institution is now established upon a permanent basis, and is fulfilling all the great and noble purposes proposed by the illustrious donor. Now, in 1837, this fund was received by the Government of the United States, and invested by the Secretary of the Treasury, Mr. Woodbury, in the six per cent. bonds of the State of Arkansas at par, to the extent of over half a million of dollars. During the same year Arkansas invested this money in a bank, entitled 'The Real Estate Bank of Arkansas;' and of which the State was the great stockholder. In 1839, this Bank, having loaned out these funds to the citizens of Arkansas, became absolutely and totally insolvent, and has never been able to pay one cent on the dollar to any of its creditors. In 1839, the State of Arkansas failed to pay the interest on its bonds, and from that day to this has never paid one dollar either of interest or principal on any of these most sacred obligations. On the 4th of March, 1845, I became Secretary of the Treasury of the United States, and having taken the deepest interest in this Smithsonian fund, and in its faithful application to the noble purpose of the donor, and inasmuch as one of my predecessors had invested these funds in these bonds, and the Government had made itself directly responsible for the faithful execution of this trust, I endeavored to reclaim, as far as possible, this money from the State of Arkansas, and to induce Congress to appropriate its own moneys to redeem the pledge of the Government, and fulfil this trust. My first official action on this subject was as follows: By act of Congress, five per cent. of the net proceeds of the sales of the public lands of the United States in Arkansas was payable to that State, for certain purposes designated in the act. There was, also, an act of Congress in force, authorizing the Secretary of the Treasury, where there were mutual debts and credits between the Government and any other person, to offset any debt due by any creditor of the United States, against any debt, so far as it would go, due by the United States to such creditor. I interpreted this act as authorizing me to withhold this five per cent. fund from the State of Arkansas and appropriate it, as far as it would go, in payment of the interest which had accumulated on the bonds of the State of Arkansas, in which my predecessor, Mr. Woodbury, on behalf of the Government, had invested the Smithsonian Fund; thus saving a small portion of the interest which had accrued on these bonds. For this act I was violently denounced by the Senators and Representatives of Arkansas in Congress, as also by the Legislature and Governor of the State, and strenuous efforts were made, unsuccessfully, first to induce me to revoke my action, and, secondly, to have it overruled by the Government. But I adhered to it, and declared openly, that if such a breach of trust were consummated, and my action overruled in the premises, I would resign my seat in the cabinet.