According, then, to Mr. Jefferson Davis, the London Times and the London 'Change are great reprobates, and it is not Mississippi, but 'the English Government' which has repudiated their own public debt.

From such angry epithets and fierce denunciation, the reader will be prepared to find very little argument in Mr. Jefferson Davis' second letter. He denies that Mississippi received the money. But a bank, of which she was the sole stockholder, and whose directory was all appointed by her, received it. They received it also for her exclusive benefit, for she, as a State, was to derive large profits on the stock of the bank, which was hers exclusively, and was paid for entirely by the proceeds of these bonds. Mississippi then, as a State, through her agents appointed by her, received this money. All governments must act through human agency, and the agency in this case, which received the money, was appointed entirely by the State. But this is not all. The Bank, which was exclusively a State bank, and based entirely on the proceeds of these State bonds, with no other stockholders, was directed by the charter to loan this money, the proceeds of these bonds, only to 'the citizens of the State,' sec. 46, and so the loans were made. The State, then, through an agency appointed exclusively by itself, received this money, the proceeds of the State bonds, and the State, through this same agency, loaned this money to 'the citizens of the State,' who never repaid the loans. The State then received the money and loaned it out to its own citizens, who still hold it; and yet this money, obtained on the solemn pledge of the faith of the State, her citizens still hold, and the State repudiates her bonds on which the money was received, and Mr. Jefferson Davis sustains, indorses, and eulogizes this proceeding. Never was there a stronger case.

Mr. Jefferson Davis reiterates in this letter his arguments contained in his previous communication of the 25th May, 1849, so fully answered by the editors of the London Times in their money article before quoted of the 13th July, 1849. He elaborates, particularly, the legal position, that the bonds were invalid, because he says not sanctioned by two successive Legislatures as required by the Constitution of Mississippi. This statement is erroneous, because the loan, in the precise form in which the bonds were issued, was sanctioned by two successive Legislatures in perfect conformity with the Constitution. This is shown, as will be proved hereafter, by reference to the laws passed by the State, and such was the decision on this very point by the highest judicial tribunal of Mississippi, in 1842 and 1853. But let us suppose that there was some technical legal informality as to the law, would that justify the repudiation of these bonds? The Legislature had passed laws in 1837 and 1838 authorizing the issue and sale of these bonds, those acts had been all signed and approved by the Governor of the State, the bonds had been signed by the Governor and Treasurer of the State, the broad seal of the State had been affixed to them by the Governor, they were placed in the hands of the authorities of the State for sale, they were sold by them, and the full amount paid over to the agency appointed by the State, and by that agency the money was loaned to the 'citizens of the State' and still retained by them. When the sale of these State bonds in August, 1838, together with all the facts and documents, were placed by the Governor before the Legislature in 1839, they ratified and highly approved the sale, as before quoted by the Times, and again still more decidedly in 1841. And yet the State, on the technical grounds stated by Mr. Davis, repudiated their bonds. It was unconstitutional to return the money which they had borrowed and used! Could anything be more absurd or dishonorable than this? The law says, if a man borrows money without certain legal authentications, he shall not be forced to repay; but if he receives and uses the money, and then interposes such technical pleas, he is justly deemed infamous. He has violated his honor. And is the honor of an individual more sacred than that of a state or nation? State and national debts rest upon faith, they repose upon honor, the obligation is sacred, and must be fulfilled. It can never he illegal or unconstitutional to pay a debt, where the money has been received by a state or a nation. And, where a State, acting through its supreme Executive and Legislature, has issued its bonds and affixed its seal, and they have passed into the hands of bona fide holders, the obligation must be fulfilled. For a state or nation, having issued its bonds under its highest legislative and executive sanction, to say, that their own functionaries mistook some of the formalities of the law, and refuse payments, is a fraud upon the bona fide holders, and can never be sustained before the tribunal of the world. But when, besides the Legislature and Executive of the State, its highest judicial tribunals have declared the bonds perfectly constitutional and valid, and to have been sold in accordance with the terms of the law, for such repudiation of such bonds it is difficult to find any language sufficiently strong to mark the infamy of such a transaction.

If indeed the formalities of the Constitution had not been complied with, and this were not a mere pretext, how easy would it have been to have passed a new act in conformity with the constitutional formalities, assuming the debt, or providing for the issue of new bonds to be delivered to the holders on the return of those alleged to be informal. But the truth is, this alleged unconstitutionality was a mere pretext for repudiating a just debt: it never occurred to the Legislatures which passed these laws in 1837 and 1838, or to the Governor, who signed them, and was rejected by the Legislature in 1839, and again, in the most solemn form, in 1841.

And now let me trace the history of this transaction chronologically. The original act chartering the bank, with the 5th section authorizing the loan, was passed by the Legislature January 21st, 1837, and again, in strict compliance with the provisions of the Constitution, reënacted in the same words on the 5th of February, 1838. Now the bonds issued are in strict conformity with this law, and an exact copy of the form of the bonds prescribed by the law. If then, the supplemental act of the 15th February, 1838, was unconstitutional, null, and void, as contended by the repudiators, then the whole original act remained in full force, and the bonds were valid under that law, and such was the unanimous decision of the High Court of Errors and Appeals of Mississippi, as will be shown hereafter. It was contended before the court (and by Mr. Davis in his last letter) that, under the original law, certain acts were to be performed before the bonds could issue. But here again, it is plain on the face of the law, and so the High Court of Errors and Appeals of Mississippi unanimously decided, that these acts were not required to be performed as conditions precedent to the issue of the bonds, and that the issue and sale of the bonds were perfectly valid before these acts had been performed. The bonds then are in exact conformity with a law, which was passed by two successive Legislatures, precisely as provided by the Constitution.

In 1836 there was a great pecuniary embarrassment in Mississippi, attributed by many to what was called the specie circular, and soon followed a suspension of the banks. Under these circumstances there was an almost universal demand in Mississippi for relief measures. As a consequence, the attention of the Legislature was absorbed almost exclusively in the consideration of remedies for the existing embarrassments. The result was the enactment, on the 21st January, 1837, of the law, creating the Union Bank of Mississippi. This bank was based upon loans to be obtained upon bonds of the State, the proceeds of which, when sold, were to constitute the capital of the bank, which money, by the terms of the charter, was to be loaned to the 'citizens of the State,' to relieve the existing embarrassments.

The fifth section of the act was the only one in which any authority was given for a loan by the State, and any power to pledge its faith. That section, entire, was as follows:

'That, in order to facilitate the said Union Bank for the said loan of fifteen millions five hundred thousand dollars, the faith of this State be, and is hereby pledged, both for the security of the capital and interest, and that 7,500 bonds of $1,000 each, to wit: 1,875 payable in twelve years; 1,875 in fifteen years; 1,875 in eighteen years; and 1,875 in twenty years, and bearing interest at the rate of five per cent. per annum, shall be signed by the Governor of the State to the order of the Mississippi Bank, countersigned by the State Treasurer, and under the seal of the State; said bonds to be in the following words, viz.:

'$2,000. Know all men by these presents, that the State of Mississippi acknowledges to be indebted to the Mississippi Union Bank in the sum of two thousand dollars, which sum the said State of Mississippi promises to pay in current money of the United States to the order of the President, Directors, and Company in the —— year ——with interest at the rate of five per cent. per annum, payable half yearly, at the place named in the indorsement hereto, viz.: —— on the —— of every year until the payment of the said principal sum: in testimony whereof the Governor of the State of Mississippi has signed, and the Treasurer of the State has countersigned these presents, and caused the seal of the State to be affixed thereto, at Jackson, this —— in the —— year of our Lord.

'Governor.