'The case of Mississippi stands thus: In 1838 the State issued bonds for five millions of dollars, to establish the Union Bank. These bonds were dated June, 1838, bearing five per cent. interest from date, and it was stipulated with the bank that they should not be sold under their par value. On the 18th August following, the bank sold all these bonds to the United States Bank for five millions of dollars, payable in five equal instalments in November, January, March, May, and July, but without interest. The money was punctually paid to the Mississippi Bank, and the Legislature of Mississippi, on the terms of the sale being communicated to them, resolved, 'That the sale of the bonds was highly advantageous to the State, and in accordance with the injunctions of the charter, reflecting the highest credit on the Commissioners, and bringing timely aid to an embarrassed community.' In little more than two years, however, the Mississippi Bank became totally insolvent, having lost the entire five millions invested in it by the State. Immediately on this having transpired, the Governor of the State sent a message to the Legislature recommending them to repudiate (this was the first time the word was used) their obligations, being founded on the plea, that as the bonds were issued with interest payable from the date, and they had been sold to the United States Bank for their nominal amount only, the stipulation that they should not be disposed of below their par value had been departed from. He further urged that although the bonds had been sold ostensibly to Mr. Biddle, the president of the United States Bank, the sale was actually to the bank itself, which, by its charter, could not legally purchase them. Hence, although Mississippi had received the money for the bonds, it was thus proposed to refuse to repay it, on the ground that the purchaser had no right to buy them. The Legislature, however, was not quite prepared for this, and accordingly, in responding to the Governor's message, they resolved: '1st. That the State of Mississippi is bound to the holders of the bonds of the State sold on account of the bank for the amount of principal and interest. 2d. That the State of Mississippi will pay her bonds, and preserve her faith inviolate. 3d. That the insinuation that the State of Mississippi would repudiate her bonds and violate her plighted faith, is a calumny upon the justice, honor, and dignity of the State.' But after this, the pecuniary condition of the State became rapidly worse, and the disposition to pay diminished in proportion. Accordingly a joint committee of the Legislature appointed in 1842, reported that the State was not bound to pay the bonds, advancing the reasons before mentioned, and also another, namely, that the bonds had not been sanctioned in the manner required by the Constitution, since, although the provision that no loan should be raised, unless sanctioned by a law passed through two successive Legislatures, had been complied with, and the bonds had been legally authorized, the act also prescribed certain conditions regarding the Bank of Mississippi, which conditions had been altered by a subsequent act, that had only passed through one Legislature.
'In addition to the five millions thus repudiated, Mississippi owes two millions which she recognizes. It has always, however, been a difference without distinction, since she pays no dividends on either. From the period of repudiation up to the present moment, all representations of the bondholders have been treated with disregard. About a year and a half back, however, one of the citizens of Mississippi, a Mr. Robbins, admitted the moral liability of the State, and proposed that the people should discharge it by voluntary contributions.
'The next step is the appearance of the letter from Mr. Jefferson Davis, with whom we are now called upon to deal. This statement, which was transmitted by him to the Washington Union, in reply to our remarks of the 23d February last, runs as follows.'
Here the Times inserts Mr. Jefferson Davis's repudiation letter before quoted.
'The assurance in this statement that the Planters' Bank, or non-repudiated bonds, are receivable for State lands, requires this addition, which Mr. Jefferson Davis has omitted, that they are only so receivable upon lands being taken at three times its current value. The affirmation afterward, that no one has a right to assume that these bonds will not be fully provided for before the date at which the principal falls due, is simply to be met by the fact that portions of them fell due in 1841 and 1846, and that on these, as well as on all the rest, both principal and interest remain wholly unpaid.
'Regarding the first part of the statement no comment could be made which would not weaken its effect. Taking its principle and its tone together, it is a doctrine which has never been paralleled. Let it circulate throughout Europe, that a member of the United States Senate in 1849, has openly proclaimed that at a recent period the Governor and Legislative Assemblies of his own State deliberately issued fraudulent bonds for five millions of dollars to 'sustain the credit of a rickety bank;' that the bonds in question, having been hypothecated abroad to innocent holders, such holders had not only no claim against the community by whose executive and representatives this act was omitted, but that they are to be taunted for appealing to the verdict of the civilized world, rather than to the judgment of the legal officers of the State by whose functionaries they have been already robbed; and that the ruin of toilworn men, of women, of widows, and of children, and the 'crocodile tears' which that ruin has occasioned, is a subject of jest on the part of those by whom it has been accomplished; and then let it be asked if any foreigner ever penned a libel on the American character equal to that against the people of Mississippi by their own Senator.'
To this reply of the London Times, which (except in portions of Mississippi) was generally approved throughout the Union, Mr. Jefferson Davis responded in a very long letter, dated from his residence, Brierfield, Mississippi, August 29, 1849, addressed to the editors of the Mississippian. He begins as follows:
'The London Times of July 13, 1849, contains an article which most unjustly and unfairly attacks the State of Mississippi and myself, because of a statement I made in refutation of a former calumny against her, which was published in the same paper.'
This article of the London Times Mr. Davis denounces as 'a foreigner's slander against the government, the judiciary, and people of Mississippi;' 'very well for the high Tory paper as an attack upon our republican government;' as 'untrue;' 'the hypocritical cant of stockjobbers and pensioned presses' 'reckless of reputation;' 'hired advocates of the innocent stock dealers of London 'Change;' 'a calumnious imputation.' These are pleasant epithets which Mr. Jefferson Davis applied to the London Times and the London 'Change. But Mr. Jefferson Davis was very indignant, not only with London, but with all England; for he says,
'With far more propriety might repudiation be charged on the English Government, for the reduction of interest on her loans when she consolidated her debts; for the income tax, which compels fundholders to return part of the interest they receive on their evidences of public debt, for the support of the Government which is their debtor.'