placed in the hands of commissioners appointed for that purpose, did not consider that, like all public officers managing money matters, these commissioners would have set their ingenuity at work to devise means, by which to obtain for themselves whatever of the effects would have come in their hands, so that neither creditors nor stockholders would ever have got anything; nor did they consider, that, though the Legislature might repeal, the banks were at liberty to contest their right so to do, involving the case in endless litigation, the result of which might even have been a decision in their favor; whilst, in the meantime, they would not have been at a loss how to remove their assets to a place of safety, beyond the reach of their creditors. They also paid no regard to the fact, that a government, which, yielding to the excitement of the moment, hesitates not to adopt such extreme and violent measures as cannot be justified in point of law, is calculated to excite such distrust in the minds of capitalists as to render them unwilling to subscribe to its stock, or expend their money for the improvements, which it authorizes. On the side of a compromise, it was argued, that the bonds held by the banks could not be suffered to be sold; for the sale of so great an amount of bonds, in addition to those already in the market, would not only still further depreciate their value, but, by impressing people with a belief that the State had wilfully assisted in depressing their value, in order to purchase its own bonds at the largest possible discount, would make them consider, that a State, which felt no repugnance to thus acting like a vulgar swindler, was certainly very far from entertaining any intention to pay a single cent on the public debt.

These reasons prevailing with the people, a majority of them declared themselves in favor of a compromise; accordingly, a bill of compromise with the State Bank was introduced into the House of Representatives, and passed by a vote of 107 to 4. It was at once agreed to by the bank, and Mr. Clernand, the chairman of the finance committee of the Lower House, became its principal advocate. As there existed an old feud between Mr. Clernand and Lyman Trumbull, Secretary of State, the latter threatened, that he would take good care, that the bill should be so altered in the Senate, which body had yet to vote on it, that "the framers, in the House, should not know their own bantling, when it came back to them." On hearing

this, the Governor, being of opinion, that the Secretary of State ought to be the confidential adviser and helper of the executive, immediately removed Trumbull from his office. The bill was then passed by a large majority, and approved by the council of revision; and a similar one was passed in regard to the Illinois Bank, at Shawneetown; by which two bills a debt of $2,500,000 was liquidated, and the domestic treasury at once relieved.

The Legislature, at this session, also enacted laws for the sale of State lands and property, for the negotiation of the loan of $1,600,000,, which had been proposed to complete the Illinois and Michigan Canal, for the redemption of interest bonds mortgaged to McAlister and Stebbins, and for the reception of the distributive share of the State in the proceeds of the sales of the public lands; by which laws the State debt was reduced to $8,000,000. This reduction could not fail to have a highly beneficial influence upon the condition of the State. Auditor's warrants, which had sold at 50 per cent., at once rose to 90 per cent.; State bonds, which had been selling at 14 cents on the dollar, now sold for 40, the banks paid out their specie, and the currency of the State was restored to a good condition in less than three months.

The negotiation of the canal loan having been already commenced in the year 1842 by Justin Butterfield and Michael Ryan, the latter gentleman, who had been an engineer on the canal himself, and was in possession of much valuable information concerning its progress and statistics, was appointed, with Col. Charles Oakley, agent to bring this business to a conclusion. They proceeded to New York, and wrote a series of articles for the New York newspapers, in which the real condition of the State was truthfully described. Confidence was at once restored among business men and capitalists; and David Leavitt, the distinguished president of the American Exchange Bank, in New York, which held $250,000 of canal bonds, assisted in calling a meeting of the American bondholders, at which it was resolved, that the American creditors should subscribe for their proportion of the loan. Confident of success, Messrs. Oakley and Ryan proceeded to Europe, and had interviews with Baring, Brothers & Co., of London, Hope & Co., of Amsterdam, and Magniac, Jardine & Co., all creditors of the State, and among the wealthiest capitalists in Europe. These gentlemen declared themselves in favor of the loan, but wanted to

