In his letter before quoted, of the 23d March last, Mr. Slidell, the minister of Jefferson Davis at Paris, says, 'There is a wide difference between these (Union) bonds and those of the Planters' Bank, for the repudiation of which neither excuse nor palliation can be offered.' And yet I shall now proceed to prove, that Mr. Jefferson Davis did not only palliate and excuse, but justified the repudiation, in fact, of those bonds by the State of Mississippi. First, then, has Mississippi repudiated those bonds? The principal and interest now due on those bonds exceed $5,000,000 (£1,000,000), and yet, for a quarter of a century, the State has not paid one dollar of principal or interest. 2. The State, by act of the Legislature (ch. 17), referred the question of taxation for the payment of those bonds to the vote of the people, and their decision was adverse. As there was no fund available for the payment, except one to be derived from taxation, this popular vote (to which the question was submitted by the Legislature) was a decision of the State for repudiation, and against payment. 3. The State, at one time (many years after the sale of the bonds), had made them receivable in purchase of certain State lands, but, as this was 'at three times its current value,' as shown by the London Times, in its article heretofore quoted by me, this was only another form of repudiation. 4. When a few of the bondholders commenced taking small portions of these lands in payment, because they could get nothing else, the State repealed the law (ch. 22), and provided no substitute. 5. The State, by law, deprived the bondholders of the stock of the Planters' Bank ($2,000,000), and of the sinking fund pledged to the purchasers for the redemption of these bonds when they were sold by the State. Surely there is here ample evidence of repudiation and bad faith.
The bonds issued by the State of Mississippi to the Planters' Bank were based upon a law of the State, and affirmed, by name, in a specific provision of the State Constitution of 1832. The State, through its agent, received the money, and loaned it to the citizens of the State, and the validity of these obligations is conceded by Mr. Slidell and Mr. Davis.
These bonds were for $2,000,000, bearing an interest of six per cent. per annum, and were sold at a premium of 13-1/2 per cent For those bonds, besides the premium, the State received $2,000,000 of stock of the Planters' Bank, upon which, up to 1838, the State realized ten per cent. dividends, being $200,000 per annum. In January, 1841, the Legislature of Mississippi unanimously adopted resolutions affirming the validity of these bonds, and the duty of the State to pay them. (Sen. Jour. 314.)
In his message to the Legislature of 1843, Governor Tucker says:
'On the 1st of January, 1838, the State held stock in the Planters' Bank for $2,000,000, which stock had, prior to that time, yielded to the State a dividend of $200,000 per annum. I found also the first instalment of the bonds issued on account of the Planters' Bank, $125,000, due and unpaid, as well as the interest for several years on said bonds.' (Sen. Jour. 25.)
The Planters' Bank (as well as the State), by the express terms of the law, was bound for the principal and interest of these bonds. Now, in 1839, Mississippi passed an act (Acts, ch. 42), 'to transfer the stock now held by the State in the Planters' Bank, and invest the same in stock of the Mississippi Railroad Company.' By the first section of this act, the Governor was directed to subscribe for $2,000,000 of stock in the railroad company for the State, and to pay for it by transferring to the company the Planters' Bank stock, which had been secured to the State by the sale of the Planters' Bank bonds. The 10th section released the Planters' Bank from the obligation to provide for the payment of these bonds or interest. Some enlightened members, including Judge Gholson, afterward of the Federal Court, protested against this act as unconstitutional, by impairing the obligation of contracts, and as a fraud on the bondholders.
They say in this protest:
'The money which paid for the stock proposed to be transferred from the Planters' Bank to the Mississippi Railroad Company, was, under the provisions of the charter, obtained by loans on the part of the State, for the payment of which the stock, in addition to the faith of the Government, was pledged to the holders of the bonds of the State. By the terms of the contract between the commissioners on the part of the State and the purchasers of the bonds, the interest on the loans is required to be paid semiannually out of the semiannual dividends accruing upon the said stock; and the surplus of such dividends, after paying the said interest, is to be converted into a sinking fund for the payment and liquidation of said loans. The bill, as the title purports, simply provides for the transfer of the stock now held by the State in the Planters' Bank, and that the same shall be invested in the stock of the Mississippi Railroad Company, leading from Natchez to Canton, which has banking privileges to twice the amount of capital stock paid in. The transferring of the stock and dividend to another irresponsible corporation, and the appropriation of the same to the construction of a road, is a violation of and impairing the obligation of the contract made and entered into with the purchasers or holders of the bonds of the State, under a solemn act of the Legislature. If it should be thought that a people, composed of so much virtue, honor, and chivalry, as the noble and generous Mississippians, would disdain, and consequently refrain, from repealing or violating their plighted faith, it may be answered, that the faith of the State, solemnly and sacredly pledged by an act of the Legislature, with all the formality and solemnity of a constitutional law, is violated by the provisions of this very bill under consideration. The faith of the State is pledged to the holders of the bonds, by the original and subsequent acts incorporating the Planters' Bank, as solemnly as national or legislative pledges can be made, that the stock and dividends accruing thereon shall be faithfully appropriated to the redemption and payment of said loans and all interest thereon, as they respectively become due; the appropriation of this fund to an other purpose is, therefore, a violation of the faith of the State.' (House Jour. 443.)
Thus was it, that the stock of the bank, which for so many years had been yielding a dividend far exceeding the interest on the loan, and which stock had been pledged for the redemption of the loan, was diverted to the building of a railroad, which never did or could yield a single dollar, and the company soon became insolvent. By another clause of this act of 1839, the Planters' Bank, which, by the loan act, was made responsible (together with the State) for the payment of these bonds, was released from the obligation to make such payments.
And now, what is the answer of Jefferson Davis on this subject? He says, in his letter of the 25th May, 1849, before quoted: