The Works of William H. Seward

act of annexation, Texas agreed that we should not be liable, and that she would pay them, and that the creditors had notice of that annexation on those terms, and did not protest, and therefore impliedly consented. But the honorable senator was understood to waive this point of implied consent by the creditors.

I take the objection, however, in whatever form, and say in reply:

1. That all the world knows that a protest by the creditors against the act of annexation, would have been not more impertinent than unavailing.

2. That it may well be supposed that the creditors concerned may, in 1845, have foreseen that although the United States then refused, yet in 1850 they would assume the debts of Texas, to the amount supposed to be received by the revenues of Texas, diverted into the federal treasury.

The senator from Virginia objects, secondly, that the sovereignty of Texas was not, by the act of annexation, merged in the United States; but that, on the contrary, she still remains a sovereign state, and in the enjoyment of adequate and ample resources, viz.: her public domain and capacity for direct taxation, to pay the creditors.

I reply, first, that while the public domain of Texas, like our own, and her capacity for direct taxation, like our own, are valuable resources for credit, and to some extent for expenses of current administration, they are practically unavailing for the payment of a large funded debt. The resources of Texas for that purpose were their customs, which we have diverted, and so annexation, instead of increasing, has impaired the practical ability of Texas to pay her debts.

2. This objection is foreclosed by the compromise of 1850.

The senator from Virginia objects, thirdly, that the plan proposed is a departure from the theory of annexation, which theory was that Texas should pay her own debt. And the senator insists that the compromise of 1850 adhered to that supposed theory of the act of annexation, because it directed the five millions to be paid, not to the creditors, but to Texas herself.

I reply, that the imagined adherence in the compromise of 1850 to the theory of annexation, is an adherence in form only and not in fact, because the five millions of dollars are to be paid to Texas when she procures releases from her creditors, and never to

be paid if they will never give the releases. So the stipulation is exactly the same thing as would have been a stipulation for paying the five millions, or so much as should be due directly to the creditors. The departure from the supposed theory, then, was made in 1850, and is not to be made in 1853. We must keep on in the course of 1850 till we reach the goal.

The honorable senator objects further that this plan of the committee to pay $8,333,333 at three per cent., being less than the usual rate of interest on public stocks, is a scaling of the debts, so that creditors will not get dollar for dollar, and is therefore objectionable on the same ground that Texas is complaining of. Grant this to be true, still I reply that we scale less deeply than Texas. Secondly, that we are mediating between the proper parties; and thirdly, who can complain? Not Texas, for we take nothing from her, and do not divert any fund in which she has a claim. Not the creditors, for they assent.

The honorable senator further objects that Texas will nevertheless come back for the five millions, and will be entitled to it. I reply that Texas has already declared, by an act of January 31, 1852, that $3,355,360 25 of this same five millions is justly due to these creditors, and shall be paid to them. At the very worst, Texas will not come back for that sum. Will Texas come back for the remaining $1,644,639 75? She must produce releases from the creditors for it. They will have already released, upon a just consideration paid, not by Texas but by the United States, and after Texas had had ample time to obtain releases, and had failed, because she exacted what the creditors were neither legally nor equitably bound to yield.

The senator from Virginia objects further that the $8,333,333 at three per cent., will cost the treasury more than the five millions at five per cent. It will cost exactly $3,333,333 more. But that is no good objection, if, first, it is necessary to pay that sum to discharge these debts; and if, secondly, it is just, both of which points have been demonstrated.

The senator at last falls back on his original ground, that the United States are not liable for the debt of Texas, according to the law of nature or of nations. It is quite too late to raise the question after the act of annexation of 1845, and the compromise

of 1850.

Nevertheless, I will briefly consider the senator's argument. VOL. III.-43

The United States derived advantages from the annexation of Texas, and creditors had aided Texas to rise to the condition in which her union was thus advantageous. They did not give her a dowry, but they enabled her to assume her own. The union of Texas with the United States and of her revenues was a division of her sovereignty, rendering her less fully and exclusively approachable by creditors. Was there not in these circumstances sufficient consideration to sustain the agreements between Texas and the United States for the benefit of the creditors?

Bynkershock teaches us so (p. 191).

Again, Texas by annexation became subject to the debts of the United States. How is it then that the United States could acquire Texas without coming under some moral obligation to guaranty the debts of Texas?

It remains only to notice the argument of the honorable senator from Texas, Mr. Houston, which seems to result in this: that Texas had a right to ascertain and fix the amount of her liabilities, and she has fixed it at $3,355,360 25 and the United States and the creditors are concluded by that decision.

I reply, that was not the agreement in the compromise. It was that the creditors should release their claims. If they will release for the $3,355,360 22 it is enough. But they have not released for that sum, and they will not.

Then the senator insists that Texas is just and they unreasonable. I do not think so. The principle assumed by Texas is that she owes her creditors not what she agreed to pay, but the value of what she received from them. It needs only that this proposition should be stated to secure its rejection. It can be no more just in the case of Texas in regard to these debts than in any other case of public and even private indebtednesss.

The argument, however, is attempted to be sustained by precedents. I reply, if sound it needs no aid from precedents. If unsound, then no precedents can make it sound.

There is only one ground on which a government can justly scale its debts-that is the ground of absolute inability or bankruptcy, and then there must be a devotion of all its wealth. Neither Texas nor the United States can adopt that ground. Each of the parties is prosperous, each is rich, and they can neither assume the condition nor interpose the plea of insol

vency.