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sales of her public lands. We could not with honor take the lands without assuming the full payment of all incumbrances upon them." According to the terms subsequently agreed upon between the United States and the Republic of Texas, whereby the latter became one of the United States of America, the vacant and unappropriated lands within its limits were to be retained by the State and "applied to the payment of the debts and liabilities of the Republic of Texas; and the residue of the lands, after discharging the debts and liabilities, were to be disposed of as the State might direct, but in no event were said debts and liabilities to become a charge upon the Government of the United States."

Subsequently the United States, in 1850, in consideration of a modification of the Texas boundary, of the cession to the United States of all claim to territory exterior to such boundary, and of the relinquishment by Texas of "all claim upon the United States for liability of the debts of Texas" and for compensation for the surrender of forts and other public property, agreed to pay to Texas $10,000,000, but stipulated that five millions thereof should remain unpaid "until the creditors of the State holding bonds and other certificates of stock of Texas, for which duties on imports were specially pledged, shall first file at the Treasury of the United States releases of all claim against the United States for or on account of said bonds or certificates in such form as shall be prescribed by the Secretary of the Treasury and approved by the President of the United States."

A difficulty arose in carrying this law into effect, owing to the facts (1) that the debts of Texas were charged generally upon her revenues, and not specifically on "imposts" eo nomine, and (2) that doubts arose whether under the agreement between the State and the United States any part of the debts could be paid unless the whole should be discharged. These questions formed the subject of exhaustive reports by Mr. Corwin, Secretary of the Treasury, and later of an extended and able opinion by Attorney-General Cushing. In the course of this opinion, which was largely devoted to the proper construction of the act of Congress, Mr. Cushing said:

"It is contended in some of the arguments before me, and assumed by the late Secretary of the Treasury, that the receivability of the bonds under this act in payment of any duties by import,' constitutes a special pledge of duties on imports within the meaning of the phrase in the act of Congress. I do not think this altogether certain; for,

a President Tyler's 4th Annual Message, December 3, 1844, Richardson's Messages, IV. 344.

5 Stats. at L. 798.

C Act of Sept. 9, 1850, 9 Stats. 446.

d S. Ex. Doc. 103, 34 Cong. 1 sess. 406-407.

e6 Op. 130, Sept. 26, 1853.

although the United States, by receiving the Republic of Texas into the Union, extinguished all the separate import duties, and collects them into the Federal Treasury, and may therefore be under obligation to see that all such debts of Texas as were made receivable for duties on imports are provided for, it would not therefore follow of necessity that all such debts have been in fact provided for by the act of Congress under consideration. . . . The claims to be released are: 1. Bonds, or certificates of stock; not all evidences of indebtedness, but bonds or certificates of stock. This excludes not only arrearages, if any due, for supplies or services, or any other liquidated debt, but also the circulating notes of the 9th June, 1837. . . . 2. The bonds and certificates of stock to be released are such for which duties on imports were specially pledged, a pledge of all revenues being, in my judgment, a pledge of revenues from customs. Therefore, the scope of the condition covers . . . all loans negotiated by the Republic of Texas. But the circulating promissory notes of the treasury, the redbacks, do not in my opinion come within the true meaning of the phrase 'loans negotiated by the Republic.'. . . The United States, in taking from Texas, by the act of 1850, a cession of a large quantity of her vacant and unappropriated lands,' and in paying her therefor, chose to stipulate that a portion of the purchase-money should be 'applied to the payment of the debts and liabilities of said Republic of Texas.' It by no means follows that the United States have assumed any liability thereby, or impliedly recognized the existence of any liability on their part; nor that any less readiness will be shown by the proud and wealthy State of Texas to fulfil the engagement in regard to her debts contained in the compact of her admission into the Union.

"To what extent, and when, the United States will in justice and equity be liable, if ever, to the creditors of the Republic of Texas, because of a lien held by them upon the revenue of that Republic to arise from duties on imports, and the transfer, by the act of annexation to the United States, of the sole and exclusive power to levy money by duties on customs, imports, and tonnage, is not a question which the Executive of the United States can decide. That question belongs properly to the Congress of the United States, which has not as yet assumed to pay the debts of Texas.

That question, if there be any, of the liability of the United States in the premises, goes deeper, indeed, than the mere fact of revenue from customs expressly or specially pledged; for all the revenues of Texas, even where, as in the case of outstanding and unliquidated accounts for supplies and services, not expressly pledged, were yet impliedly engaged for the payment of all the debts of the Republic. And though the accession of Texas to the American Union relieved her of the burdens, and consequently expenses, military and civil, of

separate nationality, still it deprived her of certain revenues, which became irrevocably vested in the United States.

"A public creditor, like a private creditor, has a general right to receive payment out of the property, income, or means of his debtor. A special pledge of this or that source of revenue, of this or that direct tax, or indirect tax, when made by a government, renders such source of revenue, like a mortgage or deed of trust given by a private individual to his creditor, a specific lien, a fixed incumbrance, which the government ought not, in justice to the creditor, to abolish, lessen, or alienate, until the debt has been satisfied. But a public creditor, like a private one, even as to debts not secured by hypothecation of specific property or other express lien, ought not to deprive himself of the means of payment; as the two governments, that of Texas and of the United States, abundantly indicated, as well by the compact of annexion as by that for the change of boundaries.

"I waive, therefore, as irrelevant to the present object, all inquiry as to what Congress ought to do in the premises, in consequence of the absorption, by the United States, of the revenues from duties of imposts and tonnage, which might have accrued to the Republic of Texas if she had not consented to become one of the United States of America." In 1854, while these questions were still pending, and while a bill was under consideration in Congress for their adjustment, an English holder of a Texas bond, issued in July, 1839, brought a claim against the United States for the payment thereof before the mixed commission organized under the convention between the United States and Great Britain of February 8, 1853, for the settlement of claims of citizens or subjects of the one country against the Government of the other. Mr. Hornby, the British commissioner, held that the claim. should be allowed. On the other hand, Mr. Upham, the American commissioner, maintained that the commission had no jurisdiction of the subject. The indebtedness of Texas was, he said, "a distinct subject of agreement by the terms of the union;" the United States and Texas, as was shown by the act of 1850, the report of Mr. Corwin, the opinion of Mr. Cushing, and the pending legislation, were acting in concert to cause the debts to be paid; whether the United States should "be liable for this indebtedness," he did not feel "called upon to decide;" the tendency of the opinion of Mr. Cushing, so far as his views could be gathered, was to establish such liability in part; it was clear that Texas was not exonerated from the debt, and the United States had manifested a strong disposition to bring about its adjustment; but there was nothing to show that the subject was within the jurisdiction of the commission; it had not been brought to the notice of either Government, or made a matter of correspondence or difficulty between them, or included in any list of unsettled claims at the date of the convention; it therefore did not appear to be within the intent

of either contracting party as a matter to be acted upon by the commission."

The umpire dismissed the claim, it being for transactions with the independent Republic of Texas prior to its admission as a State to the United States."

By an act of Congress of Feb. 28, 1855, it was provided that, in lieu of the $5,000,000 payable to Texas in 5 % stock under the act of 1850, the Secretary of the Treasury should pay to the creditors of the late Republic, who held "such bonds, or other evidences of debt for which the revenues of that Republic were pledged," as were found by Mr. Corwin in the report approved by the President Sept. 13, 1851, or by Mr. Cushing in his opinion of Sept. 26, 1853, to be within the act of 1850, the sum of $7,750,000, to be apportioned among the holders pro rata, the interest on such debt to be determined by the then existing laws of the State of Texas.

