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the sun, civilized or savage. I know of but a single instance of the ability of a nation to borrow largely, and with such consummate ingenuity as to create no debt ; but unfortunately for the example, the ill-gotten gold and jewels having been wrought into an object of idolatry, were ground to powder and strewn upon the waters, and the people were compelled to drink of the bitter waters. Mr. Spencer says, “the terms debt and credit are reciprocal.” Undoubtedly they are, and when an individual parts with his title to a valuable thing to a State or another individual, on the faith of future payment, he gives credit and the recipient becomes the debtor. A promise to pay is no payment, a specific lien on a thing or fund, from which future payment may certainly be realized is not payment; until that lien has been enforced, the debt exists. No matter whether, by the stipulations of the contract, payment is to be made from the general or a specific fund of the debtor, the obligation to pay continues, and according to my old fashioned notions, until that obligation is discharged, the relation of debtor and creditor exists. Although a State cannot be sued in its own courts, this circumstance does not change the relation of the parties. At the present day, all debts honestly contracted rest against the property and not the person of the debtor, and against that property in severalty. It must be sold, article by article, and no more can be sold than sufficient to pay the amount of the debt. A State cannot repudiate its debts, it must pay them—its property and the property of the citizens stand constantly pledged for its honor, and when it receives the money of an individual, no matter how vehemently it may protest against a general liability, it must pay it. The obligation of a State rests on the highest considerations of honor and integrity, for this is the only security of its creditor, and to deny payment on a clumsy and disingenious technicality would cover it with eternal disgrace. Such an idea is not at all admissible. Where a State is concerned, it is idle to talk of a sale, or of a specific lien on its unearned and anticipated revenues. It takes the money of the citizen, call it borrowed or not, and pays or expends it for the general good, it goes into its treasury, and it must pay, yes pay it again. It owes the amount, it is a debtor for it, and no legislative trickery, can convert it into anything but a debt. The advocates of this scheme are driven to extremities to maintain that this bill creates no debt. The reasoning on which that notion is based is alike peurile and disreputable, and ought never to be heard in the halls of legislation. It is this “So where a mortgage is given without any covenant, or other engagement to pay, no debt is created, and the only remedy is on the property mortgaged;” “so where there is a sale, with the option of re-purchasing at an advance price, no debt is created.” I would ask the author of the above extract, what does the State of New York mortgage by this bill? What does it sell with the right to re-purchase at an advanced price? It is a certificate given on the loan, deposit or delivery of money to the State, declaring that the person delivering it is entitled to receive the the amount delivered (if that is the least offensive word,) in 21 years, with interest semi-annually, until paid, a mortgage 2 Does such a certificate entitle the State to re-purchase it, or the surplus revenues of the canals, at an advanced price? No, it is a loan, a naked, bold, palpable loan of money on the credit of the State, to which it is loaned, and nothing else. But suppose it to be a mortgage ; is the position of the learned jurist correct 8 Clearly not. A specific lien on an article without covenant to pay, as in case of a mortgage on real estate, without covenants, creates a debt of the most solemn kind. The want of covenants only effects the remedy. The creditor must be satisfied with the property mortgaged, for his debt. The courts have never held that an unsatisfied and unforeclosed mortgage, without a covenant to pay, created no debt, and they never will be guilty of any such folly. The mortgage itself creates a debt, (the very name of the instrument conveys the idea of debt, and a pledge for payment) on it the debtor pays interest, and finally the principal, or he loses his property. There can be no such thing as interest and principal without debt, and if the debtor does not pay the interest and principal, the lien is foreclosed, and the property sold ; this is the creditor's remedy. If it sells for enough the creditor realizes his debt; if for more, the overplus belongs to the debtor. The law calls a debt thus secured a mortgage debt, in contradistinction to a simple contract debt. Before foreclosure the debtor owes the whole amount; after foreclosure, the balance remaining after applying the proceeds of sale, if there is a covenant to pay; if there is no covenant, no personal action will lie to recover the balance, and this is the length and breadth of the principle. But if the mortgage should contain a covenant that the mortgaged premises should, on foreclosure, produce the full amount of the mortgage debt, I think it would be difficult for the most accomplished ingenuity to show that the debtor would not be liable for any deficiency that might arise on the sale of the mortgaged I'êIYıISéS. p If this transaction can, under any aspect in which it may be viewed, be regarded as a mortgage of the anticipated revenues of the canals, it is accompanied by precisely such a covenant as I have described. In my opinion the receipt of the money for which the “certificates” are to be given, and the giving of the certificates, ereate a State debt. A brief statement of the material provisions of this bill, will aid us in arriving at a just conclusion as to its character, with reference to its constitutionality. The bill finds the State in this condition: it is in want, or supposes itself to be in want, of mine millions of dollars for present use, but the money is not in the treasury, and cannot be obtained, unless the words “loan” and “debt” can be cheated out of their ordinary signification. The State owns property, the annual income of which can be safely estimated at a given sum, but the whole of this income is pledged by the Constitution to certain specified objects; two millions five hundred thousand dollars being pledged for the payment of the existing State debt and for the ordinary re. pairs of this property, and the balance to the Erie Canal enlargement and the completion of the Genesee Valley and Black River Canals. The friends of the bill deem it for the public advantage to anticipate this “remainder” pledged to these canals, and to realize present money, by pledging them to such capitalists as may choose to advance money on the credit of this fund, and the bill is drawn to effectuate this object. The second section of the act authorizes the Comptroller to issue “canal revenue certificates,” of denominations from fifty dollars to twenty thousand dollars, chargeable on the surplus revenues of the canals, bearing an interest not exceeding six per cent, payable semi-annually, and the principal redeemable at a future day, not exceeding twenty-one years. The form of the “certificate” is given, and it declares that the holder or his assigns is entitled to receive a given amount of money at a given day, and interest at a given rate, semi-annually, and the certificate contains an adenda, to the effect that the holder shall receive his money and interest, “without any other obligation, liability or pledge on the part of the State of New York, than such as is contained in this act.” These certificates are to be officially signed by the Comptroller and countersigned by a transfer agent. When so signed, they are to be thrown into the market in quantities of three million dollars annually, and sold to the highest bidder, at not less than par. If not sold, canal contractors may receive them at par in payment of labor. The proceeds of the sale of these certificates “shall be immediately paid into the treasury of this State,” and are to be paid out of the treasury in the same manner as the canal revenues are. Section 3 appropriates the canal revenues for four years to the enlargement, &c., and afterwards to the payment of the interest and the redemption of the principal of the “canal revenue certificates,” until they are fully paid or bought up by the State. Section 5 authorizes the Comptroller to turn these illegitimate stocks into the constitutional stocks of the State, by investing the canal revenue fund in stocks, &c. Section 6 authorizes banking on these “certificates.” Section 10 empowers the Legislature, after the year 1854, to direct the sum of three hundred and fifty thousand dollars to be applied to the necessary expenses of the government. Section 11 requires the canal board so to regulate canal tolls, as to produce a “remainder” of at least eight hundred thousand dollars annually, until the canal revenue certificates are fully redeemed. Sec. 12 requires the completion of the canals in three years, and authorizes the payment of contractors in the revenue certificates created by the act. The above are the material features and provisions of the bill, and I regard it as directly in conflict with the Constitution in its whole scope.

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1. It creates a state debt in violation of the 12th section of article 7 of the Constitution. .

The state throws its credit into market and sells it to the highest bidder. It is true it pledges a fund for the redemption of its promises to pay, and declares that it will not be liable beyond that fund; but it covenants that that fund shall be amply sufficient to meet its engagements. Without this covenant, is there any doubt that a state debt is created 8 but with it, the transaction contains a most solemn guarantee to the creditor that he shall be paid. Suppose Mr. Van Rensselaer, desiring to raise a sum of money for present use, should throw his notes into market for sale, payable ten years after date, pledging therein the future rents of his leasehold estate for their payment, with a condition that he would not be liable beyond those rents; would those notes in the hands of a purchaser, make Mr. V. R. a debtor, and would they create a debt If to this limitation there should be added a covenant that the rents should amount annually to a sum certain amply sufficient for the ultimate payment of the notes and interest, the debt would become strictly personal, but the transaction would create a debt, with or without the covenant. That part of the canal revenue known in the constitution as “the remainder,” is the money of the people; it is the produce of property on which they have expended nearly $50,000,000, some portion of which has been raised by direct taxation, its income ls raised by another mode of taxation, levied upon the citizens of the state, and is often times onerous and oppressive. When that income is received, it goes into the people's treasury, and is their property; any lien upon it or upon the future earnings of the canals, which in the Constitution are declared to be the property of the people, becomes a debt in the strictest sense of the term; a debt which the property of the people must pay. The state says to the creditors under this bill that it will pay the debt, and pledges its property to that object, and covenents in the most solemn manner that that property shall be sufficient to pay it. If this was an ordinary transaction of bargain and sale, the thing sold should be delivered or be capable of delivery. The vendee should be put in charge of the canals, and receive the income. But the bill puts him in no such condition. The state receives the money and pays it out to the creditor. Suppose the canal revenues should fall short of the anticipations of the present day, or some subsequent legislature believing this bill to be uncon, stitutional, should devote the canal revenues appropriated by it, to the purposes of education, in what attitude would the public creditors holding “canal revenue certificates” be placed ; In either contingency, would not these men be creditors of the state, and legally and morally entitled to payment of their debts? I think they would. It is a solecism to say that the state can receive $9,000,000, agree to pay interest on it semi-annually, and to pay the principal in 21 years, out of the earnings or income of its property, and all this while owe no debt for it. ..., so

