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Bank of the United States which purchased and resold, or pledged, the bonds in question, endorsed with its own guarantee, that the European holders of them must look for their redemption, and not to the people of the State of Mississippi ; — and finally, that inasmuch as no portion of the proceeds of the bonds ever came into the treasury of the State, or under the control of any of its officers, there is no equity in the case against it so as to counteract the undeniable technical illegality of the transaction on the part of the two banks, and to impose on the State an obligation of honor to redeem the bonds.
Such are the leading points of the anti-bond argument. It is not to be denied that they constitute at least a strong prima facie case in favor of the proposed repudiation; and that they ought to silence the clamor we have heard against the people of Mississippi, as desiring to evade the redemption of the public faith of the State, fairly and legally plighted. That is precisely the hinge of the question, and to assume that the public faith is so plighted, is nothing more nor less than a complete petitio principii. And to infer from the present agitation of this controversy, that there either exists now, or is likely to arise, in any of the States of this Union, anything like a formidable disposition to repudiate their public debts, is as absurd as it is calumnious. We are profoundly and perfectly convinced, that every dollar of the public stocks of every State in the Union will be eventually paid, to the last jot and tittle of the redemption of their plighted honor. Fearful as may be the demoralization, with respect to the sanctity of contracts, which has been the worst of the fruits of our paper-money credit system, we have no fear that it has proceeded to such a length as this. And of one thing are we especially certain that the Democratic Party, which is and must continue in the long run the dominant power in the country, will be the very last portion of the whole people, with whom the base infamy of such a proposition will be ever likely to meet a favorable reception. For we are the party which, throughout the struggles and discussions of the last ten or twelve years, about these questions, has placed itself in opposition to the excesses and abuses of credit the party of moderation, of prudence the paying, in contradistinction to the borrowing, party. In private affairs, it is always on the part of those the most bold and speculative in their calculations on credit and chance, that the most lax morality prevails in regard to the redemption of the obligations they are so adventurous in hazarding. And in public, it is from your "Credit System" parties that proceed your retroactive bankrupt laws, your bank suspensions, tolerated by opinion, and sanctioned by legislation, &c. — and from
them, too, if ever from any, that can alone proceed such a public act of State bankruptcy, as is here in question, if ever the pressure of a public debt shall become too heavy to be sustained by the industrial energies of the people. If that day is ever to arrive in any of our States, the public creditor, whether he may reside at the antipodes, or in our own midst, may rely upon the assurance which, in the name of the American democracy, we feel authorized to give him, namely, that when he will find himself abandoned to his fate by those who now profess to be his peculiar friends, it will be the Democracy which will surrender to him everything but honor; which will cast to the winds everything but conscience; and which will sell out the fee-simple of the last foot of earth covered by the last hearth-stone, if necessary, for the payment of the last cent of principal or interest on the public debt.
But to return to the Mississippi Bonds-we repeat that they must be paid. The analogy, derived from the legal relations of a corresponding private transaction, on which the repudiation argument rests, is in our opinion deceptive, though specious, in its application to the circumstances of the present case. In the first place, no great force can be claimed for the argument of the unconstitutionality of the law in question. That the attention of the Legislature of 1838 was fully drawn to that point, is apparent from the fact of the protest against its passage by the minority, on that ground. Their act was an expression of their own judgment that it was constitutional; and representing, as they did by their majority, the people of the State, it is too much to expect that the foreign creditor, when in the act of lending his money, should undertake to revise and overrule their decision upon a point of that nature, made under their own high political and moral responsibilities, to the people and their own oath of office. Faithfully and honestly or not-yet actually it cannot be denied that they represented the people; and the doctrine would be absurd, that when in the interval between the passage of a law, of perhaps disputed constitutionality, and a judicial decision to that effect, equitable rights have arisen under its operation, involving the public faith to innocent private parties, a subsequent change of majority should justify the Legislature in repudiating all such obligations, on the ground of the different view now taken by it of the constitutional question. A legislative body must stand as the sole authoritative judge of its own constitutional powers, until the action of the judiciary supervene, in some controversy of private rights. And though a law may of course be declared void for unconstitutionality, as affecting injuriously the rights of oth
ers; yet it would be monstrous to claim for the people of a State as represented and embodied in its regularly constituted Legislature, the right themselves to take advantage of such a subsequently declared unconstitutionality, to repudiate, to their own benefit and the injury of innocent third parties, obligations assumed by them with all the solemn formality of an act of legislation, claiming to be for an object of public interest, and in the very act positively asserting its own constitutionality. They cannot thus take advantage of the dishonesty or ignorance, as the case may be, of their own elected representatives. If they will be guilty of the folly of sending such a set of men to their legislative halls, they must for the present submit to the consequences for which they have themselves chiefly to blame, and for the future profit well by the experience for which they have been thus made to pay. The unconstitutionality of the law, then, clearly will afford no justification to the Anti-Bond party for the course threatened by a large part of the press of Mississippi,-assuming that unconstitutionality to be beyond question, and putting out of view the important fact that Governor McNutt, the prime mover of repudiation, himself signed the law referred to, and himself partially carried it into execution.
Nor is the argument of illegality, derived from the mode of executing the law, much stronger than that of the unconstitutionality of the law itself. The State subscribes to the stock of the Bank, and the five millions of bonds are delivered over to the officers of the latter, for the purpose of affording it the capital necessary to set it in operation, this being esteemed, by the false and morbid popular opinion of the day, an object of high public concern and interest. Grant that, in the sale of them, the Bank, through its agents, the commissioners, may have in some respects transgressed the provisions of the law; the State ought not to have intrusted them to such unfaithful agents. The circumstance of their being changed in form, from "current money of the United States" to sterling currency, is immaterial in its nature, unless the former expression is fraudulently meant to give the State the advantage, in the payment of its interest, of the depreciated condition of the paper "current money" of some portions of the United States. This is not to be supposed; and no other honorable interpretation can be put upon the expression than that of the true constitutional "current money of the United States," gold and silver. The translation of the one currency into the other may or may not have been at the just rate of the par of exchange. We all know that extremely vague and loose ideas have been of late years very prevalent of the meaning of that little monosylla
ble. "Par" has had a very different meaning with the one of our political parties than with the other. With the Whigs, including a great majority of the commercial community, the current value of a suspended bank-note circulation has constituted the local standard of "par," while specie has been at a greater or less "premium ;" while with the Democratic party the currency of the Constitution and of the world, the precious metals, have alone afforded the standard level from which the depreciation of the respective paper circulations of different sections have been measured downward. We cannot perceive in this feature of the transaction, taken even in its strongest shape, a just or honorable ground for the proposed repudiation. It ill becomes a sovereign State and that State a republic and a democracy on petty technical grounds of such a character as this, the payment of debts, however unwisely contracted and trusted in the hands of unfaithful agents, on the faith of which an innocent foreign creditor has been induced to part with his property; to place it, if not in the coffers of the State treasury itself, at least in those of an institution in which the State was the largest stockholder, and which it created as a valuable object of public policy, for the presumed benefit and “relief” of its great commercial and agricultural interests. Nor does it appear by any means clear that after the delivery of the bonds to the Bank, in payment of the subscription of the State to its stock, the State has any further right to scrutinize the terms of any arrangement that may be made by the Bank to realize upon them the highest price admitted of by the condition of the market-provided that the State is credited with them at the full value of their face, at par and as cash, on its subscription to the stock. And this we understand to be the fact. That the directors of the Union Bank have wasted their capital in the false and dishonest system of banking and financiering which has prevailed in that State, is no fault of the foreign creditor, who lent his money on the credit, neither of the Bank, nor of its companion in iniquity, the Bank of the United States, but on that of the State of Mississippi. The State has doubtless sunk its money, as many a stockholder in many a bank, in that as in other parts of the country. This has not been caused by the fact of the loss sustained by the Bank on the sale of the bonds, be the true figure of that loss more or less. The same would have been the case had the bonds in question commanded a premium, instead of having been sold at a rate of five and six per cent. depreciation. The same would doubtless have been the case had the entire fifteen millions, originally contemplated, been consigned to the same destination. Happily for the people of
VOL. X., No. XLIII. — 2
Mississippi, and thanks to the intelligent firmness of Governor McNutt, the State has lost only five millions, where it might have lost fifteen. It deserved richly the smaller loss - it would have deserved richly the greater for the folly of which it was guilty, in creating the Bank, and thus endowing it with the means of evil from the public treasury. It would have made no practical difference in the result, whether the contribution of the State had been in the form of a loan of its bonds to the Bank, as contemplated in the original act, or in that which was given to it by the supplementary act authorizing a direct subscription to the stock. Substantially the transaction was the same. The former was fully authorized by the required constitutional ratification. The truth is, that the public opinion of the State in relation to banks and banking facilities was radically wrong. The people of Mississippi are now only paying the natural and usual penalty of human folly; and instead of complaining instead of staining the fair scutcheon of the public faith and honor with the disgrace of this threatened repudiation they ought rather to consider themselves fortunate in escaping with but one-third of the loss which they might have sustained, and which they so unwisely hazarded.
The bonds must be paid, then ; — and that they will be eventually paid, whatever may be the action of the Legislature recently elected, we have no more doubt than we have that they ought to be.
One good result, however, at least, may be ascribed to the agitation of this question in Mississippi - and we are duly and sincerely grateful for it. We allude to the total destruction of the European market for our public stocks. Our only fear is, that this effect may prove but temporary, and that a revival of the confidence of the foreign capitalist may renew yet again this pernicious system of national borrowing, from which through the last ten years we have suffered so much. Our public credit is down now to so low a point that we can borrow no more - Heaven forefend that it should rise again!— except to the extent of doing justice to the creditors on our actual existing debt. Such a state of things we often hear spoken of as a national calamity; it is rather a national blessing. In fact, the doctrine of public credit may be regarded as one of the most pernicious inventions of modern times. Witness its awful fruits in England! as well as under other foreign governments to which it has alone furnished, by the unrighteous mortgage of the labor and property of unborn generations, the means of carrying on the wars, and sustaining the military establishments, with which they have desolated provinces and kingdoms. And within the past ten years in our own coun