The interpretation by the officials of the United States of the proviso in the Boundary Act and the report of the auditor and the comptroller of the debts as ascertained to November 12, 1851, were followed by the long delayed act for the payment of the debt of the republic. This was the act of January 31, 1852.2 It accepted the rating of the debt as given in the auditorial report of 1851 and appropriated $2,000,000 of the United States bonds as a means of payment. It provided that the non-revenue debt should be paid unconditionally, but that no payment should be made on the revenue debt until the governor was notified by the President that there would be issued an amount of the reserved five million of bonds equal to the amount of releases filed by the creditors with the United States Treasury. The debt for which unconditional payment was provided consisted of audited paper, audited claims, miscellaneous liabilities, and the 8% and 10% bonds issued under the act of February 5, 1840. The par value of these debts, not including interest, was $1,678,242, but scaled, the amount was $1,058,779.

Another deadlock between the state and the creditors took place. The condition attached by Texas to the payment of the revenue debt flew in the face of the ruling of Secretary Corwin. This ruling would in its operation work a hardship upon the state, for it would prevent reimbursement for payments on the revenue debt until all this class of creditors filed their releases with the United States. Unless a reasonable length of time were prescribed within which filing should take place, the state could be held up by tardy creditors and the state treasury would be deprived of the funds expended for an unnecessarily long time.3 At the same time this ruling protected the United States, and it was very much to the interest of the creditors. The other cause of the deadlock was the refusal of the creditors to accept the scaled rates adopted by Texas.

1 Report of the Comptroller, 1852-3, p. 7. 2Laws of 1852, p. 38.

3 Speech of Mr. Bell, Cong. Globe, vol. 28, pt. 3, p. 595. Message of Governor Pease, December 23, 1853.

Memorials of creditors, some praying for a modification of the secretary's ruling in order that payment might be begun by Texas at the scaled rates; others proposing the responsibility of ,the United States for the full payment of the revenue debt, brought the matter into Congress.1 In the Senate on August 26, 1852, there failed a proposed amendment to a foreign relations bill which would have permitted the issue of bonds to Texas as fast as releases were filed.2 It was developed in the debate upon this amendment that creditors whose claims had been scaled but little would accept payment and that those whose claims were heavily scaled would not; be satisfied and would continue to demand relief from Congress.3 The creditors contended that the responsibility of the United States arose when Texas lost through annexation the right to impose the customs duties which were pledged for the payment of the public loans, and they contended further that this responsibility was virtually admitted by the "Boundary Act" in the proviso reserving the $5,000,000 of bonds.4 The contention of the creditors was accepted in the two reports of the Senate Finance Committee to which the memorials were referred, and was the basis of the later action of Congress.5 With its report on August 17, 1852, the Senate Finance Committee submitted a bill to appropriate in lieu of the $5,000,000 of reserved bonds, $8,555,000 in 5% bonds, to be divided equally among the holders of the revenue debt.6 The Thirty-Second Congress expired without any action being taken.

The question was reopened in the first session of the Thirty-Third Congress by the introduction on December 12, 1853, of a bill by Senator Thompson, of Kentucky, which proposed the distribution of $8,333,000 in 3% bonds among the revenue debt creditors.1 The Senate Finance Committee, to which it was referred, reported it on June 15, 1854, with a substitute which proposed a pro rata distribution of $6,500,000 in cash.2 This substitute did not meet the approval of the chairman and of other members of the committee and it was recommitted to the committee on June 21. The committee again reported on July 1, 1854, but this time in favor of a distribution of $8,500,000 in cash.3 This amount was equal to the face value of $5,000,000 of reserved bonds with interest to maturity.4 An amendment by Mr. Bright, of Indiana, that the interest on the debt should be regulated by the existing laws of Texas was agreed to, but an amendment by Mr. Chase, of Ohio, to reduce the amount to $6,-500,000 was defeated.5 The amount proposed by Mr. Chase and later by the House was the reserved $5,000,000 with premium and with interest to date.6 The bill with the Bright Amendment passed the Senate July 21, 1854, by a vote of 27 to 19.7 The first session ended, however, without any action being taken by the House. At the second session the House made seven amendments. They were, principally, that the sum to be appropriated should be reduced to $6,550,000, and that the act should not become effective until assented to by the legislature of Texas nor until the legislature should withdraw and abandon all claims and demands against the United States on account of Indian depredations, prior to the admission of the state into the Union.8 The bill as amended passed the House February 7, 1855, by a vote of 153 to 43.9 The Senate disagreed to the amendments and the bill went to conference.10 In the conference the Senate withdrew from its disagreements to the House amendments, and the amount to be appropriated was agreed upon at $7,750,000.1 The conference bill was accepted by the House by a vote of 123 to 77 and by the Senate by a vote of 30 to 14. The bill was approved February 28, 1855.2

1 Cong. Globe, vol. 24 pt. 3, pp. 2231, 2380; vol. 28, passim.

2 Ibid., vol. 24, pt. 3, p. 2380.

3 Ibid.,p. 2381.

4 Gouge, op. cit., pp. 312-316.

5 Report of August 17, 1852, in Gouge, op. cit., pp. 312-316. Report of July 1, 1854; House Misc. Doc. No. 17, 33d Cong., 2nd Sess., pp. 23-28.

6 Mr. Pearce, of Maryland, chairman of the committee, stated in his speech of August 26, 1852, that the committee proposed to appropriate $8,333,000 in 3 per cent bonds. See also message of Governor Bell, January 13, 1853; Senate Journal, 4th Leg., Second Sess., p. 20.

1 Cong. Globe, vol. 28, pt. 1, p. 28, and pt. 3, p. 1806. 2Cong. Globe, vol. 28, pt. 3, p. 1806. 3Ibid., p. 1806.

4 Cong. Globe, vol. 28, pt. 3, p. 1845. 5Cong. Globe, vol. 28, pt. 3, p. 1845. 6Ibid., p. 1844. 7Ibid., p. 1845.

8 Cong. Globe, vol. 30, pt. 1, pp. 618, 619. 9Ibid., p. 619. 10Ibid., pp. 719, 743.