2. This bill is in conflict with sec. 3 of article 7 of the Constitution. That section requires the application of the revenues remaining after meeting the appropriations of the 1st and 2nd sections to the specific objects provided for to be made annually. The language of the section will admit of no other construction. It is plain, clear and explicit. It is as follows: “And the remainder of the revenues of the said canals shall, in each fiscal year, be applied in such manner as the legislature shall direct, to the completion of the Erie Canal enlargement and the Genesee Valley and Black River Canals until the said canals shall be completed.” . This section to meet Mr. Spencer's construction should read as follows: “And the remainder of the revenues of the said canals of each fiscal year shall,” &c. As it stands when shall the remainder, &c. be applied ? Obviously “in each fiscal year.” By whom are they to be applied ? By the legislature of each year. The time of the application is specified, it is not left open to doubtful construction. It “shall” be “” each fiscal year.” There is no occasion to resort to lexicons or lexicographers for the signification of the word “applied.” It is a word of very common use, and its meaning well understood, and standing where it does in the sentence it can mean but one thing, and that is that this annual “remainder” shall be annually used in the completion of these public works. The object and the time of the use are both specified, and cannot be changed by construction. This view is strengthened by the concluding words of the sentence, “until the said canals shall be completed.” When they are completed, the application of the “remainder” to that object shall cease, not when the debt contracted for their completion shall be paid, but when “the said canals shall be completed.” If these canals are completed in three years does not this “remainder” became relieved from this constitutional dedication, and subjected to the disposal of the legislature. If they do, the intention of the convention is violated and such is not the reading of the Constitution. That instrument requires this “remainder to be applied in each fiscal year to the completion of these works, until they shall be completed.” When this section was under discussion, calculations were made by several members of the convention, to ascertain in what time the canals would be completed, by an annual application of this remainder, and in order to secure as large a “remainder” as possible, only $200,000 were given to the general fund for necessary expenses, and the pledged funds in the 1st section were cut down from $1,500,000 to $1,300,000. No man supposed that this remainder could, consistently with the language employed, be anticipated, nor can it, without violating the plain unequivocal language of the Constitution. * By referring to sections one and two of this article, senators will see that the same terms are employed, in relation to the contributions to the sinking funds. In section 1, the sum of $1,700,000 “in each fiscal year,” &c., and shall be saCredly applied, &c.; and in section 2, $1,500,000 “in each fiscal year,” &c. e I trust it will not be contended that the State could, by issuing and selling “sinking fund certificates,” anticipate these pledged funds, and convert them into ready money— pledging the fund, and the fund only, for the ultimate redemption of the new certificates. . If such a contriyance could be resorted to, certainly no one possesses the hardihood to say that the State had wiped out her entire debt by the operation. A strong temptation to this course is apparent, in the fact that"a premium of from 10 to 20 per cent might be anticipated to arise on such a sale, and the transaction would be quite as constitutional as the scheme contained in this bill. to I beg to call the attention of senators to the last paragraph of section 3 of this article, as it has a material bearing on the proper construction of the words “shall in each fiscal year,” in the foregoing part of the section. This paragraph provides for a diversion of $350,000 annually to defray the necessary expenses of the government, but this cannot be resorted to until eight years from the adoption of the Constitution have expired; from that time until the canals shall be completed, or the debts paid, this diversion cannot exceed $350,000 annually, but after the happening of either of these events, the sum may be increased to $672,500 annually–clearly contemplating that, under the annual appropriation and application of this “remainder,” the canals would not be completed in eight years, and that there would be a period between the expiration of the eight years and the finishing of the canals, during which this $350,000 might be used, and such, beyond all doubt, was the settled intention of the convention. This provision is utterly inconsistent with the construction which is indispensably necessary to uphold this bill. g Mr. Spencer has attempted such a use of the word “manner,” found in this section, as will justify the passage of this act. But when it is remembered that the time and object of the application are specified, the discretion left to the Legislature to prescribe the “manner” of doing it, is subject to these precedents: The Legislalature may direct what distinct portion of the “remainder” shall be applied to each of the specified works, how it shall be employed in the construction of the works, what portion of each work shall be first constructed, how locks shall be built, &c., &c.; in short, how, or in what manner, this money shall be applied, in each fiscal year in the construction of these works. Legislative power in a free