred acres in that colony. Although premiums were offered as an encouragement of its growth in 1651, it was not much cultivated for more than a century after in consequence of the ill-directed attention to the culture of tobacco. Wheat was introduced into the valley of the Mississippi by the "Western Company," in 1718, where, from the careless mode of cultivating it by the early settlers, and the sudden alternations of temperature, it would only yield from five to eightfold, running to straw and blade, without filling the ear. In 1746, however, the culture had so far extended, that six hundred barrels of flour were received at New-Orleans from the Wabash; and, by the year 1750, the French of Illinois raised three times as |