Stephen F Austin to Nicholas Biddle, 04-09-1836
Summary: Proposal for loan on Texan bonds
As the enclosed memorandum embraces the general outlines of the loan
for Texas on which I conversed with you
I should esteem it as a favor if I could be informed within a Short time, Whether you think any thing could be effected in this Matter—
I consider that the cause of Texas, is the cause of freemen and of
mankind, but more emphatically of the people of the United States, than any
S. F. Austin [Rubric]
It is proposed to negociate a Loan of $500,000 for the Government of Texas on the following basis,
The Commissioners of Texas, shall assign to the Bank of the United States at Philadelphia, The Bonds of the Government of Texas, which they have in their possession for the sum of $500,000, payable in not less than 5 years and bearing an interest of 8% per annum, to be held in Trust by said Bank, for the benefit of the holders of a Scrip to be issued by the Commissioners, based on said Bonds.
Books of subscription shall be opened in the Cities of Boston, New York, Philadelphia and Baltimore for a scrip to be issued by the Commissioners, in shares of $100, each, which said scrip shall entitle the holder to an interest in said Bonds, equal to the amount of the scrip thus held by him and said scrip shall be payable as follows:
of all purchases of lands at the land offices of Texas, 20% of the Sums due may be paid, and shall be receivable in said scrip. Of all customs due at the Custom Houses of Texas 20% of the sums due may be paid and shall be receivable in said scrip. The holder shall be entitled to an interest of 8% per annum, payable at the Bank of the United States in Philadelphia, on all portions of said scrip unpaid, and the Govt. of Texas shall have the privilege of paying the whole amount of said scrip and redeeming these said Bonds by paying 20% of the principal annually after the expiration of 5 years, or the whole payable at 6 months notice, after the expiration of 10 years.
The payments of the subscribers to said scrip shall be made, 25% at the time of subscription and the remainder in 3 equal payments at 60, 90 and 120 days thereafter, to be secured at the time of subscription, by the notes of the subscribers, endorsed to the satisfaction of the Directors of the Bank of the United States, or persons appointed by them and payable at such place, as said Directors shall designate, provided the same be in the Cities where said Stock is subscribed.
The Bank of the United States shall discount the notes thus paid in, and
pay over the whole amount of the proceeds thereof and the amount of the
I have taken the liberty of submitting to you a proposition for the negotiation of a loan of $500,000 for the Government of Texas, to which I would respectfully ask your consideration, provided no arrangement can be made on the basis of which we conversed today.
The personal interest you were kind enough to express for the welfare and success of my struggling country, together with your intimate knowledge of such operations have induced me to make this communication. Your answer as to your opinion of its practicability, the amount that could probably be obtained in this City, the manner in which the subject should be presented, and the willingness of the Bank to accept the Trust, and negotiate the paper, with such other suggestions as you may think important, would greatly add to the obligation, I feel under to you for kindness and attentions already received.