government, is necessarily perpetual. The changing circumstances of such a country as ours, requires that its sessions should be annual. The Legislature of this year cannot rightfully judge of the wants and the interests of the community at any given period of the future, nor can it tie up or foreclose the legislative power of the State for a quarter of a century to come. No men better understood this cardinal principle of legitimate government, than the members of the convention, and intending to confine the legislative powers to the necessities of the present, they denied it the power to bind the future. The most irresistible inclinations of present power to bind the future, have always been manifested in the constant accumulation of public debt and further burthens. Admonished, as We Were, by the history of every civilized government of which we have any knowledge, we saw the absolute necessity of restraining, within very narrow limits, the power of the Legislature to contract debts, and even the people, in adopting the Constitution, bound themselves not to contract debts, without making ample contemporaneous provisions for speedy payment. This 7th article was intended to control the prevalent mischief of governments, of loading prosperity with burthens not their own; but if the convention and the people have both failed to accomplish that great object, the principle itself may as well be surrendered as utterly impracticable. 3d. It is believed that this bill is inconsistent with section six of the seventh article of the Constitution. By the bill, the canal revenues are pledged, or mortgaged by certain public creditors for a probable period of twenty-one years; certainly for a period but a little short of that time ; and the management of the canals is so tied up, that they must produce a remainder of revenues applicable to the payment of the debt created by the revenue certificates of at least $800,000 annually. The term canal, I trust, does not signify, simply, the ditch in which the water flows, but all its incidents and appointments, including the revenues. The canals cannot be encumbered, or disposed of by sale, lease, mortgage, or in any other manner; and by purity of reasoning, the only valuable property of the canals, to wit: their revenues, cannot be disposed of in any like manner. If this Legislature can sell the canal revenues for twenty-one years, it can do so for five hundred, and by a pledge that a certain amount of surplus revenue shall be annually received, not only create a stupendous debt, and perpetuate the tax upon trade, by heavily taxing the highway, but deprive the state of that management of the canals contemplated by the Constitution. The state, in the sense here employed, means the representative authority of the state—the Legislature—and it was thought unwise, both for the interests of commerce, and of the community, to place the canals under the constant protection and management of the representatives of the people. They could judge, from year to year, of the state of the treasury, the wants of the state, the effect of rivalry, and the necessities of every class, affected by the imposition of tolls. This constant supervision was contemplated, when the Constitution placed the management of the canals in the hands of the state forever. This bill not only mortgages the canal revenues for twenty-one years, but prescribes such a condition in the management of the canals, as is wholly inconsistent with this constitutional provision. Such seems to me to be the obvious effect of the provisions of this bill, and I respectfully ask the attention of senators to the subject. 4th. This bill is repugnant to section 8 of the 7th article of the Constitution. The 8th section provides, that “no moneys shall ever be paid out of the Treasury of the State, or any of its funds, or any of the funds under its management, except in pursuance of an appropriation by law, nor unless such payment be made within two gears newt after the passage of such appropriation act,” &c. This bill makes a specific appropriation of the surplus revenues in the years 1851, 1852, 1853 and 1854, to the enlargement, &c., and after the close of the fiscal year in 1854, it applies, and appropriates the whole of the surplus revenues, “at the end of each fiscal year,” to the payment of the interest on the canal revenue certificates as it falls due, and to the redemption of the principal of said certificates, &c. This billis intended to be complete in itself, and does not contemplate any future legislation to carry it into full effect, in all its parts. We are to test its constitutionality by an examination of its own provisions, without conjecturing what future legislatures may, or may not do. Without a syllable of future legislation, a large share of the canal reveuues will be paid out of the treasury under this bill, extending over a period of at least 10 years, and probably of 21 years. It makes ample, and minute provisions, in detail, for the receipt, investment, transfer and disbursement of the canal revenues, for the whole period that the revenue certificates, or any portion of them, shall run. Sections three, four and five of the bill, are in direct conflict with the eighth section of the Constitution, and cannot be upheld. The appropriations made by these three sections, are also obnoxious to the latter clause of this eighth section—no specific sum being appropriated, and the objects are too general and multifarious. I do not claim the right, and perhaps, in the language of Mr. Spencer, “it would not be respectful,” in me to say, that this bill was obviously drawn to foreclose all future legislation in reference to the canal revenues—that it was probably suspected that some future legislature, mindful of its constitutional obligation, might neglect to divert the pledged funds of the State from their constitutional destination, and by that means fatally derange this mischevious theme—that it was important so to frame the bill that it could be carried out without the aid of the representatives

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