Stephen F Austin to Nicholas Biddle, 04-09-1836
Summary: Concerning Texan loan
The State of Texas have appointed Messrs____and myself Commissioners for the purpose of procuring the Loan of One Million of Dollars, upon the pledge of its resources—at an interest not Exceeding Eight per cent, for a Term not less than 5 Years and redeemable thereafter at the pleasure of that State at the rate of 1/5 annually—and if not so redeemed, then after 10 years redeemable wholly after six Months notice—
The Stock May from the first be Made likewise receivable partially in payment of Imports—Say 1/5 on any Invoice—also in payment for Lands, Say 1/5 from any purchaser—these provisions will create a demand that will tend constantly to augment the current price of these securities— The duties are now $100,000 and boldly encrease— and the Land sales May reach $1,000,000 soon and annually—
By the advice of friends I ask your consideration of this Subject and wish you would inquire into probability of our succeeding in this country in Making such a Loan. I am going to New York where I shall be glad to receive an answer from you as early [as] you shall find it practicable to reply with any degree of precision
The Commrs hold the Bonds of said Govt, for the sum of $500,000 payable in 10 years at 8 per cent annual interest, which they propose to assign to the Bank of the United States to be held in trust and as security for the Stock to be issued for a like amount, payable in the Same Period, and at the same rate of interest.
The stock shall be issued in shares of $100 each payable in 10 years
from date, with interest payable annually at 8 per cent, at such place, as
said stock shall be subscribed, said scrip shall be received also in payment
of one fifth of all monies due by the holders at the land offices of Texas,
and in payment of one fifth of all imposts due at the custom houses of
Texas, and at the end of five years the Government shall have the privilege
of redeeming one fifth of the remainder annually, and at the expiration of
Books of subscription shall be opened for said stock, and the subscribers shall pay 25% at the time of subscription, and notes for the remainder in three equal payments at 6, 90 and 120 days, endorsed to the satisfaction of the Directors of the U. S. Bank, or persons appointed by them to decide, and the Bank shall discount said notes, and pay the first payment, and the proceeds of notes to the Commissioners.