Washington sentinel. [volume] (Washington [D.C.]) 1853-1855, 1854-07-27
From the Warrington Union.
The Texas Debt


| From the Washington Union
The Texas Debt.
The bill for the adjustment and satisfaction
OF the claims of the Texas creditors, to which
we have already adyerted, proposes final set
Element OF the subject which has been pending
for eight years, and which has proved to be full
of embarrassment to all concerned. When
Texas was annexed to the Union, her reyolu.
tionary debt was unpaid-its amount BEING.
according to our recollection, something more
than ten millions of dollars and for the nav.
ment of it her revenues were specifi ealfy
pledged. 1t has been maintained by very MANY
eminent statesmen and jurists, that one of the
legal consequences Of the incorporation of
Texas into our Union was, that the govern
ment of the United States became responsible
for the payment of this debt. 1t is certain,
however, that the revenues pledged were there.
by made to inure to the United States, and not
to the State Of Texas. When the question as
to the boundary of Texas was adjusted, in
1850, the United States agreed to paw ten mil.
lions of dollars in bonds bearing five Der cent.
interest, and payable in 1864, for a reiinauish-
ment by Texas Of her claim to the territory in
disputes five millions of which bonds were to be
4 held by the United States until the creditors Of
Texas filed full releases of their claims.
The creditors declined to file releases be-.
cause their claims amounted to more than
double the sums so held by the United States.
On the other hand, the State Of Texas de-
clined to recognise the claims of her creditors
to their full amount, but insisted on scaling
them and making pro rata payment, accord.
| ing to fixed rate of scaling. The bonds have
| been retained by the government in conse.
quence of those embarrassing questions, and,
together with the interest and premium,
amount, on the lst Of January, 1855, to six
and half millions of dollars. This amount,
it is universally conceded, the United States
are bound to pay either to Texas or to her
creditors; and if the payment is deferred until
1864, when the bonds are payable, it is con-
ceded by all that the United States will have
to pay eight and half millions. This is the
amount which the bill proposes to pay now, in
lieu of issuing the bonds and deferring their
payment until 1864.
The only question which embarrasses the
passage of the bill, as far as we are advised,
arises from the proposition to pay eight and q
half millions instead of the six and a half mil
lions already due. The reasons on which the
Senate bill was passed in its present shape as
we gather from the report of the Finance Com
mitlee and from the debates on the measure in
the Senate, may be stated in brief as follows
tits controversy between Texas, her cred
itors, and the United States Texas is unwilling
to satisfy the claims at their nominal amounts,
but insists on scaling them. The creditors re-
fuse to submit to the rate of scaling. So long
as this controversy continues, the United States
must hold the FIVE millions of bonds, bearing
an annual interest of five per cent The gov
eminent cannot hand them over until releases
are filed, and releases cannot be fled except
upon an agreement between Texas and her
creditors. Besides these difficulties, Texas and
her creditors maintain, and with force OF
legal and moral persuasion which it is very
difficult to resist, that the government of the
the United States is responsible not only for
the five millions, but for the entire debt which
amounts to eleven and half Millions.
In this state of things, it is believed to be
morally certain that Texas will not give her
assent to any measure which merely distributes
the five millions, and leaves her liability for
the remaining six and halt, millions unset.
tied. On the other hand, it is equally certain
that the creditors will not relinquish their en-.
tire claims upon the payment of less than
half ther amount They believe that the United
States are responsible for the entire amount,
and in this opinion they are sustained by sena-
tors who have examined the whole question,
and they are therefore unwilling to lose more
than half their claims. The case suggests the
necessity for compromise, and the bill is
framed upon the principle of a compromise
1t is to be, submitted to Texas, and we have
every assurance that she will give her assent.
The creditors have already sgni6ed their assent,
and 1t only awaits the sanction of the House
to become contaminated adjustment. Texas
will be benefited in having her revolutionary
debt paid, and her credit greatly elevated. The
creditors lose three millions Of their claims, |
but have agreed to submit to the loss in con.
sideration of prompt payment and because
they have already sustained heavy sacrifices in |
the past delay. The United States are relieved
from the question as to their liability for the |
eleven millions and half, and upon the sup |
position that they are responsible, save three
millions by the bill.
As financial operation, the bill before the |
House seems to US wise and desirable for the |
government. Five million dollars of United
States bonds, bearing five per cent. interest
belonging either to the State of Texas or her |
creditors, are held in trust by the government
They were issued, we think, in January of 1851. |
They are not redeemable by the government,
unless by the consent of the holders, till Janu. |
ary 1865. The principal of the bonds, the pre-
miums the holders could receive if they were to |
sell them in the market now, and the interest |
due up to January, 1855, amounts to about six
iiiihiOho dhu uFc huuuFcd tuOusduQ QOllarS.
Now, as the bonds are lying in the treasury and
drawing interest, which, together with the prin.
cipal and premium, in January, 1865, would |
amount to eight million and FIVE hundred thou
sand dollars, and as the treasury is overflow
ing, and the money is lying idle in the govern.
ment vaults, and as in 1865 the government
must pay the amount proposed in the bill, and
in the meantime probably realize no benefit
from the money, itwould seem that, aside from
the consideration Of securing release of up
wards of eleven millions, it would be the part
OF justice for the government to pay the amount
and thus put it in circulation for the benefit of
honest creditors and the partial relief of the
commercial interest of the nation. Hence both
us financial operation and as compromise
adjustment Of embarrassing and irritating ques-
tons, we can but hope that the bill will be as
passed by the House as it has
been by the Senate
That it may be seen that our remarks are
fully sustained by the facts, we quote the con-