receive guaranties as to the value of the canal lands, as a security for the money and the ultimate payment of the canal debt ($5,000,000), and to be assured as to the willingness of the people to submit to higher taxation, if necessary. A provisional arrangement was then entered into, during the summer of 1843, in pursuance of which Messrs. Abbott Lawrence, Thomas W. Ward, and William Sturges, of Boston, were directed to appoint two competent persons in America to inquire into the value of the canal lands: $400,000 were promised to be subscribed at once, provided the Governor would pledge himself to urge the necessity of an increased taxation, at the next session of the Legislature; whereupon Messrs. Oakley and Ryan returned, in November, 1843. The choice of the Boston committee fell upon Gov. John Davis, of Massachusetts, and William H. Swift, an eminent engineer and Captain in the U. S. Army. Having examined the canal and canal lands, and satisfied themselves as to the truth of the representations of Messrs. Oakley and Ryan, Gov. Davis and Capt. Swift issued a circular, strongly recommending the loan. Senator Ryan, and afterwards Col. Oakley, returned to London to complete the necessary arrangements for the loan; but the foreign bondholders refusing to meddle any further with it, until the Legislature and the people of the State should have manifested some public regard to their obligations, and made some efforts to pay the interest on the public debt, they were obliged to return without having accomplished anything.

In the fall of 1844, a letter was addressed through the public newspapers to Gov. Thomas Ford, by that faction of the people hostile to increased taxation, in which that measure was bitterly denounced. Although Gov. Ford knew very well, that to advocate increased taxation might render him utterly odious to a tax-hating people, he came up to the question with great resolution and self-devotion to the welfare of his country, publishing an answer to the above letter through the newspapers, which, remarkable as it was for its sound common sense and sagacious views, and the noble spirit of patriotism animating every line of it, not only entirely refuted the arguments set up by the opposite party, but also in due time, when its contents had become known in the Eastern States and London, by convincing the public creditors, that not every man in Illinois was of necessity a hair-brained,

rabid demagogue, produced so favorable a change in their minds, as to make them not only at once agree to complete the arrangements for the loan, but also subscribe for a much larger amount, than they had originally intended. Mr. Leavitt, a gentleman of the highest standing and credit in the financial world, and a very able financier, who, by his successful exertions in the arrangement of the loan, to which he himself had very liberally subscribed, had rendered the most essential services to the State, hurried to Illinois, accompanied by Col. Oakley and Gov. Davis. They arrived at Springfield about the middle of February, 1845, during the session of the Legislature. Gov. Davis and Mr. Leavitt submitted the proposition of the public creditors, which was at once communicated to both houses, through the executive. It passed the House by a considerable majority, but was defeated in the Senate, owing to the spirit of hostility engendered in that body by the Ex-Secretary of State and his friends, who, it is probable, from motives of personal resentment, had arrayed themselves in opposition to it. But the friends of the bill procured a reconsideration of the vote, and by dexterously removing and striking out of the canal bill whatever related to, or had the semblance of a public tax, having silenced much of the opposition, secured the concurrence of the Senate in the bill so introduced, and of the House in the bill so amended. Laws were passed perfecting the canal arrangement; two trustees were elected by the bondholders, and one by the Governor: the board was organized, the work on the canal let out to contractors, and the money required for carrying it on was obtained.

The Legislature, at this session of 1845, also fixed the rate of interest on money, at six per cent.; which measure had become necessary, owing to the conduct of a great part of the merchants of the State, who, in the time of bank suspension, having a large stock of goods on hand, in consequence of which competition amongst them, in their retail business, was considerably increased, had found themselves obliged to encourage people to buy on credit, crediting almost any one to the whole amount of his property, and in case he was unable to pay, taking his notes at 12 per cent. interest; so that a majority of the people were soon indebted beyond their means, and compelled to pay a ruinous rate of interest to save themselves from being sued for their debts.

On reviewing again its financial condition, it will be found, that the affairs of the State had been administered with such distinguished skill and integrity by Gov. Thomas Ford, that in December, 1846, when his term of office expired, the domestic debt of the treasury had been reduced from $313,000 to $31,000, Auditor's warrants were at par, the banks had been liquidated in a just and honorable manner, their notes had been banished from circulation, and been replaced by coin currency and the notes of solvent banks of other States, the people had paid their debts, and eight millions of the public debt had been paid, redeemed, or otherwise provided for: and the State itself, which but a short time before had been in a most ruinous condition, discredited throughout the world, had yet been able to borrow the further sum of $1,600,000 for the completion of the work on the canal. Confidence in the prospects of the State was at once revived, and the tide of emigration once more directed to Illinois, the population of which in 1845, according to the census of that year, amounted to 662,150 souls, and was rapidly increasing.

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