"It has been reported that the existing Government has contracted a considerable debt. Full particulars should be ascerFiji debts. tained as to this debt, the amount of the principal and interest, the circumstances under which it has been contracted, the persons from whom it has been borrowed, the validity of the engagements entered into with them, the manner in which the money so obtained has been expended, and the precise extent of the obligations which would have to be assumed in respect of this debt by the future government of Fiji if the islands should be annexed to the British Crown. It will, of course, be understood that Her Majesty's Government could not consent to make the revenues of this country liable in any way for this debt, or to charge upon them any portion of the cost of the local government, or of maintaining order within the Islands."

Earl of Kimberly, Colonial Secretary, to Commodore Goodenough, R. N., and Mr. Layard, British consul in Fiji, Aug. 15, 1873, C. 983, April, 1874, p. 6, instructing them to report upon the question of the proposed annexation of the Fiji Islands.

"II. Liabilities.

"6. I have directed the accounts of the former Governments to be closed to the 10th of October, the date of cession; and all then outstanding revenue as it comes in to be applied to the reduction of the obligations unpaid at that date. It will, therefore, be some short time before the precise amount of the liabilities outstanding at the date of

@S. Ex. Doc. 103, 34 Cong. 1 sess. 406-409.

Moore, Int. Arbitrations, IV. 3591-3594.

c10 Stats. 617-619. See Lawrence's Wheaton (1863), 54, note; Dana's Wheaton, §30, note 18. The following Congressional documents may be consulted in regard to the Texas debts: S. Ex. Doc. 29, 28 Cong. 2 sess.; S. Mis. 72, 32 Cong. 1 sess.; H. Mis. 17, 33 Cong. 2 sess.; S. Mis. 1, 34 Cong. 3 sess.; S. Mis. 198, 35 Cong. 1 sess.

cession can be ascertained; but Mr. Thurston has supplied me with an approximate statement of the liabilities computed to the 30th of September, 1874, a copy of which I inclose. This document, although susceptible of alteration to some small extent, is no doubt sufficiently accurate for all practical purposes, and will enable Her Majesty's Government to decide the general principles upon which they will be prepared to deal with these obligations. The account shows a total liability of 87,631 7., and the various claims may be divided into four classes:

"(1) Amount due to debenture holders.

"(2) Amount due to Fiji Banking Company.

"(3) Amount due to Government officials and servants for salaries and wages.

"(4) Amount due to merchants and tradespeople for stores and supplies.

"7. I observe in the statement that two sums of 665 7. and 520 7. for the amount short paid on salaries during the ad interim Consular Government are put down amongst the liabilities. But I think that these sums should be struck out altogether. The salaries were reduced in March last, because it was estimated by Commodore Goodenough and Mr. Consul Layard that such a step was necessary to bring the expenditure of the Government within the receipts. The necessity for such a step has been proved by the result. Notwithstanding these reductions the revenue has been unequal to the expenditure, and the reductions, which might perhaps have been claimed if the revenue had proved sufficient to cover them, should not now be recognized amongst the liabilities of the Government.

"8. As regards the remainder of the claims, it must be borne in mind that they have all accrued since 1871, and that the lenders practically trusted for the repayment of their advances to the success of the so-called Constitutional Government. That experiment has proved a complete failure. The security upon which the money was lent has therefore become valueless, and if the cession of the country had not been accepted by Great Britain, not a fraction of these liabilities would ever have been recovered by the Government creditors. It appears to me, therefore, to be competent for Her Majesty's Government with perfect equity to decide upon the manner in which these liabilities shall be dealt with, and that any amount received by the creditors of the late Government should be looked upon by them as so much recovered of a worthless debt-so much rescued, as it were, from the wreck of a losing venture. Viewed in this light, I do not think that the British Government is in any way called upon to give the creditors of the collapsed Fijian Government the full amount of their claims. For example, the 51,400 7. of the 10 per cent. Government debentures, which is the first item in the list of liabilities, only

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